The Research Climate, So to Speak

Judith Curry writes,

Careerism leads a scientist not to want to have their research be challenged or audited, for fear of damage to their reputation that is shallowly based on such things as publication numbers, funding, memberships on prestigious boards, press releases and citation numbers (rather than an interest in learning and making meaningful contributions that advance science).

Policy advocates/activists do not want to see their science challenged (or the science of their political allies), for fear that the challenge will diminish their policy and political objectives. Challenges from someone on the ‘other side’ of the policy/political debate are regarded as especially objectionable, since their motives are ‘different’. As a result, we are seeing an epidemic of ‘activism that abuses science as a weapon.’

Read the whole post. I was not sure what made the best excerpt.

I see this issue in Martin Gurri terms, with insiders and outsiders in conflict. The insiders are the credentialed academics. The outsiders non-academics or academics from other fields. We can expect outsiders to enjoy greater access to information and more ability to publicize their analyses than was the case before the Internet. The insiders will react by attacking the outsiders’ motives and lack of credentials. If we side too much with the outsiders, we risk nihilism, in which good science is too easily dismissed. If we side too much with the insiders, we risk groupthink, in which bad ideas persist because contrary analysis is suppressed.

Economics and Agency

Alberto Mingardi asks,

Shall we pretend events like globalisation and the feeding of billions are the clear result of the actions of some brilliant men, and that’s it? Shall we produce a Marvel comics version of the free market, that instead of focusing on the invisible (indeed) interactions of many, praises just the courage and intelligence of few?

Read the whole thing. I believe that the issue of agency is indeed very important.

1. As individuals, we are inclined to view our successes as due to our own efforts and choices and our failures as outside of our control.

So, if you have some good things in life, you tend to overstate how much you earned them and understate the extent to which you were fortunate. When you look at others, you tend to see a more appropriate mix of earned success and luck. As a result, to most people, the economy looks unfair. We can see the element of luck in the success of those doing better than us. We don’t see the element of luck in our own success.

One wise piece of advice I got from a co-worker is that they way to be happy is to compare your salary and work effort to that of colleagues who work harder and earn less. Instead, most people do the opposite, and it makes them unhappy. It is a very difficult trick to see your own salary as being lucky in comparison with someone else’s.

2. We are more inclined to think of economic outcomes as determined by deliberate agency than by emergent phenomena.

Thus, we attribute the state of the economy to policy. In my view, we much over-rate the control that the Fed has over the stock market and the economy.

The politician who promises to “fix” the economy can take advantage of both of these inclinations. He can appeal to people’s bias toward seeing the system as unfair by saying that the system is broken. And he can take advantage of people’s bias to over-rate his ability to control economic outcomes by saying that he can fix the system. Of course, after he has been in office a while, unless he has gotten lucky, these inclinations will work against him and in favor of a challenger.

Compared with 100 Years Ago

Timothy Taylor pulls some nuggets from an article by Carol Leon Boyd in the Monthly Labor Review.

BLS reported about 23,000 industrial deaths in 1913 among a workforce of 38 million, equivalent to a rate of 61 deaths per 100,000 workers. In contrast, the most recent data on overall occupational fatalities show a rate of 3.3 deaths per 100,000 workers.

That’s the sort of thing that doesn’t show up in GDP growth rate statistics.

There is much more at the link.

Two Historical Tales of Productivity.

1. Dietrich Vollrath writes,

the weighted variance of log capital and log coal per worker is either 0.0188 (if you use Clark’s index of capital) or 0.0381 (if you use Clark’s data on looms equivalents). Either way, this is only 2.92% or 5.90%, respecitively, of the total variance in real wages. A tiny fraction of variation in real wages is driven by differences in capital per worker, and the rest must be explained by technology, human capital, or something else. Clark has disposed of technology as an explanation, so it could be human capital. Clark eliminates big human capital differnces (at least in terms of age structure or experience), so it has to be “something else”. That something else is either local effects or culture, depending on your choice of terms.

This refers to international comparisons of productivity in the cotton industry. Clark is Gregory.

