Friday, May 31, 2013

Any costs are absorbed by people further down the socioeconomic ladder

From The New Liberalism and Its Discontents by Ross Douthat.
Just because powerful people support a policy doesn’t make it a bad idea. But given his (appropriately) jaundiced view of Silicon Valley liberaltarianism overall, it’s striking how little skepticism Packer shows about Zuckerberg and Co.’s promise that on this issue, Silicon Valley’s self-interest just happens to finally align with equal opportunity and upward mobility and various other good things. Especially since it’s relatively easy to see mass immigration as a prime example of the phenomenon that Packer elsewhere find troubling — a post-1960s trend that’s made America more diverse and inclusive but also more stratified and less solidaristic. In which case, the elite, bipartisan support for accelerating current immigration trends looks like a prime example of the phenomenon Goldman describes in his response — the way the new upper class embraces the “more diversity, less solidarity” bargain because it serves their own self-interest, and any costs are absorbed by people further down the socioeconomic ladder. (Indeed, if you’re a tech mogul, the bill that the Senate is currently considering isn’t just a proposition that requires no sacrifice on your part; it’s a policy shift that arguably reduces your incentive to worry about other domestic social problems, because it makes it easier to look abroad for productive workers if America’s families and schools and neighborhoods aren’t buoying enough young people upward.)
An interesting tying together of multiple complex issues. Also a great illustration of our incorrigible reluctance to acknowledge and address the trade-off decisions we make and ignore.

Thursday, May 30, 2013

We lose sight of the vast reaches of our ignorance

From The Battle over Junk DNA by Alex Tabarrok
Why discuss such an esoteric (for economists) paper on a (nominally!) economics blog? The Graur et al. paper is highly readable, even for non-experts. It’s even funny, although I laughed somewhat sheepishly since some of the comments are unnecessarily harsh. Many of the critiques, such as the confusion between statistical and substantive significance, arise in economics and many other fields. The Graur paper also makes some points which are going to be important in economics. For example they write:
“High-throughput genomics and the centralization of science funding have enabled Big Science to generate “high-impact false positives” by the truckload…”

Exactly right. Big data is coming to economics but data is not knowledge and big data is not wisdom.

Finally, the Graur paper tells us something about disputes in economics. Economists are sometimes chided for disagreeing about the importance of such basic questions as the relative role of aggregate demand and aggregate supply but physicists can’t even find most of the universe and microbiologists don’t agree on whether the human genome is 80% functional or 80% junk. Is disagreement a result of knaves and fools? Sometimes, but more often disagreement is just the way the invisible hand of science works.
I agree. We stumble along the shoreline, making much ado of our deep knowledge of the occasional Ghost Crab or Whelk we encounter, oblivious of what lies at the end of the shoreline or beyond the distant horizon. We know so much more than we ever used to know that we lose sight of the vast reaches of our ignorance.

Wednesday, May 29, 2013

Book Jenga

From 25 Signs You’re Addicted To Books by Summer Anne Burton

Sign Number 15. The stack of books by your bed resembles the beginning of a Jenga game.

Monday, May 27, 2013

The life so short, the craft so long to learn

From Geoffrey Chaucer's Parliament of Birds.
The life so short, the craft so long to learn,
The attempt so hard, the victory so keen,
The fearful joy, so arduous to earn,
So quick to fade - by all these things I mean
Love, for his wonders in this worldly scene
Confound me so that when I think of him
I scarcely know whether I sink or swim.
Translated by Theodore Morrison

Another version.
The life so short, the craft so long to learn,
The assay so hard, so sharp the conquering,
The fearful joy that slips away in turn,
All this mean I by Love, that my feeling
Astonishes with its wondrous working
So fiercely that when I on love do think
I know not well whether I float or sink.
Translated by A.S. Kline

The original.
The lyf so short, the craft so longe to lerne.
Th’ assay so hard, so sharp the conquerynge,
The dredful joye, alwey that slit so yerne;
Al this mene I be love.
Geoffrey Chaucer
Parlement of Foules, l. 1-4.

In Flanders fields the poppies blow

In Flanders Fields
by John McCrae

In Flanders fields the poppies blow
Between the crosses, row on row,
That mark our place, and in the sky,
The larks, still bravely singing, fly,
Scarce heard amid the guns below.

We are the dead; short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe!
To you from failing hands we throw
The torch; be yours to hold it high!
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.

Sunday, May 26, 2013

Comparative Greats

In my post yesterday, Consequence, acceleration and velocity, I spoke of the advantage early contributors have in terms of consequence versus those making equal contributions much later.

Pursuing this thought, I got curious, in terms of consequence (discussed by many people, durable over time, diverse audiences), how do two of the most famous economists compare to one another, Adam Smith and Karl Marx. Because Marx's ideas were hijacked by brutish totalitarians, it is easy to forget that he was an economist who made numerous contributions to the field.

Google Ngram Viewer allows you to look at the relative frequency of word and phrase usage by year over time among the 5 million books Google has digitized up to 2008. As long as a title is not also a common phrase, you can compare the degree that book is being discussed by other authors and thinkers. So I started out comparing how often people are discussing the two classics associated respectively with Smith and Marx, The Wealth of Nations and Das Kapital. (Click on the picture to enlarge).

