Month: July 2011
*On What Matters, vol. I*, review of Derek Parfit
Derek Parfit is one of my favorite philosophers, and favorite writers at that, so for many years I have been looking forward to his next book, which is now out. The main argument is that rule consequentialism, properly understood Kantianism, and contractualism all can be understood as a broadly consistent moral theory, all climbing up the same mountain from different sides.
The text is recognizably Parfit, but I am not convinced by its major arguments, and I also believe the Parfitian method — any reader of him will understand this reference — does not succeed in all of the new areas under consideration.
The philosophical patron saints of the book are Kant and Sidgwick, and I would suggest also Bloomsbury. Parfit is an extreme rationalist and he thinks (hopes?) we can find, and agree upon, the right answers to moral questions. (At the same time he deeply fears that we cannot, and he is a philosophic conservative as Keynes was.) What’s missing is Hume, not the Hume of is-ought worries but the Hume who came to terms with the tensions between the arguments of philosophy and the experience of everyday human life.
My favorite features of the Parfit book include the early comparison of Kant and Sidgwick and the general concern with the frequency and intensity of moral disagreement.
Parfit at great length discusses optimific principles, namely which specifications of rule consequentialism and Kantian obligations can succeed, given strategic behavior, collective action problems, non-linearities, and other tricks of the trade. The Kantian might feel that the turf is already making too many concessions to the consequentialists, but my concern differs. I am frustrated with this very long and very central part of the book, which cries out for formalization or at the very least citations to formalized game theory.
If you’re analyzing a claim such as — “It is wrong to act in some way unless everyone could rationally will it to be true that everyone believes such acts to be morally permitted” (p.20) — words cannot bring you very far, and I write this as a not-very-mathematically-formal economist.
Parfit is operating in the territory of solution concepts and game-theoretic equilibrium refinements, but with nary a nod in their direction. By the end of his lengthy and indeed exhausting discussions, I do not feel I am up to where game theory was in 1990.
I read the standard game-theoretic results as implying that ethics is a far more indeterminate enterprise than Parfit might like to see. Any particular specification of rule consequentialism tends to require increasingly baroque refinements to cover all the different possible kinds of situations. At the end we’re not left with much in the way of a rule at all, other than a general injunction to tell people to do something good and then to rejigger the rule itself, or complicate it with more contingencies, to cover the required ground.
To pose a simple example: “maximize your marginal impact” won’t as an injunction address a lot of environmental problems. “Maximize your average impact” fails in cases where you are truly decisive. What might other more complex rules be, and what are the expectations those rules are making about the behavior of others, what you infer from their behavior, what they infer from your inference, and so on. The path out of these boxes takes us very far away from a rules concept that say Sidgwick might have found intuitive.
Hume has been locked out of the room and he is not allowed to re-enter in the form of Parfit having a dialogue with Cho and Kreps.
Now maybe, just maybe, that game-theoretic messiness does not have to be fatal for rule-consequentialism. Still, I propose a rewrite. Cut or severely limit the hundreds of pages on this topic, start with what game theory already is showing, describe that mess in philosophic, conceptual terms, and then consider whether that mess is compatible with the analogous messes found in Kantianism and contractualism, Maybe it can be shown that they are (broadly) the same mess. Nonetheless, such a collection of messes may be surrounding the same mountain but they will not scale it and Parfit would have to gaze once again into the abyss of, what is to him, ethical nihilism. (Cut back to David Hume for a different attitude. Perhaps Parfit’s very strong philosophic and personal desire to succeed and solve the whole problem draws him from the path that will get us up the mountain some small degree.)
For these reasons I see the biggest and most central part of the book as a failure, possibly wrong but more worryingly “not even wrong” and simply missing the questions defined by where the frontier — choice theory and not just philosophic ethics — has been for some time.
On other points, the criticisms of subjective and desire-based theories are good, but I view Parfit’s conclusions as already having been established.
