Economics cannot be divorced from culture

From Trust: The Social Virtues and the Creation of Prosperity by Francis Fukuyama. Page 13.

Over the past generation, economic thought has been dominated by neoclassical or free-market economists, associated with names like Milton Friedman, Gary Becker, and George Stigler. The rise of the neoclassical perspective constitutes a vast improvement from earlier decades in this century, when Marxists and Keynesians held sway. We can think of neoclassical economics as being, say, eighty percent correct: it has uncovered important truths about the nature of money and markets because its fundamental model of rational, self-interested human behavior is correct about 80% of the time. But there is a missing twenty percent of human behavior about which neoclassical economics can give only a poor account. As Adam Smith well understood, economic life is deeply embedded in social life, and it cannot be understood apart from the customs, morals, and habits of the society in which it occurs. In short it cannot be divorced from culture.

With friends like this, climate scientists need no additional enemies

From Should You Trust Climate Science? Maybe the Eclipse Is a Clue by Justin Gillis.

I am deeply skeptical of the anthropogenic global climate warming hypothesis, not because it is wrong but because we don't know enough to know that it is right. Indeed, the anthropogenic global climate warming hypothesis panic mongers themselves are skeptical of their own claim, using it now as a mote-and-bailey fallacy tactic of argumentation. They have evolved their strong but weakly evidenced claim of anthropogenic global climate warming hypothesis to the far more anodyne but easily defended claim "global climate change" and in speech to the virtually meaningless "climate change." No one disagrees that there is climate change. No one.

Climate is a complex, non-linear, chaotic, dynamic system. It is inherent that it changes, locally and globally. Climate change is the bailey in their argument. It is easily argued, indeed almost tautologically correct.

The radical, and not easily argued anthropogenic global climate warming hypothesis is the mote. They start with that position which is weak and as soon as their argument is attacked, retreat to the anemic "climate change" bailey which is both defensible and virtually meaningless.

But this isn't about whether anthropogenic global climate warming hypothesis is correct. Gillis is an example of the journalist advocate who is seeking to help make the case for the anthropogenic global climate warming hypothesis but doing so in such a shoddy and ham-fisted way that he brings discredit not only to himself but to the hypothesis he seeks to defend.

Thanks to the work of scientists, people will know exactly what time to expect the eclipse. In less entertaining but more important ways, we respond to scientific predictions all the time, even though we have no independent capacity to verify the calculations. We tend to trust scientists.

For years now, atmospheric scientists have been handing us a set of predictions about the likely consequences of our emissions of industrial gases. These forecasts are critically important, because this group of experts sees grave risks to our civilization. And yet, when it comes to reacting to the warnings of climate science, we have done little.

If the science were brand new, that might make sense, but climate scientists have been making predictions since the end of the 19th century. This is the acid test of any scientific theory: Does it make predictions that ultimately come true?

This is simply embarrassing in addition to being ignorant, wrong and condescending. No climate scientist would commit the non sequitur that Gillis does of lumping two different science fields together to harvest the creditability in one for the benefit of the other. This is a simplistic appeal to authority fallacy.

Astronomy and astronomical forecasting is a complicated field but it is deterministic. The reason that Egyptians and Babylonians were able to forecast eclipses five thousand years ago is that there are stable formulae and periodicities that can indeed be validated through observation. Eclipses occur and they can be predicted accurately and based on a causative model.

In contrast, climate science is a complex field. There are multiple constituent systems which are chaotic, non-linear, dynamic, with multiple incompletely known and little-understood feedback mechanisms. The field is still relatively nascent, the data sets are patchy, incomplete, inconsistent with one another, and subject to significant measurement errors. The most reliable data (though still incomplete and patchy) is of recent origin, measured in decades in a field where effects are measured in centuries. Journalists (and advocates) are using such short time frames for reporting (a year) that the margin of error of measurement is greater than the reported change.

Gillis has made a category error by comparing a field characterized by deterministic processes with a field characterized by complex processes. He has also, in the process made a False Analogy.

The ruinous piece continues.

By the 1960s and ’70s, climate scientists were making more detailed predictions. They said that as the surface of the Earth warmed, the temperature in the highest reaches of the atmosphere would fall. That is exactly what happened.

