Category: Philosophy
David Brooks on Larry Summers
To use a fancy word, there’s a metacognition deficit. Very few in public life habitually step back and think about the weakness in their own thinking and what they should do to compensate. A few people I interview do this regularly (in fact, Larry Summers is one). But it is rare. The rigors of combat discourage it.
Of the problems that afflict the country, this is the underlying one.
The full piece is here.
Further sentences to ponder, or my Arnold Kling imitation
I am aware that not everyone is happy with Rasmussen polls, still I think this result is striking, especially the difference in perspectives:
63% of the Political Class think the government has the consent of the governed, but only six percent (6%) of those with Mainstream views agree.
Seventy-one percent (71%) of all voters now view the federal government as a special interest group, and 70% believe that the government and big business typically work together in ways that hurt consumers and investors.
The link is here, with further information, and I thank Roger Congleton for the pointer.
Pecuniary externalities
Samson, a loyal MR reader, requests:
Tyler,
What do you think about pecuniary externalities? What would be a good definition of such externalities, if you find them to be plausible? Without the fiction of an infinite number of buyers and sellers, why isn't it the case that any transaction through the price system, through an impact on price, causes an externality, and might one call such an externality a pecuniary externality? I cannot find much on this subject.
Thanks!
Economists try to make a distinction between pecuniary externalities — changes in price which merely redistribute wealth — and non-pecuniary externalities, which involve a real good or service being provided or denied at the margin. If the price of wheat rises, wheat consumers suffer a pecuniary externality. If you dump garbage on my lawn, that's a non-pecuniary externality, although it may be accompanied by a pecuniary externality, namely a decline in the value of the house. In the meantime, the lawn stinks.
The distinction is often a tricky one, especially in the absence of perfect markets. A lot of the complaints about health care markets are actually complaints about pecuniary externalities, namely that some people get priced out of the market. Alternatively, the risk of facing high prices for cancer treatment may make people nervous and insecure. The notion of "risk" often bundles together pecuniary and non-pecuniary externalities in a not-too-easy-to-separate form.
Efficiency and distribution are not always possible to separate, no matter what the first and second welfare theorems seem to imply.
What about people near subsistence? Say you redistribute $500 from a poor Haitian to a somewhat less poor Mexican, and the Haitian dies and the Mexican buys a used motorbike. Is that "just a transfer"? Or is it "a real resource loss"? I say it's the latter, but then virtually any redistribution will destroy some complementary value from the portfolio of the individual losing the money. What is then left to count as a pure transfer?
There is also no such thing as a pure lump-sum transfer when population is endogenous, either through child-bearing decisions or through taking risks with one's life.
The distinction between pecuniary and non-pecuniary externalities is useful, and hard to do without, but its foundations are shaky. In practical terms the weakness of the foundations matters most when we are doing health care economics or analyzing food subsidies (or comparable forms of aid) in poor countries. The richer and healthier the people are, the more likely the distinction can be invoked without much trouble.
And Samson is correct to think that large numbers of transactions involve pecuniary externalities, at least whenever the particular actions of a buyer or seller influence market price.
The culture that is Bryan Caplan
A new paper finds that your philosophic beliefs matter for your real world performance, or at least they predict it:
Do philosophic views affect job performance? The authors found that possessing a belief in free will predicted better career attitudes and actual job performance. The effect of free will beliefs on job performance indicators were over and above well-established predictors such as conscientiousness, locus of control, and Protestant work ethic.
The pointer comes from Vaughn Bell on Twitter. One interpretation is that a "belief in free will" corresponds to private information about the likelihood of being successful, and wanting to take credit for that success. A second interpretation is that the belief itself makes you more successful, by encouraging you to take responsibility for your choices.
Who are the interesting collaborators?
Pensans, an MR reader of uncertain loyalty, requests:
How about a really systematic exploration of other contemporary collaborators with totalitarian regimes whose propaganda you would like to tout to unsettle readers? Or, would that disturb the shocking effect of your bold free thought on your readership?