Interesting. Both books are cited a lot (at the 1x10E-5 level)since the thirties. Shockingly to me, for half that time, Marx's work was more discussed than Smith. 1968 was the high mark for Marx and the second lowest mark for Smith. But since then, Smith has come back into his own, overtaking Marx in the dank year of 1977. Since then Smith has held pretty steady, with Marx plunging towards the dustbin of history. In 2008 his work is referenced at less than half the rate of Smith.

But then I got to thinking. So that is how they compare to one another, how about to other consequential and innovative thinkers. So I started adding works to get some sort of benchmark of comparative consequence. Following are the comparisons, sequentially adding, Atlas Shrugged, The Structure of Scientific Revolutions, The Origin of Species, the Iliad, To Kill a Mockingbird. The choices are basically random based on being classics but wanting to look at serious economics versus literary economics (Atlas Shrugged), classics in scientific fields and literary classics ancient and modern.

OK. Atlas Shrugged is consequential but not in the same league as either Das Kapital or Wealth of Nations.

The Structure of Scientific Revolutions: right up there with Smith and outstripping Marx. Kudos Kuhn.

Same with Darwin's Origin of Species.

The old blind Greek guy still has a voice - in good company with the other greats and looking down at the Marx-come-lately.

Even such a contemporaneous literary star as Harper Lee with To Kill a Mockingbird has entered the pantheon.

Neat stuff.

Unconscious but systemic ageism

From Whatever Happened to Graham Greene? by James MacManus.
Over lunch with a colleague in London the other day I mentioned that business managers face a problem summed up by Graham Greene in the title of his book, The Human Factor. I was expounding my view that even the most experienced and intelligent members of staff could make irrational and expensive errors of judgment when I saw her face retreat into a questioning frown.

Who is Graham Greene she said? For a moment I was speechless. Here was a 30 year-old university educated English woman who had never heard of one of most famous novelists of the 20th century. Some days later I reported this episode to an executive in her forties who works in the HR department of a City law firm. She is an intelligent, lively woman with a passion for outdoor sports. To my amazement she shyly admitted that she too had never heard of Graham Greene.
For an answer I turned to my friend Erica Wagner, the starry literary editor of The London Times. She told me that Greene may well be entering the no-man's land between currently fashionable writers, be they alive or dead, and the enduring classic authors such as Hemingway, Wodehouse and Dickens. Her view is that this no mans land can swallow a writer and his work and some never re-emerge.

To make her point, Erica told me that she continues to champion the wonderful Canadian novelist Robertson Davies who has dropped beneath the literary radar since he died in 1985. And that gave me a pang of acute embarrassment : I'd never heard of him.
MacManus reinforces a point I make to reading enthusiasts, to little avail, that enthusiastic readers lose perspective on what people know, and just how meager is the consumption of books among the general public, even the educated and informed public.

With these examples, I have read several Robertson Davies books and enjoyed them, even though I am not much of a fiction reader. But I haven't heard anyone mention him in years.

Graham Greene is one of those authors where I have purchased several of their books and even started a few, but never have become engaged with any of them. I suspect that there will come a time in my life where they may become interesting or pertinent, but I haven't encountered it yet.

In the book community, it is almost as if we are so focused on the new and the edgy and the book ever more targeted to a microscopic demographic, that we fail to tend those masterpieces that actually could have broad appeal. Unconscious but systemic ageism, perhaps. More likely just a function of the structure of commerce but still, there seems an opportunity out there somewhere.

Saturday, May 25, 2013

Consequence, acceleration and velocity

From Why Is There No New Milton Friedman Today? by Tyler Cowen. I like his insight.
If I approach this question from a more general angle of cultural history, I find the diminution of superstars in particular areas not very surprising. As early as the 18th century, David Hume (1742, 135-137) and other writers in the Scottish tradition suggested that, in a given field, the presence of superstars eventually would diminish (Cowen 1998, 75-76). New creators would do tweaks at the margin, but once the fundamental contributions have been made superstars decline in their relative luster.

In the world of popular music I find that no creators in the last twenty-five years have attained the iconic status of the Beatles, the Rolling Stones, Bob Dylan, or Michael Jackson. At the same time, it is quite plausible to believe there are as many or more good songs on the radio today as back then. American artists seem to have peaked in enduring iconic value with Andy Warhol and Jasper Johns and Roy Lichtenstein, mostly dating from the 1960s.

In technical economics, I see a peak with Paul Samuelson and Kenneth Arrow and some of the core developments in game theory. Since then there are fewer iconic figures being generated in this area of research, even though there are plenty of accomplished papers being published.

The claim is not that progress stops, but rather its most visible and most iconic manifestations in particular individuals seem to have peak periods followed by declines in any such manifestation. In essence the low-hanging fruit for the production of fame becomes much harder to find. Probably there will never be another geometer as fundamental as Euclid and no economist to rival the reputation of Adam Smith as a founder of the discipline.

