Home > Economics - General, Environment > Unforgivable, at least by me

Unforgivable, at least by me

October 30th, 2009

The SuperFreakonomics chapter on global cooling is still being kicked from one end of the blogosphere to another, with error after tired delusionist error being pointed out. Most of the time, it’s just sloppy contrarianism of the type you might expect from people who hang around with rightwingers a lot and are in a rush to produce a controversial book. But there is one point that, coming from Steve Levitt, I find unforgivable. Before pointing it out, I’ll quote what I said about Freakonomics when it came out, in a post entitled “Getting the data to talk

what Levitt has taken from the economics profession is not so much a body of theory to be applied, as a set of tools for empirical analysis and an unflinching willingness to look at social and policy issues without regard to social norms or received wisdom. More importantly, he’s combined all this with creative flair and an impressive capacity to see the right way of teasing compelling conclusions out of refractory data.

Looking back, I still think this judgement stands up as regards Freakonomics, which makes the tragedy of Superfreakonomics all the greater.

Given Levitt’s justified reputation as someone who knows more about data than I ever will, how could he put his name to this?

Then there’s this little-discussed fact about global warming: While the drumbeat of doom has grown louder over the past several years, the average global temperature during that time has in fact decreased.

and defend it by saying, as reported by AP that

he did not do any statistical analysis of temperatures, but “eyeballed” the numbers and noticed 2005 was hotter than the last couple of years.

This is even worse than the usual cherrypicking that takes the massive El Nino of 1998 as a starting point. Here’s a graph of global temperatures since 1980.
climategraph

Someone ignorant of such complex statistical concepts as variance might indeed be tempted to include that temperatures have flattened out over various periods in this data set (from 1983 to 1995, for example). Any competent social or natural scientist should be aware that a trend picked out by a selective choice of start and end dates is meaningless (the fact that a number of people with social or natural science qualifications, including a few who were, at least in the past, notable, have made such claims is a regrettable instance of how standards slip when ideology and wishful thinking get in the way). But Levitt, of all people, can’t claim ignorance as an excuse. And he doesn’t even try to pretend there is a structural break that would justify his cherrypicking. Unsurprisingly, real statisticians (the group to which Levitt formerly belonged) are crying foul.

Granted, this book is just a silly exercise in contrarianism. Still, it’s being presented as a serious piece of work, trading on Levitt’s well-justified reputation. After something like this, it’s hard to see how Levitt can distinguish himself from his former adversary John Lott.

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  1. Alice
    November 1st, 2009 at 12:37 | #1

    @Donald Oats
    Sea Bass – I know enough about Marx to know that his theory of the progress of capitalist development would end in what he called the crisis of capitalism ie it needs to keep exponentially expandng until presumably all resources being stripped from the earth and the environmental degradation would ultimately bring it down (water wars, starvations, and yes even climate change). It is dire but thats the way its going right now isnt it?
    Malthus and Marx may yet be proved right but then from the ashes the pheonix might rise (or is that from the pheonix the ashes might rise??). As to what the pheonix looks like…it could just be the start of a new capitalism or a new feudalism or a new marxism or even a new dictatorship or heaven help us all ..mass destruction.

    The eternal problem of the future (and economists?)…can capitalism be fixed or will it fix itself?

  2. Kevin Cox
    November 1st, 2009 at 13:36 | #2

    Michael Harris and Ernestine I am complaining about the use of economic ideas being applied to other areas. Economic models that most economists use are bad at modelling the way economies behave so to think the ideas have much relevance to other areas is misplaced.

    Economic models would be good at modelling economies if economies were systems that went from one stable equilibrium state to another. The systems as constructed do not behave that way. We could construct economic systems that behaved closer to that model but the empirical evidence is that the ones we have at the moment do not.

    Climate is not a stable system and so models based around stable equilibrium states are not going to tell us much about how to control and change climate.

    If Levitt is a mainstream economist then he has little to tell us about economies and even less to tell us about about climate.

  3. Sea-bass
    November 1st, 2009 at 14:47 | #3

    @Donald Oats
    I cannot recall any straight-out denialism being expressed on my part. The connection between greenhouse gases and a warming trend has always been somewhat intuitive to me, and climate change mitigation plans such as the ETS are not inconsistent with classical liberalism. If I engage in behaviour that produces a negative externality, I should pay for that – no problems there. Climate change mitigation per se is not socialism, and in fact the solutions proposed thus far (like the ETS) are pretty acceptable to free marketers.

    My concerns are that AGW is the Trojan Horse of socialism – and on the face of it, most of the “solutions” and treaties proposed by alarmists will have a negligible effect on climate mitigation, so the real motivation is wealth redistribution.

