Economics and economists

For a very long time, I've held a dim view of economics as a "science" and economists in general. It's funny, because I had never taken an economics course. Not in five years as an undergraduate; nor the two extra years I stayed at my alma mater picking up my MA in math. This, in spite of the fact that I had become quite interested in voting theory¹.

Not only had I never taken any econ courses, I knew precious few economics majors and almost never talked to them about economics. Off the top of my head, I can remember only one - a fellow who shared a first name, a fencing hobby, and for the first half of his freshman year, an intended physics major with me. He was doing badly in physics and so dropped down into economics because it was easier.

What I did know is what I read about economics and economists. I was familiar that the justification for right-wing economic policies - including a number that seemed to fly in the face of countervailing empirical evidence, such as the old Reaganomic rattle about tax cuts stimulating growth².

I read biting critiques of economists by philosophers and Richard Feynman. I even read articles by economists trying to demand more respect for their field, but remained totally unimpressed. I did not study economics, and from what I saw, economics was not even a science.

I also thought that economics education seemed to be all about learning how to agree with standard doctrines³. The handful of different approaches to economics, Wikipedia and other sources informed me, were hostile to each other as schools of thought and mainly differentiated by choosing the appropriate sorts of assumptions to back up a particular political faction⁴.

I knew there was actually some pretty cool stuff in economics - some neat results here and there - but I dismissed economics. I've been frequently heard to declare that economists aren't scientists, but bad mathematicians attempting to do philosophy.

And now?

So instead of trying for a doctorate in physics or pure mathematics (I had funded offers for both), I decided to go California and get a doctorate in a cross-disciplinary institution. I'm still a math man at heart, but my funding comes through the school of social sciences, and in the last year and a half, I've had more interaction with economics, economists, and econ majors than in the rest of my life put together.

I TAed an econ course my first quarter here. I'm taking my first econ course this quarter. At least half the students in my research group come from an econ background.

So here's what I know now. There are economists who are scientists, good ones who believe in the scientific method every bit as much as Feynman did. They seem not to be a majority of the field, but they're actually testing theories of economics. The good ones are studying and applying psychology to understand why people act as they do and then explaining the collective irrationalities we seem to engage in.

Many economists are critical of economics and other economists. Econ graduate students and economists themselves are usually fairly bright. There are a lot of smart economists out there doing a lot of good work trying to figure things out.

While some econ majors are surely the immediate predecessors of the bright, smart, and motivated grad students I meet with on a weekly basis, most of them aren't. If anything, econ majors seem to be wholly different creatures on an entirely different plane of competence. They're terrified of the math that is necessary to get anywhere interesting, and seem to have relatively little understanding of the scientific method.

I'm not sure that my oft-repeated claim about bad mathematicians trying to do philosophy isn't true of the bulk of economists, or economics viewed as an academic field in practical terms. But now that I know some people with economics degrees sitting beside their names who don't fit neatly in that pigeonhole, the fun's gone out of saying it. It just seems like a cheap shot now.

1. It started when I as an undergraduate got to participate in a seminar field-testing this book. It's a field that's been largely populated with economists for the last half-century.
2. That one is a very hard sell for someone who started following the news in the early 90s, watched economic growth follow the Clinton tax hikes, and then watched the economy flatline during the Bush years after being "stimulated" by tax cuts.
3. I actually didn't get that notion from reading articles like that one. I got it from reading between the lines in articles written by economists trying to defend their field, and also from students who'd found economics courses disagreeable.
4. To this day, I believe this is how people who don't make a living in economics decide what school of economic thought is best - take the conclusions that they like and work backwards to justify the assumptions that school swears by. I suppose this may also be true of some economists.

Snap judgment

One of the most difficult things in the world to do, for me, is withholding judgment. It's something I have to constantly work at, to train myself in, and for a scientist or a mathematician looking to discover the untested truth of propositions, one of the most important.