Newer areas still seem to be generating iconic superstars up through the current day. Bill Gates, Steve Jobs, and Mark Zuckerberg stand good chances of going down as world-historic innovators and perhaps thirty years from now we will be asking why there is no new Steve Jobs.
Elsewhere, I use the term consequentiality as a measure (or collection of measures) of the impact of a book. There is no means to quantify subjective perfection but we can use consequentiality as a proxy. The more people are discussing a book (song, play, idea, etc.), over greater lengths of time, and across more cultures, the more basis there is for claiming such a book as consequential. This definition frees you from the shackles of passing celebrity, well funded marketing, topicality, the impact of movie tie-ins, etc. Such an approach can be used in terms of individuals as well.

I think the insight that Cowen provides is that fame is a function of absolute contribution and relative contribution and cumulative contribution. If you were there earliest with the initial insights, you are likely then to be much more iconic (or in my terms, consequential) than someone making an equally weighty contribution today. Making a contribution of five pounds of knowledge when the sum of knowledge is ten pounds is huge. Making a contribution of five pounds of knowledge when the sum of knowledge is one hundred pounds is incremental. In some regards, equally important but not as consequential.

Another way to put this perhaps is in terms of acceleration and velocity. We are looking at a particular case in any established field of knowledge, and that is when the acceleration of knowledge begins to decrease while the velocity continues to increase. We continue increasing our store of knowledge but the rate of increase has fallen.

What is it that we perceive, the reduction or the increase? Depends on frame of reference and that is usually time based with a substantial recency effect bias, i.e. proximate items are esteemed or held in regard to a greater degree than items more remote in time or awareness. Perhaps what we notice is the continued (incremental) increase in velocity but what we remember is the decrease in acceleration. That would explain why, given that there are always contemporary celebrities who command our attention (they are going faster than anyone has gone before but in smaller increments) in a given field, who we really focus on as the "greatest" are those that made the biggest strides (greatest acceleration) and because of the declining returns on effort, those biggest strides are early on. Morgan Freedman is a really great actor but in terms of impact on his field, how can he compare to a Chapman or Keaton or Grant or Bogart? Freedman is inching towards perfection while they leapt towards it.

What we remember most, in this framing, are those who gave us the greatest surge of acceleration in a field while acknowledging those superior absolute performances of the late comers.

These thoughts tie in to some of the issues raised by Stephen Jay Gould and Niles Eldredge with regard to punctuated equilibrium and by Thomas Kuhn in 1962 with his The Structure of Scientific Revolutions.

You can be the brightest and work the hardest and take the most planned risks and be the most articulate in promoting the results but if you are in a field of reducing acceleration, you will be overshadowed by the early players and you will likely achieve less celebrity compared to others of comparable ability in nascent fields.

Hard work, persistence, risk taking, effectiveness, are all necessary ingredients to success but the degree of success will depend on the context. There is a tension between those that believe that achievers are basically lucky while others point towards effort as the determinant of outcome. They are both right: individual effort gets you in the game but the degree of success (money, fame, etc.) is dependent on the game (context).

Friday, May 24, 2013

A minuscule sigh in the crown of eternity.

I picked up a Karin Fossum book at a library sale last week. I like those sales as the books are really cheap and it provides an opportunity to sample authors and styles beyond your normal reading tastes without breaking your book buying budget. In this case it was a very good purchase. I like Scandinavian Noir (Fossum is Norwegian) in general and Fossum is much more in the league of some of my favorites than other authors. Don't Look Back is the book I just finished. A gripping murder mystery. I often will try the first few pages of these library samplers and if it looks good, then hold it for the beach in the summer. In this case, too gripping to wait.

A good line.
The car crunched over the gravel road to Lundeby Church. It was floodlit now and stood in the pink-colored light with solemn self-possession, as if it had stood there forever. In reality it was only 150 ears old, a minuscule sigh in the crown of eternity.

Wednesday, May 22, 2013

When the Nazis came for the communists

I have often heard it quoted but not ever seen it sourced.
When the Nazis Came
by Martin Niemöller

When the Nazis came for the communists,
I was silent,
I was not a communist.

When they locked up the social democrats,
I was silent,
I was not a social democrat.

When they came for the trade unionists,
I was silent,
I was not a trade unionist.

When they came for me,
there was no more,
to speak out.

Tuesday, May 21, 2013

Direct and Indirect Choices

The key conclusions in this paper, that social policies are hard and are likely to generate unintended consequences and that voluntary peer selection is an important element of success is consistent with my operating model that there are some things we can control directly in terms of life success and that there are other processes which we can't control but can only place ourselves in a position to take advantage of opportunities that come along.

Peer sorting will happen regardless, best to make sure that one is engaged with good peers.

Monday, May 20, 2013

Every single piece has a principle of motion of its own

From Adam Smith's The Theory of Moral Sentiments.
The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.
Referenced by Tyler Cowen in regard to a paper demonstrating that indeed, "every single piece has a principle of motion of its own."
We take cohorts of entering freshmen at the United States Air Force Academy and assign half to peer groups designed to maximize the academic performance of the lowest ability students. Our assignment algorithm uses nonlinear peer effects estimates from the historical pre-treatment data, in which students were randomly assigned to peer groups. We find a negative and significant treatment effect for the students we intended to help. We provide evidence that within our “optimally” designed peer groups, students avoided the peers with whom we intended them to interact and instead formed more homogeneous sub-groups. These results illustrate how policies that manipulate peer groups for a desired social outcome can be confounded by changes in the endogenous patterns of social interactions within the group.