The talk of Kantian dignity, and of “treating people as a mere means” I do not think can be well-defined. I kept on wanting to see the Marginal Revolution (the real one, the 1871 one) inform this discussion.
I very much agree with Parfit’s argument that no one — not even evil people — should deserve to suffer. I also agree with Parfit’s notion of the irreducibly normative.
Until the material on consequentialism is nailed, I don’t think the integration with contractualism can work.
I would describe the Parfitian method as “the postulation of bold, minimalist claims, explored by the use of brilliant hypotheticals and counterexamples.” In Reasons and Persons the Parfitian method works because the potential for philosophic vagueness is limited by the vividness of the counterfactual (or real world) examples. Most readers of that book are still thinking about split brains, the Repugnant Conclusion, and Future Tuesday Indifference, among numerous other examples. You could question whether all of the terms were pinned down rigorously, but you still knew that the thought experiment was making you rethink some of your priors. In the subject areas of On What Matters the semantics are too slack, too open to multiple interpretation, and too many of the central concepts cry out for formalization. There are not compelling new metaphors and examples to pin down the discourse. Parfit’s greatest strength is as an imaginer, often outside of traditional philosophic dimensions, and yet here he is so concerned with justifying his disagreements with his peers and colleagues. Their ghosts and comments and discourses are shackling him, and if you visit the best pages of Reasons and Persons you will see they hardly mention the names of other philosophers at all, much less current philosophers.
I do not wish to put you off Parfit. He is a philosopher of major importance and, non-trivially, one of the most philosophical philosophers, perhaps ever. He lives, thinks, feels, breathes, and exudes philosophy in a way which is, in and of itself, a major contribution to human thought and being. Reading him is an unforgettable and illuminating experience. His best arguments have great real world import.
It is stunning to read the last three pages of the preface, which list everybody who gave him comments. It’s a long list, but I’m not sure it was the right list to have chosen.
Addendum: Here is Peter Singer’s review. Here is a review from Constantine Sandis.
Would temporary capital controls for Greece work?
Has anyone written a good blog post about this topic?
If you allow redemption of accounts into currency, the currency can be mailed, carried across borders, sent by PayPal against credit cards, sent by Western Union, or many other options. It would be hard to shut them all down at once. The Greek government could try. Carrying currency across the border would be the hardest one to stop, although it might not be the most important external channel for getting funds out of the country. They could search people at the border, much as the U.S. government now searches us for liquids before a plane flight.
A second scenario freezes bank accounts and doesn’t worry too much about currency leakage. Instead it stops people from adding to their currency holdings, or at least tries to. The Greek economy then has to do without currency withdrawals for some time, until the new drachma currency is ready.
Which is the more feasible option? Is either at all an option? Am I overlooking an alternative? Without some kind of capital controls, a move away from the euro simply drains the country of its euros.
From Brian Eno
“Something I’ve realized lately, to my shock, is that I am an optimist, in that I think humans are almost infinitely capable of self-change and self-modification, and that we really can build the future that we want if we’re smart about it,” he said. Given Mr. Eno’s characteristically eclectic form of brain gymnastics, the conversation was only partly about his new album, “Drums Between the Bells” (Warp), to be released on Tuesday. Ask Mr. Eno a question — about lyrics, say, or his songwriting process — and an hour later you walk away with an unsummarizable catalog of big ideas on music, history and technology, as well as a reading list to keep you occupied for a month…
“In my normal life I’m a very unadventurous person,” Mr. Eno said. “I take the same walk every day and I eat in the same restaurants, and often eat exactly the same things in the same restaurants. I don’t adventure much except when I’m in the studio, and then I only want to adventure. I cannot bear doing something again, or thinking that I’m doing something again.”
The article is here and for the pointer I thank James Crimmins.
Assorted links
1. David Glasner is now blogging monetary economics.
2. Seattle Times review of TGS.
3. Good account of dramatically falling migration from Mexico, and rising living standards in Mexico. It’s gone from about 500,000 illegal Mexican migrants a year to 100,000 a year.
