Pursuit of Truthiness

my gut tells me I know economics

Archive for the ‘dark thoughts’ Category

The Paradox of Trust

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We constantly make judgements, usually subconsciously, about how much to trust others. On average, we seem to be pretty decent at making these assessments- at first. But someone’s trustworthiness is not a fixed quantity. When someone knows that others trust them, they know that people are less likely to look for their possible misbehavior, and more likely to accept their version of events if evidence of misbehavior arises. Some people will take advantage of this trust to commit misdeeds.
The same analysis applies to professions, with the additional mechanism that people with bad intentions may seek out a place in trusted professions in order to commit their misdeeds with a reduced chance of being caught. The very fact that so many people trusted priests not to sexually assault children is what allowed it to happen so often. The very fact that most people trust police not to kill unjustifiably is what allows some to kill unjustifiably.
This seems like a bit of a paradox to me. Is it ever possible for a trusted profession to remain trustworthy for long? How? By trying as hard as possible to select for people of good character? This seems like a hard problem.
The paradox seems like a problem that others must have thought about a lot in many fields- literature, philosophy, and economics at the very least seem like they would be fruitful here. I think a game-theoretic analysis would be interesting, and may have no stable equilibrium. But nothing much comes to mind when I try to think of what others have said about this, besides “who guards the guards?”
What am I missing?

Written by James Bailey

December 5, 2014 at 12:35 am

Taxation is Death

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Disclaimer- I hope this post does not get read widely, because it is a relatively controversial take on a peripheral part of what is mainly an open-and-shut case of police abuse. People of different political persuasions seem to actually be coming together on the main issue in this case- liberals seem furious about it even beyond the race angle, major conservatives are calling it a tragedy, and when was the last time Reason magazine celebrated the US Attorney General for prosecuting someone? But many others are saying those things well, so this was what remained on my mind unsaid.

Many anarcho-capitalists want to end all taxation because “taxation is theft”. I have always had a hard time getting worked up about this- sure, taxation does seem like a type of theft, but the practical benefits of a tax system seem to outweigh this abstract flaw.

Then they note that if you try to resist the theft by not paying, you could get thrown in prison, an even more serious violation of your rights. But in practice this happens so rarely; almost everyone just pays up, and never really even thinks about taxes as coercive measures backed by physical force. It seems like the tax system more or less works, and funds the government’s worthwhile endeavors. Sure, it has flaws, but consequentialists and economists like myself usually focus on flaws like how most taxes distort the incentives to save and invest- flaws that can be fixed without scrapping the idea of taxation.

But sometimes, events make the nature of the system hard to ignore. Government taxes and regulations really are backed by force- and sometimes, given a government staffed by imperfect humans, something as well-intentioned a tax on cigarettes can lead not only to people in jail, but to someone being killed.

The idea that taxation is theft, backed by force doesn’t mean we should eliminate all taxes. But it is one of many things worth keeping in mind when you propose a tax. It is something I should have been thinking of when I last taught microeconomics and enumerated to the class the benefits of Pigouvian taxes- I even used the example of a cigarette tax.

Written by James Bailey

December 4, 2014 at 7:26 pm

Ignoring Economics: Tactics for Beginners and Advanced Practitioners

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President Obama called for an increase in the minimum wage to $9 in last night’s State of the Union speech. A lot of economists will take this as a personal affront, wondering how people still think this is a good idea after we explain in every MicroEcon 101 class how it will backfire and result in poor people losing their jobs and losing non-wage benefits. If you are determined to support a minimum wage, you could simply ignore all these arguments, but this beginner tactic will leave you looking ignorant.

A more advanced tactic for not having to change your mind about the minimum wage allows you to know two things instead of none. You can know the Econ 101 arguments, and also know about Card and Kreuger’s 1996 empirical study showing how the minimum wage might not affect unemployment. Pull out your pocket copy of Card and Kreuger’s paper whenever someone brings up the topic.