Monday, May 13, 2013

Pople generate their own good fortune via four basic principles

Snake oil alert. Always beware of conclusions from studies in which the participants are self-selected. This is an intriguing synopsis of some Luck research, The Luck Factor by Richard Wiseman.
Over the years I have interviewed these volunteers, asked them to complete diaries, personality questionnaires, and intelligence tests, and invited them to my laboratory to participate in experiments. The findings have revealed that luck is not a magical ability or the result of random chance. Nor are people born lucky or unlucky. Instead, although lucky and unlucky people have almost no insight into the real causes of their good and bad luck, their
thoughts and behavior are responsible for much of their fortune.

My research revealed that lucky people generate their own good fortune via four basic principles. They are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.
I tried to find any follow-up research and came up dry. Here is a reporter's interview. How To Make Your Own Luck by Daniel H Pink

Thursday, May 9, 2013

The riotousness of the crowd is always very close to madness.

One of the most influential scholars and teachers in history was Alcuin, English but later of Charlemagne's court.
Wisdom in a letter from Alcuin to Charlemagne, dated 798.
Nec audiendi qui solent dicere, Vox populi, vox Dei, quum tumultuositas vulgi semper insaniae proxima sit.
Which is translated as:
And those people should not be listened to who keep saying the voice of the people is the voice of God, since the riotousness of the crowd is always very close to madness.
Vox populi, vox Dei - important to distinguish the two.

Wednesday, May 8, 2013

Interesting what happens when people have to think

An interesting conjunction. In yesterday's post, The fate of human beings in the here and now loomed larger as a moral concern, I quoted Thomas Sowell on the development in the West of moral repugnance regarding the worldwide and millennia-old practice of slavery.
Religious minorities, such as the Quakers or the Evangelicals within the Anglican Church, could not simply rely on religious tradition and authority because their very existence was based on a questioning of, and in some cases a break with, those traditions and authorities.

These insurgents had to think independently about slavery, as about other things, and derive their own conclusions—as most people do not have to think through things which have been accepted facts of life for centuries. The rising class of secular intellectuals in the West could even less rely on the authority of established religious institutions. This did not mean that either secular or religious insurgents were automatically anti-slavery. What it meant was that they both had to evolve some intellectually and morally defensible position because they could not simply base themselves on existing beliefs or practices. Different individuals resolved the issues differently but out of this process came some who began to see slavery as an intolerable evil.
In this week's e! Science News, there is an article, Extreme political attitudes may stem from an illusion of understanding, that obliquely makes the same point. As with most these type of small studies, this is at best an indicative study.
In their first study, the researchers asked participants taking an online survey to rate how well they understood six political policies, including raising the retirement age for Social Security, instituting a national flat tax, and implementing merit-based pay for teachers. The participants were randomly assigned to explain two of the policies and then asked to re-rate how well they understood the policies.

As the researchers predicted, people reported lower understanding of all six policies after they had to explain them, and their positions on the policies were less extreme. In fact, the data showed that the more people's understanding decreased, the more uncertain they were about the position, and the less extreme their position was in the end.

The act of explaining also affected participants' behavior. People who initially held a strong position softened their position after having to explain it, making them less likely to donate bonus money to a related organization when they were given the opportunity to do so.
Interesting what happens when people have to think.

Tuesday, May 7, 2013

Heaven was silent in that awful moment

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 145.
Even at the individual level, it was not always legally possible for a slaveowner to simply set a slave free, for authorities had to approve in many states. When a motion was introduced into the Virginia House of Burgesses in 1769 to allow slaveowners to free their slaves unilaterally—a motion seconded by Thomas Jefferson—there was anger at such a suggestion and the motion was roundly defeated. An unlimited power to release slaves into the larger society was considered too dangerous to leave in private hands.

Many who have dismissed the anti-slavery words of the founders of the American republic as just rhetoric have not bothered to check the facts of history. Washington, Jefferson, and other founders did not just talk. They acted. Even when they acted within the political and legal constraints of their times, they acted repeatedly, sometimes winning and sometimes losing. One of the early battles that was lost was Jefferson’s first draft of the Declaration of Independence, which criticized King George III for having enslaved Africans and for over-riding colonial Virginia’s attempt to ban slavery. The Continental Congress removed that phrase under pressure from representatives from the South.

When Jefferson drafted a state constitution for Virginia in 1776, his draft included a clause prohibiting any more importation of slaves and, in 1783, Jefferson included in a new draft of a Virginia constitution a proposal for gradual emancipation of slaves. He was defeated in both these efforts. On the national scene, Jefferson returned to the battle once again in 1784, proposing a law declaring slavery illegal in all western territories of the country as it existed at that time. Such a ban would have kept slavery out of Alabama and Mississippi. The bill lost by one vote, that of a legislator too sick to come and vote. Afterwards, Jefferson said that the fate “of millions unborn” was “hanging on the tongue of one man, and heaven was silent in that awful moment.”

