Over at Crooked Timber, we’ve had various versions of the case for and against the use of (micro)economic rational actor models in the social sciences lately, so I thought I would weigh in with my version of the case against. It has three main elements
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It’s now the second half of 2009, so it’s a convenient time to remember that, early last year, Keith Windschuttle published a piece in the Oz, touted as an extract from his “forthcoming, later this year” Volume 2 of The Fabrication of Australian History. This Volume 2, devoted to the Stolen Generations, and attacking historians such as Peter Read is different1 from the Volume 2 announced back in 2002 and promised for 2003, in which Windschuttle was supposed to make good his claims that Henry Reynolds had fabricated the history of frontier conflict in Queensland.
Neither promised Volume 2 has appeared, and there is no sign that either of them ever will. And there was even supposed to be a Volume 3 at one time, IIRC.
1 I’ll leave to the philosophers the question of whether two non-existent books can be said to be different or (as I suspect on reflection) all non-existent books are the same.
I’m not all that good at remembering which way various standard distinctions go, especially when I have some underlying doubt about them. In classical hypothesis testing, for example, Type I error involves erroneously rejecting the null hypothesis, while Type II error involves erroneously failing to reject. Since I mostly think in Bayesian terms, I regard the whole classical setup as a fairly arbitrary social convention. One result is that I have to remind myself, fairly regularly, which type of error is which.
I have a different kind of problem with the terminology of skewness. Positive skewness is often called “right skewness”, but it seems to me this is the wrong way around. Suppose I started with a zero-mean symmetrical distribution (say normal) and reduced some of the values near the mode/mean/median. The result would be a distribution with negative mean, mode and median, and positive skewness. In visual terms, the peak of the distribution would be pushed to the left, while the right hand tail would now be long. In ordinary terms, I would say the distribution had been skewed to the left. Any comments?
Writing in today’s Oz, Greg Melleuish starts out with the observation
It is not common for the political leadership of the country to be discussed in generational terms
Having read the piece that follows, I’m not surprised. Silly as the usual generation game stuff is, the attempt to classify individual political leaders by their birth year is even sillier (which isn’t to say it hasn’t been done, particularly in the US). The burden of the piece is to attack Kevin Rudd for the heinous sin of having been born in 19571
It’s hard to know what’s silliest in this piece: there is, for example, the claim that boomers like Kevin Rudd were products of the “education revolution of the 1960s” – in reality, the schools of the 1960s and early 1970s were dominated by rote learning of tables and dates. As for the university radicalism of the era, it was confined to a minority of a minority, since few kids got past year 12 in the 1960s. And by the time Kevin Rudd went to ANU in the mid-1970s 2, the days of radical activism were well and truly over.
Or perhaps there is the idea that, as a baby boomer, Rudd is tarred with the brush of postmodernism. As anyone who has followed these intellectual games knows, postmodernism came to the fore in the late 1980s, and was much more associated with Gen X academics, who used it to undermine the “grand narratives” (Marxism, functionalism and so on) which had appealed to the boomers who were now blocking their career progress.
But I think, the clearest silliness is the pairings it produces. It is a commonplace of Australian political discussion that the great adversaries Whitlam and Fraser share more similarities than differences, but Melleuish absurdly pairs Whitlam with Holt and Fraser with Hawke. More recently, and fatally to Melleuish’s silly attack on Rudd, lots of people have observed that Rudd is, in many respects, a younger version of John Howard. But, in Melleuish’s theatre of the absurd, Howard is paired with Paul Keating (in many ways the ultimate embodiment of cliches about baby boomers) on the basis that both were born during World War II. He might want to check the bios of, say, John Lennon and Mick Jagger.
1For aficianados, this makes him a member of Generation Jones, but Melleuish appears to have got his knowledge of the subject at the pub, or by watching game shows on TV
2 I just found this out on Wikipedia. We were contemporaries, it seems, but I never met him
Over the last week or two, there has been a lot of discussion of the idea of Obama leading from “two steps behind”, initially in relation to the Iran protests1, and then as a general description of his operating style. There’s an obvious link to the famous quote attributed to FDR, “I agree with you, I want to do it, now make me do it.”
But, how should Obama’s supporters respond to this, particularly on civil liberties issues such as detention withour trial where Obama is not only two steps behind but often appears to be going in the opposite direction? Suppose that Obama really wants to deliver on his campaign rhetoric about openness and due process, but is facing powerful resistance from within permanent power centres such as the CIA. Hence, it might be supposed, Obama has to put up a show of resistance, and needs his supporters to make enough noise to compel him to fulfil his promises
How, if at all does such a situation differ from one in which Obama is a natural centrist wants to backslide on promises made to secure his base in the election year, but can be held to his promises by sufficiently vociferous pressure?
Its time once again for Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.
Via Paul Krugman and the Financial Times news that the World Trade Organization has indicated that it will endorse border taxes on imports from countries that don’t participate in an international agreement to reduce carbon dioxide emissions.
