Tag Archives: Social Science

My Old Man Rant

As a 62 year old man, I think I’m entitled to rant once in a while. But instead of “you kids get off my lawn!”, this is my rant:

In principle, economics can help advise most any decisions, like when to wake up, or whether to own a second car. But there are fixed costs to doing explicit econ analysis, and also persuasion costs when you try to influence the decisions of some audience. Thus econ analysis seems most valuable for the biggest decisions whose the audience respects economists for those decisions. Or perhaps many similar but smaller decisions which can all be analyzed at once in the same framework. As we economists are most known for our work evaluating institutions, and as our institutional choices are some of the biggest ones we have, this all suggests our biggest wins come there.

I was first exposed to economics and libertarianism at the same time, and what most excited me about both were similarities to science fiction: they let me imagine very different social worlds. One could see how we could have very different institutions from our current versions, ones that would also plausibly be better. Yes, one couldn’t be very sure that those worlds would be better. But they gave us new things to try, to test and see if they might be better.

When I was young, theory was king, and I tried to master theory. But since then data has come to be king (and queen), even in econ and libertarian circles. Yet I hadn’t realized just how far that trend had gone until this pandemic. To me the obvious theory question a pandemic raises is: what are good general institutions for dealing with pandemics? I wrote a bit on that early on, but was told then that we instead needed immediate help in a crisis. Which I also tried to offer, but which many hated.

Yet it is now two years into what is looking more and more like an eternal pandemic, and I still haven’t see economists or libertarians talking about better pandemic institutions. While this pandemic has done great damage to libertarian sympathies, I’ve only seen libertarians argue that in this particular pandemic, doing nothing officially would have been better than doing what we did. And I’ve seen economists argue about particular parameter settings of the usual government-run system: rules, subsidies and direct government management of masks, lockdowns, tests, and vaccines. Mostly via data, not theory, analysis.

But I’ve not seen work on if there are better institutional alternatives to these two categories, if not for this pandemic then for future ones. Which to me feels like a deep betrayal of what I most value in econ: our ability to imagine, test, and argue for big institutional changes. Even my immediate (and beloved) colleagues haven’t been interested.

To me, the obvious other category is: law. We are better off having law to deal with many harms we can each do to each other, such as assault, slander, and reneging on contracts. Better than ignoring them, and better than having government agencies more directly manage such behaviors. Yes, our society runs law centrally, and likely law would be better if offered privately. But even so, for many harms we are better off because we now apply law over the other two main solutions of doing nothing officially or direct government management.

For law to work for assault, slander, theft, or car accidents, we need it to be often feasible to bring sufficient evidence to convince a court that a particular person harmed a particular other person to a particular degree at a particular event. If so, we can then sufficiently discourage such harms merely via the threat of such legal penalties. At least if we can sufficiently punish those we find guilty, and if we make it easy enough for complainants to subpoena the evidence they need to make their case.

Law today often ensures sufficient punishment via jail and criminal law, which works even if not as well as would vouchers. Law usually allows parties to subpoena any info relevant to a live case, and it so happens that evidence needed to prove assaults and car accidents lasts long enough to let them be so subpoenaed. With vouchers and the level of surveillance likely soon, I don’t actually think we’d need most of our traffic laws; the threat of lawsuits would be enough.

The main policy problem with pandemics is that some people hurt other people by infecting them. Just like they do in assault, slander, theft, and auto accidents. So law could deal fine with pandemics if we could meet the same two conditions: (1) sufficiently able to punish those who found guilty, e.g. via jail or vouchers, and (2) often enough able to easily-enough subpoena sufficient info to show who did what to whom. It is on that last point that economists, and lawyers, have traditionally thrown up their hands and concluded that law can’t deal with pandemics.

That is, people have just assumed that it is not possible to tell who infected who in a pandemic. At least not often enough for law to be our main way to deal with severe pandemics. So for something like the flu we subsidize vaccines and little else, while for covid we go crazy with government managing many related details.

But today with smartphone tracking we can actually see who was close enough to whom when to have infected them. And if we have spit samples from two people infected with covid, we can compare the DNA in their viruses to see if they match. By combining these two pieces of information, one could make a sufficiently strong case that a particular person infected another particular person with the virus at a particular time and place.

So the question that remains is: should we actually induce sufficient information collection and subpoena power, and sufficient punishment ability, to let law deal with pandemics? That is, on the one hand we might make infecting others a punishable crime, require everyone to have their phone track their locations, to report their infections, and to save regular spit samples. And then let government police pour over these details. Which does sound like a pretty intrusive police state, though perhaps still better than the actual police state we’ve had during this last pandemic.