Monday, May 6, 2013

It was essentially European imperialism which ended slavery

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 134.
Even independent non-Western nations were pressured to end slavery, both directly and by a desire not to be embarrassed in the eyes of the world — meaning, during the nineteenth century, mostly the powerful European world. In short, where European and European-offshoot societies held direct and effective power in the nineteenth century, slavery was simply abolished. But where the Western world’s power and influence were mediated, reduced or otherwise operated only indirectly, there non-Western peoples were able to fight a long war of attrition and evasion in defense of slavery—a war which they had, however, largely lost by the middle of the twentieth century, but which they had not yet wholly lost even at the beginning of the third millennium, when vestiges of slavery remained in parts of Africa.

Despite all this, those with an instrumental view of history have managed to turn things upside down and present slavery as an evil of “our society” or of the white race or of Western civilization. One could as well do the same with murder or cancer, simply by ignoring these evils in other societies and incessantly denouncing their presence in the West. Yet what was peculiar about the West was not that it participated in the worldwide evil of slavery, but that it later abolished that evil, not only in Western societies but also in other societies subject to Western control or influence. This was possible only because the anti-slavery movement coincided with an era in which Western power and hegemony were at their zenith, so that it was essentially European imperialism which ended slavery. This idea might seem shocking, not because it does not fit the facts, but because it does not fit the prevailing vision of our time.

Sunday, May 5, 2013

The fate of human beings in the here and now loomed larger as a moral concern

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 128.
It was not until the late eighteenth century that there was even an intellectual movement, much less a political movement, for the abolition of slavery, and those in these movements were distinctly in the minority, even in the West—and had no counterparts outside the West. What was historically unusual was the emergence in the late eighteenth century of a strong moral sense that slavery was so wrong that Christians could not in good conscience enslave anyone or countenance the continuation of this institution among themselves or others. Nor was this view confined to religious leaders or congregations. Adam Smith in Britain and Montesquieu in France were among the secular intellectuals who wrote against slavery in the eighteenth century.

Slavery was one of a number of long-standing institutions and traditions which were being questioned in the eighteenth century in the West. Before then, both secular and religious philosophers going back to Plato had seen the mundane physical world as being far less important than the ideal or spiritual world, so that being right and free in one’s mind was more important than one’s fate in the physical world. Dissipating one’s energies trying to reform the practices of a sinful world was considered less important than bringing one’s own soul into line with spiritual imperatives. To the religious, the world of the here and now was a transient thing, a prelude and a testing ground for the world that really mattered, the world of eternity. However, as a humanistic philosophy began to affect both secular and religious thought, what happened in the mundane physical world began to assume greater importance than it had before in the eyes of intellectuals, philosophers, and religious leaders.

As the fate of human beings in the here and now loomed larger as a moral concern, the fate of slaves became part of the intellectual and moral agenda of the times. Over the centuries, established religious institutions in the West—notably the Catholic Church, but later including also established Protestant denominations—had made their peace with the institution of slavery as a fact of life and produced traditional rationales to reconcile it with the message of Christianity. Now these institutions, traditions, and rationales came under fire from within, as well as outside, the religious community across a broad front, of which slavery was just one battleground. Religious minorities, such as the Quakers or the Evangelicals within the Anglican Church, could not simply rely on religious tradition and authority because their very existence was based on a questioning of, and in some cases a break with, those traditions and authorities.

These insurgents had to think independently about slavery, as about other things, and derive their own conclusions—as most people do not have to think through things which have been accepted facts of life for centuries. The rising class of secular intellectuals in the West could even less rely on the authority of established religious institutions. This did not mean that either secular or religious insurgents were automatically anti-slavery. What it meant was that they both had to evolve some intellectually and morally defensible position because they could not simply base themselves on existing beliefs or practices. Different individuals resolved the issues differently but out of this process came some who began to see slavery as an intolerable evil.

Saturday, May 4, 2013

Cost of trust

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 89.
One of the many practical benefits of close ties within a middleman minority has been an ability to conduct business with one another at lowers costs because of less need to resort to precautions before making transactions or to the formal legal system afterward, both of which can be costly and time-consuming. Thus Lebanese diamond dealers in Sierra Leone have handed over diamonds to one another without even getting receipts - as Hasidic Jews have done in New
York's diamond district. Such mutual trust has also been common in commercial transactions in general among the overseas Chinese in Southeast Asia. It was likewise the basis of international trade among the Armenians in earlier centuries:
These widely spread but highly interrelated individual enterprises operated under the ethos of trust. Trust, and the shared moral and ethical norms underlying it, helped the Armenian trading houses to avoid the relatively rigid and costly operation of the hierarchic system of organization practiced by the English. Seen in this light, trust served as a human capital, but one that could not be acquired through a rational investment decision. It accrued to the Armenian merchant community as a result of their collective sociopolitical experiences over many generations. Based on family kinship and trusted fellow countrymen, the Armenian trading house did, indeed rely on trust as its principal means of organization and control.
These middleman minorities have thus been able to take advantage of business opportunities that others would either be reluctant to risk or could do only with precautions that cost time and money. But such a mode of operation becomes practical only on the basis of strong social ties and enduring economic relationships that make cheating too costly to attempt.