4. Where does the revenue from the iPod go? Full paper here.
5. When giant wombats walked the earth, and Angus doesn’t want the deal.
The ongoing German recovery
Here is the latest:
Factory orders in Germany, Europe’s largest economy, unexpectedly increased in May, led by domestic demand for investment goods such as machinery.
Orders, adjusted for seasonal swings and inflation, increased 1.8 percent from April, when they surged a revised 2.9 percent, the Economy Ministry in Berlin said in a statement today. Economists had forecast a drop of 0.5 percent, according to the median of 33 estimates in a Bloomberg News survey. In the year, orders rose 12.2 percent, when adjusted for work days.
That is a funny result for a country committed to a near-balanced budget by 2016 and it shows the continuing importance of real factors for economic recovery. Mind you, this may well end badly, but for broader European reasons, or perhaps because of problems from the Chinese economy.
From Michael Burda and Jennifer Hunt, here is a very useful paper (newer, better, and gated version here) on why German labor markets have done so well in the Great Recession:
Germany experienced an even deeper fall in GDP in the Great Recession than the United States, with little employment loss. Employers’ reticence to hire in the preceding expansion, associated in part with a lack of confidence it would last, contributed to an employment shortfall equivalent to 40 percent of the missing employment decline in the recession. Another 20 percent may be explained by wage moderation. A third important element was the widespread adoption of working time accounts, which permit employers to avoid overtime pay if hours per worker average to standard hours over a window of time. We find that this provided disincentives for employers to lay off workers in the downturn. Although the overall cuts in hours per worker were consistent with the severity of the Great Recession, reduction of working time account balances substituted for traditional government-sponsored short-time work.
I would add one factor. Germany didn’t have much of a real estate bubble and the Great Recession arrived on its shores, in part, through export markets. Global export markets collapsed quite rapidly, but they also recovered fairly rapidly (ask Singapore, and here). That made the German recovery easier. It also helped their labor market policies. Germany didn’t encounter much of a “recalculation.” Demand went and then demand, for more or less the same things, came back. The political strategy of “freezing” the jobs and trying to preserve the informational capital in those relationships was set up to work fairly well, which it did.
Small steps toward a much better world (TGS is over)
Terrafugia, Inc., the Woburn, Mass., company developing a flying car or “roadable aircraft” called the Transition, says it received special exemptions from the National Highway Traffic Safety Administration.
The exemptions, which are particular to vehicles that fly and drive on roads, will allow the company to begin delivering the Transition when it is ready late next year. They allow the Transition to use plastic windows instead of standard automotive safety glass, and tires that aren’t normally allowed on multi-purpose vehicles.
The company says laminated safety glass used on cars for decades would add too much weight and could fracture in a way that would obscure the pilot’s view through the windshield. Lightweight polycarbonate windshields used in aircraft are designed in part to withstand impacts with birds, which are generally more of a hazard to pilots than drivers.
The article is here and for the pointer I thank Alex.
The Art of Bribery
Interesting piece on bribery in China. The following four scenarios all have counterparts elsewhere but, as relayed by the author, in China the elegance of the art and the elegance of the bribe are all brought together with true appreciation.
The First Scenario:
The corrupted official can sell a fake painting at any rigged gallery. After coordinating with the official, the briber will go to the designated gallery and buy it at the agreed price plus the commission of the gallery owner. All of the three parties know that the painting is fake, but eventually they are all benefited. This fake painting can be reused and it can go through another bribery circulation of other “elegant” buyers and sellers.
The Second Scenario:
The briber puts a real and expensive painting at the gallery. The gallery marks down the price as if it were a fake painting. The official buys it as if he has the greatest bargain on earth. Sooner or later, the official can resell it at the right place, at the right time, and at the right price.