The following names come to mind as "collaborators" worth reading or otherwise imbibing:
Martin Heidegger, Pablo Neruda, Jean-Paul Sartre, Jean-Luc Godard, Susan Sontag, Ezra Pound, Eric Foner, Eric Hobsbawm, and I have lost track of who exactly apologized for Castro but it is many smart people.
H. Bruce Franklin, editor of "The Essential Stalin," was a splendid teacher and he had a notable influence on me.
There's a long list of Western intellectuals and Founding Fathers who apologized for slavery and violent imperialism. Although that does not fit the word "totalitarianism" exactly, it was often a form of totalitarianism — or worse – for those who suffered under it.
Sentences to ponder
Gabriel Josipovici, a research professor at the University of Sussex, is disenchanted with the absence of disenchantment with the world.
*Neoconservatism: An Obituary for an Idea*
The author is C. Bradley Thompson and this new book is in broad terms an Objectivist ("Randian") critique of neoconservatism and Leo Strauss. Here is one summary bit:
Inevitably, the neocons are epistemological relativists (though of an anti-egalitarian nature), which is the source, as we shall see momentarily, of their moral relativism. Because the political good in their world is mutable and always changing, the neoconservatives do not want fixed principles to which they are hbeholden, nor do they strive to be morally or politically consistent. Their power and authority is generated and sustained by the illusion that the world is in a state of constant change and that it is governed by what Machiavelli called fortuna. The truth or falsity of an idea is, according to the neocons, determined by its usefulness in a particular situation and for particular people. What is true today, they argue, may not be true tomorrow if an idea or an action fails to work in new and different situations. In such a world, there can be no certainty, no absolutes, no fixed moral principles.
The author writes — correctly – "hoi polloi," instead of the redundant "the hoi polloi."
Thompson argues that Leo Strauss showed sympathies for the Italian fascism of Mussolini, at least relative to liberalism and religion.
At times the book sounds like Bryan Caplan criticizing me, though I take such ripostes to say more about Bryan than about me.
When I was young, I very much enjoyed reading John Robbins's Calvinist answer to Ayn Rand (revised here), even though I did not agree with much of it. I often learn more when ideas clash in relatively stark forms.
In my view, principles and politics don't always mix but the problem is neither epistemological nor moral. Ill-informed voters, especially in diverse societies, can only swallow so much in the form of principle. If one is committed to intellectual discourse, but within the range of the politically feasible, a lot of intellectual principle is difficult to sustain. I do believe in principles, but I don't see that any point of view has overcome this quite general problem. In that sense I do not blame neoconservatism per se. But am I a neoconservative? No, and Brad's book gives some of the reasons why not.
*Ernest Gellner: An Intellectual Biography*
Gellner's general view of the world of advanced liberal capitalism is by now familiar: it is a relatively open world in which science prospers, bringing both affluence and diminished moral certainty — with Danegeld doing a good deal to secure social cohesion.
This splendid intellectual biography, by John A. Hall, should be read by all those interested in Hayek, Popper, Berlin, Oakeshott, and the foundations of a free society. You can order it here. I spent $33 on the book and it paid back every penny and then some. Here is Henry on the book.
Annualized interest rates of two hundred percent a year?
I read someone, somewhere arguing that Elizabeth Warren was the nominee to shut them down. I am curious about the modern liberal take on autonomy and credit. Let's say that two gay men, of unknown health status, want to have informed, consensual, unprotected sex. Should the law prohibit this? I believe the answer is no. Furthermore it is not just a matter of enforcement difficulty, it is a question of autonomy. If you don't think so, modify the example so that two heterosexual people want to have consensual but unprotected sex. And so on.
The unprotected sex is riskier and less prudent than borrowing money at an annualized rate of two hundred percent. Why prohibit one and not the other? Many of the borrowers are being fooled, but others have legitimate reasons to seek the money, such as wanting to buy a birthday present for a visit to one's child, living with a separated spouse.
Is it that sex is sacred but borrowing money is not? What if you're borrowing money to catch a plane to go have sex? Isn't sex a big reason why people might borrow money at high annualized rates? Aren't "sex decisions" some of the least rational we make and the most prone to error?