Or, only during an officially declared severe pandemic we could tell everyone that they must either strictly isolate, or, they can get a “pandemic passport” by agreeing to get a voucher, have their phone track their locations, and regularly save spit samples, all available only to be subpoenaed in case of lawsuits by people who claim to be harmed, but not for general browsing by a police state.

Yes, once a pandemic becomes nearly endemic, frequent infection events could clog up courts. But at such scale vouchers would streamline their processes and settle almost all cases out of court. I also know of ways to greatly cut court costs. And damages awarded might greatly fall once one could credibly argue that the victim would likely have caught it soon from someone else.

This idea of legally requiring people to save info so that it can be available to be subpoenaed for future lawsuits is not a particularly new idea. It is just the application to the case of pandemics that would be new. But in our new world of greatly increased surveillance and info of various sorts, we should in fact be thinking about how all that new info might help us solve problems. Like pandemics. Via new institutional changes

Come on, don’t any economists or libertarians out there want to think about new pandemic institutions?

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Roemer’s Socialism

Several times before I have posted on trying to figure out what just people mean when they propose “socialism”, and which variations seem how attractive. I just tried this exercise again, this time reading respected Yale economist and political scientist John E. Roemer’s paper What is Socialism Today? Conceptions of a Cooperative Economy, published Dec. 2020 in International Economic Review.

Roemer says “My intention in this article is to retrieve, from the history of the socialist idea, several alternatives to these two socialist varieties” of (1) central planning, which was “toxic” when combined with state ownership and one-party politics in the Soviet Union, and (2) “social democracy” that taxes and redistributes in a familiar world of private firms. He has two proposals for us to consider, explained via math models.

In “Socialism 1”, there is one profit-maxing firm wherein each worker and owner of capital gets paid their marginal product. Capital owners get paid because we need “incentives for citizens to invest their wealth productively. The remainder of firm income goes to firm owners, whom he insists are not being paid for prior entrepreneurial or managerial efforts or investments, not unless the firm was “created by individuals” who did not sell any ownership to others. Yet Roemer is reluctant to expropriate such illegitimate owners because then

We would … lose the monitoring advantages that might accrue to having firms be in part privately owned. And having the state own a large share of firms introduces the issue of political interference in firm decisions.

A linear income tax is instead imposed on everyone, which would result in inefficient work and investment choices if people behaved according to standard game theory, but which they do not because everyone instead follows a cooperative “Kantian optimization” (except that they are price takers due to “bounded rationality.” )

In “Socialism 2”, there are many profit-maxing firms, each of which is entirely owned by its workers and which pays a firm-specific tax set by the state, though he worries that this tax would “discourage innovation on the part of the firm’s workers and investors, who would have no incentive to cut costs to earn above-normal profits”.

In both Socialism 1 & 2 that cooperative “Kantian optimization” behavior ensures the production of public goods and the suppression of public bads such as “employing child labor, polluting, or running assembly lines at a breakneck pace”.

Roemer says that we know such cooperative behavior is possible because the U.S. once taxed the rich more:

In the period 1930−1970, a more cooperative ethos existed in the United States than we experience today: the key evidence is the existence of very high, even confiscatory, taxes on the very rich.

And he suggests we could enforce cooperation via labor unions:

Each must trust that others will optimize in the Kantian manner if he/she does. … [To achieve this,] workers may entrust decisions (such as supplies of labor) to organizations that represent them—unions—which can carry out the Kantian optimization for them.

But Roemer thinks this cooperation requires redistribution, as people won’t cooperate “with others whom they see have much higher incomes”. And it requires the right sort of politicians, as “ethnic, linguistic, and religious heterogeneity frustrate” it, and “power-hungry leaders seek to divide their citizenries by emphasizing identity and difference”.

So why don’t we see this cooperation today? We have the wrong “ethos”:

The behavioral ethos of socialism is cooperation. … they are engaged in a cooperative enterprise to transform nature to improve the lives of all. … Capitalism’s behavioral ethos is individualistic: economic activity is characterized as the struggle of each person against all other persons and nature. The ethos may be summarized as one of “going it alone.”

But Roemer is famous for studying, and approving of, political competition. So for some reason he doesn’t think that sort of competition hinders the right ethos. Unless maybe “power-hungry” leaders appear? Are labor unions to stop that somehow?