2. Gerben Bakker, Nicholas Crafts, and Pieter Woltjer write,

Compared with Kendrick, we find that labour quality contributes more and TFP growth less. For this period as a whole, TFP growth accounted for about 60% of labour productivity growth rather than the 7/8th famously attributed to the residual by Solow (1957).1 Contrary to secular stagnation pessimism, TFP growth was very strong both in the 1920s and the 1930s, at 1.7% and 1.9% per year, respectively – well ahead of anything seen in the last 40 years. Regardless, even though the 1930s saw the fastest TFP growth in the private domestic economy before WWII, it was not the most progressive decade of the whole 20th century in terms of TFP growth. Both 1948-60 and 1960-73 were superior at 2.0% and 2.2% per year, respectively

Pointers from Mark Thoma for both.

Keep in mind that in (2), they are starting with output per worker in the aggregate economy, and certainly there are problems measuring the numerator. Then you adjust for capital per worker, and that raises another measurement challenge. Then, in order to calculate you take a percentage change, which amplifies measurement error. Then, to compare growth rates across time periods, you take the difference in percentage changes, which amplifies measurement error yet further. I’m not criticizing these specific results, but just raising a general caution.

A Very Sobering Sentence

from Jonathan Haidt.

in the academy now, if truth conflicts with social justice, truth gets thrown under the bus.

Earlier in the interview, he says,

For many years now, there have been six sacred groups. You know, the big three are African-Americans, women and LGBT. That’s where most of the action is. Then there are three other groups…Latinos, Native Americans, and people with disabilities. So those are the six that have been there for a while. But now we have a seventh–Muslims. Something like 70 or 75 percent of America is now in a protected group. This is a disaster for social science because social science is really hard to begin with. And now you have to try to explain social problems without saying anything that casts any blame on any member of a protected group. And not just moral blame, but causal blame. None of these groups can have done anything that led to their victimization or marginalization.

Read the whole thing.

Growth, like the future, is not evenly distributed

Larry Summers writes,

whereas my grandmother would have been at sea if returned to her girlhood home, I would miss relatively little if suddenly placed in the home I grew up in. It takes longer and is less comfortable to fly from Boston to Washington or London than it was 40 years ago. There are more highways now but much more traffic congestion as well. Life expectancy has continued to increase, though at about half the pace it did during my grandmother’s day. But the most important transformation—child death being an extraordinary event—had already happened by the time I was born.

Pointers from both Mark Thoma and Tyler Cowen.

If you compare 1900 to 1960, you can point to a few innovations that transformed America. The car, radio and television, and household appliances like refrigerators and vacuum cleaners.

Has there been comparable transformation since 1960? I would say that there has, but the improvements have been distributed differently and are not embedded as much in tangible goods. Continue reading

One Language of Politics?

A piece in the UK Spectator says,

A senior editor of Nature, one of the leading academic journals, refused to consider it for review because she regards scientific research into the personalities of the long-term unemployed as ‘unethical’, and a sociology professor whom the publishers had asked to peer-review the book refused to do so on the grounds that any book linking benefit dependency to personality must be nonsense because personality is a ‘capitalist construct’.

Pointer from Tyler Cowen. The controversial book argues that welfare claimants have personalities that make them difficult to employ. It’s fine if you prefer the oppressor-oppressed narrative to the civilization-barbarism narrative. But instead of shutting the other side down, you should be standing up for their rights to make their case.

Olivier Blanchard and Joseph E.Gagnon: This Time is Different

They write,

the deviations of the P/E from its historical average are in fact quite modest. But suppose that we see them as significant, that we believe they indicate the expected return on stocks is unusually low relative to history. Is it low with respect to the expected return on other assets? A central aspect of the crisis has been the decrease in the interest rate on bonds, short and long. According to the yield curve, interest rates are expected to remain quite low for the foreseeable future. The expected return on stocks may be lower than it used to be, but so is the expected return on bonds.

Pointer from Mark Thoma.

Their point is that when interest rates are low, you can justify exceeding historical norms for the price-earnings ratio on stocks. I made a similar point about the price-earnings ratio for real estate relative to interest rates during the housing bubble.

Socialism’s Poster Child?

David Deming writes,

You don’t have to be a student of ancient history to know socialism doesn’t work. The collapse of the Soviet Union in 1989 was an unequivocal demonstration of the moral and economic superiority of capitalism. The misery caused by socialism is unfolding today in Venezuela. Since Venezuela embraced socialism in 1999, poverty, crime and corruption have all increased. Grocery shelves are empty and the annual inflation rate is estimated to be as high as 200 percent.

