Category: A Rationale
Posted by: Admin
Philosophy may be too broad a term for the specific interest I have in the Philosophy of explanation and knowledge, ways of reasoning, means for thinking about content and process, as well as making sense of rights, duties and obligations. Since business and life involves reasoning and knowledge, learning about these phenomena is indispensable for me....
Category: Problems in explanation
Posted by: Admin
One of the genuinely brilliant minds of the last century, Feynman contributed in numerous areas. Not the least of his contributions was to rigour in thinking. In this series of blog pieces I record some of his observations which I have found most insightful.
He noted that while in the physical sciences we have a number of confirmed theories which account for various phenomena, this is true only at certain levels or scales. Thus he cites the very well specified body of laws we have which describe and explain how and why water goes over a waterfall and descends to the pond or river below.
What we do not have he notes, is any body of law or theory which tells us how a specific body of water in a specific waterfall will unfold in the particular pattern it will while obeying the larger scale generic laws (gravity and so on). This strikes me as having important counterparts in economics.
We have a well elaborated law of demand for example. We do not have laws and theories which tell us in any meaningful fashion quite how a particular demand curve will unfold.
In this sense at least economics is no better but no worse than physics - a point often lost on journalists, politicians and the like.
He noted that while in the physical sciences we have a number of confirmed theories which account for various phenomena, this is true only at certain levels or scales. Thus he cites the very well specified body of laws we have which describe and explain how and why water goes over a waterfall and descends to the pond or river below.
What we do not have he notes, is any body of law or theory which tells us how a specific body of water in a specific waterfall will unfold in the particular pattern it will while obeying the larger scale generic laws (gravity and so on). This strikes me as having important counterparts in economics.
We have a well elaborated law of demand for example. We do not have laws and theories which tell us in any meaningful fashion quite how a particular demand curve will unfold.
In this sense at least economics is no better but no worse than physics - a point often lost on journalists, politicians and the like.
Interviewing one of the authors of recent book "The Spirit Level: Why Equal Societies Almost Always Do Better" (Richard Wilkinson and Kate Pickett) radio commentator and general life critic Chris Laidlaw pondered with one of the authors recently on how N.Z. is performing given its claim to egalitarianism.
The thesis of the book is - in tones and shroud waving familiar to the left - income disparities are getting ever wider, various capitalists and growth merchants especially bankers are to blame and the usual litany of accusations coupled with hand wringing, which ever flees from the fact that improvements across numerous indicators show that while gaps may widen all measures of central tendency show that the lift from previous levels of poverty for the vast majority of the world have been nothing short of phenomenal.
Interestingly the Guardian tells us the authors are epidemiologists - who swing (predictably if boringly) Krugman into action.... another who has left his field of excellence to fiddle and prognosticate in paddocks best left to others (politics) while he ignores what he is good, even great at (trade economics).
What struck me though was less this tale than the likely misconceptions we have in N.Z. about what sort of society an egalitarian one might be and whether or not it would be characterised by "equality" or even by smaller rather than larger disparities in income.
If a society became more egalitarian should we expect that income disparity would flatten or at least not increase. There is a good argument which suggests we might expect absolutely the opposite..... roughly as follows:
The drive for egalitarianism generally seeks to ensure that success, status (social and economic), positive progress for individuals and any privilege is based on relevant not irrelevant criteria. To the manor... not born, but by merit. Commissioned officers through competence not genealogy. Business success through merit and performance not inheritance. Riches through work not graft, gender, race, family background, school tie and so on.
The more successful a society is in ensuring that irrelevant factors remain just that - irrelevant - the more likely it is that success will arrive only via achievement. Thus just as one cannot "inherit" a place in the All Blacks - it has to be won, so too in a more as opposed to a less egalitarian society, places have to be won by dint of success in relevant skills, competencies and experience, and talents in relevant areas.
By definition, a society which has succeeded in suppressing the matching of status to relevant criteria and has instead allowed the irrelevancies of class, gender and the old school tie to dominate production and distribution will have artificially flattened incomes. Over any reasonable time, the phenomena of reversion to the mean will have ensured that success based on merit will have been leveled by the lacklustre efforts of the hereditary nincompoops.