The moment I look at a proposed theorem, or a math problem, or read the description of a court case, I want to be able to say "Well, obviously, it's this." I want to know that man is definitely guilty, I want to know that the proposition holds for all x>3, I want to be able to tell immediately if a fuel is a thermodynamically viable carbon-neutral energy vessel. I'm impatient like that, and growing up with the ability to answer nearly any of the "math" problems posed to me within seconds probably didn't help.

I mean, I sped my way through the SAT, taking less than half the time allotted on each section, just because I wanted to say I knew answers immediately, to make snap judgments. It didn't matter that it was important for college admissions, and it probably didn't help that the one time I actually went back and made myself check my answers, telling myself the test score was important, I got a 1480 that was almost exactly the same 1480 I'd gotten the previous year (740/740 vs 760/720).

But the thing is, I also hate being wrong . I just have to be right, and being wrong would be even worse than having to wait for the answer. So I learned - slowly and painfully - to withhold judgment. The study of philosophy has been very helpful for me in developing that patience, and I've withheld judgment about many things that few people hesitate to fix in their mind. I'm comfortable with being an agnostic; I push myself to try foods that I was sure I disliked; I understand how to take a hypothetical position and work up a whole tree of contingent conclusions while keeping my assumptions in clear sight.

It's not what I really wanted - to know the answer now - but if I can only either be sure I'm right, or have my answer now, I'd rather be sure.

Fascism

It might surprise some of you that I run into both supporters of fascism and people who terribly misunderstand fascism historically on a very regular basis. I see at least one or the other almost weekly; certainly almost every month for the past half decade.

You might say that it's simply because of Godwin's Law: Any vociferous argument over the internet will inevitably wind up with comparing people to Nazis. I don't really believe in Godwin's Law, but for a common touchstone, fascism certainly is poorly understood, and since fascists are almost shorthand for evil, well, it's easy to see the motives for the poorly stretched analogis to Godwin's Law.

And it's not limited to casual discussion on the internet. The political right has been working hard to cast Hitler as part and parcel of the political left, an exercise that reached new heights with Jonah Goldberg's book Liberal Fascism, and something truly remarkable to historians who recall that the architects of fascism explicitly identified liberals as a problem. The conflation of "socialist" with "national socialist" is one I have seen all too many times.

It's with good reason that historians put fascism on the right side of the political spectrum, but it would also be naive to confuse the modern political right with fascism. Modern fascists and - if you are one of those few who draws a distincition - neonazis almost always align themselves within the political right wing (e.g., David Duke), although the mainstream of the political right generally disowns their support. Historically, fascists drew their support from business elites, corporate interests, and traditionalists, core groups for conservative movements now.

There are common elements, such as the invocation of nationalist sentiment, militarism, leaning heavily on traditional family values, and getting "outsider" ethnic groups to conform to an identified traditional norm or leave; there are also critical differences, such as theoretical economic policy.

Right wing ideologues will at least claim to support the free market - fascism, however, was nearly as opposed to lassez faire economics as it was to socialism. Proponents described it as a "third way," neither communist nor free-market. To understand fascism - and I only suspect that I do - it is necessary to understand that fascism is all about the good of the nation. In the Nazi model, we insert the good of the race as a template over the good of the nation, but in both cases, it is about competition and strength. Social Darwinism is probably the most compelling ideological inspiration for fascism; and at its core, fascism is not particularly peaceful.

When conflict can serve to strengthen a nation, weeding out weaker elements within the nation and weaker nations within the world, conflict becomes desirable.

But everybody already knows what fascists are. Fascists are people who do and believe something different from you politically, who you think are forcing the wrong thing upon you... right? Leave alone this nonsense about "historical reality," you know what you want to believe!

Fanon and Iran

The fact that protests are continuing in Iran leads me to several conclusions.

One, my initial guess as to what would happen has proved fairly correct, and my hopes disappointed. Those in power have clamped down, rather than reaching out, conducting a runoff election, and settling the matter with Mousavi, who is no radical; instead, it looks just a little more like revolution. With Mousavi and other approved candidates trying to distance themselves from the protests, there's no clear outlet left within the system, and so pressure has built.