This is known as cherry-picking or biased sampling. Of course climate scientists have made some accurate forecasts. But you don't get to pick and choose successes. You have to look at the totality of forecasts. If I flip a coin one hundred times and I say I can predict accurately all tosses by looking in a black box and I get 50 calls correct - that does not mean I have any insight as to what causes the outcome nor does it mean I am reliable at forecasting. You have to count the missed calls as well.

Gillis is not functioning as a journalist. By presenting only successes and not failures he is demonstrating a behavior anathema to the scientific method. What else were climate scientists forecasting in the 1960s and 1970s? Global cooling and a coming ice age. Not all climate scientists and not all within the same time frame, but it was a common forecast. You have to take the good with the bad in terms of forecast accuracy and Gillis betrays his reader by failing to do so.

The scientists told us that the Arctic would warm especially fast. They told us to expect heavier rainstorms. They told us heat waves would soar. They told us that the oceans would rise. All of those things have come to pass.

Again, you can't be occasionally right in your forecasts, you have to be predictably right. We have always had cycles of Arctic warming and freezing, cycles of rainstorms and droughts and ocean rising and falling. And indeed, cycles at much greater extremes than we currently see. It is no insult to climate scientists to point out that many of their predictions have not borne out. The Arctic is not ice free as it was claimed it would be. Many of the droughts and storms are known to be associated with the El Nino cycles and not with some larger system of climate change, etc.

Gillis is providing a kindergarten-simple description of science which is appropriate for five-year olds but is in no way accurate.

Considering this most basic test of a scientific theory, the test of prediction, climate science has established its validity.

To be a credible and stable science we need at least three elements - empirical validation of the data (does the phenomenon exist, is it really happening?), a testable hypothesis of causation (a detailed and testable identification of the mechanisms which cause the outcomes), and confirmed forecasts with no counterfactuals (the forecasted outcome happens and there are no failed forecasts and no unpredicted outcomes) or forecasts that fall within a probablistic range (not every forecast has to be accurate but accuracy has to be beyond a specified level for a population of forecasts).

It is no insult to climate scientists that they have not met this standard yet. It is a complex system and a relatively nascent field, the data sets incomplete and major subsystems are added every few years. There is no shame in failure as long as the field continues laying a groundwork for greater comprehension in the future.

But for Gillis to even pretend that occasional accurate forecasts in the midst of repeated other failures is a sufficient basis to establish validity is ludicrous. While his degree is in journalism, he is supposed to be a science writer. It would seem impossible that he could believe what he has written which leaves only the possibility that he is doing ideological or faith-based shilling, not science reporting.

We trust scientific expertise on many issues; it is, after all, the best advice we can get. Yet on climate change, we have largely ignored the scientists’ work. While it is true that we have started to spend money to clean up our emissions, the global response is in no way commensurate with the risks outlined by the experts. Why?

Why? Because the science is not settled (and it never is). Claiming a large risk is no justification for action. That is another fallacy - appeal to fear.

Trying to scare people into action is not a scientific basis for decision-making. It is a rhetorical device used by advocates and it is a technique relied upon when you don't have better arguments. There is a panoply of local and global problems we face of which possible global warming is only one. The effects are distant in the future, our knowledge incomplete, our models have known biases, our forecasting has at best been mixed and certainly the more extreme forecasts have failed to eventuate.

We have limited resources. Money diverted to undertake actions now for uncertain effect in the future is money that cannot be used to ameliorate more tangible current problems that we understand better (with greater confidence) and with more positive near-term consequences. Priorities based on consequences, robustness of knowledge and statistical confidence in forecast are the norm. With anthropogenic global climate warming, our knowledge is partial and evolving, the possible outcomes include beneficial attributes (longer growing seasons for example), and our forecasting record is at best mixed.

Again, this is pretty basic knowledge for any scientist and certainly for a science writer. But Gillis does not appear, in fact, to be a science writer. He seems to be an ideological or faith-based adherent who writes.

That's just the science side of things. The fact is that through email leaks and data leaks we know that the patchy data sets are routinely being adjusted to yield desired outcomes, that the extreme claims have failed to occur, that there is plenty of correspondence demonstrating collusion to suppress contradictory data, that there are coordinated efforts to coerce independent research voices to leave the field and that there are all sorts of incentives (monetary and social) for advocates to advance a fear-based agenda.