Thus the average level of competence in the corps of British Officers of today could be expected to sharply exceed that of 200 years ago. In business the same pattern applies. Incomes and dividends are likely to reflect that. Even anecdotally that would appear to be the case.
Sweep away class systems and like non egalitarian criteria from the field and institutionalise entry to business, education, employment based on the more egalitarian factors of merit and demonstrated competence, and those who are excellent will rise and become visible. Lesser lights no longer protected will also be visible. On average the gap between top and bottom must widen. The result will surely be a necessary widening of income gaps (and other measures of improved welfare).
The logic is dreadfully simple. We might even speculate that a lack of income disparity means only one of two things:
1. Levels of poverty are so low that everyone is "equally poor". No doubt "fair" in the eyes of those whose envy exceeds their desire for the tide of growth to raise all boats, or,
2. A lack of the egalitarianism so keenly sought and praised by commentators, the media and politicians.
Either of these is a long way from cursing Thatcher or Reagan, monetarism and classic liberals as suggested by author Richard Wilkinson. More importantly it suggests that once the logic is considered egalitarianism is about equality of opportunity not artificially flattened outcomes.
The thesis of the book is - in tones and shroud waving familiar to the left - income disparities are getting ever wider, various capitalists and growth merchants especially bankers are to blame and the usual litany of accusations coupled with hand wringing, which ever flees from the fact that improvements across numerous indicators show that while gaps may widen all measures of central tendency show that the lift from previous levels of poverty for the vast majority of the world have been nothing short of phenomenal.
Interestingly the Guardian tells us the authors are epidemiologists - who swing (predictably if boringly) Krugman into action.... another who has left his field of excellence to fiddle and prognosticate in paddocks best left to others (politics) while he ignores what he is good, even great at (trade economics).
What struck me though was less this tale than the likely misconceptions we have in N.Z. about what sort of society an egalitarian one might be and whether or not it would be characterised by "equality" or even by smaller rather than larger disparities in income.
If a society became more egalitarian should we expect that income disparity would flatten or at least not increase. There is a good argument which suggests we might expect absolutely the opposite..... roughly as follows:
The drive for egalitarianism generally seeks to ensure that success, status (social and economic), positive progress for individuals and any privilege is based on relevant not irrelevant criteria. To the manor... not born, but by merit. Commissioned officers through competence not genealogy. Business success through merit and performance not inheritance. Riches through work not graft, gender, race, family background, school tie and so on.
The more successful a society is in ensuring that irrelevant factors remain just that - irrelevant - the more likely it is that success will arrive only via achievement. Thus just as one cannot "inherit" a place in the All Blacks - it has to be won, so too in a more as opposed to a less egalitarian society, places have to be won by dint of success in relevant skills, competencies and experience, and talents in relevant areas.
By definition, a society which has succeeded in suppressing the matching of status to relevant criteria and has instead allowed the irrelevancies of class, gender and the old school tie to dominate production and distribution will have artificially flattened incomes. Over any reasonable time, the phenomena of reversion to the mean will have ensured that success based on merit will have been leveled by the lacklustre efforts of the hereditary nincompoops.
Thus the average level of competence in the corps of British Officers of today could be expected to sharply exceed that of 200 years ago. In business the same pattern applies. Incomes and dividends are likely to reflect that. Even anecdotally that would appear to be the case.
Sweep away class systems and like non egalitarian criteria from the field and institutionalise entry to business, education, employment based on the more egalitarian factors of merit and demonstrated competence, and those who are excellent will rise and become visible. Lesser lights no longer protected will also be visible. On average the gap between top and bottom must widen. The result will surely be a necessary widening of income gaps (and other measures of improved welfare).
