Author: John Quiggin

Ian Castles – correction

John Quiggin

A few months ago, I linked to a Ken Miles post saying that Ian Castles, former Australian Statistician and prominent critic of the IPCC and Kyoto was a member of the Lavoisier Group. Ken’s post was based on Lavoisier’s Presidential Report, which stated

Two of our members, Bob Foster and Ian Castles, represented the Lavoisier Group at a workshop conducted by the Australian Academy for Technological Sciences and Engineering (AATSE)

.Ian Castles has written to me (and previously to Ken, who has already posted on this) to advise that this claim by the Lavoisier Group is incorrect, and will be corrected in due course. He is not, and has never been a member of the Lavoisier Group. Here’s a letter from Ian’s co-author David Henderson to USA Today on the same topic.

Dear Sir,

In your issue of April 2, your science correspondent, Dan Vergano, in referring to some recent work by Ian Castles and me, makes two statements which give the wrong impression. First, he describes us as being Ê’associated with the Lavoisier Group’ in Australia. It is true that we both know well the founder of the Group, and we agreed to his request to post our work on their website. But neither Castles nor I are members of the Group; no member of it is or has been involved on our work; and what we have written does not purport to be on the Group’s behalf or to represent its views. We are independent persons, holding no official position, and we speak and write for ourselves alone.

It is also not correct to say that what we have written has ‘appeared in The Economist’ : they published an article (18 February) on our work. They too asked permission to post our critique on their website, and in this case also we agreed.

David Henderson
Westminster Business School
London NW1, England.

For anyone who wants to read all the details, I’ve appended the entire exchange of emails, showing how the Lavoisier Group claim came about.

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Monday Message Board

John Quiggin15 Comments

Access to the site has been intermittent for the last couple of weeks and comments have been correspondingly scanty. But everything seems to be working now, and I’m hoping discussion will resume here. Meanwhile, it’s been a bit lonely. So please post your comments on any topic or even just a note to say you’ve been to visit the site (as always, civilised discussion and no coarse language, please).

Imperfect existence

John Quiggin3 Comments

Kieran Healy responds to my limited defence of existence theorems with the following challenge to economists

As John says, existence theorems are the negative form of impossibility theorems. The classic existence theorems in economics ÷ such as those for general equilibrium , also due to Kenneth Arrow, along with Gerard Debreu ÷ illustrate the point neatly. We begin with the result . Roughly speaking, Arrow and Debreu wanted to show that supply and demand could be in balance in all markets at once. We then move backward to the assumptions necessary to make possible such a result. These include (1) All individuals are perfectly rational, (2) All trades take place simultaneously and instantaneously, (3) There is perfect information about all markets for all products in all conditions both now and at any point in the future, (4) Money does not exist. With these (and other) assumptions in place, the existence of a general equilibrium can be proved. The proof is striking because the initial assumptions are so implausible, even absurd, but they must all be satisfied together in order for the desirable result to be possible. And so we give up our quest for what we now recognise is a chimera ÷ the idea that our world could ever contain economies capable of general equilibrium.

This attempt at a reductio ad absurdam doesn’t work properly, though, because Kieran is treating the sufficient conditions found by Arrow and Debreu as if they were necessary conditions. A lot of effort (too much, McCloskey would say) has gone into demonstrating that a general equilibrium can exist under weaker conditions than

I’ll grossly oversimplify and make the claim that an existence result for competitive general equilibrium like that of Arrow and Debreu will hold even if all of the conditions mentioned by Kieran are violated, provided only that technology sets are ultimately convex (that is, provided economies of scale run out in the end). Of course, even this condition is implausible and suggests that some activities where economies of scale are unbounded (for example, the dissemination of knowledge) must be excluded. But (if you accept my claim that convexity is the crucial necessary condition) at least the theorem is telling us where to look for problems.

The other main results proved by Arrow and Debreu are the First and Second Welfare theorems showing that
(1) a competitive general equilibrium is Pareto-optimal [you can’t make anyone better off without making someone else worse off]
(2) any Pareto-optimal outcome is the competitive equilibrium arising from some initial allocation of wealth and other endowments
For these theorems, the conditions found by Arrow and Debreu are, for all practical purposes, necessary and sufficient. The Big Argument in mainstream economics is whether the differences between the Arrow-Debreu conditions and the real world (often called, in a rather question-begging fashion, “imperfections”) are large enough to justify extensive intervention by governments that are, themselves, necessarily imperfect.

Headline News

John Quiggin4 Comments

Humans being what they are, admissions of error are rare events. My own concession a while back that I had been overly pessimistic about the military phase of the Iraq war was sufficiently unusual to earn a para in the Bulletin from Tim Blair.

So it’s headline news that, after a long debate, Catallaxy blogger Jack Strocchi has come to the conclusion that he overestimated the benefits of the war and underestimated the costs, saying “The US invasion and occupation of Iraq can now be considered a failure”. His lengthy, closely argued and densely hyperlinked post on the subject is vintage Strocchi and may well be the best he’s ever done.