That means the end of the free rider problem. Provided the big players (US, EU and China) sign up to an agreement, any country that chooses to hold out will be committing economic suicide. And, in the initial bargaining between the developed countries and China, the pressure on China to reach an agreement has been greatly increased.
Several years ago, Andrew Glyn sent me a copy of his new book, Capitalism Unleashed, which I promised to review. But with one thing and another, I didn’t get to it, and then I received the news of his premature death, which set me back still further. I promised myself that I would do the review as a tribute to Andrew’s memory, and now, I’ve finally managed to do it.
Of course the environment now is radically different to the one in which the book was written, and that means the review must be to some extent informed by the wisdom of hindsight. In the introduction, Andrew notes as the first of the big open questions thrown up by the unleashing of capitalism
Will the ever more complex financial system implode in a major financial crisis and bring prolonged recession
We all know the answer now.
The Waxman-Markey American Clean Energy and Security Act bill, establishing an emissions trading scheme for the US, has been passed by the US House of Representatives. The vote was close, and depended on the last vestiges of bipartisanship, with the 219-212 majority depending on 8 Republicans willing to save the planet (44 Democrats voted against, a few because they thought the bill was too weak). Since good actions by Republicans are so rare nowadays, I’ll salute all eight, as listed here : Bono Mack (Calif), Castle (Del.), LoBiondo (NJ), McHugh (NY), Reichert (Wash.), Smith (NJ), Lance (NJ), Kirk (Ill.). My guess is that the narrowness of the majority is a little misleading. In cases like this, the Administration cuts enough deals to get a majority, but usually has a few votes in reserve.
I have no idea how things will go in the Senate, but I’m feeling optimistic that the bill will pass in the end. The Lieberman-Warner bill got 48 votes in 2008 (including 7 Reps) and the Senate is a lot better now than it was then.
Of course, this good news has the implication that Australia could be left at the back of the pack, among the last developed countries to sign on to emissions trading. That’s the price of having a delusional and disfunctional opposition, and of the Labor backroom deals that managed to give Steven Fielding the balance of power in the Senate.
Given that we’ve been discussing the transparency or otherwise of public processes, I was interested to get an email saying that ASIO is to get a new headquarters, built on the shores of Lake Burley Griffin. Apparently the public consultation process consisted of some documents posted, for the statutory 10 days, on a Dept of Finance website under the title ‘EPBC referral 2009/8414 Commonwealth new building project’. The project was quietly approved by the Howard Government in 2005 and exempted from oversight by the joint parliamentary public works committee. The Rudd Government continued the secrecy.
You can get links to more info here.
It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. As always, civilised discussion and no coarse language.
Coming out of the utegate/emailgate fiasco, I’ve seen a lot of variants on the claim that interventionist policies, like OzCar, are conducive to corruption, while economic liberalism reduces the scope for wrongdoing. I’ll just offer a few observations (readers with access to Google can fill in the details).
* If the standard of behavior implicit in criticism of Wayne Swan were applied to the Howard government, hardly any minister in that government could have remained in office. That particularly includes Howard and Turnbull.
* The Howard government breached standards of public probity on a scale never before seen with an Australian government, and approached only by the later years of Hawke-Keating and the worst of state governments. Not only did numerous ministers engage in activity that personally enriched them, and would have been regarded as corrupt in any preceding government, but the government consistently undermined the integrity of the public service, engaged in cronyism to an unprecedented extent and (Howard in particular) lied consistently and shamelessly. With relatively few exceptions, economic liberals didn’t complain about this.
* The Thatcher-Major, Reagan and Bush II governments were among the most sleazy and corrupt in the modern history of the UK and US (Clinton, Bush I and Blair were marginally better).*
In summary, the idea that economic liberalism goes with high standards of public probity doesn’t pass the laugh test.
* Defenders of economic liberalism may wish to disclaim one or more of these. But I’m not going to respond, except with derision, to anyone who tries to dodge the issue by any of the standard excuses familiar from apologists for the failure of Communism: never really tried, the fault of the individuals not the theory, etc.
Yet another in my series of articles on economic theories, empirical hypotheses and policy programs that have been refuted, or undermined, by the Global Financial Crisis. This one, on Real Business Cycle Theory, is a bit econowonkish, but I’m putting it up here because
(a) I hope some econowonks among the readers might find errors and correct me
(b) Judging by some other recent commentary, RBC still has some interest.
* As indeed, they have. My suggestion of a link between calibration and the GMM has been roundly refuted both here and at Crooked Timber. I can only say, it seemed like a good idea at the time. Thanks for the very useful comments on this point, and on RBC more generally.
I doubt that this is exactly what Ross Douthat had in mind, but I have been thinking for a while about one version of extending the duration of a limited-scope copyright. I’d support a proposal that gave Disney unlimited duration ownership of Mickey Mouse and similar characters, both for economic and political reasons. The political reason is straightforward: if Disney got its own side deal, they would have no reason to keep up the push for indefinite extensions of copyright for books and other things I actually care about.