The logic is dreadfully simple. We might even speculate that a lack of income disparity means only one of two things:
1. Levels of poverty are so low that everyone is "equally poor". No doubt "fair" in the eyes of those whose envy exceeds their desire for the tide of growth to raise all boats, or,
2. A lack of the egalitarianism so keenly sought and praised by commentators, the media and politicians.
Either of these is a long way from cursing Thatcher or Reagan, monetarism and classic liberals as suggested by author Richard Wilkinson. More importantly it suggests that once the logic is considered egalitarianism is about equality of opportunity not artificially flattened outcomes.
31/05: Breaking the Cycle....
Category: Modes of Explanation
Posted by: Admin
Emmanuel Derman was one of the first of the physicists to go to Wall Street in the 1980s. This essay covers a variety of epistemological issues.... most notably the relationship between theories and models.
"One of the things I've been thinking about a lot, both in relation to the financial crisis and in relation to the way people understand the world in general, is the role of models in the world. There are a variety of different approaches to trying to understand the world, in all its facets, from the physical sciences to the social sciences and even one's personal life. I've categorized them in two ways: I like to distinguish what are called "theories" from "models". Theories, in my view, really try to capture the essence of the world, as in physics in one short equation, or in other fields, in one short schema.
It seems to me you can't really act in the world without having some kind of model or theory of how the world is going to behave in the future.
"One of the things I've been thinking about a lot, both in relation to the financial crisis and in relation to the way people understand the world in general, is the role of models in the world. There are a variety of different approaches to trying to understand the world, in all its facets, from the physical sciences to the social sciences and even one's personal life. I've categorized them in two ways: I like to distinguish what are called "theories" from "models". Theories, in my view, really try to capture the essence of the world, as in physics in one short equation, or in other fields, in one short schema.
It seems to me you can't really act in the world without having some kind of model or theory of how the world is going to behave in the future.
Here Robin Hanson raises some awkward but significant issues....
"A groundbreaking report by the National Academy of Sciences (NAS) last year recognized that much of forensic science is not rooted in solid science. Many forensic disciplines — such as hair microscopy, bite-mark comparisons, fingerprint analysis, firearm testing and tool-mark analysis — were developed solely to solve crimes. They evolved mainly in the context of individual cases, which often had significant variation in resources and expertise. They have not been subjected to rigorous experimental scrutiny, and there are no standards or oversight in the United States or elsewhere to ensure that validated, reliable forensic methods are used consistently. With the exception of DNA analysis, no forensic method has been proved to reliably and accurately demonstrate a connection between evidence and a specific source. …"
We advocate the creation of an office of forensic science improvement and support (OFSIS) within the US Department of Commerce to spur independent research, develop standards and ensure compliance. … [Some] within the forensic-science and law-enforcement fields … argue that an OFSIS is not necessary and that laboratory accreditation is sufficient. … They argue that an OFSIS would cost too much … and that it could create chaos in the US justice system by reopening countless old cases. … Political and criminal-justice ends — rather than research imperatives — have taken forensic science off course. … See www.just-science.org.
The primary social pressure on law court practices is for courts to give the appearance of punishing guilty folks. Observers have much less info on who is actually guilty. So the main pressure on legal standards is that officially-accepted evidence seem to the public, juries, and judges to indicate guilt, not that it actually indicate guilt. We expect the law to be overconfident about its evidence.
Requiring that legal evidence standards stand up to independent experimental scrutiny would create a more accurate legal system, but at the expense of reducing the apparent rate at which the guilty are punished. So I expect, sadly, this proposal to be rejected.
"A groundbreaking report by the National Academy of Sciences (NAS) last year recognized that much of forensic science is not rooted in solid science. Many forensic disciplines — such as hair microscopy, bite-mark comparisons, fingerprint analysis, firearm testing and tool-mark analysis — were developed solely to solve crimes. They evolved mainly in the context of individual cases, which often had significant variation in resources and expertise. They have not been subjected to rigorous experimental scrutiny, and there are no standards or oversight in the United States or elsewhere to ensure that validated, reliable forensic methods are used consistently. With the exception of DNA analysis, no forensic method has been proved to reliably and accurately demonstrate a connection between evidence and a specific source. …"
We advocate the creation of an office of forensic science improvement and support (OFSIS) within the US Department of Commerce to spur independent research, develop standards and ensure compliance. … [Some] within the forensic-science and law-enforcement fields … argue that an OFSIS is not necessary and that laboratory accreditation is sufficient. … They argue that an OFSIS would cost too much … and that it could create chaos in the US justice system by reopening countless old cases. … Political and criminal-justice ends — rather than research imperatives — have taken forensic science off course. … See www.just-science.org.