Here are my reactions:

1) I don’t see how Roemer’s proposal really does much to cut back on economic competition, or how it prevents the bad sort of politicians. Or how even it is “socialism”. Workers still compete within professions and firms, investors compete to pick the best firms, firms compete to max profits, and politicians compete in elections. What exactly is different?

2) I don’t think all the math really adds much to his proposals.

3) I’m not convinced that his “public bads” really fit the definition,

4) I’m pretty convinced in the absence of war, theft, slavery, etc. firm ownership gains really are returns to entrepreneurial or managerial efforts or investments.

5) I agree that humans do often vary in how “cooperative” they feel and act, and that it can be valuable to promote such cooperation, all else equal. But I don’t at all see high taxes on the rich as much evidence of or cause of useful cooperation. Nor do I see the existence of economic competition as reducing cooperation more than does political competition.

6) Most fundamentally, I just don’t see what Roemer is proposing to do to increase our cooperative inclinations. In our competitive world nations, firms, political parties, and other orgs have long competed to promote cooperation internally and among alliances. The world we see is the result of those attempts.

Merely declaring that we now have “socialism” won’t ensure more cooperation, nor will mass redistribution, nor will increased control by governments or labor unions. Those might induce some temporary cooperations, but they also seem to hinder the longer-term search by orgs to find better ways to induce cooperation.

In the end I just don’t see much to Roemer’s proposals beyond “if you agree cooperation is good, then you should do everything I say and then maybe everyone will cooperate.” No thanks.

 

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Live And Learn

In my last four posts you’ll see a pattern repeated twice: first I participate in “ground” talk on a particular issue, then I stand back and reflect on some patterns in that ground talk. I see this as a healthy way to think about social behavior.

If I only participated in each topic, I’d miss the chance to notice key social patterns up close. A great pleasure and power of being a social scientist is that most all social behavior you see around you is grist for your mills.

If I only thought about behaviors from a distance, without participating in them, I’d miss many crucial details useful in testing broader theories. Yes, by participating I risk collecting biases due to my particular stances, biases that my block me from seeing larger pictures. That probably does happen, maybe even a lot. But this still seems like a good mix.

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Socialism: A Gift You’d Exchange?

After reading and reviewing a book by a socialism critic, I then did a book by an advocate. Then some told me “No, here is the advocate book you should have read.” I tried one of them: Nathan Robinson’s Why You Should Be a Socialist, said to be “A primer on Democratic Socialism for those who are extremely skeptical of it.”

Robinson won’t commit himself to what exactly is socialism’s proposal, other than pushing for big changes in light of some vague and widely-shared values (mostly equality and democracy). He says conservatives are mean and liberals are wimpy; liberals have similar goals, but are to be disdained for not calling for bigger changes. Yet the only specific changes he’ll clearly endorse are smaller changes widely endorsed by liberals. I’ll get to some of those below, but instead of writing a whole review, I’d rather make one big point, riffing off of these quotes: Continue reading "Socialism: A Gift You’d Exchange?" »

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Common Econ Critiques

Consider this critique of physics:

Once upon a time the universe was full of magic, mystery, and majesty, wherein humans lived organically and intuitively with nature. But then physicists (and their engineering minions) pretended to know far more than humans can ever know in an irreducibly complex universe. And they pretended to far more objectivity and neutrality in their inquiries than is possible for humans. Using impressive math, physicists rose in status, while other less mathy but more fluid and organic ways of thinking fell in status. Physics concepts became used more widely, displacing other useful and more human but now neglected ways of thinking.

Physicists are reductionist, and focus overwhelmingly on the simplest physical parameters of the smallest physical parts. So they ignore more interesting parameters and large scale organization. They study particular phenomena via vastly-over-simplified models that neglect most of the rich complexity of the real world. Worse, regarding the items that they do consider in their simple models, most of their assumptions are just wrong.

For example, standard models of mechanical systems assume that they sit in a flat space-time. Most materials are uniform, isotropic, solid with sharp boundaries, and uncharged. Ground anchors do not rotate or accelerate. Perfect vacuum sits between most adjacent parts, and between the other pairs is either an absolute bond or frictionless relative motion. Yet real mechanical systems sit in rotating, accelerating environments full of corrosive fluids and cosmic rays, at temperatures and pressures that often melt materials, and amid vibrations that often break them. And estimates of all physical parameters in such models are known to be wrong, i.e., not exactly correct. Physicists claim that such deviations make for only small errors in their final analysis, but how can they know that if they don’t model the full complexity?

