Wednesday, July 15, 2020

Experiment shows that giving people money reduces psychological stress!


An article in the New Yorker trumpets the promising results of a citywide basic income experiment. A few paragraphs into the article we find this statement of the study's objectives:
The study set out to prove that a basic income could, according to the research plan, “lead to reductions in monthly income volatility and provide greater income sufficiency, which will in turn lead to reduced psychological stress and improved physical functioning.”
Of course, in our world of empiricism, we have to give money to people to see if that will lead to the hoped-for results.

Well, if you income is low, then $500/month has to lead to less volatility. I think that the math basically guarantees it. And, if your income is low, does having a guaranteed $500/month reduce your psychological stress? Let me tell you, my income is greater than the people participating in this study, and $500/month would even reduce my psychological stress!

Of course, this result comes in an economics environment which produces a Nobel Prize (actually, the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) for finding that:
Making the schoolwork more relevant to students, working closely with the neediest students and holding teachers accountable — by putting them on short-term contracts, for example — were more effective in countries where teachers often don’t bother showing up for work.
Another amazing result, that making schoolwork relevant and teachers accountable led to improvements. No economist in the Austrian school would have thought to bother testing for these obvious outcomes. No wonder Israel Kirzner has not received the prize!

As a final comment on the Stockton experiment, I quote Benjamin Franklin, who said:
I am for doing good to the poor, but...I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. I observed...that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.
These observations were also made by Alexis de Tocqueville in his Memoir On Pauperism: Does public charity produce an idle and dependant class of society?.

Is there a place for thinking in today's economics? It seems doubtful.

Monday, July 13, 2020

Liberalism has not failed

Jonah Goldberg, conservative pundit, has written Liberalism has not failed, a response to Patrick Deneen's book, Why Liberalism Failed. While I generally have a warm spot in my heart for Goldberg, he makes an unnecessary concession:
America's troubles today are inextricably linked with the breakdown of the family, local institutions, communities, organized religion and social trust. Such deterioration is driven, at least in part, by the relentless individualistic logic of Liberalism and the market (Joseph Schumpeter made this point about markets as far back as the 1940s).
I think that is baloney. It's primarily driven by the steady elimination of consequences that teach people that they have made mistakes. This elimination has taken place primarily through government programs like unemployment insurance, Social Security, and the galaxy of welfare programs that make ill-advised behavior bearable. On top of that, the steady erosion of religion by the forces of rationality has eliminated consequences in the afterlife. These things have nothing to do with the "relentless individualistic logic of Liberalism" and everything to do with the state's increasing position as a universal problem solver.

Thursday, June 25, 2020

Joe Rogan Experience #1494 - Bret Weinstein

Today, after seeing John Deming's share of it on Facebook, I listened to Joe Rogan Experience #1494 - Bret Weinstein. In Rogan and Weinstein we clearly have two people of good will attempting to examine the situation that is now unfolding after the death of George Floyd, although Weinstein has past experience that led him to believe something of this nature was in the future.

I think that Weinstein gets the analysis of what is going on right, but some of his solutions seem to be off the mark, reminding me of my impression of Noam Chomsky. I have a few remarks and criticisms; but it will not be a complete summary and I encourage everyone to listen to the podcast.

Weinstein worries that we are headed for civil war. I have this worry as well. The winner-take-all, zero-sum-game of politics has gotten so divided and the stakes have gotten so high that the two sides (recognizing that there are more than two political sides who simply manifest themselves through one or other of the largest two parties) cannot be happily reconciled. Reparations as a remedy for injustices inflicted on black Americans that resulted in poverty and desperation is a controversial topic. Weinstein believes that some adjustments must be made, while disagreeing that reparations are the appropriate the vehicle.

Weinstein, as most progressives, fails to look very deeply into history to identify the source of the problem of black poverty. Yes, there's slavery, and that is over 150 years in the past; but he dates the current deterioration to the Clinton administration, in which he claims Democrats abandoned the position of defending the common man and adopted the Republican model of influence peddling to businesses, albeit "other businesses." This claim ignores the fact that black poverty was declining prior to the War on Poverty but has not had an appreciable improvement since shortly after that legislation was enacted. Ignoring this fact prevents him from offering the possible explanation that incentives for poor people have changed in a way that reduces or even prevents progress. To quote Benjamin Franklin, "I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it."