The primary social pressure on law court practices is for courts to give the appearance of punishing guilty folks. Observers have much less info on who is actually guilty. So the main pressure on legal standards is that officially-accepted evidence seem to the public, juries, and judges to indicate guilt, not that it actually indicate guilt. We expect the law to be overconfident about its evidence.
Requiring that legal evidence standards stand up to independent experimental scrutiny would create a more accurate legal system, but at the expense of reducing the apparent rate at which the guilty are punished. So I expect, sadly, this proposal to be rejected.
An ethical as much as a philosophical issue this... from Tyler Cowan at Marginal Revolution.
Arnold Kling queries what I meant on that point in a recent talk. I meant the following:
1. There is an entire class of economists -- a large class at that -- whose choice of problems to work on bears little relation to what they think are important issues in the real world. I would stress, however, that it is difficult to find such economists (though there are some) at the top tier schools. This is a bigger problem at lower tier and wanna-be institutions.
2. I commonly meet economists and other social scientists who will tell you about the implications of their latest research, yet if you ask them other questions they will respond in hushed tones of the most severe agnosticism. For instance they will refuse to answer Robin Hanson's question about identifying large inefficiencies in the contemporary United States.
Now, if such agnosticism truly represents their actual views as human beings, that is a perfectly defensible stance. Yet I find that many (most?) of these same people will hold very definite political views and act on them in their private lives. They will support candidates, donate money, condemn colleagues who don't hold similar views, and so on. In other words, they are not really agnostic on all those other issues, they just don't want their personal views subject to full analytic scrutiny. They bifurcate the personal and the political.
This is one of my pet peeves. It is defensible to be truly agnostic. It is also defensible to believe that general principles of economic theory and empirics and ethics allow us to have "all things considered" policy views on matters we have not studied closely. It is not defensible to hold such views but, under the cloak of a not-really-meant agnosticism, refuse to put them on the social science table, so to speak.
(I find that bloggers hardly ever suffer from this problem. In many ways the core of blogging is a willingness to apply what you know to every problem you encounter, and see how good a job you can do of it in a more or less integrated fashion.)
3. Most intelligent people, in their ordinary lives, believe that other people, especially less intelligent ones, make stupid mistakes all the time, including in their decisive choices (not just in their voting). Yet some of these intelligent people call themselves rational expectations theorists. I don't get it.
Arnold Kling queries what I meant on that point in a recent talk. I meant the following:
1. There is an entire class of economists -- a large class at that -- whose choice of problems to work on bears little relation to what they think are important issues in the real world. I would stress, however, that it is difficult to find such economists (though there are some) at the top tier schools. This is a bigger problem at lower tier and wanna-be institutions.
2. I commonly meet economists and other social scientists who will tell you about the implications of their latest research, yet if you ask them other questions they will respond in hushed tones of the most severe agnosticism. For instance they will refuse to answer Robin Hanson's question about identifying large inefficiencies in the contemporary United States.
Now, if such agnosticism truly represents their actual views as human beings, that is a perfectly defensible stance. Yet I find that many (most?) of these same people will hold very definite political views and act on them in their private lives. They will support candidates, donate money, condemn colleagues who don't hold similar views, and so on. In other words, they are not really agnostic on all those other issues, they just don't want their personal views subject to full analytic scrutiny. They bifurcate the personal and the political.
This is one of my pet peeves. It is defensible to be truly agnostic. It is also defensible to believe that general principles of economic theory and empirics and ethics allow us to have "all things considered" policy views on matters we have not studied closely. It is not defensible to hold such views but, under the cloak of a not-really-meant agnosticism, refuse to put them on the social science table, so to speak.