Be careful, though, not to take this whole “acquiring new information” thing too far. Remember that your goal isn’t to understand how the world works, but rather to keep the beliefs you started with. Don’t develop a general rule of looking at the academic literature on a subject: this would lead you to do things like read other papers about the minimum wage, but the vast majority suggest problems with it. Don’t decide that David Card and Alan Kreuger are the most trustworthy economists- this would mean you need to take their other work seriously, and then you would have to change your mind about immigration or occupational licensing. Remember, reasoning works by starting with a conclusion you like, and then looking for information that supports it. Otherwise you might have to admit you were wrong!

Obviously this is my poor attempt at a joke. More seriously, as a researcher I worry that even when people do seem to be interested in your work, it is only because it confirms their prior beliefs. Alan Kreuger is a great econometrician and managed to become an advisor to the President. This could be a great opportunity for his work to inform which policies to choose, but instead his work is either ignored or used as a decoration for policies that would be pushed anyway. So, depsair.

Written by James Bailey

February 13, 2013 at 1:22 pm

Politics is the Mind-Killer. Are Dark Arts the Solution?

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Politics tends to make people much dumber, or at least much worse at discovering the truth.  There is a good reason for this, and Eliezer Yudkowsky said it well:

Politics is an extension of war by other means.  Arguments are soldiers.  Once you know which side you’re on, you must support all arguments of that side, and attack all arguments that appear to favor the enemy side; otherwise it’s like stabbing your soldiers in the back – providing aid and comfort to the enemy.

This is one of the reasons that politics is not about policy.  I wish politics were really all about figuring out what policies are best for everyone and implementing them.  But in reality people are not strongly attached to policies.  It is fun to see everyone change positions on the merits of the filibuster when there is a new majority party in the Senate.  Recently we have been treated to the spectacle of the Heritage Foundation and Mitt Romney disavowing the health reform that strongly resembles the policies they advocated and implemented, because this one was passed by Evil Democrats.  Similarly, all the Democrats who claimed to feel very strongly about the Wars on Afghanistan, Iraq and Terror when the Big Bad Republicans were doing it forgot all about this once their guy was elected and continued the same policies.  Sociologist Fabio Rojas found that attendance by Democrats at anti-war demonstrations fell by more than half after Obama was elected; ironically, this is when the protests may have actually had a better chance at changing policy.

Glenn Greenwald (the currently-ignored conscience of the Democratic Party, or indeed the US) made some great points in this vein recently in a controversial (1700+ comments) article:

Then there’s the inability and/or refusal to recognize that a political discussion might exist independent of the Red v. Blue Cage Match. Thus, any critique of the President’s exercise of vast power (an adversarial check on which our political system depends) immediately prompts bafflement (I don’t understand the point: would Rick Perry be any better?) or grievance (you’re helping Mitt Romney by talking about this!!). The premise takes hold for a full 18 months — increasing each day in intensity until Election Day — that every discussion of the President’s actions must be driven solely by one’s preference for election outcomes (if you support the President’s re-election, then why criticize him?).

You should probably just read the whole Greenwald article, it is a better version of this post.  Anyway, I’ve been thinking about this a lot as we start election season in the US.  How can we be involved in both truth-seeking and politics when they don’t naturally mix?

Two great public intellectuals, Paul Krugman and Tyler Cowen, have been openly discussing the merits of their very different rhetorical strategies.  Krugman has a more political style, implying and often outright saying that people who disagree with him must be idiots.  Cowen is more intellectual and abstract.  Cowen implies that Krugman’s style lacks virtue and integrity:

“The issue is not that Krugman changed his mind (I’ve done that plenty, Alex too).  The issue is that Krugman a) regularly demonizes his opponents, including those who hold Krugman’s old positions, and b) doesn’t work very hard to produce the strongest possible case against his arguments….. There is a kind of hallelujah chorus for Krugman on some of the left-wing economics blogs.  The funny thing is, it’s hurting Krugman most of all”

This is a new chapter in an ancient debate; it reminds me of Socrates calling out the Sophists.  Socrates was a purist who thought we should seek truth and the good, while the Sophists realized that their rhetorical Dark Arts could win them money and influence.  Indeed, Krugman’s response is essentially that his style brings him influence, and you can’t argue with success:

I realized that I also wanted to say something in response to the concern trolling, the “if you were more moderate you’d have more influence” stuff. Again, this amounts to wishing that we lived in a different world. First, there is no such thing in modern America as a pundit respected by both sides. Second, there are people writing about economic issues who are a lot less confrontational than I am; how often do you hear about them? This is not a game, and it is also not a dinner party; you have to be clear and forceful to get heard at all.

