Monthly Archives: April 2018

The Anti-tribal tribe

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David Fuller writes,

Recently a new meme started doing the rounds on the Internet — the “Intellectual Dark Web”. The phrase was coined by the mathematician Eric Weinstein. It seems to have caught on — showing that whatever it is, quite a few people are recognising it — even though there’s a lot of discussion about what exactly it means.

. . .one of the things that unifies many of the thinkers in the IDW is a belief that the evolutionary strategies that got us to where we are now are unlikely to get us any further — particularly our hard-wired tribalism.

He links to the intellectual darkweb site, which is sort of a self-appointed unofficial hall of fame for the IDW. Also to a piece by Meghan Daum that appeared in a mainstream media outlet, the LA Times.

Reading Fuller’s essay and Daum’s column, I believe that my Three Languages of Politics book is in the IDW spirit. Also, at least a couple IDW hall-of-famers have read it.

Some challenges that the IDW faces:

–how to be non-tribal while opposing tribalism

–how to expose and overcome smugness without becoming smug about it

Where I get news

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A reader asks,

What sources do you use to gather “news”? I have become quite cynical and skeptical of most major news outlets. I am certain that one must consider multiple sources of news to gather a general understanding of what is going on. I am just interested as to where you gather your news from.

In general, I think that competition for attention favors “outrage of the day” stories and disadvantages important stories that do not feed the outrage machine. I try to lean against.

1. My print news source is the Wall Street Journal.

2. I dropped my subscription to the Washington Post. I sort of miss the editorial section, which has some balance to it. But the front section is devoted to undoing the 2016 election. No doubt this caters to the tastes of many of the Post‘s readers, but it does not make for reliable prioritization of stories or for balanced coverage within those stories. Also, the Sunday Outlook section has too many pieces that look like undergraduate essays written to please the sociology professor. Instead, the Journal‘s Saturday Review section often has interesting material.

3. I check Google News once or twice a day, just to see the headlines. Interestingly, they almost never show me headlines from the Journal, but they always show me headlines from the Post. So I don’t

4. Blogs are less shrill and more useful for following news than other social media. But the blog ecosystem functioned better when there were trackbacks, the Google newsreader and Google blogsearch. And no Twitter. As it is, I use Feedly to check blogs. Even though I am not interested in the outrage-of-the-day stuff, it often gets enough blog coverage to keep me from missing out entirely. As an aside, I believe that some of the stories that outrage people on the right, such as college campus hijinks, are not covered in the mainstream media very much.

5. I never turn on a TV. I would not be able to pick out of a police lineup any of the reporters or pundits whose names I see mentioned on blogs, much less anyone who is less well known.

6. All I do on Twitter is echo my blog posts there. Not sure I should even do that.

7. I check Facebook once or twice a week. But I really want Facebook to show me personal items from my friends, not so-called news. I only click on a news-type story if it seems really interesting and different from what I might see anywhere else. That does not happen very often.

Update: Jordan Greenhall, one of my current favorites, says,

I have recently fully unplugged from social media because social media is almost completely toxic, which is to say that when I go into any social media environment I find myself decreasingly capable of making good choices and increasingly willing to make bad choices, because it has that effect. Now, this is an interesting problem because we’ve got billions of people who are now connected on social media.

And by the way I don’t just mean social media; think also broadcast media… if I read an article in the New York Times there’s a 99% chance that I’m worse off rather than better off. Books, particularly old books, by the way, are things that we can still rely on because they take so long to write and to read. They have this cool concept… that has to do with a differential time element—so books are slower than other things.

Perspectives on Jordan Peterson

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1. By Jordan Greenhall.

It might very well be the case that 2018 will be known as the “Year of Jordan Peterson”.

. . .Sovereignty is the capacity to take responsibility. It is the ability to be present to the world and to respond to the world — rather than to be overwhelmed or merely reactive. Sovereignty is to be a conscious agent.

2. Russ Roberts writes,

Peterson reminded me that civilization is fragile.

…Because of Peterson, I read The Brothers Karamazov, a big hole in my reading history. What an extraordinary book. Part of me is amazed and ashamed that I’d never read it. The other part of me is thrilled. I don’t think it would have nearly the impact on me in my teens and twenties as it did reading it now. Deeply thought-provoking on questions of good and evil and theodicy, on the dark side of human nature and on the potential for goodness to be redemptive despite that dark side. I’m thinking of inviting Peterson back to EconTalk just to discuss The Brothers K.

Scott Alexander writes,

The non-point-missing description of Jordan Peterson is that he’s a prophet.

. . .prophets are neither new nor controversial. To a first approximation, they only ever say three things:

First, good and evil are definitely real. You know they’re real. You can talk in philosophy class about how subtle and complicated they are, but this is bullshit and you know it. Good and evil are the realest and most obvious things you will ever see, and you recognize them on sight.

Second, you are kind of crap. You know what good is, but you don’t do it. You know what evil is, but you do it anyway. You avoid the straight and narrow path in favor of the easy and comfortable one. You make excuses for yourself and you blame your problems on other people. You can say otherwise, and maybe other people will believe you, but you and I both know you’re lying.

Third, it’s not too late to change. You say you’re too far gone, but that’s another lie you tell yourself. If you repented, you would be forgiven. If you take one step towards God, He will take twenty toward you. Though your sins be like scarlet, they shall be white as snow.

My own thoughts:

For those of us who gaze at college campuses and see students being taught to conform and to bully rather than to think, Peterson offers a rallying point.