Friday, May 3, 2013

That can warn us against blind alleys and counterproductive efforts

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 87.
Intense family loyalties have led middleman minorities to take young relatives into their businesses, even when these might have to be brought from overseas in India or Lebanon or elsewhere. Among the Lebanese living in other countries, for example, "a successful emigrant would send back to others from the same district in some town or region of the country of settlement." In Argentina or Sierra Leone, for example, established Lebanese would lend money to new arrivals or create business partnerships with them. This has been just one aspect of strongly felt mutual obligations within families. Some middleman minorities have been noted for their remittances to family members in the countries from which they came or in other countries in which they have settled. Local populations have long resented this as exporting their countries' wealth - a charge often made against the Chinese in Southeast Asia and the Lebanese in many countries. Even in the early years of Jewish poverty in the United States, those in America managed to send money back to family members in Eastern Europe, not only for subsistence but also to pay for their passage to the United States. These international transfers of wealth, though large in the aggregate, were no net reduction of the wealth of the country from which they were sent because the middleman minorities had already added to the pre-existing wealth of the countries in which they settled and were sending abroad only a fraction of that net addition.

The central role of families - their cohesiveness, cooperation, and loyalties - has long been a common denominator among middleman minorities around the world. Their successes have not been simply the individual successes of "cream rising to the top" in isolation, though such groups have in fact turned out many remarkable individuals in many fields. Other groups, without the same strong and stable family backgrounds found among middleman minorities, have succeeded disproportionately in those few areas where purely individual talents are the over-riding factors, such as sports and entertainment. In the United States, the Irish in the nineteenth century and blacks in the twentieth century became spectacularly successful in boxing and baseball, as well as among singers and other entertainers, despite their lagging behind other groups in business, science, and other fields with more pre-requisites of cultural or social capital.

Both the nineteenth-century Irish and the twentieth-century blacks were noted for high rates of broken families, violence, alcoholism and crime. It is hardly surprising that both groups succeeded, not only as well as others, but far more so than most others, in fields where only the individual's abilities mattered. Such fields attracted a disproportionate share of their most able and ambitious young people, who often lacked the social prerequisites for widespread success in other fields. While intergroup comparisons have been discouraged by the taboo against "blaming the victim," blame is in fact irrelevant. Certainly no individual or group has any control over the past from which their social and cultural legacy has come. What intergroup comparisons can tell us is which things have turned out to produce what results under what circumstances. If nothing else, that can warn us against blind alleys and counterproductive efforts - and against demagogues who would lead the young, especially, into those blind alleys and into self-destructive attitudes and behavior.

Education is not positively and significantly related to economic growth for most samples

One of the challenges of a complex process is that many times you have to operate with assumptions in which you have great confidence but for which you have little evidence. Robin Grier raises this in A New Database on Educational Quality by Robin Grier.
I frequently have my undergrad and grad students read Bill Easterly’s excellent book, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. They are often a bit depressed after reading the chapters on growth, noting how little we seem to know about growth in the real world. It is the education chapter, however, which really gets to them. In it, Easterly points out what has been known for ages but is rarely mentioned in print (see Lant Pritchett’s “Where has all the education gone?” for a refreshing exception), namely, that education is not positively and significantly related to economic growth for most samples. Sometimes you can find a weakly positive t-stat in a sample of OECD countries, but you are lucky if you merely find zero correlation (instead of a negative and significant) in the developing world.
We see that economic growth and increased education are weakly correlated but it is very difficult to determine the flow of causality much less to establish the mechanisms by which education might cause economic growth. There is lots of useful speculation as to how increased education could cause economic growth but very, very little evidence that it does cause growth.

There is a similar issue with reading. Book creation and book reading is positively correlated with economic growth and personal success. Just as with macro-economics, it is easy to speculate how enthusiastic reading could be causative of life success but very, very difficult to demonstrate that it does cause life success.

It is worth remembering as we become passionate about the details of how encourage reading, or how to enable greater education, just how weak the foundation is. Not to say that that the unsupported assumptions are wrong, simply that they are unsupported regardless how much we believe them to be true.

Thursday, May 2, 2013

It is the activity itself that is resented

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 80.
While such individuals might be of any ethnic background, in Nigeria they were often from the Ibo tribe, in whose culture "thrift, resourcefulness and foresight were the principal themes." Some Ibos "began trading with a few shillings or even a few pence derived from the sale of agricultural or jungle produce." From there they proceeded to rise, step by step, as they "slightly enlarged their still very small scale of operations" until eventually they were able to become established in retailing. "In practically all cases they were members of farming families."