Engineers who use physics tend to create system designs that are more like typical physics models, with a small number of simple parts having a few simple relations to one another. These systems are quite different from the fluid, complex, highly-interdependent rich-relation biological systems that we are, and once lived among. These physics-model-derived systems are harsh, ugly, fragile, uninspiring, and alienating. These systems may do well by simple physics metrics, but that neglects a vast space of better if less formal ways to evaluate systems.

The dominance of physics in engineer training and related government policy has unfairly neglected intuitive, magical, arty, and literary approaches to engineering system design. Approaches that look bad by physics metrics, but not by intuitive organic human ways to evaluate. Today the fields of “design” use better approaches, and are displacing the fields of “engineering”. It’s about time.

Here’s an obvious response:

For most products, few customers care much about how their systems are engineered, or the parameters by which they are described. So in a free competitive world, firms are free to offer products designed and evaluated via “intuitive, magical, arty, and literary approaches.” But few do. Yes, firms today also commonly use design as well as engineering, but mainly for a few relatively aesthetic choices close to the user experience. For at the vast majority of other choices, out of user sight, physics-based engineering dominates.

Physics winning this competition suggests that alternate approaches just aren’t as productive. Yes, there is often less free competition to woo government buyers, and physics-dominated regulations often demand that physics be used to prove that products are safe and effective. But consider that the world still has many competing nations, and engineering matters greatly in war, where simple physical parameters are quite meaningful. If a nation could build more effective weapons using other approaches to weapons design, they could win wars that way. The fact that few nations try is more evidence that physics-based approaches work better.

Yes, models greatly simplify. But for humans with some abstract understanding and greatly limited mental abilities of other sorts, approximation via simple modular models and designs is our main way to manage complexity. Nature faced different constraints, which is why her designs are different. Yes, simple modular designs can be harsh and alienating, but without them we could not create engineering designs nearly as capable. Humans just can’t do analysis without making a mass of simplifying, and thus wrong, assumptions. But the fact that our designs tend to work shows that our approximations tend to be appropriate. Yes of courses if we approximate badly, our models and designs will go badly. Which is why physicists and engineers pay so much attention to approximating well.

Now consider the many critiques of economics, which I’ve just spent many hours sampling. Most econ critiques are much like the above physics critique, making a similar response appropriate. But with one key difference, to be discussed at the end.

Before going into details, let’s review a few basics. Like physics, econ uses math to create a space of possible models. But instead of describing physical systems, econ models describe social systems. Economists have a standard set of assumptions that they see as most likely to be true, and other standard set of assumptions that seem easiest to analyze. Assumptions from the second set are often preferred, to allow entire models to be simple enough to analyze. Different economists explore different models, comparing them to each other and to data, and arguing about their relative accuracy as approximations. If you are arguing for different models in this topic area, but accepting that models are a reasonable way to think about social behavior, then you are doing econ. (And you might have a valid complaint re if your kind of econ gets a fair hearing.) Econ critics, in contrast, reject, or at lest minimize the value of, the whole econ approach to studying social behavior, and designing policy.

That said, let us now consider some common econ criticisms. Continue reading "Common Econ Critiques" »

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Missing Model: Too Much Do-Gooding

Grim view of human nature … is mistaken, a persistent and counterproductive myth. … the evidence for mass selfishness is extremely thin. … The surprising truth is that people tend to be­have decently in a crisis. To the British, the all-too-familiar example is the cheerful demeanour of Londoners during the Blitz. … New Orleans after Hurricane Katrina … rumours ran wild about the murder and rape of children inside the Louisiana Superdome; but when the national guard showed up, … met instead by a nurse asking for medical supplies. (more)

Friday I asked the author of a pandemic novel what he thought went most wrong in his fictional world. He said selfishness: blaming others, and not sacrificing enough to protect others from infection. He also said he was surprised to see people acting less selfishly than he predicted in our real pandemic.

As the above quote indicates, that’s a common mistake. In this pandemic I estimate that the bigger problem is people pushing for too much “helping”, rather than too little. That’s a common problem in health and medicine, and this poll says 2-1 that it is the more common problem:

Of course my Twitter followers are probably unusual by this metric; I’d bet most think selfishness is the bigger problem. One reason is that it can look suspiciously selfish to say there’s too much do-gooding, as if you were trying to excuse your selfish behavior. Another reason is that the theory of selfishness is simpler. In economics, for example, we teach many quite simple game theory models of temptations to selfishness. In contrast, it seems harder to explain the core theory of why there might be too much do-gooding.