    Let’s not forget, prior to the popularisation of climate change, the socialists (and many others) believed that socialism would eventually outproduce capitalism. There’s a well known poster that states something like “chimney smoke is the breath of Mother Russia” or something. The socialist countries absolutely destroyed their environments trying to bring about this goal. When it became readily apparent that this was not the case, the socialists instead turned to chastising capitalism for producing too much!

    A lot of this is summed up nicely by PJ O’Rourke, who watches Fidel Castro berate the capitalist countries for the way their mode of production has lead to the degradation of the environment: “We throw these b@stards out the door of human liberty and back they come through the window of ecological concern. Here is old Busy Whiskers [Castro] – puffy, aging, abandoned at the altar of Marxism, a back-number tyrant and ideological bug case who has reduced the citizens of his own country to boiling stones for soup. And now he’s a a friend of the earth.” (All the Trouble in the World)

    Likewise, well known AGW denier Vaclav Klaus hasn’t really taken on the science of climate change as far as I know, but he realises first hand the way the “politically correct” language of modern day environmentalists resembles that of old communist propaganda.

    All of which does not mean that AGW is fictitious, true. But it does not rule out that the Trotskyists and Marxists have found a very convenient new horse to which they can hitch their woeful little cart. The fact that progressives are more willing to believe the worst case scenarios is no doubt because it justifies more intensive intervention and wealth redistribution i.e. it is a convenient way to get their social engineering programs passed through into law under the guise of caring about the environment.

  4. November 1st, 2009 at 16:52 | #4

    Alice,
    All that proves is that Marx did not understand the price mechanism, nor what people acting through normal social interaction can achieve.
    It is under systems where coercion dominates (such as those claiming to follow his ideas) that environmental destruction was never controlled. It is under the relatively free and near-capitalist systems that environmental destruction has been reduced and even reversed.
    People are capable of acting in their own interests and generally do not require substantial force to do so.

  5. Alice
    November 1st, 2009 at 18:01 | #5

    @Andrew Reynolds
    Andrew – you havem proved in the past you place far too much faithy in the price system and you continue to place far too much faith in the price system. I see nothing in the price system that will prevent continued degradation of the environment and scarce resources – and this is your one true failing and perhaps Marx’s one true insight.

  6. Sea-bass
    November 1st, 2009 at 18:43 | #6

    @Alice
    My previous comment is still in moderation, but I’ll reiterate a point. The communist countries definitely weren’t renowned for their level of environmental concern, with Russia having possibly the worst environmental record of any nation ever.

    Marx definitely wasn’t remotely concerned with the environment. In fact, he advocated that man should one day exert complete dominance over nature, which lead to such efforts as the Aral Sea-draining irrigation of the Soviets. It is a remarkable irony that the Marxists have thrown their lot in with environmentalists.

    The price system may not be perfect, but it at least gives us an idea of scarcity and how we should best go about utlilising these resources.

  7. Uncle Milton
    November 1st, 2009 at 19:19 | #7

    “Russia having possibly the worst environmental record of any nation ever.”

    Not true.

    East Germany was much worse.

  8. Michael Harris
    November 1st, 2009 at 19:24 | #8

    Kevin Cox :
    Michael Harris and Ernestine I am complaining about the use of economic ideas being applied to other areas. Economic models that most economists use are bad at modelling the way economies behave so to think the ideas have much relevance to other areas is misplaced.
    Economic models would be good at modelling economies if economies were systems that went from one stable equilibrium state to another. The systems as constructed do not behave that way. We could construct economic systems that behaved closer to that model but the empirical evidence is that the ones we have at the moment do not.
    Climate is not a stable system and so models based around stable equilibrium states are not going to tell us much about how to control and change climate.
    If Levitt is a mainstream economist then he has little to tell us about economies and even less to tell us about about climate.

    I don’t believe (having not read the relevant chapter in Superfreakonomics, but having read about it) that Levitt’s contribution to that chapter is not on the basis of his expertise in economics. And I note — again — that Levitt is not a general equilibrium modeller. Whatever he says about climate change is not conditioned on his crunching through a CGE model of any kind at all.

    Once more with feeling: If you’re going to criticise Levitt, perhaps you could do so on non-specious grounds? If that’s all right with you.

  9. Michael Harris
    November 1st, 2009 at 19:25 | #9

    EDIT: That should have said:

    “I don’t believe (having not read the relevant chapter in Superfreakonomics, but having read about it) that Levitt’s contribution to that chapter IS on the basis of his expertise in economics.”

    Not “is not”. I double-negatived.