Since we are dealing in faith-based matters and not science, let's call this article what it is - an abomination. It is larded with appeals to authority, non sequiturs, false analogies, category errors, biased sampling, appeals to fear, and is structured as a one-sided argument. It would be bad enough were it only an opinion piece but it is proffered as straight reporting. No wonder there is such high public skepticism of newspapers and journalists. With "reporting" like this, it is no surprise that only 8% of the public have a great deal of trust/confidence in news organizations.

Timelessly cocooned in light

Four Women
by John Whitworth

Four women stand on the gravel path
With an ivied wall behind,
My pretty mother, my granny, my gran
(The two old ladies didn't get on
But I didn't know that) and Auntie Cath,
My mother's Scottish friend.

That's me, fat-legged. I've one hand held
In Mummy's, and the other
Is tugging poor Granny right out of square
While Gran stands straight as a brigadier
And Auntie Cath cradles a new-born child
Who is possibly my brother.

This possible brother is swathed in lace
Which might be a christening gown,
We were churchy people, and Auntie Cath
Godmothered this mite in his lacy froth,
If it is my brother. Her plain, sweet face
Is canted smiling down.

Women and children are timelessly
Cocooned in light: my mother,
Her time so short, the two old trout
And my stepmother, (funny how things turn out),
All of them dead. Now there's only me
And the baby. If that's my brother.

From The Spectator, 16 September, 1989

A moody and sometimes irascible girl

From Warriors: Portraits from the Battlefield by Max Hastings. Page 45.

Figures you do not often hear of in military history books and yet who are interesting and consequential, in this case Joshua Chamberlain.

Still anticipating a career as a missionary, and too poor to marry Fannie Adams, whose family anyway opposed the match, Chamberlain enrolled at Bangor Theological Seminary. He spent the next three years studying—Hebrew, German, Arabic and Latin as well as theology — and preaching, to growing local acclaim. In 1855 he became an instructor in logic and natural theology at Bowdoin, and was soon promoted to professor of rhetoric and oratory. Having at last achieved some financial security, he was able to marry Fannie, evidently a moody and sometimes irascible girl, whose enthusiasm for her husband later waned, as his for her never seemed to do. They began to raise a family. By 1861 Joshua Chamberlain had become a significant local figure, respected for his cleverness, integrity and commitment to everything he undertook. Though he had abandoned ideas of a career in the ministry, in a God-fearing age he was a sombrely upright, God-fearing man, not much given to jesting, direct to the edge of naivety.

What a sadness captured in that turn of phrase, "he was able to marry Fannie, evidently a moody and sometimes irascible girl, whose enthusiasm for her husband later waned, as his for her never seemed to do."

He freed himself, his crew and their families from slavery on May 13, 1862

Forgotten chapters of history. From Robert Smalls - Wikipedia.

Robert Smalls (April 5, 1839 – February 23, 1915) was an enslaved African American who, during and after the American Civil War, gained freedom and became a ship's pilot, sea captain, and politician. He freed himself, his crew and their families from slavery on May 13, 1862, by commandeering a Confederate transport ship, CSS Planter, in Charleston harbor, and sailing it from Confederate-controlled waters to the U.S. blockade. His example and persuasion helped convince President Lincoln to accept African-American soldiers into the U.S. Army and the U.S. Navy.

Smalls was born in Beaufort, South Carolina. After the American Civil War, he returned there and became a politician, winning election as a Republican to the South Carolina State legislature and the United States House of Representatives during the Reconstruction era. As a politician, Smalls authored state legislation providing for South Carolina to have the first free and compulsory public school system in the United States. He founded the Republican Party of South Carolina. Due to the state's white Democrats disfranchising most blacks Smalls was the last Republican to represent South Carolina's 5th congressional district until 2010.

More on his escape from the Confederacy. He was 23 years old.