When I use the ATM, often I am outside the network and thus I am paying annualized interest rates of over two hundred percent a year. Should someone (other than Natasha) stop me? Should they only stop me when I am younger and poorer than is the current Tyler? What about equality before the law?
How many of you would support this same woman — with enthusiasm — if she wanted to ban risky but consensual sex?
Preachers who are not believers
In Preachers who are not believers, a provocative new paper in Evolutionary Psychology, Daniel Dennett and Linda LaScola interview five preachers who no longer believe in God. Here's one bit:
A gulf opened up between what one says from the pulpit and what one has been taught in seminary. This gulf is well-known in religious circles. The eminent biblical scholar Bart D. Ehrman’s widely read book, Misquoting Jesus (2005), recounts his own odyssey from the seminary into secular scholarship, beginning in the Moody Bible Institute in Chicago, a famously conservative seminary which required its professors to sign a statement declaring the Bible to be the inerrant word of God, a declaration that was increasingly hard for Ehrman to underwrite by his own research. The Dishonest Church (2003), by retired United Church of Christ minister, Jack Good, explores this “tragic divide” that poisons the relationship between the laity and the clergy. Every Christian minister, not just those in our little study, has to confront this awkwardness, and no doubt there are many more ways of responding to it than our small sample illustrates. How widespread is this phenomenon? When we asked one of the other pastors we talked with initially if he thought clergy with his views were rare in the church, he responded, “Oh, you can’t go through seminary and come out believing in God!” Surely an overstatement, but a telling one. As Wes put it:
…there are a lot of clergy out there who — if you were to ask them — if you were to list the five things that you think may be the most central beliefs of Christianity, they would reject every one of them.
One can be initiated into a conspiracy without a single word exchanged or secret handshake; all it takes is the dawning realization, beginning in seminary, that you and the others are privy to a secret, and that they know that you know, and you know that they know that you know. This is what is known to philosophers and linguists as mutual knowledge, and it plays a potent role in many social circumstances. Without any explicit agreement, mutual knowledge seals the deal: you then have no right to betray this bond by unilaterally divulging it, or even discussing it.
It was interesting to me that this account is related to the ideas of preference falsification developed by Timur Kuran, sacrifice and stigma developed by Larry Iannaccone and common knowledge by Robert Aumann.
Robin Hanson responds on cryonics
Does Tyler think the world would be equally better off if foodies were to act contrary to type, express less via buying less fancy food, and give the difference to charity? If so, why has he never mentioned it in his hundreds of food posts?
Could it be Tyler knows that tech nerds are low status in our society and fair game for criticism? Is this really any different than rich folks complaining about inner city kids who buy $100 sneakers instead of saving their money or giving it to charity, even while they buy $1000 suits and dresses instead of saving their money or giving it to charity?
There is much more here. This is not essential to the points under discussion, but I should add that I consider tech nerds to be a relatively high status group in American society, at least above the age of thirty.
Why pick on cryonics?
A few of my lunch compadres have asked why I compare cryonics (unfavorably) to acts of charity, rather than comparing other acts of personal consumption (I enjoy the gelato here in Berlin) to charity. My view is this: the decision to have one's head frozen is not primarily instrumental but rather expressive. Look at the skewed demographics of the people who do it, namely highly intelligent male readers of science fiction, often with tech jobs. Is it that they love their lives especially much? Unlikely. Instead it's a chance to stand for something and in a way which sets them apart from many others. It's a chance to stand for instrumental rationality, for Science, for attitudes which go beyond traditional religion, for the conquering of limits, for probabilistic reasoning, and for the notion that the subject sees hidden possibilities and resources which more traditional observers do not.
It's like voting for a very unusual political candidate.
In my view the people interested in cryonics are often highly meritorious, as is Robin. So I'm very sympathetic with a) letting them do what they want, and b) praising them and their affiliations, simply because they are productive and smart and also not harming others. Those factors militate in favor of cryonics and indeed I am happy to endorse laissez-faire for the practice but still I don't find myself settling into really liking the idea.
