The term ‘rational’ and its variants (rationality, rationalism) are used in a lot of contexts in economic debate, both positively and negatively, but nearly always sloppily or dishonestly. A specimen I’ve seen on more occasions than I can count is the line (usually presented with a sense of witty originality) ‘if you are opposed to economic rationalism, you must be in favor of economic irrationalism’.

In keeping with the idea of this regular feature, I thought about providing a definition that would clarify the issues surrounding this word and the reasons it causes so much confusion. In reflecting on the problem, however, I’ve come to the conclusion that the word ‘rational’ has no meaning that cannot better be conveyed by some alternative term and that the best advice is probably to avoid it altogether.
Read More »

As everyone is busy celebrating Queen Victoria’s birthday today, today’s Message Board will probably be a bit quiet, but that gives anyone who’s been waiting to post their first comment an ideal time to do so.

My attempted discussion-starter is a request for suggestions for more and better public holidays. For example, if we can have a holiday on a fictitious date the Queen’s Birthday who not the Horses’ birthday?

As always, please keep the discussion civilised and avoid coarse language.

This is a followup to my earlier posts on consequentialism/utilitarianism. A notable debate in the literature on this topic is on whether, from a consequentialist or utilitarian perspective, it is best to try always to choose the action with the best consequences (act-consequentialism) or whether to try to find those general rules which, on average, yield the best consequences, and follow those rules even when in particular cases, they yield bad consequences (rule-consequentialism).
Read More »

I’m running a bit late today. It’s past time to put up the Monday Message Board, where you can comment on any topic that takes your fancy. I note that Tim Dunlop is thinking of adopting this idea. Does anybody have any suggestions for other regular features they’d like to see?

As always, comment on any topic, civilised discussion, no coarse language

Wealth and Democracy by Kevin Phillips. It’s a good time to be reading it in parallel with the ongoing debate on wealth and inequality being pushed along, among others, by the blogosphere’s #1 Kevin, Kevin Drum at Calpundit.

Having completed unpacking, we were sufficiently relaxed yesterday to take the CityCat ferry to Southbank (cultural/cafe precinct including State Museum, Library, Art Gallery etc). I always love riding on the ferry. In fact, I’d say that, in terms of enjoyment/dollar a ferry ride is the best bargain available in transportation. And of all ferry rides, fast catamarans are the most fun. The museums were pretty good too.

Matt Yglesias accepts my invitation to demonstrate the naivety of economic thinking about consequentialism. He proposes the following example

John is at the casino and he puts $100 on the number 12 spot at the roulette table. While the wheel is spinning, John dies suddenly. The body is removed and the casino manager finds John’s wife and sole heir Jane. The manager now needs to give Jane the money she’s inherited from John. Instead of just giving Jane the $100, however, he decides to cover the wheel and offer Jane the following choice. She can either choose to just take John’s $100 or else she can leave the $100 on the table and the manager will uncover the wheel. If it turns out that the ball has landed in the 12 slot Jane will get the $3,200 payoff, if not she will get nothing. Jane chooses to take the $100 so the manager gives it to her, then uncovers the wheel revealing that the ball had, in fact, landed on the 12.

Yglesias agrees that Jane adopted the correct decision procedure (since the odds were unfavorable), but nonetheless goes on to say

The purpose of the procedure, after all, is to get you the most money possible, and given these circumstances, Jane could have made more money by taking the bet. Thus, there is a sense in which Jane did the wrong thing

This example seems to me to suffer from exactly the same problems as the stock market example put up in the Stanford Encyclopedia of Philosophy which, the post informs me, is by Walter Sinnott-Armstrong .
Read More »

Consequentialism is the claim that we should judge the rightness of an action by the desirability of its consequences, as opposed, say, to its conformity with some concept of virtue or honour. As I mentioned last week, it is very closely tied to utilitarianism and is most appealing as a criterion for public policy rather than individual ethics or jurisprudence.

The big question in relation to consequentialism is how we assess the consequences of an action. And as usual there seems a huge divide between economists (particularly decision theorists) and philosophers on this point.
Read More »

It’s time for the Monday Message Board, where everyone gets to have their say on any topic (civilised discussion and no coarse language please).

I’ve managed to avoid comment on the downfall of the GG, so perhaps commentators will fill this glaring gap in my blog. But, as always, comments on any topic are welcome.

Tuesday update Lots of suggestions for a new GG. I’m backing Reithy myself.

And the other subthread relates to Collingwood-hatred. Joining in from his new site, , Tim Blair asks “Why do they hate us”, and promptly demonstrates why, by linking to this shameless piece of Victorian imperialism.

When All Else Fails: Government as the Ultimate Risk Manager by David Moss and The New Financial Order: Risk in the 21st century by Robert Shiller. These are both important books and I plan to review them in the near future.

I also watched Enigma on DVD, expecting it to be based on some combination of the breaking of the eponymous German code and the life of Alan Turing. Instead, it was dominated by an absurd spy thriller/action hero subplot – I should perhaps have been warned off by Tom Stoppard’s credit for the screenplay.

But watching this movie prompted a question. In movies of this kind, it’s necessary that the audience have some idea what’s actually involved in codebreaking (or similar esoteric devices). Surely there must be some other way of conveying the relevant info to us than to have one character ask a lot of dumb questions, giving another (usually the hero) a chance to deliver a lecture.

Another Monday, another Message Board. Now that everyone has forgotten about Iraq (except the Iraqis, of course), there’s lots to get our attention on all news fronts – universities, tree-clearing and the Murray-Darling – to name just a few. If I get time, I’ll post on these and other things, but why don’t you have your say first. As always, civilised discussion and no coarse language, please.