In West Africa as elsewhere, the rise of middlemen from poverty to affluence has been widely seen as having taken place at the expense of others. This applies to both indigenous and immigrant middlemen, such as the Lebanese:
The opinion derives superficial plausibility from the fact that many traders began operations in West Africa with little or no capital, so that the increase in their capital and their prosperity have been obvious. However, this belief is fallacious because it ignores the productivity of trade. The wealth of traders has not been taken or extorted from the Africans but has been created by their trading activities. It was not previously in existence...
As in the prisoner-of-war camp during World War II and in countries around the world, middleman activities have usually not been seen as producing wealth, but only as appropriating pre-existing wealth, since the middleman does not visibly create a material thing. Neither does anyone else create or destroy matter, except for a few nuclear physicists. Turning iron ore into steel products is not creating any material thing but only changing its form to something that people
want more. That is precisely what middlemen do when they make goods or money available earlier than otherwise through retailing, credit, or loans. They change the time when things become available. Consumers could, in theory, drive to factories to buy goods directly but retailers make this time-consuming activity unnecessary, for a price - a price whose legitimacy has often been questioned because the middleman did not change the physical nature of what was sold.

Resentments against both indigenous and expatriate middlemen in West Africa - with violence having erupted from time to time against both - underline the fact that it is the activity itself that is resented. The same has been true in other parts of the word and other periods of history. Moreover, moving into middleman occupations from other kinds of work has not been solely a characteristic of farmers. Korean shopkeepers in American black ghettos did not come from a farm or business background in Korea, but from an urban background. They had no special training in retailing, and the great majority had not even been salespeople before opening their own businesses. Most relied on their own savings, rather than bank loans or government loans, and these savings came chiefly from working low-paid jobs, including two jobs at a time for about one-fourth of the Korean businessmen in Atlanta. They worked an average of nearly four years before saving enough money to set up their own business. In short, they worked their way up from the bottom, much like the Ibos in Nigeria and like other middleman minorities around the world.

When the very same ethnic group plays the middleman role in some countries but not in others, the hostility to them has been greatest where they have been middlemen. Japanese immigrants, for example, were long subjected to far greater hostility in Peru, where they worked in middleman occupations, than in Brazil, where they became agricultural producers - the latter partly as an organized and conscious effort to avoid the social and political problems associated with operating as middleman minorities.

The world looks increasingly similar even as each world resident experiences an increase in variety

From Apple Diversity has Grown by Alex Tabarrok. An excellent piece.
Mother Jones has a fun piece on apple hunters, people who track down long-forgotten apple varieties, sometimes to a single, ancient tree which they then clone in order to resurrect its unique apples. It’s a fun, human-interest story but Mother Jones also repeats a number of errors about apple diversity. Most notably:
In the mid-1800s, there were thousands of unique varieties of apples in the United States, some of the most astounding diversity ever developed in a food crop. Then industrial agriculture crushed that world. The apple industry settled on a handful of varieties to promote worldwide, and the rest were forgotten. They became commercially extinct—but not quite biologically extinct.
Mother Jones is tame compared to The New Internationalist which really ramps up the imagery:
Lincoln was assassinated. So were Washington and Jefferson. In fact all three Lincolns were wiped out. In the end it wasn’t so much an assassination as a massacre, with 6,121 of the 7,098 American apple varieties that blossomed last century now extinct….In less than a century, market pressures for uniformity have slaughtered crop diversity.
All of this is highly misleading at best. The innovative Paul Heald and co-author Sussanah Chapman show that the diversity of the commercial apple has increased over time not decreased (pdf). It is true, that in 1905 W.H. Ragan published a catalog of apples with some 7000 varieties. Varieties of apples come and go, however, like rose varieties or fashions and Ragan’s catalog listed any apple that had ever been grown during the entire 19th century. (Moreover, most varieties are neither especially good nor especially unique). At the time Ragan wrote, Heald and Chapman estimate that the commercially available stock was not 7000 but around 420 varieties. What about today?

The Fruit, Berry and Nut Inventory for 2000 lists 1469 different varieties of apples, a massive gain in terms of what growers can easily find for sale. The Plant Genetic Resources Unit of the USDA, in Geneva, New York, maintains orchards containing an additional 980 apple varieties that are not currently being offered in commercial catalogs. Scions from these trees are typically available to anyone who wishes to propagate their variety. The USDA numbers bring the total varieties of apples available to 2450.

In fact, there are more than 500 varieties of apples from the 19th century commercially available today–thus there are more 19th century apples available today than probably at any time in the 19th century!
But he doesn't stop there. He gets into some quite interesting aspects of variety and some of the paradoxes arising from globalization.
Increasing variety for individuals even as world variety declines is a fundamental fact of globalization. In the context of culture, Tyler explains this very well in his book, Creative Destruction; when people in Beijing can eat at McDonald’s and people in America can eat at great Chinese restaurants the world looks increasingly similar even as each world resident experiences an increase in variety.

Thus it may well be the case that more apples varieties were grown in large quantities in the 19th century but there are both more varieties commercially available today (our stock of genetic diversity is higher) and individual consumers have low-cost access to more apple varieties than ever before.