(I find that bloggers hardly ever suffer from this problem. In many ways the core of blogging is a willingness to apply what you know to every problem you encounter, and see how good a job you can do of it in a more or less integrated fashion.)
3. Most intelligent people, in their ordinary lives, believe that other people, especially less intelligent ones, make stupid mistakes all the time, including in their decisive choices (not just in their voting). Yet some of these intelligent people call themselves rational expectations theorists. I don't get it.
"We speak for free markets and free people, the principles, if you will, marked in the watershed year of 1776 by Thomas Jefferson's Declaration of Independence and Adam Smith's "Wealth of Nations." So over the past century and into the next, the Journal stands for free trade and sound money; against confiscatory taxation and the ukases of kings and other collectivists; and for individual autonomy against dictators, bullies and even the tempers of momentary majorities."
29/03: Now You See it Now You Don't
Category: Problems in explanation
Posted by: Admin
Some information here from the Economist March 7th - the remainder from my now 28 year old Ph.D studies and pondering.
A slightly obscure realm of physics is concerned with what seems to be as much a question of philosophy as of physics - the issue of the interaction between matter and anti matter.
Physicist Lucien Hardy asserted that when a particle meets its anti particle the pair explode in a burst of energy leaving nothing. His formulation did however leave open the possibility that the particles might collide and survive if they were unseen.
What nonsense is this? The "seen unseen" issue arises from the work of Bohr and Heisenburg in the 1920s showing that the very act of observing altered what was being observed and thus whatever "was" before it was seen could never be observed. More practically the act of observing plus all the apparatus being used to observe alters what is being observed - that apparatus includes the theories brought to the "seeing".
This then - starts to look a bit more exciting and relevant. If the thought apparatus brought to the observation process is in fact defining in some (unspecified) part what is being observed then we ought to be careful what we think.
The Economist reports however that two independent groups of physicists have demonstrated that things do indeed "exist" even when not seen (bad luck for the question "is a man wrong even when he says something in a dark wood and no woman can hear him"- at least for males).
The two teams - one from Japan and one from Canada - probed "reality" without disturbing it by using what is, in effect, an analogue model. Polarisation of photons (which are the particles making up light) involves behaviour which follows exactly the behaviour of the particles in Hardy's paradox.
The trick was to NOT gather all the information (shades of the non barking dog in the Sign of Four - again) in any one experiment and thus not "observe" in any one experiement. Data were then pooled so that the sum of the partial information allowed confirmation of collision and survival but only when not seen.
What might this mean for us lesser mortals trying to explain and describe social, economic and cultural behaviour. Well it admits the possibility, may even prove, that such phenomena exist but - the catch is they cannot be observed without altering them. So objectivity is both possible and impossible all at the same time.
The claim that objectivity is not possible is far from new but has been made before primarily as a matter of assertion and disciplinary defensiveness. These results suggest a more robust explanation is possible - and yes, theory and one's epistemological apparatus matter very, very much.
A slightly obscure realm of physics is concerned with what seems to be as much a question of philosophy as of physics - the issue of the interaction between matter and anti matter.
Physicist Lucien Hardy asserted that when a particle meets its anti particle the pair explode in a burst of energy leaving nothing. His formulation did however leave open the possibility that the particles might collide and survive if they were unseen.
What nonsense is this? The "seen unseen" issue arises from the work of Bohr and Heisenburg in the 1920s showing that the very act of observing altered what was being observed and thus whatever "was" before it was seen could never be observed. More practically the act of observing plus all the apparatus being used to observe alters what is being observed - that apparatus includes the theories brought to the "seeing".
This then - starts to look a bit more exciting and relevant. If the thought apparatus brought to the observation process is in fact defining in some (unspecified) part what is being observed then we ought to be careful what we think.
The Economist reports however that two independent groups of physicists have demonstrated that things do indeed "exist" even when not seen (bad luck for the question "is a man wrong even when he says something in a dark wood and no woman can hear him"- at least for males).