In April 1861, the American Civil War began with the Battle of Fort Sumter in nearby Charleston Harbor. In the fall of 1861, Smalls was assigned to steer the CSS Planter, a lightly armed Confederate military transport under the command of Charleston's District Commander Brigadier General Roswell S. Ripley. Planter's duties were to deliver dispatches, troops and supplies, to survey waterways, and to lay mines. Smalls piloted the Planter throughout Charleston harbor and beyond, on area rivers and along the South Carolina, Georgia and Florida coasts. From Charleston harbor, Smalls and the Planter's crew could see the line of Federal blockade ships in the outer harbor, seven miles away. Smalls appeared content and had the confidence of the Planter's crew and owners, and at some time in April 1862, Smalls began to plan an escape. He discussed the matter with the other slaves in the crew except one, whom he did not trust.

The day of May 12, 1862, the Planter traveled ten miles southwest of Charleston to stop at Coles Island, a Confederate post on the Stono River that was being dismantled. There she picked up four large guns to transport to a fort in Charleston harbor. Back in Charleston, the crew loaded 200 pounds of ammunition and 20 cords of firewood onto the Planter. At some point family members hid aboard another steamer docked at the North Atlantic wharf.

On the evening of May 12, Planter was docked as usual at the wharf below General Ripley's headquarters. Her three white officers disembarked to spend the night ashore, leaving Smalls and the crew on board, "as was their custom." (Afterward, the three Confederate officers were court-martialed and two convicted, but the verdicts were later overturned.) About 3 a.m. May 13, Smalls and seven of the eight slave crewmen made their previously planned escape to the Union blockade ships. Smalls put on the captain's uniform and wore a straw hat similar to the captain's. He sailed the Planter past what was then called Southern Wharf, and stopped at another wharf to pick up his wife and child, and the families of other crewmen.

Smalls guided the ship past the five Confederate harbor forts without incident, as he gave the correct signals at checkpoints. The Planter had been commanded by a Captain Relay, and Smalls copied Relay's manners and straw hat on deck to fool Confederate onlookers from shore and the forts. The Planter sailed past Fort Sumter at about 4:30 a.m. He headed straight for the Union Navy fleet, flying a white bed sheet as a surrender flag. The Planter had been seen by the USS Onward, which was about to fire until a crewman spotted the white flag. The Onward′s captain, John Frederick Nickels, boarded the Planter, and Smalls asked for a United States flag to display. He surrendered the Planter and her cargo to the United States Navy. Smalls' escape plan had succeeded.

In addition to her own light guns, Planter carried the four loose artillery pieces from Coles Island and the 200 pounds of ammunition. Most valuable, however, were the captain's code book containing the Confederate signals, and a map of the mines and torpedoes that had been laid in Charleston's harbor.

Governments can enact policies that have the effect of depleting social capital

From Trust: The Social Virtues and the Creation of Prosperity by Francis Fukuyama. Page 10.

But the United States has been changing rather dramatically over the past couple of generations with respect to its art of association. In many ways, American society is becoming as individualistic as Americans have always believed it was: the inherent tendency of rights-based liberalism to expand and multiply those rights against the authority of virtually all existing communities has been pushed towards its logical conclusion. The decline of trust and sociability in the United States is also evident in any number changes in American society: the rise of violent crime in civil litigation; the breakdown of family structure; the decline of a wide range of intermediate social structures like neighborhoods, churches, unions, clubs, and charities; and the general sense among Americans of a lack of shared values and community with those around them.

This declining sociability has important implications for American democracy, perhaps even more so than for the economy. Already the United States pays significantly more than other industrialized countries for police protection and keeps more than 1 percent of its total population in prison. The United States also pays substantially more than does Europe or Japan to its lawyers, so that its citizens can sue one another. Both of these costs, which amount to a measurable percentage of gross domestic product annually, constitute a direct tax imposed by the breakdown of trust in the society. In the future, the economic effects maybe more far-reaching; ehe ability of Americans to start and work within a wide variety of new organizations may begin to deteriorate as its very diversity lowers trust and creates new barriers to cooperation. In addition to its physical capital, the United States has been living off of a fund of social capital. Just as its saving rate as being too low to replace physical plant and infrastructure adequately, so its replenishment of social capital has lagged in recent decades. The accumulation of social capital, however, is a complicated in many ways mysterious cultural process. While governments can enact policies that have the effect of depleting social capital, they have great difficulties understanding how to build it up again.