Weinstein exhibits a kind of oppression mentality, arguing the "police brutality is a feature, not a bug" in the sense that powerful elites must use the police to keep the lid on the people who have been cast into misery. Such an idea creates a direct link between the elite and the masses that I doubt exists. Those who work for the state and have "qualified immunity" have little incentive to behave in a civil manner, as a server would toward a customer. I believe the brutality of our system has more to do with perverse incentives than the purposeful oppression of the downtrodden.

Weinstein argues that blacks and Native Americans have been deprived of their software—the culture that guided their lives prior to the devastating experiences of slavery and decimation, respectively. But humans are very flexible, and adapt quite quickly to new environments. Blacks made steady progress over almost a century after slavery, but then became enmeshed in a culture of victimhood and subsidies that were meant to elevate them but largely increased their dependence. Native Americans, on the other hand, were sequestered in reservations that are run in an environment of pure communism. It's no wonder that, while some individuals from both groups have been quite successful, the majority have achieved far less than they might have. It must be emphasized that the problem is not the race or moral fiber of those who are suffering that is the cause—they do not deserve it—the culture, the software, created as a result of the incentive structure, is at fault.

Approaching the halfway point, Weinstein makes a claim that I have never heard before—that black men are leaving their children fatherless because the number of black men in prison produces promiscuity in those remaining. First, he says that when men are in high demand sexually, they tend to be worse actors, which I find plausible. That coupled with the incarceration rate of black men leads to male promiscuity, which I find plausible, and to abandoning their children, which I find less plausible. I think the abandoning occurs because their children are not only shielded from bad outcomes by welfare programs, but may have also be benefited, as these programs may provide income and benefits unavailable to a family that is working poor.

Moving on, Weinstein characterizes the system as "so politically corrupt it's not interested in doing what has to be done." His remedy is to draft two individuals, one center-left and one center-right, and who are "patriotic," "courageous," and "highly capable," run as a team for President and Vice President. The plan is that they will govern by deciding on actions to take together, with the President having override power in case disagreement. This is politics with romance—the idea that we can just pick the right people to be at the top of this massive, intrusive bureaucracy and everything will be fine. In The Open Society and Its Enemies (4th ed., vol 1, p 121), Karl Popper suggests that the proper approach is not to ask "Who should rule?" but to ask "How can we so organize political institutions that bad or incompetent rulers can be prevented from doing too much damage?" Clearly, Weinstein is not asking the question Popper believes is more important. Weinstein goes on to suggest his center-right and center-left picks, Admiral William McRaven (former Navy SEAL and former Chancellor of the University of Texas) and Andrew Yang (former Democrat Presidential candidate and supporter of Universal Basic Income). I will refrain from commenting on these two—two people I would definitely not want to be at the helm when we have political institutions that will not prevent them "from doing too much damage."

A real surprise comes when Weinstein supports the conjecture that SARS-COV-2 leaked from the Chinese virology lab in Wuhan. He was initially persuaded that the virus had occurred naturally, and was transmitted via bats in the Wuhan wet market. However, on investigation Weinstein became skeptical and now believes in the "strong possibility" that the virus was enhanced in the lab. I have to point out that this is the mark of a real scientist—the fact that he changed his mind upon investigating the fit between the theory and the facts.

Finally, Weinstein discusses the corruption of science, including his own experience in trying to bring his findings to the attention of the general scientific community. These findings would jeopardize the protocols used in testing drugs, and it is crystal clear why they would be resisted. The pharmaceutical companies operate under a protective umbrella provided by the FDA, which infuses perverse incentives in the system. Weinstein's findings would jeopardize previous FDA approvals and probably cost the industry billions. Of course, the FDA, arguably a real culprit in this process, would be immune from the consequences, but we can be sure that the political pressure to continue the process as-is is tremendous. If drugs were approved by insurance companies or some institution funded by insurance companies, Weinstein's findings would be of immediate consequence, as endangering policyholders' health and welfare is the last thing an insurance company wants to do.

Bret Weinstein is like so many leftists, including Noam Chomsky, who are great at identifying problems, and so bad at proposing solutions, which generally are compatible with the theme of more government intervention. They are completely insensitive to economic theory, and the data that cries out for more evolutionary learning and less heavy-handed, top-down, one-size-fits-all "solutions" to problems. However, he seems to be thoughtful—a real scientist—and someone who might, someday, abandon both the left and right and consequently politics with romance.

