Revisiting Halberstam’s The Best and the Brightest

I write,

I have come to see the “can-do” attitude, and its attraction to politicians and the public, as very dangerous. On economic matters, the “can-do” adviser offers the promise of a free lunch: increased access to health care without raising health care spending; tax cuts that “pay for themselves”; budget deficits that will create millions of jobs, projected with outrageously exaggerated precision.

I credit this book with helping to start me on my political journey from left to right. Although it criticizes the Vietnam policy from a left perspective, it never endorses the Chomsky silliness of saying that Vietnam was a capitalists’ war for markets.

Halberstam offers lessons to both sides in the Trump era. The anti-Trumpers would do well to reflect on the way that establishment group-think can be costly. For Mr. Trump himself, I have this admonition.

he should try to restrain the urge to be an intimidator. The office of the President is intimidating in its own right. The President needs honest advisers more than he needs yes-men.

Thoughts on Sociology

1. What we call social science ought to be called the study of human conflict and cooperation.

2. Sociology ought to be the study of human conflict and cooperation in the larger society, in the realm of informal authority, its sources and uses. Social norms and hierarchies are important components of informal authority.

3. When we study human conflict and cooperation in close personal relationships, we are mostly in the realm of psychology.

4. When we study human conflict and cooperation in the larger society in the realm of specialization and trade, we are mostly in the realm of economics.

5. When we study human conflict and cooperation in the larger society in the realm of formal authority, we are mostly in the realm of political science.

I use the phrase “mostly in the realm” because I doubt that any of the four disciplines can be totally isolated from the others.

6. When we study human conflict and cooperation in a specific time and place, we are mostly in the realm of anthropology. Anthropologists might study the psychology, economics, politics, and sociology of the unit under observation.

7. A business manager needs to handle conflict and cooperation within a firm, which also requires all four basic disciplines. There are aspects of political science (think of corporate governance). Business strategy deals with specialization and trade. Understanding “office politics” requires knowledge of psychology. And managers have to understand the informal sources and uses of authority within the firm, also known as “corporate culture.”

8. Informal authority is complex because there are many intangible factors involved. Sociologists do a disservice when they try to reduce their discipline to the study of tangible factors, such as race, gender, or Marx’s dichotomy of labor and capital.

I also believe that economists and political scientists are guilty of shying away from intangible factors. In Invisible Wealth (first appeared as From Poverty to Prosperity, Nick Schulz and I tried to point out how much you miss when you ignore the intangibles in economics.

9. One can do sociological analysis of particular groups within society. One can do sociological analyis of economists. Or of sociologists. The book I am reading about Pierre Bourdieu has him doing exactly the latter.

10. One of Bourdieu’s themes is that people who are discontented with their social status are prone to make trouble.

11. Without using the term “status-income disconnect,” he suggests that a source of discontent for those in academia is that their economic capital does not match their cultural capital.

What I’m Reading

Culture and Power: The Sociology of Pierre Bourdieu, by David Swartz. An excerpt:

Bourdieu in fact speaks of three different types of field strategies: conservation, succession, and subversion. Conservation strategies tend to be pursued by those who hold dominant positions and enjoy seniority in the field. Strategies of succession are attempts to gain access to dominant positions in a field and are generally pursued by new entrants. Finally, strategies of subversion are pursued by those who expect to gain little from the dominant groups. These strategies take the form of a more or less radical rupture with the dominant group by challenging its legitimacy to define the standards of the field.

For Austrian economists, Pete Boettke likes a succession strategy. I prefer a subversion strategy.

A book recommendation

from Jonathan Haidt and Greg Lukianoff:

The social psychologist Jean Twenge has just written a book, titled iGen (which is short for “internet generation”), in which she analyzes four large national datasets that track the mental health of teenagers and college students. When the book is released in August, Americans will likely be stunned by her findings. Graph after graph shows the same pattern: Lines drift mildly up or down across the decades as baby boomers are followed by Gen-X, which is followed by the millennials. But as soon as the data includes iGen—those born after roughly 1994—the rates of anxiety, depression, loneliness, and suicide spike upward.

Due out one month from now.

Richard Bookstaber on Economic Methods

I have a long essay on his book, The End of Theory. One brief excerpt:

In conventional economics, people are assumed to know, now and for the indefinite future, the entire range of possibilities, and the likelihood of each. The alternative assumption, that the future has aspects that are not foreseeable today, goes by the name of “radical uncertainty.” But we might just call it the human condition. Bookstaber writes that radical uncertainty “leads the world to go in directions we had never imagined… The world could be changing right now in ways that will blindside you down the road.” (page 18).