The Third Scenario:
The briber visits the official and gives him/her a real or fake painting as a present. Three days later, a seemingly unrelated person knocks the door of the official and buys that particular painting at an unreasonably high price. This buyer is actually a trusted subordinate of the briber, and, by doing so, the whole process does not involve the gallery whose owner will certainly ask for a commission.
The Fourth Scenario:
There are rigged auction houses all over China and they become the most suitable places for elegant corruption. The briber, first of all, gets a fake painting either from a gallery or a fake painting factory. Then, s/he provides relevant document proof of scholars and experts to take care of the problem of authenticity. These scholars and experts are paid to confirm the authenticity of this fake painting. They falsify every historical detail, evidence of painting style and scientific verification of the materials used. The forged painting is then given to the official as a gift and is auctioned at a very high price. Eventually, there is always someone coming from nowhere who wins the bid. Again, the bidder is a trusted person of the briber. These auction houses get hush money before the whole corruption process is completed.
Hat tip: Daniel Lippman.
Netherlands fact of the day
Take the case of the Netherlands. Unbeknown to most people, it is world’s third largest agricultural exporter, despite having little land (it has the world’s fifth highest population density). This has been possible because the Dutch have “industrialised” agriculture by, for example, deploying hydroponic agriculture (growing plants in water) that uses computer-controlled feeding of high-quality chemicals—something that would not have been possible if the Netherlands did not have some of the world’s most advanced chemical and electronics industries.
That is from Ha-Joon Chang, via Matt Yglesias. Here is the list of largest exporters.
Assorted links
1. Will Iceland move to prescription-only tobacco?
2. Books which are coming out soon.
3. What does it cost to make a typical hit song?
4. Who is the most followed person on Google+?
5. New hypothesis about why global temperature was falling for a while (not good news). More detail here.
6. What times of the day are criminals at work? 9-5 it seems.
Take the deal, people
Here is Bruce Bartlett on the legacy of Margaret Thatcher. And David Brooks is exactly right. Take the deal, people.
Megan McArdle comments.
Brazilian consumer debt
The average rate of interest on consumer lending has jumped from 41 per cent in 2010 to 47 per cent most recently in May 2011. This rise from an already elevated level reflects the cumulative effect of tightening by the Brazilian central bank in order to contain inflation.
The consumer debt service burden, which stood at 24 per cent of disposable income in 2010, is now slated to rise to 28 per cent in 2011.
This compares with 16 per cent for an “overburdened” US consumer and a mid-single digit reading for other emerging markets such as China and India.
In short, the cash flow burden is astronomical and rising.
We calculate that the debt service burden for the so-called “middle class” in Brazil has now breached 50 per cent of disposable income…
Read more here. Loan delinquencies, by the way, are rising, and that is in a rapidly growing economy. Is it a good or bad thing that their real interest rates are twelve percentage points higher than in some of the wealthier nations?
When are signaling and human capital theories of education observationally equivalent?
Going as far back as Andrew Weiss’s survey paper, there are various attempts to argue that the two theories make the same predictions about earnings and education. A randomly elevated individual will earn more money but is this from having learned more or from being pooled with a more productive set of peers?
To explore this, let’s pursue the very good question asked by Bryan Caplan:
Our story begins with a 22-year-old high school graduate with a B average. He knows an unscrupulous nerd who can hack into Harvard’s central computer and give him a fake diploma, complete with transcript. In the U.S. labor market, what is the present discounted value of that fake diploma?
If he can fake a good interview (a big if, but let’s say), and if certification from recommenders is not important in the chosen sector (another big if), he may get a Harvard-quality job for his first placement. If you believe in the signaling theory, however, his marginal product is fairly low, much lower than the wage he will be paid. They will fire him. He’ll come out a bit ahead, if he is not too demoralized, but within a few years he will be paid his marginal product.
In most jobs they figure out your productivity within two or three months after training, if not sooner.