Sunday, February 09, 2020

The Society Most Conducive to Problem Solving

The Independent Review,  "A Journal of Political Economy," has published my essay "The Society Most Conducive to Problem Solving: Karl Popper and Piecemeal Social Engineering."

The paper was presented first at the 2014 Symposium on Karl Popper & the Open Society held at Lebanon Valley College, Annville, PA (video of the presentation may be found at the symposium link) followed by the presentation of an expanded version at the 2015 Austrian Economics Research Conference at the Ludwig von Mises Institute, Auburn, AL. Subsequently, the paper was further expanded and revised to address referees' comments and criticisms before final publication.

At this time the article is only available for purchase in the context of the complete issue. Within 9 months or so it should be available as an individual pdf.

Please feel free to comment below.

Saturday, December 15, 2018

Are Societal Structures Really "… the result of human action, but not the execution of any human design?"


This phrase from Adam Ferguson (quote in context here) is bandied about quite a bit by supporters of markets and, specifically, in the context of Friedrich Hayek's views of markets and society. The phrase brings to mind the inductivist view that science proceeds first by observations"just observe." However, in the case of creating social structures, "just act." This formulation can lead one to think that in science any random observation can lead to knowledge, or in society, any action will contribute to the spontaneous order. Such thinking denigrates the individual and minimizes such achievements as Newton's laws of motion and Mises's work on socialism's calculation problem.

If we accept Mises's definition of human action, "purposeful behavior" (Human Action, p 11), we take it that each action is rational and aimed at a certain end (this is not to say that impulsive or instinctual actions involve thought processes, but that the ones that concern us in economics and social interaction do). Therefore we can say that each action is designed by the individual for a specific purpose. When individuals act with a purpose in mind they are supported by the entire background of biological and societal evolution that preceded them. For that reason, actions are not random but are stochasticly targeted in the sense Denis Noble describes in Dance to the Tune of Life (194-197), varying only part of the theoretical structure.

In acting, each person impinges upon the plans of others. As each person adjusts their plans to mesh with others' their actions produce effects that feed back into the system, producing new effects unanticipated by the original actors. These new effects produce plan revisions, and so on. The pattern is the same as Karl Popper's tetradic schema:

P1 → TT → EE → P2
 Where P1 is the initial problem state, TT is a tentative solution or theory, EE is the error-elimination process applied to the theory, and P2 represents the new problem state that has been generated by the process.

This concise representation is simply that of a Darwinian or evolutionary approach to knowledge, reflecting the iterative process of markets that is so foreign to the state and political governance.

New knowledge is created at the frontier by trial-and-error based upon what we currently believe to be true. Individuals produce the mutations to our theoriesscientific and socialthat make progress possible. These mutations are tested against reality and retained or discarded based on the results. Sometimes, when problems with an accepted theory become too great science takes a step back, and we discover we "know what ain't so."

At this moment in history, it appears that what we are in such a position with economics and society. In economics we are in the grips of the neoclassical synthesis, which provides an intellectual argument for the state, an institution that already resists falsification through power and violence. In society the failed arguments of natural rights have opened the floodgates to identity politics and the intellectually sterile ad hoc strategy of resistance to it. It would seem that we are heading for a giant reset in which one hopes for a rethinking of the whole project of governance resulting in institutions developed through the trial-and-error of what I have called evolutionary liberalism. Only then might we have Peace on Earth.

Monday, September 17, 2018

Thoughts on Popper's World Three

In Popper's concept of three worlds (see here for a brief discussion), he characterizes world 3 as "autonomous," and restricts it generally to humans with some minor exceptions, like spiders' webs and birds' nests. However, it seems to me that world three exists at multiple levels in living organisms.

Organisms need a way to pass on their learning through time if progress is to be made and so must search for a world 1 representation of world 3 knowledge to serve this purpose. I suggest that DNA is the representation of world 3 knowledge for cells, while the brain is such a repository for organisms with central nervous systems. In mankind we see, for the first time due to the phenomenon of language, knowledge represented outside of the organism, while it is still within the evolving organic social system. This idea means that we have multiple world 1 representations of world 3 within us (e.g., within the immune system), and that many of them may so far be undiscovered.

