Category Archives: Jason Collins is Indispensable

Sentences I Might Have Written

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A tropical forest is a complex system, but a suburban garden is not. The reason is the the former is deeply interconnected, and it is the interconnected links that define it. A tropical forest will likely collapse if you disturb the natural balance too much, while in a suburban garden you can generally safely remove entire flower beds without affecting its overall health or integrity.

The standard way of doing policy considers our social system as a suburban garden. It tills, plans, and cultivates as if the parts are not interrelated.

That is David Colander and Roland Kupers, writing in Complexity and the Art of Public Policy: Solving Society’s Problems from the Bottom Up.

I am only part way through the book (by the time this post goes up I may be nearly finished). My initial reaction is that it is either more or less Austrian economics. It could be more if I decide that the explicit complexity theory really adds something to what otherwise is a very Austrian critique of mainstream economics. It could be less if I decide that I am disappointed by what I fear will be a treatment of government that I find unsatisfying.

In any case, it looks like one of the better books of 2014. In fact, relative to a very weak 2014 crop, so far this is looking like the best. I first became aware of the book here, but Tyler Cowen never gave it more than an “arrived in my pile” mention, which suggests that he did not find it worthwhile.

Coincidentally, Jason Collins points to an essay by Brian Arthur, who coined the term complexity economics. Arthur also has some sentences that I might have written.

think of the agents in the economy – consumers, firms, banks, investors – as buying and selling, producing, strategizing, and forecasting. From all this behavior markets form, prices form, trading patterns form: aggregate patterns form. Complexity economics asks how individual behaviors in a situation might react to the pattern they together create, and how that pattern would alter itself as a result, causing the agents to react anew.

…It views the economy not as machine-like, perfectly rational, and essentially static, but as organic, always exploring, and always evolving – always constructing itself.

Must-read Sentences

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Jason Collins writes,

As I have said many times before, giving a bias a name is not theory.

He refers to a new paper by Owen Jones, from which Collins quotes

[S]aying that the endowment effect is caused by Loss Aversion, as a function of Prospect Theory, is like saying that human sexual behavior is caused by Abstinence Aversion, as a function of Lust Theory. The latter provides no intellectual or analytic purchase, none, on why sexual behavior exists. Similarly, Prospect Theory and Loss Aversion – as valuable as they may be in describing the endowment effect phenomena and their interrelationship to one another – provide no intellectual or analytic purchase, none at all, on why the endowment effect exists.

Read the whole thing.

Jonathan Haidt on Political Bias in Sociology

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He is quoted by Chris Mooney as saying,

When the facts conflict with…sacred values, almost everyone finds a way to stick with their values and reject the evidence. On the left, including the academic left, the most sacred issues involve race and gender. So that’s where you find the most direct and I’d say flagrant denial of evidence. I think the results of this study do clearly show that political concerns influence the willingness of sociologists to consider a major class of causal factors in human behavior.

Read Mooney’s whole piece. The study he refers to is by sociologist Mark Horowitz and two colleagues.

Plus, there is this article on Haidt on social psychology. Pointer from Jason Collins.

Matthew Yglesias on Amazon and Market Power

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He writes,

What is indisputably true is that Amazon is on track to destroy the businesses of incumbent book publishers. But the many authors and intellectuals who’ve been convinced that their interests — or the interests of literary culture writ large — are identical with those of the publishers are simply mistaken.

Pointer from Jason Collins.

I agree that we should not be rushing to the barricades to defend the traditional publishing business model. Rooting for the book publishers to have strong negotiating leverage with Amazon is equivalent to rooting for the legacy music industry to have strong negotiating leverage with iTunes.

Research Findings Support Change-the-Gender

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Therese Huston writes in the NYT,

Neuroscientists have uncovered evidence suggesting that, when the pressure is on, women bring unique strengths to decision making.

…the closer the women got to the stressful event, the better their decision making became. Stressed women tended to make more advantageous decisions, looking for smaller, surer successes. Not so for the stressed men. The closer the timer got to zero, the more questionable the men’s decision making became, risking a lot for the slim chance of a big achievement.

Pointer from Jason Collins.

An evolutionary psychologist would have a great just-so story to explain this. Women are gatherers, looking for smaller, surer successes in finding food. Men are hunters, risking a lot for a slim chance of bringing back meat.

As you know, I have frequently suggested that if I had the job of regulating risk in the financial industry, I would change the gender of the CEO’s at big banks. (Some people wonder if that means I would order sex-change operations. No, I would also give the CEO the option of stepping down to allow a woman to be appointed.) I came to this point of view on the basis of casual observation of the different propensities of men and women as executives.

But now we have experimental evidence. Trust the science!

Just to be clear, these findings come from a methodology of which I am deeply skeptical. It just happens that in this case that the results line up with my own preconceptions.

Isabel Sawhill’s New Book

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Generation Unbound. I am reading it–may have finished by the time this is posted. In short, her thesis is that many twenty-somethings are having unplanned children out of wedlock, with detrimental consequences, particularly for the children.

Possibly related: This chart from Frances Woolley, showing Canadians’ intentions to have children, sorted by gender and age. What stands out is that among 15-24 year-olds, females are much keener on children than males.

Certainly related: Ben Casselman on a recent Pew survey of marriage patterns. Pointer from Jason Collins.

Jason Collins Reviews Scarcity

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He writes,

I also doubt that Mullainathan and Shafir’s description of the poor as suffering from scarcity is generally true. When it comes to time, the poor watch more television, invest less time in caring for their children, have plenty of free time to think about what they will eat, and yet are more likely to be obese. Their characterisation of the poor having a lot on their mind whereas the rich are relaxed despite their more complex employment does not seem particularly strong.

Read the whole thing.

Gender and Risk-Taking

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Jason Collins favorably reviews The Hour Between Dog and Wolf, a book by John Coates, who says that hormonal responses to success and failure serve to reinforce risk-taking and risk aversion. I note from the book description on Amazon:

Dr. John Coates identified a feedback loop between testosterone and success that dramatically lowers the fear of risk in men, especially younger men—significantly, the fear of risk is not reduced in women.

I count this as additional support for what I have said I would do if I were financial regulatory czar: change the gender of the CEO’s of the largest banks.

Gregory Clark on Immigration and Income Distribution

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Self-recommending, although I could raise many objections to his conclusion. Some excerpts:

There is reason to believe that many recent migrants to both the United States and Europe will have a much more difficult time than their predecessors. Meanwhile, the countries in which they settle are less likely to see the benefits of immigration as they experience heightened social tensions and widening social inequality. Policymakers would be wise to take those risks into account. Rather than focus on policies for integrating new immigrants, they should concentrate on avoiding selection policies that threaten to create near–permanent ethnic or religious underclasses.

…countries that selected elite immigrants to begin with now have high-performing immigrant classes. For example, the United Kingdom selects immigrants based more on education and skills. As a result, African, Chinese, and Indian immigrants outperform their British counterparts; although children of white British parents born between 1963 and 1975 attained on average 12.6 years of education, children of African migrants stayed in school for 15.2 years, those of Indian migrants for 14.2 years, and those of Chinese migrants for 15.1 years.

Pointer from Reihan Salam.

UPDATE: Also self-recommending is this Greg Clark podcast. Pointer from Jason Collins.

Greg on Greg

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Meaning Cochran on Clark.

If moxie is genetic, most economists must be wrong about human capital formation. Having fewer kids and spending more money on their education has only a modest effect: this must be the case, given slow long-run social mobility. It seems that social status is transmitted within families largely independently of the resources available to parents.

Pointer from Jason Collins.