In a one-shot static setting, signaling and human capital theories might have the same empirical implications because the learning and pooling effects can produce similar links between education and wages (again assuming someone can fake an interview). But not over time and of course the wage dispersion for an educational cohort does very much increase with time. The workers don’t keep on receiving their “average marginal product” for very long.
Do not be tricked by those who serve up one-period examples to establish the empirical equivalence of signaling and human capital theories!
To tie this back to the academic literature, if IV-elevated workers enjoy an enduring wage effect comparable to that of the other degreed workers, you should conclude they learned something comparable at school unless you wish to spin an elaborate and enduring W > MP story.
Addendum: There is a less drastic scenario than the one outlined by Bryan. Let’s say there are fourteen classes of workers and a class nine worker is randomly elevated to class seven credentials. He might use that momentary good fortune to learn from smarter peers, work hard to establish a foothold, and so on. His lifetime earnings might end up as roughly those of other class seven workers, despite being of initial type nine. The higher earnings are still based on learning effects (not mainly pooling), though pooling gave that worker temporary access to some new learning and advancement opportunities. In most regards this works like the learning model, not the pooling model, although the period of learning extends beyond schooling narrowly construed.
Abramowicz on the Constitution and the Debt Limit
Section 4 of the 14th Amendment says “The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.”
“Questioned” is pretty vague but there is certainly an argument (more here) to be made that the president could constitutionally disregard the debt limit. But disregarding the limit is only one way not to question the validity of the debt. Alternatively, one could argue that the way to keep with the constitution and the debt limit law is to cut spending or raise taxes.
Michael Abramowicz who wrote an article on the debt clause (from 1997, recently posted on SSRN) has a good suggestion to split the difference:
…a modest approach for the President to take would be not to conclude that the debt limit is facially unconstitutional, but rather that it would be unconstitutional as applied, to the extent that it would prevent payment of interest on the debt. If the President took that position, the Administration would in effect continue to raise the debt limit as necessary to make payments on the debt. But when other bills came due, if there were insufficient funds to pay them, that would not justify the issuance of additional debt. The consequences of such nonpayment are sufficiently severe that the President and Congress could continue to play their game of chicken, but the worst case scenario would be a government shutdown, rather than a default. Perhaps the President can accomplish this even without invoking the Public Debt Clause, simply by prioritizing payments on the debt over other payments that come due, but his ability to do that depends in part on the timing of revenues and expenditures, and an announcement that the President will make payments on the debt despite the debt limit statute no matter what would calm the markets.
Have a Happy July 4.
Pain as an agency problem: do smart or stupid species suffer more?
It is an interesting question, incidentally, why pain has to be so damned painful. Why not equip the brain with the equivalent of a little red flag, painlessly raised to warn, “Don’t do that again”? In The Greatest Show on Earth
, I suggested that the brain might be torn between conflicting urges and tempted to ‘rebel’, perhaps hedonistically, against pursuing the best interests of the individual’s genetic fitness, in which case it might need to be whipped agonizingly into line. I’ll let that pass and return to my primary question for today: would you expect a positive or a negative correlation between mental ability and ability to feel pain? Most people unthinkingly assume a positive correlation, but why?
Isn’t it plausible that a clever species such as our own might need less pain, precisely because we are capable of intelligently working out what is good for us, and what damaging events we should avoid? Isn’t it plausible that an unintelligent species might need a massive wallop of pain, to drive home a lesson that we can learn with less powerful inducement?
That is from Richard Dawkins, via The Browser, still the best site on the internet.
Assorted links
1. Vote winners for best conservative books.
2. Suicide bomber markets in everything.
3. Prince Twins Seven-Seven passes away.
4. People’s reasons for not having children.
5. Anthony Painter reviews TGS.
6. The largest holders of Greek debt.
7. Read the “Tree of Life” dialogue or better yet watch the Leo Kottke video. Here is my favorite Malick review so far; oddly I find New World to be his masterpiece.