This seems to suggest a good and feasible project: generate or identify some good simple game theory models that predict too much do-gooding. Not just personal signaling acts that do too much, but acts that push collective norms and decisions toward too much do-gooding. I’d be happy to help with such a project. Of course it would make only a small contribution to the problem, but still I’d guess one worth the trouble.

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Defrock Deregulation Economists?

Recent economics Nobel prize winner Paul Romer is furious that economists have sometimes argued for deregulation; he wants them “defrocked”, & cast from the profession: 

New generation of economists argued that tweaks … would enable the market to regulate itself, obviating the need for stringent government oversight. … To regain the public’s trust, economists should … emphasize the limits of their knowledge … even if it requires them to publicly expel from their ranks any member of the community who habitually overreaches. …

Consider the rapid spread of cost-benefit analysis … Lacking clear guidance from voters, legislators, regulators, and judges turned to economists, who resolved the uncertainty by [estimating] … the amount that society should spend to save a life. … [This] seems to have worked out surprisingly well … The trouble arose when the stakes were higher … it is all too easy for a firm … to arrange for a pliant pretend economist to … [defend them] with a veneer of objectivity and scientific expertise. …

Imagine making the following proposal in the 1950s: Give for-profit firms the freedom to develop highly addictive painkillers and to promote them via … marketing campaigns targeted at doctors. Had one made this pitch to [non-economists] back then, they would have rejected it outright. If pressed to justify their decision, they [would have said] … it is morally wrong to let a company make a profit by killing people … By the 1990s, … language and elaborate concepts of economists left no opening for more practically minded people to express their values plainly. …

Until the 1980s, the overarching [regulatory] trend was toward restrictions that reined in these abuses. … United States [has since been] going backward, and in many cases, economists—even those acting in good faith—have provided the intellectual cover for this retreat. …

In their attempt to answer normative questions that the science of economics could not address, economists opened the door to economic ideologues who lacked any commitment to scientific integrity. Among these pretend economists, the ones who prized supposed freedom (especially freedom from regulation) over all other concerns proved most useful …  When the stakes were high, firms sought out these ideologues to act as their representatives and further their agenda. And just like their more reputable peers, these pretend economists used the unfamiliar language of economics to obscure the moral judgments that undergirded their advice. …

Throughout his entire career, Greenspan worked to give financial institutions more leeway … If economists continue to let people like him define their discipline, the public will send them back to the basement, and for good reason. …

The alternative is to make honesty and humility prerequisites for membership in the community of economists. The easy part is to challenge the pretenders. The hard part is to say no when government officials look to economists for an answer to a normative question. Scientific authority never conveys moral authority. No economist has a privileged insight into questions of right and wrong, and none deserves a special say in fundamental decisions about how society should operate. Economists who argue otherwise and exert undue influence in public debates about right and wrong should be exposed for what they are: frauds. (more)

Oddly, Romer is famous for advocating “charter city” experiments, which can be seen as a big way to escape from the usual regulations.

So how does Romer suggest we identify “pretend” economists who are to be “exposed as frauds” and “publicly expelled from economists’ ranks”? He seems to say they are problematic on big but not small issues because firms bribe them, but he admits some are well-meaning, and doesn’t accuse Greenspan of taking bribes. So I doubt he’d settle for expelling only those who are clearly bribed. 

That seems to leave only the fact that they argue for less regulation when common moral intuitions call for more. (Especially when they mention “freedom”.) Perhaps he wants economists to be expelled when they argue for deregulation, or perhaps when they offer economic analysis contrary to moral intuitions. Both sound terrible to me as intellectual standards.

Look, people quite often express “moral” opinions that are combinations of simple moral intuitions together with intuitions about how social systems work. If they are mistaken about that second part, and if we can gain separate estimates on their moral intuitions, then economic analysis has the potential to produce superior combinations.

This is exactly what economists try to do when applying value of life estimates, and this can also be done regarding deregulation. The key point is that when people act on their moral intuitions, then we can use their actions to estimate their morals, and thus include their moral weights in our analysis.

In particular, I don’t find it obviously wrong to let for-profit firms market drugs to doctors, nor do I think it remotely obvious that this is the main cause of a consistent four-decade rise in drug deaths.