Read the entire essay. It is another attempt to address issues of economic methods.

Somewheres vs. Anywheres

we need more nuanced terminology than “populists” versus “elites.” Thankfully, David Goodhart, a British author affiliated with the London think tank Policy Exchange and the founding editor of Prospect, offers just that. In his forthcoming book, The Road to Somewhere, Goodhart sees “two rival value blocks” that are setting people at odds with each other: those who see the world from anywhere versus those who see the world from somewhere. Educated and mobile, the Anywheres value autonomy, openness, and fluidity. They flourish in a globalized economy: If a software engineer loses his job in one city, he packs up and moves to another, with national boundaries posing little impediment. By contrast, the Somewheres are more rooted and less well educated. They value group attachments, familiarity, and security—they are deeply concerned about the welfare of particular places.

That is from Michael Doran and Peter Rough. I’ve been using the terms Abstract vs. Concrete, or Bobo vs. anti-Bobo. The Bobos are Anywheres because they could be comfortable anywhere among other members of the Abstract class. As I put it in The Three Languages of Politics, they are more comfortable in Prague than in Peoria. The Somewheres need to be located in their home town in order to work and to feel comfortable.

One can argue that the Somewheres and the Anywheres need one another, although neither side would admit it. The Anywheres have the competence in dealing with abstractions in the economy and government. The Somewheres have patriotic solidarity, without which the Anywheres might have their world broken up by face violence and chaos. Note, of course, that the libertarian line is that government is the chief source of violence and chaos, and if you go with that, then patriotic solidarity is a bug rather than a feature. I have trouble buying into this particular libertarian line.

By the way, Goodhart’s book is due to be available July 1.

My Review of Kevin Laland

The book is Darwin’s Unfinished Symphony, which is still my favorite non-fiction book of 2017. My review says,

Laland weaved together mathematical models, simulation exercises, experiments, and observations in a way that was much more persuasive than most social science. I recommend that economists read the book in order to stimulate thinking on how to improve our research methods.

The Samuelson Story

I am still reading the Backhouse intellectual biography. What a monumental effort! By comparison, it makes Sebastian Mallaby’s biography of Alan Greenspan look like a summer vacation project. But I recommend Mallaby to anyone. Backhouse is for people with a pretty narrow interest in the history of economic thought.

A few more comments.

1. Backhouse sees Samuelson as making a major contribution to clarifying Keynes. I disagree. At most, Samuelson provided the freshman interpretation. But for intermediate courses and above, Hicks was the go-to clarifier, and he preceded Samuelson. Backhouse agrees that the intermediate courses left Samuelson behind.

It seems that a lot of the initial confusion about the simple Keynesian multiplier concerned the process by which it was supposed to play out. You can write down Y = C + I + G and C = a + bY and then solve for Y and C in terms of the other letters, but nobody in the 1930s or 1940s thought in terms of such an instantaneous equilibrium. Instead, they thought in terms of a solution being ground out over time, iterating back and forth between the two equations. There were any number of plausible lag structures, and also a variety of plausible definitions of investment, consumption, and savings.

As Backhouse points out, in hindsight it appears that Keynesian economists were floundering unnecessarily in their attempts to deal with what we now regard as the simplest class of models. Perhaps without Samuelson the floundering would have been worse and more long-lasting. I am not convinced.

But the main reason I do not give Samuelson credit for clarifying Keynes is that Keynesian economics remains unclear to this day. And economists who call themselves Keynesians would be the first to admit that.

2. The conventional narrative is that Samuelson made mid-century economics. His prodigious talent shaped the profession. Backhouse sticks with this narrative.

I would pose an alternative narrative, which is that mid-century economics made Samuelson. Sometimes a movement needs to create a larger-than-life figure. In religion, the larger-than-life figure might be Christ or Mohammed or the Buddha. In a nation at war, it might be Napoleon or Churchill.

In the (seemingly) secular world of Olympic sports, the broadcast network will try to make a few athletes larger than life. And speaking of Keynes, he became a larger-than-life figure in the movement to promote activist macroeconomic policy.

With his unbounded ego, Samuelson moved easily into his heroic role. He was a legend in his own mind, given to overstating both the rigor of his mathematics and the significance of his analysis. Had he appeared at a different point in history, this might have earned him scorn and derision. But when Samuelson arrived as a graduate student at Harvard, there was a strong latent desire, particular among younger economists, to show that they were scientists and to show that they, unlike their elders, knew how to prevent and cure Depressions. So instead of pushing back against his arrogance, his peers heaped praise on his work. In the process, they were raising their own status relative to older economists while creating a new and more exalted public image of the economics profession.