For the left, the poster children for socialism would not be the Soviet Union or Venezuela. Instead, think of Sweden or Denmark. But one can argue that those are welfare states, not socialist states in the sense of government ownership of the means of production. But consider Singapore:

A majority of the top dividend-paying stocks on the Straits Times Index are government-linked

That is according to Andy Mukherjee. Pointer from Tyler Cowen.

I would suggest focusing on the relationship between knowledge and power. In small states, like Singapore, Sweden, and Denmark, there is relatively little discrepancy between knowledge and power. It is possible for government officials to know more of what they need to know to carry out policy effectively.

Large states are harder for a central government to manage. Decentralized institutions, including markets, do a better job of aligning knowledge with decision-making power.

See my essay on the recipe for good government.

What Books to Read?

Diane Coyle asks,

What ten books would you absolutely want a young person to read – whatever their subject – to be well-rounded? The idea is a kind of summer reading list for someone about to go to university – what kind of broad mental hinterland should they have before arriving to start a social science degree?

Pointer from Tyler Cowen.

Of the ten she lists, I have read Hume, Kahneman, Camus, and Jacobs. I have strong impressions (possibly too shallow) of what is in Darwin, de Beauvoir, and Scott. I have no strong impression of the other three.

a. I have compiled these sorts of lists before. I think that perhaps more important than which books you put on the list is your thought process in assembling them.

b. There is nothing magic about the number 10.

c. Some of the books that would be in my list have yet to be written.

My first category might be called war and society.

1. Violence and Social Orders, by North, Weingast and Wallis. A very powerful political economy framework that I think works.

2. The Best and the Brightest, David Halberstam, about the Vietnam War. It is an epic tale of government failure.

3. Alone, William Manchester’s second volume of his biography of Winston Churchill. If Vietnam was the costliest intervention mistake made by a western democracy in the 20th century, then the failure to heed Churchill’s warnings about Adolf Hitler was the costliest non-intervention mistake.

My second category might be called late 20th-century perspectives on 21st century technology and society.

4. The Diamond Age, a work of science fiction by Neal Stephenson, is longer and more confusing than I would like, but it offers a vision of the impact of technology on society that raises many of the important issues, particularly the class divergences that people are talking about today.

5. The Transparent Society, by David Brin. That also was a very farsighted book, about the issues of privacy and security that are being much discussed today. See my review.

6. The Age of Spiritual Machines, by Ray Kurzweil. He later updated and expanded his thinking in The Singularity is Near, but I think that the older version may be more interesting, because of the long list of predictions made in 1999 for 2009 and 2019 that we can now evaluate.

My third category might be called fictional insights into human nature and power over others.

7. One Flew Over the Cuckoo’s Nest, by Ken Kesey. Don’t bother with the movie, even though it was voted Best Picture. For me, the book offers insights into the dynamics among people who feel entitled to power and people who are nervous about freedom.

8. Animal Farm, by George Orwell. Another book on the determination to exercise power.

9. Lord of the Flies, by William Fielding Golding. I see it as a story of reversion to barbarism.

I do not know how to categorize my next pick.

10. The Blank Slate, by Steven Pinker. The book gives you a lot of modern European philosophy and a lot of evolutionary psychology.

My next category might be “dueling asymmetric insights.”

11. Moral Politics, by George Lakoff. Lakoff, a progressive, offers an interesting theory of the appeal of conservatism. Recommended for conservatives so that you can understand how progressives think of you.

12. The Vision of the Anointed, by Thomas Sowell. Sowell, a conservative, offers an interesting theory of the appeal of progressivism. Recommended for progressives so that you can understand how conservatives think of you.

Finally, I have my category of works yet to be written.

13. Readings on The Industrial Revolution. This would include timelines for growth rates, innovations, and trading patterns. It would include excerpts from various theories (Clark, North, McCloskey, etc.) of why the Industrial Revolution emerged at the time and place that it did.

14. Readings on the Great Depression. This would include a chronology of events, and it would include excerpts from various theories of why it started and why it persisted. It would include analyses of the political legacy of the Great Depression

15. A project that I am currently toying with (probability of attempting of about .2), on the challenge of trying to extricate yourself from political tribalism. A bit of Robin Hanson, a bit of the three-axes model, a bit of Martin Gurri. Possibly embedded in a work of fiction.