Yes of course, it is a problem if professionals can be bribed to give particular recommendations. But in most of these disputes parties on many sides are willing to offer such distorting rewards. My long-standing recommendation is to use conditional betting markets to induce more honest advice from such professionals, but so far few support that.

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The Aristillus Series

There’s a contradiction at the heart of science fiction. Science fiction tends to celebrate the engineers and other techies who are its main fans. But there are two conflicting ways to do this. One is to fill a story with credible technical details, details that matter to the plot, and celebrate characters who manage this detail well. The other approach is to present tech as the main cause of an impressive future world, and of big pivotal events in that world.

The conflict comes from it being hard to give credible technical details about an impressive future world, as we don’t know much about future tech. One can give lots of detail about current tech, but people aren’t very impressed with the world they live in (though they should be). Or one can make up detail about future tech, but that detail isn’t very credible.

A clever way to mitigate this conflict is to introduce one dramatic new tech, and then leave all other tech the same. (Vinge gave a classic example.) Here, readers can be impressed by how big a difference one new tech could make, and yet still revel in heroes who win in part by mastering familiar tech detail. Also, people like me who like to think about the social implications of tech can enjoy a relatively manageable task: guess how one big new tech would change an otherwise familiar world.

I recently enjoyed the science fiction book pair The Aristillus Series: Powers of the Earth, and Causes of Separation, by Travis J I Corcoran (@MorlockP), funded in part via Kickstarter, because it in part followed this strategy. Also, it depicts betting markets as playing a small part in spreading info about war details. In addition, while most novels push some sort of unrealistic moral theme, the theme here is at least relatively congenial to me: nice libertarians seek independence from a mean over-regulated Earth:

Earth in 2064 is politically corrupt and in economic decline. The Long Depression has dragged on for 56 years, and the Bureau of Sustainable Research is making sure that no new technologies disrupt the planned economy. Ten years ago a band of malcontents, dreamers, and libertarian radicals used a privately developed anti-gravity drive to equip obsolete and rusting sea-going cargo ships – and flew them to the moon.There, using real world tunnel-boring-machines and earth-moving equipment, they’ve built their own retreat.

The one big new tech here is anti-gravity, made cheaply from ordinary materials and constructible by ordinary people with common tools. One team figures it out, and for a long time no other team has any idea how to do it, or any remotely similar tech, and no one tries to improve it; it just is.

Attaching antigrav devices to simple refitted ocean-going ships, our heroes travel to the moon, set up a colony, and create a smuggling ring to transport people and stuff to there. Aside from those magic antigravity devices, these books are choc full of technical mastery of familiar tech not much beyond our level, like tunnel diggers, guns, space suits, bikes, rovers, crypto signatures, and computers software. These are shown to have awkward gritty tradeoffs, like most real tech does.

Alas, Corcoran messes this up a bit by adding two more magic techs: one superintelligent AI, and a few dozen smarter-than-human dogs. Oh and the same small group is implausibly responsible for saving all three magic techs from destruction. As with antigravity, in each case one team figures it out, no other team has any remotely similar tech, and no one tries to improve them. But these don’t actually matter that much to the story, and I can hope they will be cut if/when this is made into a movie.

The story begins roughly a decade after the moon colony started, when it has one hundred thousand or a million residents. (I heard conflicting figures at different points.) Compared to Earth folk, colonists are shown as enjoying as much product variety, and a higher standard of living. This is attributed to their lower regulation.

While Earth powers dislike the colony, they are depicted at first as being only rarely able to find and stop smugglers. But a year later, when thousands of ships try to fly to the moon all at once from thousands of secret locations around the planet, Earth powers are depicted as being able to find and shoot down 90% of them. Even though this should be harder when thousands fly at once. This change is never explained.

Even given the advantage of a freer economy, I find it pretty implausible that a colony could be built this big and fast with this level of variety and wealth, all with no funding beyond what colonists can carry. The moon is a long way from Earth, and it is a much harsher environment. For example, while colonists are said to have their own chip industry to avoid regulation embedded in Earth chips, the real chip industry has huge economies of scale that make it quite hard to serve only one million customers.

After they acquire antigrav tech, Earth powers go to war with the moon. As the Earth’s economy is roughly ten thousand times larger that the moon’s, without a huge tech advantage is a mystery why anyone thinks the moon has any chance whatsoever to win this war.

The biggest blunder, however, is that no one in the book imagines using antigrav tech on Earth. But if the cost to ship stuff to the moon using antigrav isn’t crazy high, then antigravity must make it far cheaper to ship stuff around on Earth. Antigrav could also make tall buildings cheaper, allowing much denser city centers. The profits to be gained from these applications seem far larger than from smuggling stuff to a small poor moon colony.