This generalization of Popper's thinking is in line with his ideas of evolutionary knowledge and removes its anthropocentric bias. It would appear that Popper was moving radically in that direction when he wrote, in "Towards an Evolutionary Theory of Knowledge" (1990, p 35)
Can only animals know? Why not plants? Obviously, in the biological and evolutionary sense in which I speak of knowledge, not only animals and men have expectations and therefore (unconscious) knowledge, but also plants; and, indeed, all organisms.
I cannot know if Popper would have embraced this idea of a world of world 3s, as he may have seen some flaw and responded with a conjecture that moved far beyond what I am suggesting. After all, it seems like he spent a lot of time trying to explain world 3 to his audiences. However, what seems beyond dispute is that there are representations of knowledge distributed among the many cooperating systems in our bodies, regardless of whether we assign that knowledge to "world 3."

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Popper, Karl R., (1990) . "Towards an Evolutionary Theory of Knowledge" in A World of Propensities, by Karl Popper, 29-51, Bristol, UK: Thoemmes.

Sunday, August 12, 2018

Command or Coordination?

A couple of weeks ago, after an online discussion of some of Denis and Raymond Nobles' ideas to be published in a forthcoming paper, I sent them an e-mail inquiring about a statement that had been made in the discussion that seemed to contradict something I had read in another book  Gary Cziko's Without Miracles. In describing the hypermutation to produce antibodies in the immune system, Cziko wrote "Antibodies that are not successful leave no offspring and therefore soon become extinct..." (1995, p 45), while Denis Noble had said they were "told to die." The important part of the e-mail is produced here:
I did want to ask at least one question that was prompted by something you said – that the immune system cells that do not produce successful antibodies are "told to die." My first brush with the amazing workings of the immune system were in Gary Cziko's book, Without Miracles, in which he suggests that the unsuccessful cells simply cannot reproduce and die in the natural course of things. In my mind there is a great difference in the two descriptions, although the end result is the same. The first I would characterize as an authoritarian regime, while the latter would be self-limiting. 
This difference comes to the fore in upward and downward causation, which you say have differences in your paper. I have biases, and maybe even prejudices, towards methodological individualism, acquired through valuing personal freedom and reading economists like Ludwig von Mises and Friedrich Hayek, and finally, Popper who, as you must know, was friends with Hayek. This methodological individualism leads me to see organisms as cooperative entities – even as societies – of cells and/or organs that are coordinated by signals rather than orders. Possibly, there is no way of testing the difference, but I don't see that cells or organs are acting in the ways they do out of fear of punishment, as is the case in what we might call a human authoritarian environment. They generally simply do what they have to do or, if we may anthropomorphize, what they want to do. Negative feedback mechanisms develop to dampen cheating (mentioned in your paper), but they seem to be spontaneous and, again, operate at the individual level. 
This issue comes up in discussing societal evolution, as people like David Sloan Wilson advocate more central planning based upon the idea of downward causation. I have argued that societies expand and contract based upon their attraction to current and potential constituents. If rules are created that reduce the attraction of a society, there will be pressure for changes (voice) or for exit. For example, the USSR and its satellite countries created a large population of people who, without voice, desired to exit, with almost any country in the liberal West being preferable. This desire demonstrated the attractiveness of liberal values relative to Soviet ones. Wilson, on the other hand, believes the purpose of society is to limit personal freedom in such a way that society is not threatened – something that the USSR was clearly in the business of doing. 
My question to you is how you understand the word "control" when using it in the context of downward causation. Is it authority, coordination, or something else?
 At this point I have not received a reply, and have some guesses as to why. One is that I am just not in the same league as Denis and his brother, and there is some merit in that possibility. Denis, at least, has many honors, and we can easily believe that he has many demands on his time that make responding to me of low priority. When I sent him a link to A Popperian View of The Selfish Gene he didn't know me and responded very quickly, but he may have since seen that I have no publications or academic standing and decided that responding, or even entering into a debate, would not provide him any value. That is a choice that I would respect.

Another possibility is that the mention of Mises and Hayek, along with the indirect criticism of David Sloan Wilson, led Denis and his brother to believe that I am a "market fundamentalist." If they tend to agree with an authoritarian view of downward causation an answer could have led to a tedious debate, linking this possibility with the first. It would have been a terrible waste of their time to present arguments to someone with no standing, and not answering nipped the problem in the bud.

Of course, I would like to have known, and if I receive any communication from the Nobles on these subjects, I will follow up in the comments, or edit this post to indicate the change in status. In any case, I have enjoyed reading Denis's and Ray's works, and suggest than anyone who reads this post could benefit by doing the same.

Cziko, G. (1995). Without Miracles: Universal Selection Theory and the Second Darwinian Revolution. Cambridge, MA: The MIT Press.