Basically, Krugman is saying “If only you knew the Power of the Dark Side”.  But is this strategy really so powerful?  I may not be representative, but it certainly loses me.  I can help but notice how Krugman is trying to reframe the debate (and distort Cowen’s argument) in almost every sentence.  Cowen isn’t concern trolling because he practices what he is preaching; and he advocates a moderate tone, not moderate positions.  Krugman sets up false dichotmies: being civil means you aren’t clear and forceful, you can only be respected by one of two sides.  This last may be the most crucial: Krugman assumes that all discussion takes place where there are opposing sides (and only two of them!) and no respect across them.  This puts him squarely in the arguments-are-soldiers camp.

But is Krugman’s strategy effective in general?  He certainly has a large audience, which is valuable (in terms of income and status).  It is hard to say whether this results in much influence on policy though.  It is hard in general to determine the effect of individuals on policy, but I can’t think of a single issue where Krugman was a leader in getting a policy changed.  Cowen previously argued that most intellectuals, including Krugman (and himself), have little real influence.

Can we become more influential through the use of Dark Arts in general, and ridiculing the other side in particular?  I think the jury is still out here.  Milton Friedman was influential while being unfailingly civil and assuming the best of his opponents, and I think that this helps his work stand the test of time.  It is easier for people to adopt your position if this doesn’t mean they were being idiots before; as Brad Delong said (ironically, since he is guilty of the same vice) “No, Paul, No! You Don’t Slaughter the Returning Prodigal Son, You Slaughter the Fatted Calf!!”  The easiest way to convince people is not to change their mind, but to convince them they agreed with you all along; this is easier if you don’t call them names.

Even if the Dark Arts do confer the power to influence and persuade, it is likely that they erode the ability to find the truth.  In theory you could have a persuading public persona and a truth-seeking private persona with different beliefs.  But to reduce cognitive dissonance people must start believing their own propaganda.  Further, the best way to learn is often through open, honest debate that cuts to the heart of the issues; you don’t learn by beating up strawmen.  The power of the real Dark Arts, just as in so much literature and mythology, comes with a great cost.

Update: One big thing I missed in this post is the need to know your audience; there is no one form of argument that is most convincing to everyone.  My implicit assumption (and that of Kantoos, who made me realize this) is that you should target the median reader out there, just as politicians should target the median voter.  But of course, in primary season you do not target the median of the whole electorate.  Krugman is in a perpetual primary season.  He is not trying to convince the average reader that his “side” is better, but to educate, entertain and radicalize those already on his “side”, by noting that the other side is not even worth considering.  This should have been obvious since he named his book and blog “Conscience of a Liberal”, but I do catch on eventually.

Written by James Bailey

January 5, 2012 at 12:06 am

“It’s become apallingly clear that our Technology has surpassed our Humanity”

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Saw this as a bumper sticker on a car.

Two thoughts:

1) It implies that while the rest of humanity is having some trouble dealing with their newfound knowledge and power, the driver is doing just fine. If not, shouldn’t it say something like “It’s become appallingly clear that *my* technology has surpassed my humanity- watch out when I’m on the road with this beast-rendering speed machine!”

2) It implies that this is some sort of new phenomenon, when we fell from our idyllic past and invented machine guns and atomic bombs. I imagine that our technology surpassed our humanity sometime around the discovery of fire and sharp rocks; if, that is, we imagine that our humanity is kind and compassionate. If, instead, we think of our humanity as sinful, violent and often malicious- well, I’d say humanity is doing a wonderful job of keeping up with the times.

Written by James Bailey

August 7, 2007 at 11:59 pm