Let's say I use another Hansonian construct and put everyone behind a contractarian veil of ignorance. I then ask: given that we don't know who will be born into which position, which expressive symbols do we want these highly intelligent individuals to send, and also to identify with, given that reputation is limited and publicity is scarce? Keep also in mind that society is insufficiently appreciative of intelligence and we would prefer that more people had greater respect for analytic thinking. There are also many worthy causes out there.
I don't see the positive deal here. I believe the world would be better off, and the relative status of the virtuous nerds higher, if instead the cryonics customers sent more signals which were perceived as running contrary to type. Ignoring cryonics, and promoting charity, would do more to raise the status of intelligence and analytical thinking than does cryonics.
On the practical side, while I am a non-believer, I also think that charity has a greater chance of bringing a longer life to one's self – or immortality — than does signing a cryonics contract. That's an even stronger triumph for probabilistic thinking than what the cryonics customers have on tap.
Addendum: If you haven't already, do go back and read both Quentin and #44 on these issues. Bracing stuff.
Profile of Robin Hanson and Peggy Jackson (his wife)
Shortly after they met, Peggy and Robin decided to read each other’s favorite works of literature. Peggy asked Robin to read “The Brothers Karamazov,” and he asked her to read “The Lord of the Rings.” She hated it. “I asked him why he loved it, and he said: ‘Because it’s so full of detail. This guy has invented this whole world.’ He asked me why I hated it, and I said: ‘Because it’s so full of detail. There was nowhere for the reader to imagine her own interpretation.’ ” Robin, less one for telling stories, describes their early days more succinctly. “There was,” he says not without tenderness, “a personality-type convergence.”
That's from the NYT, by Kerry Howley, most of it is on cryonics and attitudes toward death. For the pointer I thank Michelle Dawson. Here is Robin himself on the article. Here is Bryan on Kerry on Robin. My question is: why not save someone else's life instead?
There is more I could say…but I won't!
James Crimmins on the portfolio approach
He writes to me:
While dogmatism seemingly requires balance so do most of life’s activities mental or otherwise. Show me the adventurous eater or traveler and I will show you a stick in the mud reader, investor, dresser. Show me the wide-eyed dreamer in one area and the odds are she or he has an anchor to windward somewhere else, if only what they wear to work or play. Human beings who are wildly adventurous in one area, say sports, tend to dine on hamburgers, but think they are adventurous in all things. he same applies to free thinkers who are downright sodden when it comes to design. The chance takers forget they also have their safe sides. We tend to huddle with like chance takers, somehow our security blankets are seldom shared.
I am likely to bring up such points, especially to some of my colleagues who think of themselves as non-conformists.
Who should a utilitarian root for in the World Cup?
The very excellent Sandor writes to me:
From a maximum utility point of view, who's the right team to root for in the 2010 FIFA World Cup (TM)?
The off-the-top-of-head first order model seems something like
num_native_fans * (joy_of_native_fans_upon_winning –
misery_upon_losing) + num_foreign_fans * (joy – misery),where the second term is probably negligible compared to the first,
except maybe for Uruguay and Paraguay. The "joy" term probably is larger the longer it's been since the team won? But maybe the misery is less for teams that have never gotten far—wouldn't Ghanaians be
pretty thrilled with a loss in the semifinal?What are the second order and higher effects? Germany's lost productivity from a long tournament run is worth more in absolute terms but maybe less in utility terms? Do we need terms for foreign anti-fans?—I've heard a surprising number of people express extreme anti-Germany and anti-Brazil feelings, the former for past crimes, the latter for general arrogance.
I'm attracted to the Netherlands and the two 'Guays, which are probably the lowest three in utility terms. Maybe I'm just a misanthrope.
Does Derek Parfit like football?
My view is that a Brazilian victory does the most to maximize happiness, although I worry about the effects on second-order violence.
If you wish to rationalize the victory of a small country team, try the argument that too many young people invest career time in becoming athletes. By having a small nation grab the glory, this wasteful effect is minimized.