Monday, May 18, 2015

Warfare isn't getting less likely -- conclusions from a new analysis



Is warfare getting less likely? Are we entering a new and more peaceful era of history? Quite a few people -- Steven Pinker and Niall Ferguson among them -- have suggested as much. But the mathematics of war statistics over the past 2,000 years doesn't back up the idea. At Bloomberg, I have a short piece describing some excellent new work by Pasquale Cirillo and Nassim Taleb. Also, more detail over at Medium.

Wednesday, May 6, 2015

To save the world -- give up on nature?


Here's a radical idea -- we can best safeguard the future of humanity not by learning to live with nature, but by turning our backs on her and learning to do without her. We should use our technology and science to isolate ourselves from nature, so that we can live without requiring nature. In so doing, we can also eliminate the burden we put on nature, and preserve it as well.

Does that sound crazy? A little, I think, but it is a creative idea and maybe some tempered and humble version of it isn't so crazy. Perhaps with better science and technology we can learn to help humans while also, to some large degree, eliminating our impacts on nature and carving out some safe space for her. That, at least, is the provocative idea suggested in The Ecomodernist Manifesto, a document published recently by folks from The Breakthrough Institute.

Many things in this manifesto seems just a little too optimistic to me -- they seem to suggest that we're already reducing our impact on nature, for example, despite causing the sixth greatest mass extinction in history -- but it is worth reading. We do need more creative thinking. I've written more at Bloomberg.

Monday, March 30, 2015

Common core and common rancor

My most recent thing in Bloomberg touches on the Common Core standards for learning. It's amazing how some things that ought to be pretty good for everyone can be controversial, but...

Learning how to distinguish between fact and opinion would seem to be a pretty fundamental piece of any education. In the bizarre world of U.S. public schools, though, it's proving to be controversial.
For several years, schools across the U.S. -- with significant help from the Bill and Melinda Gates Foundation -- have been putting in place something called the Common Core, a set of standards on what students from kindergarten through 12th grade should learn on topics including English, mathematics, science and history. Along the way, they’ve faced ample criticism, some of it reasonable. Teachers, in particular, think they haven't had adequate preparation.

Common Core

One strain of criticism in particular, though, sounds more like an assault on learning itself. Consider the argument of philosopher Justin McBrayer, of Fort Lewis College in Colorado: ...
Read more here.

UPDATE:

One thing that deserves a comment is the criticism, voiced by one philosopher in the comments, that teaching kids to know the difference between fact and opinion is somehow confusing them into thinking that opinions, if they're not the same as facts, must be false:

The reason that someone might criticize the teaching of a fact/opinion distinction is quite obvious: such a distinction is specious.

I am constantly criticizing this distinction when my students try to make it in my philosophy classes.
The main problem with the distinction is that it makes it seem like all opinions are subjective or not well-supported.

But it is my opinion that the earth revolves around the sun. That is my opinion. I really do believe that. It also turns out that such an opinion is true and well-supported. It is a fact that the earth orbits the sun. Thus, the fact/opinion distinction is specious. It doesn't tell us anything important about either the facts or the opinions involved. Some opinions are about factual matters.

Philosophers don't talk about a supposed fact vs. opinion distinction because it is not a valid distinction.

I find this rather strange. The distinction between fact and opinion is specious? As in meaningless? Saying that two words are not identical does not imply that they therefore refer to opposing, disjoint sets. We may talk about some mathematical equations as being beautiful, and others as being true, and agree that truth and beauty are not the same thing, but this wouldn't make anyone think that the beautiful equations must be false, or that the true equations must be not beautiful. We simply have two categories with partial overlap.

Perhaps I am wrong, but I equally do not think that teaching kids to distinguish the notion of "fact" from the notion of "opinion" will make them think that there's no overlap between the categories, with some opinions being facts, and others not. Come on. Kids aren't that silly. 

Monday, February 16, 2015

Macroeconomics: "not remotely scientific"


Excellent post by Noah Smith examining the question of why so many people who aren't trained economists like to weigh in with views on macroeconomics. One reason, he suggests, is that people look at macro and see a modelling approach that doesn't seem terribly plausible, and they also see lots of macroeconomists disagreeing over fundamental points. What they see mostly looks like ideology dressed up to look like something else. As he notes,

There is the perception that macroeconomists don't understand their own subject. The Great Recession convinced a lot of people that macroeconomics hasn't solved any of the problems it was created to solve. Contrast that with physics or bio or chem, which have very obviously given us a lot of the awesome stuff that makes our society rich. In addition, you have very public and acrimonious debates between macroeconomists like Krugman, Cochrane, and Sumner. That convinces a lot of people that there is no consensus within macro, which in turn makes them suspect that macroeconomists haven't gotten any answers out of the Universe. If the experts don't understand anything, why can't the amateurs weigh in?

I am not annoyed by normal people's penchant for butting into macro debates (though the "Austrian" and "heterodox" people do annoy me, since they approach things in a tendentious rather than an inquisitive manner). I think it's natural. Sure, a lot of stupid stuff gets said, but let he who is without sin cast the first stone!

I would agree that this is the main reason. By chance, I came upon this post just as I was reading a speech given two years ago by Manchester economist Diane Coyle. She is by no means a heterodox renegade. In general, she argues that there's lots of value in today's economic theory, though not necessarily in macroeconomics. The problem there, as she see it, is pretty clear:

Macroeconomics – the study of how millions of individual decisions aggregate into economy-wide measures – is essentially ideological. How macroeconomists answer a question like ‘What will be the effect of cutting the budget deficit on growth next year?’ depends on their political views. This is not remotely a scientific area of the discipline.