So even if we ignore the AI and smart dogs, this still isn’t a competent extrapolation of what happens if we add cheap antigravity to a world like ours. Which is too bad; that would be an interesting scenario to explore.

Added 5:30p: In the book, antigrav is only used to smuggle stuff to/from moon, until it is used to send armies to the moon. But demand for smuggling should be far larger between places on Earth. In the book thousands of ordinary people are seen willing to make their own antigrav devices to migrate to moon, But a larger number should be making such devices to smuggle stuff around on Earth.

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Sanctimonious Econ Critics

The New Yorker review of Elephant in the Brain raved about Cents and Sensibility, by Gary Morson and Morton Shapiro, a book said to confirm that “intellectual overextension is often found in economics.” Others have similarly raved. But I don’t care much for this book, so let me explain why. (Be warned: this post is LONG.)

In its first sentence, the book declares its aim:

This book creates a dialogue between two fields that rarely have anything to say to each other: economics and the humanities. We mean to show how that dialogue could be conducted and why it has a great deal to contribute. (p.1)

Morson and Shapiro seem to want the sort of “dialogue” where one side talks and the other just listens. All but one chapter elaborates how economists should listen to the humanities, and the one remaining chapter is on how some parts of the humanities should listen to another part, not to economists. There’s only a two page section near the end on “What Humanists Can Learn From Economists,” which even then can’t resist talking more about what economists can learn:

Economists could learn from humanists the complexity of ethical issues, the need for stories, the importance of empathy, and the value of unformalizable good judgement. But humanists could also learn from economists how to think about scarce resources, about the nature of efficiency, and the importance of rational decision making. (p.261)

So what exactly can we economists learn? Continue reading "Sanctimonious Econ Critics" »

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Economists Rarely Say “Nothing But”

Imagine someone said:

Those physicists go too far. They say conservation of momentum applies exactly at all times to absolutely everything in the universe. And yet they can’t predict whether I will raise my right or left hand next. Clearly there is more going on than their theories can explain. They should talk less and read more literature. Maybe then they’d stop saying immoral things like Earth’s energy is finite.

Sounds silly, right? But many literary types really don’t like economics (in part due to politics), and they often try to justify their dislike via a similar critique. They say that we economists claim that complex human behavior is “nothing but” simple economic patterns. For example, in the latest New Yorker magazine, journalist and novelist John Lanchester tries to make such a case in an article titled:

Can Economists and Humanists Ever Be Friends? One discipline reduces behavior to elegantly simple rules; the other wallows in our full, complex particularity. What can they learn from each other?

He starts by focusing on our book Elephant in the Brain. He says we make reasonable points, but then go too far:

The issue here is one of overreach: taking an argument that has worthwhile applications and extending it further than it usefully goes. Our motives are often not what they seem: true. This explains everything: not true. … Erving Goffman’s “The Presentation of Self in Everyday Life,” or … Pierre Bourdieu’s masterpiece “Distinction” … are rich and complicated texts, which show how rich and complicated human difference can be. The focus on signalling and unconscious motives in “The Elephant in the Brain,” however, goes the other way: it reduces complex, diverse behavior to simple rules.

This intellectual overextension is often found in economics, as Gary Saul Morson and Morton Schapiro explain in their wonderful book “Cents and Sensibility: What Economics Can Learn from the Humanities” (Princeton). … Economists tend to be hedgehogs, forever on the search for a single, unifying explanation of complex phenomena. They love to look at a huge, complicated mass of human behavior and reduce it to an equation: the supply-and-demand curves; the Phillips curve … or mb=mc. … These are powerful tools, which can be taken too far.

You might think that Lanchester would support his claim that we overreach by pointing to particular large claims and then offering evidence that they are false in particular ways. Oddly, you’d be wrong. (Our book mentions no math nor rules of any sort.) He actually seems to accept most specific claims we make, even pretty big ones:

Many of the details of Hanson and Simler’s thesis are persuasive, and the idea of an “introspective taboo” that prevents us from telling the truth to ourselves about our motives is worth contemplating. … The writers argue that the purpose of medicine is as often to signal concern as it is to cure disease. They propose that the purpose of religion is as often to enhance feelings of community as it is to enact transcendental beliefs. … Some of their most provocative ideas are in the area of education, which they believe is a form of domestication. … Having watched one son go all the way through secondary school, and with another who still has three years to go, I found that account painfully close to the reality of what modern schooling is like.