The liberal democracy that emerges at the end of history is therefore not entirely "modern." If the institutions of democracy and capitalism are to work properly, they must coexist with certain premodern cultural habits that ensure their proper functioning. Law, contract, and economic rationality provide a necessary but not sufficient basis for both the stability and prosperity of postindustrial societies; they must as well be leavened with reciprocity, moral obligation, duty toward community, and trust, which are based in habit rather than rational calculation. The latter are not anachronisms in a modern society but rather the sine qua non of the latter's success.

Long May the Spirit of "Joliet" Jake E. Blues bless America

The Washington Post publishes a piece, When ‘free speech’ becomes a political weapon by Jennifer Delton who is the Douglas Family Chair in American culture, history, and literary and interdisciplinary studies at Skidmore College.

After reading the article:


Double click to enlarge.

One more little hot house academic who is sick and tired of free speech fundamentalists who stand in the way of the platonic philosopher kings imposing their putrid postmodernist, critical theory infused totalitarian utopia on everyone else. Or, in her own words:

It was one thing to defend the Ku Klux Klan's right to march in Skokie, Ill. in 1977, when the liberal establishment and mainstream media were still intact and KKK was a marginal fringe group. The KKK was offensive, but neither its actions nor its ideas posed a threat to the political or social order, which was stable. The situation is different today, with an erratic President Trump in the White House, elites in disarray and white nationalism on the rise. In this situation, and against this foe, it may be worth remembering that our constitutional rights are not unchanging abstract principles, but, as Hook and Schlesinger argued, always evaluated in terms of their consequences for society at any given historical moment.

What ignorance on stilts.

If you are going to say something foolish, at least get your facts straight so that you don't also look stupid. The immortal Blues Brothers can teach the Douglas Family Chair in American culture, history, and literary and interdisciplinary studies at Skidmore College some real American history.


Double click to enlarge.

Cost of an education at Skidmore College? $65,000 a year. Cost of a Blues Brothers DVD? $9.99. And at least with the DVD you get some laughs with the facts.

UPDATE: The Washington Post has since updated the article to correctly identify that it was the despicable Illinois Nazis who won their court case to march. Long may free speech escape the pearl-clutching grasp of petty campus tyrants. And Long May the Spirit of "Joliet" Jake E. Blues bless America.

Shorting a nation

From From Soviets to Oligarchs: Inequality and Property in Russia, 1905-2016 by Filip Novokmet, Thomas Piketty, Gabriel Zucman. Abstrct, emphasis added:

This paper combines national accounts, survey, wealth and fiscal data (including recently released tax data on high-income taxpayers) in order to provide consistent series on the accumulation and distribution of income and wealth in Russia from the Soviet period until the present day. We find that official survey-based measures vastly under-estimate the rise of inequality since 1990. According to our benchmark estimates, top income shares are now similar to (or higher than) the levels observed in the United States. We also find that inequality has increased substantially more in Russia than in China and other ex-communist countries in Eastern Europe. We relate this finding to the specific transition strategy followed in Russia. According to our benchmark estimates, the wealth held offshore by rich Russians is about three times larger than official net foreign reserves, and is comparable in magnitude to total household financial assets held in Russia.

Policy-Based Evidence Making

A rather excellent article in terms of substance though there's regrettably quite a bit of snarkiness as well. From Policy-Based Evidence Making by Oren Cass.

"Evidence-based policymaking" is the latest trend in expert government. The appeal is obvious: Who, after all, could be against evidence?

Most EBP initiatives seem eminently sensible, testing a plausible policy under conditions that should provide meaningful information about its effectiveness. So it is not surprising to see bipartisan support for the general idea. Speaker of the House Paul Ryan and Senator Patty Murray even collaborated on the creation of an Evidence-Based Policymaking Commission that has won praise from both the Urban Institute and the Heritage Foundation.

But the perils of such an approach to lawmaking become clear in practice. Consider, for instance, the "universal basic income" campaign. Faced with the challenge of demonstrating that society will improve if government guarantees to every citizen a livable monthly stipend, basic-income proponents suggest an experiment: Give a group of people free money, give another group no money, and see what happens. Such experiments are underway from the Bay Area to Finland to Kenya to India.

No doubt many well-credentialed social scientists will be doing complex regression analysis for years, but in this case we can safely skip to the last page: People like free money better than no free money. Unfortunately, this inevitable result says next to nothing about whether the basic income is a good public policy.