And even though Iran is not by any means a colonized state, I always think of Franz Fanon when it comes to the question of revolution. Fanon very boldly asserted that it was better that the colonial powers were violently overthrown, rather than giving up power in a peaceful and bloodless transition; better to make a clean break with the past.

I sometimes wonder if he was right in that judgment. Violent revolution is a terrifying thing - but as dearly as it is sold, one wishes that something be gotten for the monstrous cost in blood. I suppose soon, when we start reaching forty day marks, we will see whether the pace of the 1979 Iranian revolution and this one are one and the same; I do not suppose that we will know soon, however, what to expect.

I will go as far as to predict this, though: The longer and harder the fight, the more radicalized it will become, and the sharper the changes that Iran will face. Whether or not the existing establishment falls, whether or not Mousavi or any other moderate tries to ride the tiger to tameness.

The economist's volcano

I went and read another bit of a book written by an economist, and after another chapter of him displaying what I wish were a bad parody of economist behavior, this illustrative scenario occurred to me.

Suppose you have a magic volcano. Not just any volcano; a special magic volcano. When you throw someone into the magic volcano and make a gainful wish, it calls up two immortal beings: An actuary and an economist.

The actuary tells the volcano how many years that person would probably have lived; the economist looks up the current estimated GDP per capita and current market prices of every commodity and manufactured good. Since this is a magic volcano, it can do multiplication, so it takes the GDP per capita and multiplies it by the years of remaining life that person was expected to have.

The next morning, on the slope of the volcano, you'll find whatever you wished for, in whatever quantity, to the market value of that much money - a whole productive lifetime of money right up front, and maybe that particular person wasn't that productive. The volcano doesn't care if they're a hard worker or chronically unemployed.

So, is throwing people into the volcano an act of public good sometimes, most of the time, always, or never? It's certainly a positive economic benefit more often than not, defined in terms of financial value or productivity. Would you want to throw someone in the volcano? What do you expect should - or would - be done regarding this volcano if the news of its abilities spread far and wide?

There's a point to prosperity. I just don't think it's especially important once you've figured out how to keep people alive and well.

Corporation as individual

One of the odder corners of legal philosophy and business is the invention and treatment of the limited liability corporation. The idea is that rather than an individual acting directly, they can bundle their money together with other investors while at the same time limiting their responsibility to a simple dollar sign.

A corporation can't be liable for more than what it actually holds on hand, and nobody in particular is responsible for it - not the executive officer, not the board, it's something of a blank empty void that can't be put in jail and whose maximum financial penalties are sharply limited.

It's either very good or profoundly problematic. Good, in that it allows small investors to take a share in large ventures without being worried about negligence on the part of those with more share over running said ventures; problematic, in that action that would lead to severe penalties for an individual can go unpunished or underpunished with nobody in particular clearly responsible.

The most bizarre turn is that under law, corporations are treated in many cases like individuals. While I can be convinced that the benefits to the efficient allocation of capital are great enough to warrant the construction of such an entity, it remains very difficult for me to buy that this non-jailable entity, so difficult to hold accountable, deserves the same legal protections and fundamental rights as a human being.

Moreover, the sheer scale of a corporation and its anonymity makes it highly difficult to keep damage in perspective. If I were to shout "Fire!" in a crowded theater and caused a dozen people to be trampled to death and others injured, I could be put away for the rest of my natural life on multiple counts of manslaughter; for a large corporation, a dozen incidental deaths resulting from poorly-considered actions (such as failing to place a warning label "DO NOT MIX WITH ALCOHOL," or knowingly selling batteries with a tendency to burst into flame) barely even qualifies as a speed bump.

We're already not equal. I am far more accountable than the corporation is; I can incur penalties and responsibilities well beyond the current value of my bank account, I can be imprisoned... and the corporation simply exists to help people turn a buck. If it has a "motive" for exercising political influence, it is for the crass motive of its own bottom line; a corporation, not being an actual person, has no morality, no soul, no religious or political dispositions, no reason for any personal "rights" at all beyond that of being created and dissolved in a manner according to its legal liabilities and its charter - in that order.