  10. November 1st, 2009 at 19:57 | #10

    Alice,
    The price system, by showing both relative and absolute scarcity in one very simple number gives everyone a reason to conserve those commodities which are scarce and use those that are not.
    Sure, it is not always perfect in that it does not price in many externalities, but both positive and negative externalities can be reflected in social pressure and, occasionally, legal action.
    These measures have a lot better record of achieving decent outcomes than any measure of central planning.

  11. Ernestine Gross
    November 1st, 2009 at 20:24 | #11

    Re: Kevin Cox @2 p. 2, quoted by Michael Harris @ 7

    Kevin, you haven’t provided any evidence that Levitt is either knowledgeable of formal theoretical models in the rather large body of literature on general equilibrium theory (including models with incomplete markets) or has done applied work in this area. JQ’s post is concerned with Levitt’s statistical work in a specific area.

    I concur with Michael Harris: if you wish to criticise Levitt’s work in the specific area that is the subject of this thread, then you’ll have to come up with something else.

  12. SeanG
    November 1st, 2009 at 20:24 | #12

    @Alice

    Taking away the price mechanism what you have left is for the government to force people by coercive means towards a specific outcome e.g. forcing them to have higher energy prices to push down energy useage, forcing them onto specific types of cars via much much higher taxes or indeed much worse ways of coercing people to do something.

    Do you think that this is fair?

  13. Kevin Cox
    November 2nd, 2009 at 05:51 | #13

    Ernestine and Michael,

    You are right. I have no evidence about Levitt and his knowledge or what he used to base his comments in this chapter.

    I am criticising economic modelling and jumping on the band wagon provided by Levitt. I agree he is unlikely to have used the techniques of equilibrium modelling in formulating this chapter but he would have used the ideas of efficient markets and of equilibrium states.

    Economic models based on the idea of equilibrium states while conceptually attractive and while they approximate some economic activity are not the best modelling tools for dynamic systems of which the economy is one and climate is another. I will take every opportunity to say this because the ideas are leading us down a path of continued unstable economic systems and stopping us doing anything sensible about climate change.

  14. jquiggin
    November 2nd, 2009 at 08:00 | #14

    Kevin, this has derailed the thread, and clearly you should not have commented as you did. I request nothing more from you on this thread and no further responses to Kevin.

    Can I make a general request to commenters who have an agenda on particular topics. Please comment on this points only
    (a) wrt posts that directly raise the issue; of
    (b) in the regular open threads

    If anyone would like to get back to Levitt, please feel free.

  15. November 4th, 2009 at 10:03 | #15

    I think I’m with Donald @ 50, the politicisation of the AGW issue is frustrating because it simply means we will not take any realistic action on a global scale to address the problem. Sometimes it makes you feel like a tiny little player in a great global farce that is being played out for the amusement of some aliens watching us…oh look they discovered fire, now look they burning oil and coal, haven’t they noticed how the planet is reacting, and now they’re arguing about it…pfft change the channel these guys haven’t got a hope.

  16. Matt C
    November 4th, 2009 at 20:19 | #16

    The criticism of SuperFreakEcon is overblown. I found their chapter an entertaining and informative read.

    John all that quote was trying to do was say that stable temps over the past decade has been an inconvenient truth to those promoting action on climate change. These people include Levitt and Dubner! And thank God they didn’t have the book edited by climate change experts, they would have sucked all the fun out of it.

    The reaction has one benefit though. It has been mildly amusing watching the responses of “heretic, heretic” to a chapter that claimed that climate change science bordered on a religion. Proved their point much more than words could.

  17. BilB
    November 6th, 2009 at 06:55 | #17

    “Then there’s this little-discussed fact about global warming: While the drumbeat of doom has grown louder over the past several years, the average global temperature during that time has in fact decreased.”

    This argument was put up the other day in an address by the president of “—” (I can’t remember), but previously he had correctly pointed out that global warming was indeed real, and he also made the destinction between global forces and weather.

    The atmospheric temperature can, in fact, decrease while global warming is well under way. Brian at Larvatus Prodeo, the other week, presented information that demonstrated that sea energy as a total mass but not on a layer by layer basis (enthalpy I guess) was steadily increasing. All of our weather is driven by the heat applied at the tropics and the cold spots at the two poles. The poles hold massive amounts of anti heat (cold), which is being released for dispersion by the ocean currents at an ever increasing rate. The period of weather cooling is evidence of the rate at which this melting of the poles is taking place. And just as our local weather seems to be oscillating wildly, so also will our climate on the broader scale and time frame. Heaven help us when the cooling period becomes a heating period, as there will be no relief from it.

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