The social world differs from the physical world because it is man-made and hence almost infinitely malleable. So, unlike the natural sciences, economics advances scientifically not by replacing old models with better ones, but by expanding its library of models, with each shedding light on a different social contingency.
Pointer from Mark Thoma.
This is certainly closer to my position than the “I am a scientist and the other guy isn’t” rhetoric coming from other quarters.
The price: 450,000 euros. The goal: To build an Israeli colony on it. Officially, the island is known as Petäjäsaari, but already upon disembarking from the plane in the town of Kuopio, after a half hour flight from Helsinki, Finnish media report on “The Israeli Island,”
Four young Israeli entrepreneurs bought it. They seem to want to create an eco-friendly (i.e., primitive) quiet residential village. No, not really a substitute for seasteading.
Summarizing a paper by two sociologists, he writes,
The key idea is that the new moral culture of victimhood fosters “moral dependence” and an atrophying of the ability to handle small interpersonal matters on one’s own. At the same time that it weakens individuals, it creates a society of constant and intense moral conflict as people compete for status as victims or as defenders of victims.
The paper is by Bradley Campbell and Jason Manning.
To me, this just sounds like what I call the oppressor-oppressed axis in the three-axes model.* With college campuses dominated by progressives, you would expect them to see things in terms of oppressors and oppressed. But I am not sure that the rest of American culture is going to go this way.
*Well, I’ll be darned. They cite The Three Languages of Politics. They say, though, that non-progressives are starting to use oppressor-oppressed terminology. That may be true (as when one complains that academic life is prejudiced against conservatives), but ultimately I think you have to stick to a different axis to remain a conservative or libertarian.
The authors claim that what preceded our current culture was a culture of individual dignity. Haidt quotes the authors,
Members of a dignity culture, on the other hand, would see no shame in appealing to third parties, but they would not approve of such appeals for minor and merely verbal offenses. Instead they would likely counsel either confronting the offender directly to discuss the issue, or better yet, ignoring the remarks altogether.
Ron Bailey offers a succinct description of the earlier transition from an honor culture to a dignity culture.
In honor cultures, people (men) maintained their honor by responding to insults, slights, violations of rights by self-help violence. Generally honor cultures exist where the rule of law is weak. In honor cultures, people protected themselves, their families, and property through having a reputation for swift violence. During the 19th century, most Western societies began the moral transition toward dignity cultures in which all citizens were legally endowed with equal rights. In such societies, persons, property, and rights are defended by recourse to third parties, usually courts, police, and so forth, that, if necessary, wield violence on their behalf. Dignity cultures practice tolerance and are much more peaceful than honor cultures.
The “honor culture” reminds me a bit of The Rule of the Clan and Mark Weiner’s view that it is the alternative to a strong state.
I would give the paper the Cowenian caveat: “speculative”
I am adding a new section, which includes the following:
In general, I shy away from using the term “social science,” because I do not think that economists can aspire to the same level of falsifiability as physicists. I believe that the difference between social science and natural science boils down to this:
In natural science, there are relatively many falsifiable propositions and relatively few attractive interpretive frameworks. In the social sciences, there are relatively many attractive interpretive frameworks and relatively few falsifiable propositions.
The reason that there are relatively few falsifiable propositions in the context of social phenomena is that there are many causal factors, and decisive experiments are rarely possible. Social phenomena are characterized by high causal density, to borrow a term from James Manzi.
As a result, economics is closer to history than to physics. If a historian wants to examine the causes of the decline of Rome, or the decline of empires in general, he or she will provide an interpretive framework. That framework cannot be falsified, but readers can compare it to other frameworks and make judgments about its plausibility.
For example, consider the phenomenon of the comparative salaries of men and women. Economists interpret salaries using the framework of human capital. That is, workers bring to the market different levels of ability, training, and experience, and this determines what they are able to earn. Sociologists use a framework that emphasizes group identity, status, and power, with men the more dominant group and women the more oppressed group.
If a study suggests that women earn less than men, even when controlling for years of education and other indicators of human capital, then this is anomalous for the economists. If a study suggests that most of the lowest-paying occupations are predominantly occupied by men, then this is anomalous for the sociologists. However, such observations will not prove decisive. By invoking other factors to explain anomalous results, each side can remain unmoved. Economists will not abandon their human capital framework, nor will sociologists abandon their group status framework.
. . .Economists who employ models think of themselves as “doing science,” meaning that they are generating falsifiable propositions. However, in practice, they rarely reject their preferred models. Instead, they explain away anomalous observations. In that sense, they are really using their preferred models as interpretive frameworks.
The Book of Arnold contains sections like this one, which argue in general terms against MIT economics. It also contains sections about practical issues, such as environmental sustainability and housing policy. The methodological sections are intended to mean something to Ph.D economists. The practical sections are intended to resonate with students and others who have much less economic background. It could be that there are diseconomies associated with trying to reach both audiences.
Timothy Taylor points to an interesting series of essays by Colander. Self-recommending*. I was drawn to the one on Harvard-MIT incest.
What I’m saying is that modern mainstream economists seem to lack the all-round wisdom reflective of the great policy integrators of the past, such as Bob Solow, Charlie Kindleberger, Charles Goodhart, Paul Samuelson, Art Okun, Jim Tobin, Herb Stein, and Paul Streeten, to name just a few.