A right to privacy? Kid me not. A strong motive to keep trade secrets, yes; a reason for wanting to obstruct investigation, sometimes; but a corporation has no personal affairs, not being a person. It cannot have a sex life or write poetry about how depressing its life is; it is simply a framework for handling responsibility for financial adventures that no single investor wishes to hold personally.

Long term; short-term

Some days, I wonder how many of the people I meet are putting their long term interests or their short term interests first.

Being aware of both is another thing that many people don't do well, whether planning for a party or running a major corporation. Unfortunately, we put many people in positions where they are unlikely to look for long term interests - traders looking to make the new smarter quicker buck, a CEO hired to make immediate changes in the short term profit numbers, politicians looking to win this year's race.

And while it's foolish to neglect your short-term interests completely, it's possible to focus a little too much on the long view, but it's much easier to go for the immediate reward. And I can't help but think that when people looking only at the short term results get that immediate reward, they're being trained to keep doing that. Something about psychology and positive reinforcement.

Nixon's southern strategy won the Republican party the South for a generation - and alienated the non-white voter for at least as long. George III found the colonies a quick and easy source of additional revenue. It is usually a perfectly rational strategy that is the worst mistake of all. Just dump it in the river, and watch it catch on fire after decades of dumping; save a few million now by privatizing prisons, and watch prison populations climb at a faster rate; throw out the rules of war, and wonder why your opponents do likewise.

This is the real reason I don't trust in the invisible hand - and the reason, too, why I try to be so careful in my decisions these days. Everything has consequences stretching into the long term.

Occupation and representation

Every so often I am reminded of Puerto Rico. It comes up in political discussions, and I've known a few people from there, or who have family from there. And every time it comes up, I wind up feeling like there's something wrong.

A dozen generations ago, Benjamin Franklin, Thomas Paine, and company were grumbling about being subject to a sovereign who they had little influence on. Parliament representation was not for mere territories.

Now, here we are, continuing to return the favor. I know - Puerto Rico gets a lot out of its relationship with the US. But it's a real affront to democracy for us to be sitting here on the mainland and handing down decrees. It's not a pressing security issue or some kind of wartime emergency; we just own it and rule the 4 million or so people there in a state of legal limbo - neither an independent country nor one of the states making up the United States proper.

There's also Guam, American Samoa, the US Virgin Islands, and the Northern Marinaras, which are a good bit smaller - between the four of them, they have a little less of a population than Wyoming. Each is individually large enough to be admitted as states under the Constitution, of course. And while many people on both sides of the affair find the status quo a reasonable compromise, I don't.

If we're ruling over you, you deserve representation in our government. "Territory" should always be a temporary status, and it should be one that's revisited regularly. Puerto Rico was taken over by the US about the same time as Hawaii and the Phillipines. Hawaii has been a state for fifty years; the Phillipines were granted independence sixty three years ago. Puerto Rico deserves to get its hands on either full statehood or independence; so, too, do the four smaller territories I mentioned.

As small as they are, Guam, American Samoa, the Northern Marinaras, and the US Virgin Islands still deserve to participate in every level of government they are subject to.

Slavery

Today was Juneteenth, and so the historical ending point of slavery in the US has passed through more minds than it usually does this week. And yet, archaic institution or not, slavery captures a lot of creative thought.

There are several modern arguments hidden in the corners of the moral and ethical spectrum of opinions that favor slavery. All - well, almost all - are unwilling to say that the institution of slavery as practiced in the US was a-OK. Hereditary racially-based lifelong slavery in which the owners have unlimited rights to dispose of their property as they see fit? Certainly not!

But while I think that the wrong was in the humans-owning-other-humans part, others would suggest it is in the other details. Why, if it is entered into with agreement by the party being enslaved, appropriate rights left to the slave, has nothing to do with racial oppression, what of it? Shouldn't people be free to enter into such a contract?