Tuesday, January 20, 2015

Presuppositions and idealizations...


Lars Syll quotes an interesting passage from Hans Albert on the weird use of theoretical abstraction in economics; "weird" as in very unusual and rather questionable from the perspective of the rest of science. As Albert writes,

Clearly, it is possible to interpret the ‘presuppositions’ of a theoretical system … not as hypotheses, but simply as limitations to the area of application of the system in question. Since a relationship to reality is usually ensured by the language used in economic statements, in this case the impression is generated that a content-laden statement about reality is being made, although the system is fully immunized and thus without content. In my view that is often a source of self-deception in pure economic thought …

A further possibility for immunizing theories consists in simply leaving open the area of application of the constructed model so that it is impossible to refute it with counter examples. This of course is usually done without a complete knowledge of the fatal consequences of such methodological strategies for the usefulness of the theoretical conception in question, but with the view that this is a characteristic of especially highly developed economic procedures: the thinking in models, which, however, among those theoreticians who cultivate neoclassical thought, in essence amounts to a new form of Platonism.

In other words, economists (many of them) start with some assumptions or presuppositions, derive some conclusions, and then feel as if they've made a real and lasting contribution to understanding the world. They've produced an "if... then" statement; established a logical connection. It's often a secondary consideration whether this "if...then" has anything at all to teach us about OUR world. Economics, in this sense, is just a branch of mathematics. Pure mathematics, not applied mathematics.

This is interesting as it resonates quite strongly with the conclusions of the recent work of Itzhak Gilboa and colleagues, who try to understand how economists see economics in relation to the rest of science. Their conclusion is much the same -- that many if not most economists (theorists, at least) see their task as producing "theoretical cases," which cannot possibly be refuted, as they are merely logical connections between antecedent suppositions and logical implications.

I wrote about the article in a recent Bloomberg column, the beginning of which goes below:

When economists say they can "explain" something, beware: Their understanding of the word might be very different from yours.

Several years ago, in the immediate wake of the financial crisis, economist Ricardo Caballero wrote about what he called the “pretense-of-knowledge syndrome” in academia. Economists, he argued, had become “so mesmerized” with the internal logic of their theories that much of the discipline -- even that part concerned directly with policy making -- had spiraled off into fantasy. Even when they studied issues close to the crisis, such as bubbles, panics and fire sales, they relegated them to the periphery of macroeconomics, which at its core valued mathematical elegance over usefulness.

Not much has changed since then. That, at least, is the conclusion of Itzhak Gilboa and a group of economists who recently tried to understand why their profession operates so differently from most sciences. Academic economists, they say, use the term "explanation" in a way that other scientists never would. Instead of developing realistic and testable theories like those in biology or physics, they often aim only to develop "theoretical cases" -- imaginary mathematical worlds with their own rules of cause and effect.

Suppose, for example, that an economist wants to explain a persistent recession following a financial crisis....  

Read more here.
 

Wednesday, December 3, 2014

Yeah for Mark Thoma!

How many economists go out of their way to examine in public what they got wrong in their past views, and what they learned by making such mistakes? I'd say the list is exceedingly short.

So three cheers for Mark Thoma, who does just that in an excellent column in the Financial Times. This is how you inspire trust.

Friday, November 28, 2014

Has big business "captured" the economics profession?


The idea of regulatory capture is a good one, and it’s the principal explanation that academic economists offer for why regulators often — as a rule, in fact — don’t act as firm and wholly independent judges of those they’re meant to regulate. Whether they’re working to make manufacturers meet safety standards, or banks avoid undue risks, regulators rarely act as stern overseers, and often end up softening regulations to appease industry desires. It’s not generally because they’re incompetent or corrupt (although that’s sometimes true). Regulators are human beings, and hold opinions which can be influenced by others. They happen to interact mostly with those they regulate, and so end up getting influenced by the regulated — not surprisingly, in ways that favor those parties.

For example, regulators need information to do their jobs, and cooperation with those they regulate is a good way — probably the best way, and almost certainly the easiest — to get it. They try to get along with those they regulate, and that implies some give and take, some understanding and sympathy. Moreover, as regulators needn’t always remain regulators, prospects for later employment also play a role. A while back, my Bloomberg Views colleague Megan McArdle summarized the natural logic of regulatory capture. It’s not really surprising at all (although it may be surprising that we don’t do more to at least try to avoid it).

Economists are rightly proud of this analysis. It’s an example where thinking carefully about ordinary human behavior, as people do their best to meet their goals and get along with one another, goes a long way to explaining an important phenomenon. However, I suspect that economists may be less happy , possibly even a little alarmed, with the direction in which one of their tribe — Luigi Zingales of the University of Chicago — suggests the analysis ought to be extended.

What about economists themselves? Are they the free authors of their ideas, or are they, like regulators, significantly influenced in their thinking by their interactions with business interests? Zingales suggests the latter — and argues that we should, therefore, consider economists’ views with considerable skepticism. Overall, he concludes, the profession and its publications most likely display a significant pro-business and pro-markets bias, because many economists are captured.

Read the whole thing at Medium.com.