I agree that there is a generation gap. More recent generations take their own work much too seriously. I think that economists offer interpretations of reality, and alternative interpretations often have as much validity. I think that the older economists understood this, even if they did not explicitly articulate it. Subsequent generations lost this wisdom.
He goes on,
Modern mainstream economics is a bit off as a result of too much inbreeding. Specifically, my argument is that the gene pool of economists in the replicator dynamics of the profession is too small to prevent undesirable recessive traits from showing up in mainstream economists from time to time.
Recall that I describe Stan Fischer as the Genghis Khan of macroeconomics, because essentially every macroeconomist is descended from him.
*self-recommending is a Tyler Cowen term, which I recall he defined as a project that by virtue of the topic and author is likely to be worth reading.
I claim here that humans have a fundamental rule of social morality, which is: Reward cooperators; punish defectors. The use of this rule is what enables humans to work effectively with strangers, making possible sophisticated economies and civilizations. However, this rule can cause problems when people mis-classify the social actions of others.
Please read the whole thing and comment. These are ideas that I also plan to include in the Book of Arnold.
1. From the Boston Globe.
The research, published this week in Nature, drew on global satellite imagery and more than 400,000 sample counts from forests around the world in order to estimate that there are currently 3.04 trillion trees on earth. This is 750 percent more than the previous best estimate, which was 400 billion.
Pointer from Tyler Cowen. Even though the estimate of the number of trees may be much higher, I gather that this does not necessarily change estimates of the total biomass of trees. Otherwise, I would say that the inputs to climate models might need some adjustment.
2. From Katherine Mangu-Ward.
The Blue Ocean Society for Marine Conservation is just one organization among many that claim that more than 1 million birds and 100,000 marine mammals and sea turtles die each year from eating or getting entangled in plastic.
Morris and Seasholes reconstructed an elaborate game of statistical telephone to source this figure back to a study funded by the Canadian government that tracked loss of marine animals in Newfoundland as a result of incidental catch and entanglement in fishing gear from 1981 to 1984. Importantly, this three-decade-old study had nothing to do with plastic bags at all.
Overall, the five-cent bag tax appears to be a case of regulatory miscalculation.
Michael Tanner and Charles Hughes write,
In Austria, Croatia, and Denmark, the effective marginal tax rate for someone leaving welfare for work was nearly 100 percent, meaning that a person would gain virtually no additional income from working. In another 16 countries, individuals would face an effective marginal tax rate in excess of 50 percent.
Benefits in the United States fit comfortably into the mainstream of welfare states. Excluding Medicaid, the United States would rank 10th among the EU nations analyzed, more generous than France and slightly less generous than Sweden. Thirty-five states offer a package more generous than the mean benefit package offered in the European countries analyzed.
In my view, the key goal of reform should be reducing the marginal tax rate. This can be done either with a high level of benefits (in which case the budget cost is very high, and people with relatively high incomes will still be receiving benefits) or a low level of benefits (in which case we are looking for charities or local governments to fill in gaps). I prefer the latter approach.
You can look at my old posts on universal benefits or flexible benefits, often in the category “Setting Economic Priorities.” I once wanted to do a project that would try to put something like that on the agenda for the 2016 election campaign. That looks like something that would have been doomed, seeing how the campaign is actually shaping up. It looks as though the Republicans are going to have to spend so much time talking economic nationalism with respect to Mexico and China that even if they win the Presidency, they will have no economic policy mandate whatsoever.
Consider Medicare. Under Parts A and B, the government pays doctors and hospitals a set fee for
each service provided. That encourages them to deliver unnecessary services because they make more money the more services they bill. As an example, investigations have found that doctors are ordering many unneeded drug tests for seniors.
I think that someone with an opposing viewpoint would say that even though government initiatives are not executed flawlessly and that adverse side effects do occur, the intentions of the programs are good and the positive outcomes are sufficient to outweigh the problems. As Edwards puts it,
It is true, however, that just because a federal policy creates unintended collateral damage does not automatically mean that the overall policy is a failure. Some federal interventions do generate higher benefits than costs. The important thing is that policymakers look beyond the intended effects of their programs and consider how people and businesses may respond in negative ways over the longer term.
As I see it, those of us who are concerned about government failure have to get over the following hurdles with those who disagree.
1. Lead them to think beyond the intention heuristic. “Support for education” sounds good, but that does not automatically justify every government program intended to improve education.
2. Scrutinize the actual design and execution of government programs, rather than assume that both are flawless.
3. Track the cost of government programs. This includes the direct cost paid by taxes, but it also includes the indirect cost of market distortions, including (as Edwards points out) the deadweight loss from taxation.
4. Take into account the organizational dynamics of government programs. That is, agencies and programs tend to persist well beyond the point where they have served a useful purpose.
5. Take into account the public choice aspect of government programs.
Even so, I still do not think that we will get very far. I think that the supporters of Obamacare are aware to some extent of the way that each of these issues has affected the program (perhaps not so much with issue 3). And yet they are very enthusiastic about Obamacare, and they insist that it is working.
From a discouraging piece by David Rotman in Technology Review:
as Robert C. Armstrong, director of the MIT Energy Initiative and one of the authors of the report, puts it: “Even if you give away the [photovoltaic] materials for free, you still couldn’t produce electricity as cheaply as with coal or natural gas.”
Read the whole thing.