It is a perfectly libertarian turn of phrase. If slavery is a transferable contract, shouldn't it be legal? Leaving aside the sticky issue of people being pressed into slavery under duress, false pretenses, et cetera. There is a subtle point in the works. While undoubtedly there are those foolish enough to sign themselves onto an open-ended transferable contract - and some of the more clever transferable labor contracts look something like that - there remains the freedom to walk away from a contract at any time - throw up your hands and walk off the job. You may be out money; you may even be liable for financial penalties; but you retain that liberty.

Perhaps most importantly, it retains a sharp distinction between people and property, which is a dangerous line to blur. And perhaps we should carefully look at the things that look like slavery - prison labor to fill pockets, transferable contracts, and the penalty clauses allowed to labor contracts - and ask ourselves "What is the difference between this, and some nicely cleaned-up version of slavery?"

And those of you in the BDSM crowd who are into the master-slave relationships and roleplay on a purely consensual basis, who can end it at any time? You can ignore all that.

Retroactive reason

We are very fond of speaking of ourselves as rational creatures, but I cannot be sure that even I am more rational than rationalized. As methodically and carefully as I approach life, and making the decisions that I make, it is very difficult to be sure that I have arrived at a decision through the rational process, or whether I simply use the rational process to justify the decision I want to make.

Every once in a while I catch myself at it - usually a little late. You rationalize a little bit, then you rationalize a little bit more, and then the data come around and slap you in the face and say Yo, you're wrong! This is why I'm very leery about claiming to know things - careful critical examination of the justification is required to be sure it's not just a pleasant rationalization with a giant hole in the middle.

Physics envy

Choosing where to go to graduate school was a long and difficult process, and of the many considerations that passed my mind, none seems more petty than status. There's something of a heirarchy of academic fields when it comes to the respect its practitioners and experts get, and "social scientist" ranks near the bottom of the sciences pile, to the point where many people will point at one or more of its disciplines and say "Well, that's not even a science."

Indeed, I've accused economists of being nonscientific before myself.

I was introduced to this concept in my introductory psychology class as "physics envy" - because physics tends to be on the top of the respect pile for the sciences, unless you count mathematics - and talked about it in my philosophy of science class. In fact, physicists get so much respect from "lay" people that they're almost treated as a priesthood of the modern age; listen to the questions physicists get asked in media interviews.

There's also a ladder of respect based on your school's reputation. So when I passed up going to a top-25 physics school for theoretical physics, and decided to go to a unique cross-disciplinary program at a less prestigious university, I felt a twinge of regret on that account. It felt like I was gambling the respect I could expect to get for my research against bad house odds.

A doctorate in physics from a top-25 school - nobody but the most Ivy League of snobs would dare to badmouth that. Working on an applied mathematical field traditionally occupied by economists at a school I hadn't heard of three years ago? Perhaps it's because that evaluation felt like such a petty reason that I made the decision I did. I've been known to be contrarian before.

The key of falsifiability

When I hear people talking about teaching intelligent design, "proofs" of economics, and touting home remedies, I think about what makes something a scientific theory.

It needs to make some kind of predictions that can be tested. A scientific theory has to be falsifiable; it simply has to be the case that measurements could be made that would make it false. When they fail to do so, we proclaim the theory good.

An object falling does not prove gravity. I could just as easily say that things want to be close together, that celestial bodies naturally move in circles while terrestrial bodies want to be stationary on a low-lying surface, and explain everything that way. Data always underdetermines theory, points underdetermine functions, facts never tell the whole story of a case.

So why? The best theory is the one that walks the knife-edge between falsifiable and false. The slightest changes in the data could invalidate it - but somehow, they haven't. Arguments about government policy illustrate the point perfectly; is the problem too much protectionism, or too much free trade? Too much subsidy, or not enough? We can stretch and contrive a complex explanation justifying ourselves, and in fact, pundits seem to do so all the time.

What would it take for you to disbelieve this idea? If you can answer that question, you know whether you're relying on science or faith to justify your belief.