One or two swallows don’t make a summer. But it would be nice if the kind of debate that prevails, at least in this corner of Ozplogistan (continuous interaction, with civilised norms of debate and easily searchable records of who said what), prompted a greater willingness to admit error.

Watching golf

John Quiggin3 Comments

For Father’s Day, the family took me out to lunch, down the hill to the St Lucia golf course, where you can have a very pleasant, moderately priced, meal overlooking the 18th hole. This is definitely the way to enjoy golf as a spectator sport. And Brisbane is definitely the place to do it.

What I'm reading, and more

John Quiggin4 Comments

How to be Human (Though an Economist) by Deirdre McCloskey, kindly recommended by Jason Soon. As an anecdote, it’s hard to top the story of the reaction of the dean of the Iowa business school when Donald (as he then was) announced his impending change of gender.

His response, after sitting for a moment in slack-jawed amazement, was a stand-up comic routine. “Oh, thank God! I thought you were going to confess to converting to socialism. (Relieved laughter- he was going to react as a friend.) “This is great for our affirmative action program: one fewer* man, one more woman” (more laughter) ” And wait! I can cut your salary to two-thirds of the male level (not so funny). And then seriously “That’s a strange thing to do. How can I help?” And he did

* I wonder if business school deans, even civilised ones, really use “fewer” rather than “less” in circumstances like this, or if McCloskey has done some editing here? Not that it matters to the story.

In the pursuit of the goal of humanising economics and economists, McCloskey recommends a variety of reading. In a couple of places she notes, as an indicator of a civilised economist, acquaintance with the companion volumes of Samuel Johnson’s A Journey to the Western Isles of Scotland and Boswell’s Journal of a Tour to the Hebrides with Samuel Johnson. I agree, particularly regarding Boswell’s book, which is a kind of pilot episode of his Life of Johnson, the first genuinely modern biography, and still one of the best in existence.

I’ll turn now to the bits that are interest mainly to economists, and other social scientists (or, as McCloskey might prefer to put it, scholars of society).

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Fathers Day

John Quiggin3 Comments

For Fathers’ Day, the family took me out to lunch, down the hill to the St Lucia golf course, where you can have a very pleasant, moderately priced, meal overlooking the 18th hole. This is definitely the way to enjoy golf as a spectator sport.

Right-wing postmodernism

John Quiggin7 Comments

Josh Marshall observes

the administration’s main obstacle has been the experts themselves–the economists who didn’t trust the budget projections, the generals who didn’t buy the troop estimates, intelligence analysts who questioned the existence of an active nuclear weapons program in Iraq. That has created a strong incentive to delegitimize the experts–a task that comes particularly easy to the revisionists who drive Bush administration policy. They tend to see experts as guardians of the status quo, who seek to block any and all change, no matter how necessary, and whose views are influenced and corrupted by the agendas and mindsets of their agencies. Like orthodox Marxists who pick apart mainstream economics and anthropology as the creations of ‘bourgeois ideology’ or Frenchified academic post-modernists who ‘deconstruct’ knowledge in a similar fashion, revisionist ideologues seek to expose “the facts” as nothing more than the spin of experts blinded by their own unacknowledged biases.

This is a point I’ve been making for some time.As the debates over Aboriginal history, global warming and even creationism show, the same is now true for large sections of the Australian right, most notably those who take their line from Quadrant. Of course, as Marshall points out, there are plenty of precedents for this kind of thing on the left, but with Marxism moribund and postmodernism in terminal decline, it’s now much more prevalent on the right.

Freedom of speech part 3

John Quiggin4 Comments

Partly because I’ve only had intermittent access to the blog over the past week, I haven’t got around to responding to Jason Soon and Andrew Norton on the debate over neoliberalism and free speech. Given this lag I thought it would be good to summarise the positions as I see them.

Neoliberals like Andrew and Jason are opposed to government restrictions on political freedom of speech with the usual narrowly-drawn exceptions (fraud, defamation of individuals and so on) but argue that

private property rights trump free speech as a general rule

. So, for example, employers and property owners can impose whatever restrictions they like on speech by their employees, tenants and so on, and government should not intervene.

I disagree with this, though not to the extent of arguing that no private restrictions on freedom of speech should be permitted. To give some substantive examples, I believe

  • Employers should be prohibited from discriminating against employees on the basis of political beliefs or off-the-job political activities
  • Similarly, landlords should be prohibited from discriminating against tenants
  • Governments should ensure that there is sufficient public space (both physical and media space) to permit the free expression of political views.

On the other hand, assuming that there are a range of media outlets, I don’t believe that individual media outlets should be required to be ‘balanced’, except for a requirement to correct defamatory falsehoods.

Having summarised the two positions as best I can, there are a lot of questions that remain. Most obviously, there’s the question of which position is right, that is, which produces the best consequences? Second, there’s the semantic issue of whether issues like those of raised are, as Jason says

nothing to do with free speech at all.

Third, there’s the history-of-thought question WWMS (What would Mill say?). Finally, there are some more specific issues regarding press freedom and academic freedom that I’d like to discuss further.

That’s enough for now. I hope to pick up the pace a bit on this one, but I’d appreciate it if anyone who thinks I’ve mischaracterized the neoliberal position speaks up now.