The flaws most starkly apparent in the basic-income context pervade EBP generally, and its signature method of "controlled" experiments in particular. The standard critique of overreliance on pilot programs, which are difficult to replicate or scale, is relevant but only scratches the surface. Conceptually, the EBP approach typically compares an expensive new program to nothing, instead of to alternative uses of resources — in effect assuming that new resources are costless. It emphasizes immediate effects on program participants as the only relevant outcome, ignoring systemic and cultural effects as well as unintended consequences of government interventions. It places a premium on centralization at the expense of individual choice or local problem-solving.

Politics compounds the methodological shortcomings, imposing a peculiar asymmetry in which positive findings are lauded as an endorsement of government intervention while negative findings are dismissed as irrelevant — or as a basis for more aggressive intervention. Policies that reduce government, when considered at all, receive condemnation if they are anything other than totally painless. Throughout, the presence of evidence itself becomes an argument for empowering bureaucrats, as if the primary explanation for prior government failure was a lack of good information.

The whole thing is worth a read and his basic criticism that proponents of government intervention are asymmetric in their approach to evidence is reasonable. But hammering on about that bad behavior takes away from what I see as the other legitimate points he makes.

Cass's criticisms of Evidence-Based Policymaking (EPB) include (my wording):

The comparison of controlled tests are to the wrong baseline. They look to see if there is an effect at all,
not whether there is a material effect.

EPB should be comparing the study case to alternatives rather than to the binary of effect:no effect.

EPB studies rarely establish the measurements of success in advance and so there is frequently goal-post shifting after the fact.

EPBs are rarely structured to allow trade-off decisions. Since there are always multiple outcomes, positive and negatives, we cannot simply focus on the positives, for analysis purposes we have to find a way to off-set the positives with the negatives. If you are building a dam to generate 10MW of energy, it is not enough to consider just the 10MW. You have to consider the lost farmland, the displaced people, the disrupted lives, etc.

EPBs are rarely structured to give us insight to alternatives. What we really want to know is "Is the cost for the desired outcome less than the cost of any alternative policy?" Bjorn Lomborg is especially trenchant on this issue as illustrated in this video.

When conducting EPBs, negative results are as meaningful as positive results and yet advocates tend to cover up negative results and keep conducting tests till they get the result they want.

Advocates also tend to be asymmetric in their criticism. If the result is against their expectations, the criticism is about test procedures, sample size, participant selection, uniqueness of circumstances, etc. None of these critical filters are called into play when the result is consistent with their desires.

EPBs fail to distinguish between the action of redistributing "free" money and the allocation of those resources for a particular use. Everyone likes free money, no one likes to be forced to spend their own money, even if it is intended to be for their own good.

EPBs often focus on process measures (number of people with health coverage) versus outcome measures (improvement in health).

EPBs typically omit second and third order effects, particularly over time.

Small scale EPBs make the mistake of confusing the map for the terrain. Small scale trials can work by free-loading off of other societal structures and then fail when they scale because they overwhelm those structures.

Policy interventions usually entail multiple complex systems interacting with one another. EPBs frequently fail to take into account context dynamic processes and input complex processes. With all the moving parts, it becomes impossible to disentangle which actions were contributive to what degree.

More broadly EPBs fail to address the full complexity of the system-environments in which they operate.

EPBs often fail to establish causative direction. Do middle class people A) have high home ownership because of their middle class behaviors or B) does owning a home cause people to acquire middle class behaviors? The causal direction is critical to know before adopting policies.

And they wonder if it was a good idea anyway

From Peculiar melodies of existence by P.J. Kavanagh in The Spectator, 3 September, 1994. A beautiful description of England in the fall.

It seems to me that August is a season in itself; not summer, not autumn, withdrawn, pensive, waiting for something to happen, and dubious about what that will be. It has individual beauties. Round here (Gloucestershire) tumbrils of straw-bales brush the hawthorne hedges, so that minute pieces of straw are dislodged and the lanes grow gold margins, two or three inches on either side, very striking in contrast with the dulled green of the hedge. These, in August, remind me of girls who have begun the party excited, in a new dress, and now the dress is a little stained, a little of awry, and they wonder if it was a good idea anyway. Also, among the hawthorns, the masculine elders are going pale and bald.