By the way, I think that the same thing happened, to a lesser degree, with some of the stars of 1970s macro, such as Robert E. Lucas, Jr., and Christopher Sims. Some of their peers saw an opportunity to raise their own status by characterizing Lucas and Sims as intellectual giants who towered over everyone else.

My own view is that in economics there are no towering giants, in the sense of economists whose aptitude for the subject far exceeds that of others in their cohort. Some economists are a bit more creative than others, some work much harder than others (Samuelson was certainly exceptional in the efficiency and extent of his work effort), and some play the academic game much better than others. But the distribution of rewards ends up being much more skewed than the distribution of talent.

What I’m reading

1. Founder of Modern Economics: Paul Samuelson. The first volume of a biography written by Roger E. Backhouse. So far not rewarding, but I feel obliged to try to stick with it.

2. The Agony and the Ecstasy, by Irving Stone. A biographical novel of Michelangelo. In 1965, it was made into a blockbuster movie, which I never saw.

Michelangelo and Samuelson are each portrayed as having a great deal of self-confidence.

The Theory of Mind

I just finished reading The Enigma of Reason by Dan Sperber and Hugo Mercier. They look at the process by which we arrive at reasons for actions. The following thought occurs to me:

You probably assume that understanding your own mind is prior to having a “theory of mind” about other humans. However, it could be the other way around.

Sperber and Mercier do not make this sort of claim. However, I do not think that it is terribly inconsistent with their views.

A theory of mind seeks to explain why agent X performs action A. What I am suggesting is that we arrive at this theory not through introspection but instead by observing action A followed by consequence B repeatedly. After we have seen this happen enough, we develop the insight that perhaps agent X is performing action A in order to achieve consequence B. Call this the basic theory of mind, or at least a theory of what motivates others. Note that we might hold such a basic theory of mind or motivation about animals or even about an inanimate object.

Given that we have a basic theory of mind and that we assume that others have similar basic theory of mind, we can engage in a new form of teaching. If I tell you that I am performing action A in order to achieve consequence B, then you can get the point of performing action A without my having to repeat action A many times.

This explanatory form of teaching is very efficient. With cultural communication so important in humans, we have become very good at explaining to others why we do things. Moreover, explanation and justification are similar functions. We develop the ability to justify to others why we do things.

We are concerned with what others think of what we say and do. As I read Sperber and Mercier, they argue that the natural function of reason is to try to gain respect and approval of others for our actions. I think that Sperber and Mercier do not give enough credit to the role of reasons in making teaching more effective. Imagine telling a child to look both ways before crossing a street without telling the child why they should do so. The child could perform the ritual exactly as directed and then walk right in front of moving car.

But the role of reasons in teaching does not address the enigma to which Sperber and Mercier refer. The enigma is that our reasoning process evolved to be biased rather than optimized to arrive at truth. Their explanation is that our reasoning process evolved as a mechanism to explain and justify our actions to others. The goal of reasoning is not to seek Truth but to defend our status. Biased reasoning is helpful for defending status. Bias is less helpful when we are trying to make decisions, but when we make decisions we are simply adapting our reasoning tool to a less natural context.

Sperber and Mercier make another claim, which is that when we argue with one another, we arrive at more reasonable conclusions than when we reason on our own. They say that this is because when we evaluate our own reasons we lack objectivity. They think we are more objective when we evaluate others’ reasons, so that our evaluations are more reliable. I do not find that persuasive. I think that part of defending our own reasons is attacking our opponents’ reasons, and I believe that we tend to be uncharitable to those who disagree with us. I am more inclined to ascribe the benefit of arguing to exposure to reasoning that we have not considered, rather than to a greater objectivity in hearing others’ points of view than in evaluating one’s own.

If reasoning evolved to justify our actions, then how do we get to a point where we use reasoning to make decisions? I think that the most consistent application of their idea would be to say that when we make decisions we anticipate having to defend our actions. As we go through this mental process, we may decide that some actions are unwise. Anticipating my wife’s reaction should I come home drunk, I stop drinking.

It could be that people with poor self-control have difficulty engaging in this exercise. That is, they either lack the ability to anticipate the reactions of others or they are less sensitive to such anticipated reactions.

It is interesting to note that I have often advised people in the throes of making a decision to imagine explaining that decision to a variety of other people. If you are thinking of quitting your job, imagine explaining that to your family, to close friends, to co-workers, and so on. I have suggested that such an exercise can help to clarify your thoughts.

Anyway, what occurs to me is that we obtain our theory of mind “outside-in” rather than “inside-out.” That is, by observing other people and listening to their reasons, we develop a theory of how our own minds ought to work.