He does have some ideas that are intellectually provocative. Scott Alexander points to the theme of chaos and order, which is important in Peterson’s thinking. Russ Roberts points to Peterson’s ability to derive insights from classics in literature.

I still think that he is better as a performer than as a writer. I am inclined to recommend binge-watching him on YouTube over reading his books.

This will be posted in the middle of Passover (note that, as usual, I schedule my posts in advance). The substance of the holiday is progressive, celebrating freedom from slavery. But the form of the holiday is order–doing things in a traditional way. The very word “seder” can be translated as “order.” One could have a discussion at the seder table that takes off from Peterson’s view of the need to preserve order while exploring chaos.

Essays of Israel Kirzner

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They have been collected in a new volume. It prompted my latest essay, but I would not call it a review. Kirzner addresses many difficult issues. For example, I write,

Those of us who wish to defend both methodological individualism and markets are faced with a paradox. When we say that the economy works well, we are claiming to speak for the entire society. But as individualists, we would say that there is no such moral entity as “society.”

Complicated vs. Complex

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Jordan Greenhall writes,

a complicated system is defined by a finite and bounded (unchanging) set of possible dynamic states, while a complex system is defined by an infinite and unbounded (growing, evolving) set of possible dynamic states.

. . .In the case of complication, the optimal choice is to become an “expert”. That is, to grasp the whole of the system such that one can make precise predictions about how it will respond to inputs.

In the case of complexity, the optimal choice goes in a very different direction: to become responsive. Because complex systems change, and by definition change unexpectedly, the only “best” approach is to seek to maximize your agentic capacity in general. In complication, one specializes. In complexity, one becomes more generally capable.

I found this distinction to be interesting. I would argue that mainstream economists treat economic problems as complicated, to be mastered by the expert. Those of us who lean toward Austrian heterodoxy treat economic problems as complex, best dealt with by adaptation.

I recommend the entire essay. His theme is the challenge that social media poses for human culture. As you know, this topic interests me a great deal.

The game of business strategy

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Greg Lewis says,

Sellers on eBay don’t quite know what gets them to the top of the search results in response to a query, but as they discovered when they made free shipping something that pushed you way up the rankings, suddenly everybody started offering free shipping. People figured it out.

The algorithm itself, the exposure, the possibility of being exposed to a customer might buy a product, very powerful and if you just start up-weighting certain features of the seller, what the seller is offering, then pretty soon, sellers will either figure it out or will die, in the sense that they won’t be on the platform and selling there much longer.

Pointer from Tyler Cowen. Tyler and I both find economists who work in business often to be more fascinating than pure academics.

I found that this wide-ranging interview reinforced many themes of mine. Business is turning into a strategy game. Price discrimination explains everything. Economic models tend to be too simple, and instead we need trial-and-error learning in many situations.

Would you buy this book?

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The title is Predicting the Markets: A Professional Autobiography. It has many favorable reviews on Amazon, but they seem to pre-date the official release of the book, which makes one suspicious. Maybe you will download the Kindle sample and leave your comments here.

1. I was aware of Yardeni back in my days at the Fed, when he was a leading Wall Street forecasting guru. In fact, I was surprised to find out he is still active–I would have assumed he had aged out of the profession or died, given how well established he was by 1980, when I started at the Fed. But he had only graduated with his Yale Ph.D four years prior to that.

2. Many of the names and events that he recalls from the 1960s, 1970s, and 1980s are familiar to me. I vividly remember that he coined the term “bond market vigilantes.” It served to emphasize that the financial markets do not necessarily strictly respond to the short-term interest rate that the Fed can control. When bond market investors were really inflation-phobic, they kept long-term rates higher than the Fed wanted. More recently, between 2003 and 2006, the bond market did the opposite–keeping long-term rates low even when the Fed was tightening. This is what made the Bernank mutter about a “global savings glut.”

3. I preach, “stare at the world, not at your models,” and Yardeni adopted that in practice as soon as he left Yale. He says that around 1988 he converted from being a macroeconomist to a microeconomist. He writes, “I have become increasingly convinced that most of the more interesting and relevant influences on the outlook for the global economy have occurred at the microeconomic level.”

4. In a chapter (still part of the Kindle sample) on economic history, he credits the decision taken in June of 1938 to suspend mark-to-market accounting for banks as helping to end the Roosevelt recession that hit in 1937. My first exposure to the accounting issue was in the 1980s, when book-value accounting allowed many under-water savings and loan associations to remain in business, and that was not a good thing–it made the inevitable bailout more expensive. The problem is that not marking assets to market makes the institution less transparent to regulators. So I was long in favor of market-value accounting.

But I have since come to hold a different view of financial intermediation, in which full transparency could be a bug, not a feature. The function of banks and other financial intermediaries is to hold risky, long-term assets while issuing low-risk, short-term liabilities. This permits households and nonfinancial firms to do the opposite. This is somewhat magical, as long as it is not carried to excess. Market-value accounting takes away some of the magic, and it has the property of turning liquidity crises into solvency crises. I still think that when government is backing deposits (and going beyond that with its de facto commitment to prop up big banks) the regulators need market-value accounting. In 2008, instead of advocating getting rid of market-value accounting, the approach that I advocating for keeping banks from all dumping assets at the same time would have been to temporarily relax capital requirements.

5. I have doubts that I would enjoy the whole book. Yardeni’s life represents a “road not taken” by me, and nothing I’ve read so far gives me regrets. I regard my own experiences as more interesting than his. Tyler Cowen says he would like to see more memoirs. I wonder if he could get through this one.