The economic reason is that Mickey Mouse is not a character in a black and white cartoon produced in the 1920s (and cribbed off someone else, IIRC), and his copyright protection does not (except incidentally) act to restrict people who want to reproduce or adapt Steamboat Willie today.
Mickey is, in the terminology of the industry, a franchise. Disney puts millions into producing and promoting Mickey every year, and reaps even more millions as a result. I think it’s plausible to claim that each individual franchise of this kind is a natural monopoly, and that we would be less well served with multiple Mickey suppliers, as opposed to competing franchises like Bugs Bunny (there’s an analogy here with the debate over sporting teams and leagues which I’m too lazy/busy to work out in full). So, I’d be happy to allow Disney, Warner Bros, DC, Marvel and so on to have permanent rights over their characters, as long as they kept on using them.
With Turnbull seemingly doomed, the great sport of Costello-watching gets one last (or maybe not) run onto the field. Will the Libs turn in desperation to the Eternal Bridesmaid, and persuade him to return to the fray? There is a favorable recent precedent with the WA Libs, who persuaded Colin Barnett to reverse a decision to quit, and went on to gain office under his leadership.I’ve never rated Costello, but then, I didn’t (and don’t) think much of Barnett, either.
The big problem for the Libs, I think, is that the Grech scandal goes a long way deeper than Turnbull. Eric Abetz and Joe Hockey are obviously implicated, for example, and the chain of links seems likely to go to Costello as well. And while, as numerous commenters have pointed out, leaks from public servants to Opposition politicians are not that unusual, each such leak constitutes a criminal offence. It’s the kind of thing that “everybody does” from time to time, but it’s only OK if you don’t get caught. Add forgery to the mix, and you’ve got a disaster.
I’ve been planning a post with reviews of lots of the books I’ve been reading, but haven’t got to it. So, I’m going to post a couple now, and try to get back to it later. Here’s a review of Akerlof and Shiller Animal Spirits
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One thing I do occasionally on the blog is publish snippets I’ve written but haven’t found a place for. This piece has been cut for space reasons from a paper I’m writing on free allocations of emissions permits (’grandfathering’). Not to keep readers in suspense, I’m against it.
The authorities in Iran seem to have succeeded in suppressing popular protests for the moment. More generally, it seems clear that “people power” has its limits, summarised by the aphorism that a successful revolution consists of kicking in an open door. That is, if a state is divided, unsure of itself and illegitimate even in its own eyes, a manifestation of mass opposition will be enough to bring it down. But a coherent ruling group, confident of its own rightness and willing to use force against its opponents, can retain power even in the face of a strongly mobilised majority of the public. It remains to be seen which of these analyses applies in Iran.
Its time once again for Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.
The Great Ute Scandal has been bubbling along for weeks but I ignored it, partly because scandals are rarely interesting and partly because I couldn’t get to the starting point of working out what wrongdoing was supposed to have taken place (compare for example the Manildra business, which involved large sums of public money and provoked no serious concern). But in the last day or two the stakes have been raised dramatically, based on the alleged email from the PM’s office urging a prompt response to the concerns of a car dealer who contributed a car to Rudd’s campaign.
Whatever the significance of the putative email may have been, Rudd’s outright denial that any such email was sent means that it will be a major crisis for him if the email turns up, and possibly a terminal one if it turns out that the email was suppressed. On the other hand, if it can be proved that the email published by the Telegraph and referred to by Turnbull was in fact a fake, the consequences will be dire for Turnbull at least (I don’t suppose the Tele could lose much credibility). As my recent spam crisis demonstrates, I’m no tech expert, but I would have thought that the headers on an email would make it pretty easy to check whether it had been sent and that erasing all trace of an email would be just about impossible. And it would be grossly irresponsible to publish an alleged email if you received it with the identifying info removed.
Update
The news that the email was a fake confirms that the outcome will be bad for Turnbull, and could be catastrophic. The worst case, but a plausible one on the evidence to hand, is that the email was the product of a fraud cooked up between Liberal staffers and one or more corrupt Treasury officials. Even the best case, that the email was fabricated for some personal reason, and passed to the Liberals along with other leaks about the car scheme, doesn’t look good. I guess, given the twists and turns so far, it’s also necessary to consider the Machiavellian possible of a (highly successful) agent provocateur, luring Turnbull into a trap, as happened (IIRC) with Ralph Willis in 1996.
Further update
It now appears that the worst-case scenario is pretty close to the truth. Grech has apparently been working as a source of leaks to the Liberal party for a long period*. Apart from the obvious disastrous implications for the Liberals, this point also casts doubt on what remains of the case against Swan. If Grech was working for the Libs all along, he could easily have generated a large volume of emails, reports and so on, without any particular pressure from the government
* The term “mole” is commonly used in such cases, but the original idea of a mole was one of an agent in place who did nothing but burrow nto the target organisation, waiting for the time to act.
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