Wednesday, May 1, 2013

Like a slap across the face

A series of passages from the recently read Black Rednecks and White Liberals by Thomas Sowell. Combative to the point of provocative but as usual crammed with unexpected facts or interpretations of facts. Page 77.
While some observers might regard such determination and resourcefulness as admirable or inspiring, to others the rise of middleman minorities from poverty to prosperity has been like a slap across the face. If accepted as an achievement, it raises painful questions about others who have achieved nothing comparable, despite in some cases being initially more fortunate. Someone who was born rich represents no such assault on the ego and creates no such resentment or hostility. Anyone who can offer an alternative explanation of these middlemen's successes - such as calling them "parasites" or "bloodsuckers" who have prospered at the expense of others - has been popular in many countries and some have built entire careers and whole movements on such popularity. When people are presented with the alternatives of hating themselves for their failure or hating others for their success, they seldom choose to hate themselves. More commonly they will listen to even inconsistent or irrational arguments against middlemen, as for example against the Chinese in the Philippines:
Pressed as to his case against the Chinese, the Filipino politician would say that the Chinese were too numerous, that they had more than half of the retail business in their hands, that they charged too high prices, cheated in weights and measures, and made high profits. Should it be objected that if this were so all the Filipino has to do was to open up a tienda of his own and put the Chinese out of business in the village, the politician would probably shift his ground. He would now say that the Chinese standard of living is deplorably low; the owner of a Chinese tienda is willing to live in a small corner of his store, that he eats almost nothing and works day and night; so does his family and assistant if he has one. The Chinese in Manila, he says, persistently disregard the eight-hour work law. In fine, the charge now is that the Chinese runs his business with too little, not with too great, overhead expenses and profits. If this is true, then the Chinese gives excellent service to the community as distributors. The Filipino can buy cheaply because the Chinese live so meagerly.
A common charge against middleman minorities in countries around the world is that they operate illegally and often corrupt the authorities with bribes. What is often overlooked by those who make such charges is that discriminatory restrictions and prohibitions against middleman minorities make it virtually impossible for them to operate legally and still make a living. Sometimes they have been deprived of citizenship in the land of their birth, even when their families have lived there for generations, or the citizenship available to them does not include the same rights as those of indigenous citizens. Such discriminatory restrictions and prohibitions have applied to the Lebanese in West Africa, the Indians and Pakistanis in East Africa, the Chinese in Southeast Asia, and to Jews across much of Europe for centuries. That people who have had to struggle for survival against such discrimination have bent or broken laws is hardly surprising and the high levels of honesty and integrity that many middleman minorities have observed within their own circles suggest that they are not dishonest by nature. Similarly, the high levels of mutual help with family and within other close circles among middleman minorities often contrast with a cold-blooded attitude toward outsiders in societies that have been discriminatory and oppressive toward them.

You know where you find a clear, neat story with no extraneous details? Fiction.

From How Social Scientists, and the Rest of Us, Got Seduced By a Good Story by Megan McArdle.
Readers hate ambiguity. Write a blog post laying out the complexities of some issue and arguing that some question is hard, the data is muddy, that there are no answers and no obvious person to blame and I guarantee that at least one of the first five or ten comments will say something like this:

"I can't believe anyone wasted time writing this. What's the point? That life is messy and it's hard to tell who's right sometimes? Way to state the obvious."

But this is not a trivial observation: most of the time, it's the truth. It doesn't seem to be so obvious, either. If it were obvious, we'd show more affinity for the folks with messy, lifelike data, instead of the clear, neat stories that we actually love.

You know where you find a clear, neat story with no extraneous details? Fiction. And if we demand a steady stream of such stories from our journalists and scientists, we shouldn't be entirely surprised when fictions are what we get.

Facts have a hard time swaying opinion

I am working on a project right now that looks at the durability of books as a proxy for the utility and durability of ideas, knowledge and influence. The supposition is that the epistemological integrity of information that is reported real-time is suspect but that it improves over time. Reports in the instant are highly inaccurate and unreliable, daily reports better, weekly and monthly better yet. By the time a book is written, months and years later, the factual information has been scrubbed and is more reliable. Not necessarily completely or even mostly reliable, just more reliable.

Megan McArdle has a couple of blog posts which, while not a book, illustrate this scrubbing process and provides a nice summary of the events thirteen years ago around the Florida recount. It also illustrates the durability of first impressions formed in the heat of the moment versus the factual reality based on later data. The accusation that the Florida vote was stolen has been long put to bed but I suspect that were you to poll a knowledgeable sample of the electorate, you would find a substantial portion, if not a majority, who believe that had not the Supreme Court issued its decision, that the outcome would have been different.

Following all the ebbs and flows at the time, and being particularly concerned about the nakedly distorting (from a statistical perspective) courses of action which were being put forward, I was eventually confident that the Supreme Court had made the right decision and that, after all the dust had settled, it would likely be found that Bush was indeed the winner, though with different numbers.

McArdle's posts affirm this; What if the Supreme Court Had Declined to Hear Bush v. Gore? and What if the Supreme Court Had Turned Down Bush v. Gore? All the details are in the posts, particularly the first one, but the upshot was that Bush would have won the recount under any requested recount procedure at the time. I somehow missed, or more likely have forgotten, the details of a newspaper consortium led research project: EXAMINING THE VOTE: THE OVERVIEW; Study of Disputed Florida Ballots Finds Justices Did Not Cast the Deciding Vote which verified that that was the case.

While this particular example is a political one, it is simply an example of a broader truth. First impressions matter because they influence the arc of a narrative being created in the moment. Later factual data can be revealing and can reverse our understanding of the facts and the events. However, facts have a hard time swaying opinion.