The two teams - one from Japan and one from Canada - probed "reality" without disturbing it by using what is, in effect, an analogue model. Polarisation of photons (which are the particles making up light) involves behaviour which follows exactly the behaviour of the particles in Hardy's paradox.
The trick was to NOT gather all the information (shades of the non barking dog in the Sign of Four - again) in any one experiment and thus not "observe" in any one experiement. Data were then pooled so that the sum of the partial information allowed confirmation of collision and survival but only when not seen.
What might this mean for us lesser mortals trying to explain and describe social, economic and cultural behaviour. Well it admits the possibility, may even prove, that such phenomena exist but - the catch is they cannot be observed without altering them. So objectivity is both possible and impossible all at the same time.
The claim that objectivity is not possible is far from new but has been made before primarily as a matter of assertion and disciplinary defensiveness. These results suggest a more robust explanation is possible - and yes, theory and one's epistemological apparatus matter very, very much.
Category: Problems in explanation
Posted by: Admin
The following is from a lecture, given in 2003, by the late Michael Crichton, Professor at the California Institute of Technology. His interest was the intersection of science, technology, public policy and everyday life. (thanks to David Haarmeyer and WSJ)
Cast your minds back to 1960. John F. Kennedy is president, commercial jet airplanes are just appearing, the biggest university mainframes have 12K of memory. And in Green Bank, West Virginia at the new National Radio Astronomy Observatory, a young astrophysicist named Frank Drake runs a two-week project called Ozma, to search for extraterrestrial signals. A signal is received, to great excitement. It turns out to be false, but the excitement remains. In 1960, Drake organizes the first SETI conference, and came up with the now-famous Drake equation:
N=N*fp ne fl fi fc fL
Where N is the number of stars in the Milky Way galaxy; fp is the fraction with planets; ne is the number of planets per star capable of supporting life; fl is the fraction of planets where life evolves; fi is the fraction where intelligent life evolves; and fc is the fraction that communicates; and fL is the fraction of the planet's life during which the communicating civilizations live.
Cast your minds back to 1960. John F. Kennedy is president, commercial jet airplanes are just appearing, the biggest university mainframes have 12K of memory. And in Green Bank, West Virginia at the new National Radio Astronomy Observatory, a young astrophysicist named Frank Drake runs a two-week project called Ozma, to search for extraterrestrial signals. A signal is received, to great excitement. It turns out to be false, but the excitement remains. In 1960, Drake organizes the first SETI conference, and came up with the now-famous Drake equation:
N=N*fp ne fl fi fc fL
Where N is the number of stars in the Milky Way galaxy; fp is the fraction with planets; ne is the number of planets per star capable of supporting life; fl is the fraction of planets where life evolves; fi is the fraction where intelligent life evolves; and fc is the fraction that communicates; and fL is the fraction of the planet's life during which the communicating civilizations live.
28/10: Practically stupid.....
Category: Modes of Explanation
Posted by: Admin
George Mason's Don Boudreaux is, I often think, at his best when just a little annoyed... the following treatment of theory versus practice is Prof Boudreaux at his best:
"Yesterday I participated in a seminar sponsored by the University of South Carolina Law Review on today's financial crisis.
It was a high-quality affair; I learned much.
One participant, however, caused me to wince. This participant was a U.S. Representative from North Carolina, the Hon. Brad Miller. He began his remarks by pointing out that he was the only non-academic speaking at the seminar. Upon hearing this remark, I guessed correctly what he'd say next. It went something like this:
Unlike academics, I don't see things with theories. I see things with my eyes. And I trust my eyes.
"Yesterday I participated in a seminar sponsored by the University of South Carolina Law Review on today's financial crisis.
It was a high-quality affair; I learned much.
One participant, however, caused me to wince. This participant was a U.S. Representative from North Carolina, the Hon. Brad Miller. He began his remarks by pointing out that he was the only non-academic speaking at the seminar. Upon hearing this remark, I guessed correctly what he'd say next. It went something like this:
Unlike academics, I don't see things with theories. I see things with my eyes. And I trust my eyes.