While Lanchester does argue against some specific claims, these are not claims that we actually made. For example:

“The Elephant in the Brain”… has moments of laughable wrongness. We’re told, “Maya Angelou … managed not to woo Bill Clinton with her poetry but rather to impress him—so much so that he invited her to perform at his presidential inauguration in 1993.” The idea that Maya Angelou’s career amounts to nothing more than a writer shaking her tail feathers to attract the attention of a dominant male is not just misleading; it’s actively embarrassing.

But we said nothing like “Angelou’s career amounts to nothing more than.” Saying that she impressed Clinton with her poetry is not remotely to imply there was “nothing more” to her career. Also:

More generally, Hanson and Simler’s emphasis on signalling and unconscious motives suggests that the most important part of our actions is the motives themselves, rather than the things we achieve. … The last sentence of the book makes the point that “we may be competitive social animals, self-interested and self-deceived, but we cooperated our way to the god-damned moon.” With that one observation, acknowledging that the consequences of our actions are more important than our motives, the argument of the book implodes.

We emphasize “signalling and unconscious motives” because is the topic of our book. We don’t ever say motives are the most important part of our actions, and as he notes, in our conclusion we suggest the opposite. Just as a book on auto repair doesn’t automatically claim auto repair to be the most important thing in the world, a book on hidden motives needn’t claim motives are the most important aspect of our lives. And we don’t.

In attributing “overreach” to us, Lanchester seems to rely most heavily on a quick answer I gave in an interview, where Tyler Cowen asked me to respond “in as crude or blunt terms as possible”:

Wait, though—surely signalling doesn’t account for everything? Hanson … was asked to give a “short, quick and dirty” answer to the question of how much human behavior “ultimately can be traced back to some kind of signalling.” His answer: “In a rich society like ours, well over ninety per cent.” … That made me laugh, and also shake my head. … There is something thrilling about the intellectual audacity of thinking that you can explain ninety per cent of behavior in a society with one mental tool.

That quote is not from our book, and is from a context where you shouldn’t expect it to be easy to see exactly what was meant. And saying that a signaling motive is on average one of the strongest (if often unconscious) motives in an area of life is to say that this motive importantly shapes some key patterns of behavior in this area of life; it is not remotely to claim that this fact explains most of details of human behavior in this area! So shaping key patterns in 90% of areas explains far less than 90% of all behavior details. Saying that signaling is an important motive doesn’t at all say that human behavior is “nothing more” than signaling. Other motives contribute, we vary in how honest and conscious we are of each motive, there are usually a great many ways to signal any given thing in any given context, and many different cultural equilibria can coordinate individual behavior. There remains plenty of room for complexity, as people like Goffman and Bourdieu illustrate.

Saying that an abstraction is important doesn’t say that the things to which it applies are “nothing but” that abstraction. For example, conservation of momentum applies to all physical behavior, yet it explains only a tiny fraction of the variance in behavior of physical objects. Natural selection applies to all species, yet most species details must be explained in other ways. If most roads try to help people get from points A to B, that simple fact is far from sufficient to predict where all the roads are. The fact that a piece of computer code is designed help people navigate roads explains only a tiny fraction of which characters are where in the code. Financial accounting applies to nearly 100% of firms, yet it explains only a small fraction of firm behavior. All people need air and food to survive, and will have a finite lifespan, and yet these facts explain only a tiny fraction of their behavior.

Look, averaging over many people and contexts there must be some strongest motive overall. Economists might be wrong about what that is, and our book might be wrong. But it isn’t overreach or oversimplification to make a tentative guess about it, and knowing that strongest motive won’t let you explain most details of human behavior. As an analogy, consider that every nation has a largest export commodity. Knowing this commodity will help you understand something about this nation, but it isn’t remotely reasonable to say that a nation is “nothing more” than its largest export commodity, nor to think this fact will explain most details of behavior in this nation.

There are many reasonable complaints one can make about economics. I’ve made many myself. But this complaint that we “overreach” by “reducing complexity to simple rules” seems to me mostly rhetorical flourish without substance. For example, most models we fit to data have error terms to accommodate everything else that we’ve left out of that particular model. We economists are surely wrong about many things, but to argue that we are wrong about a particular thing you’ll actually need to talk about details related to that thing, instead of waving your hands in the general direction of “complexity.”

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