I, Agnostic

Occasionally, I tell people that I am an agnostic. This seems to provoke some discussion, now and then, as the devout Christian or equally devout atheist would like to know just how I could be indecisive.

I'm not being indecisive, I reply, and so begins my long story. I'm not an agnostic because I haven't seen the arguments presented by either side, and can't make up my mind; I'm an agnostic because I refuse to believe something I can't know. I can't know there is a God; I can't know there isn't a God. Or Goddess. Or some number or combination of divine, semi-divine, near-omnipotent, or other supernatural beings.

That doesn't mean I don't make contingent judgments, or moral judgments, or ethical judgments, or that I don't have my own peculiar fanatical beliefs. I don't need to believe in a God, or know punishments or rewards await me in the afterlife, to decide what I should and should not do; to be the best person that I can be, to do good as best as I can, is its own reward. Nor do I need to deny others their own leap of faith in declaring there is - or is not - some God out there. For practical terms, one good leap of faith is worth quite a bit of philosophizing.

For myself, I am content to muddle along on judgments, logic, and philosophy, knowing there are things out there that I cannot know.

In a perfect world, there are no abortions

There are few debates that make me as uncomfortable as the one over abortion. Perhaps it is because I saw Citizen Ruth when I was thirteen; perhaps it was because I grew up in the UU church, and was told to question everything and make up my own mind, rather than being told what I must believe.

Perhaps it's simply because I am willing to discuss any topic with anybody, and so I've come to learn that abortion lies in a very grey area: In a perfect world, there are no abortions. Why? Because there are no unwanted pregnancies, no medical complications, and so no demand for abortions. Depending on which camp you belong to, either people aren't having sex that isn't intended for reproduction, or they're using contraception that works all the time when they don't want to reproduce.

But contraception does fail. Accidents happen. Worse, rape happens. All sorts of conditions in the real world create pregnancies that aren't desired, and it's here in the real world that the abortion debate lives. And it's conditions in the real world that can render the debate a moot point; invest in medical technology and reproductive infrastructure enough, and abortion could become obsolete or nearly so.

Until you do, we have a very real conflict between rights and values, with a philosophical open question thrown into the mix for good measure, to keep everybody at loggerheads.

One right is the right to control what happens to your body. When this right is violated, it's terrifying; fundamentally, we see our bodies as ourselves, and our very identity is threatened when that control is taken away. The other right is the right of every human to live. And here's the fundamental question: When do we stop being the potential to become human and actually become human? Because at that moment, the two rights can conflict.

How you answer the question of when life starts usually fixes you on the pro-life/pro-choice map. Myself, I don't know; I suspect I can't know. Conception - at which point there exists only a glob of undifferentiated cells? At quickening? At birth? One's naming day? Eighteen months later? I think birth is a convenient marking-post, but it's a fairly arbitrary one. Viable outside the womb? That's a moving one, depending on medical technology and financial investment.

Personally, I see the pro-choice position as practical. I don't know if I'm right, but if abortion is murder, miscarriage is manslaughter - and that is a terrifying idea to me, having watched a couple I lived with go through a miscarriage. I can only imagine what effect a criminal investigation would have had on them.

I know, firstly, that abortions will happen whether they are legal or not, and if they are not legal, they will be likely frightful and dangerous;l that most people are not inclined towards looking at this issue coldly or rationally, and that most people don't see the technological route to circumventing the entire problem that I see with such clarity.

I know, secondly, with certainty, that if we do not allow a woman to choose to stop being pregnant, that we will violate her right to control what happens to her own body. I am not so certain if exercising her right to sovereignity over her own body conflicts with another imperative, but that question I am in no position to judge. And that is why I will leave it to each and every woman to grapple with the choice of whether or not to carry a pregnancy to term.

I know, thirdly, that if someone wants to stop abortion, it is their logical duty to fight for improvements in contraception, for comprehensive sexual education, and to fight against rape culture, all of which will help reduce the number of abortions performed. If you do not so fight, do not tell me that eliminating abortion is your number one priority, because you aren't doing all that you could do.