Mad Economists

Who is the closest person out there to being a “mad economist”, in the sense of a mad scientist?

I have a hard time thinking of anyone who really qualifies. I think this is because mad scientists do practical things that directly affect the real world- either by building crazy things (death ray, killer robot, 5 assed baboon, et c), or by using crazy methods for research (harming human/animal subjects, making their base underwater/ in an active volcano / on the moon).

Economists tend to be bound to relatively boring methods (doing math on a chalkboard or analyzing data on a computer) that lead to relatively boring outcomes (writing papers that expand our understanding of the world a bit and possibly tell policymakers what to do).

The recent trend toward lab and field experiments in economics certainly expands the possibilities for madness. Prisoners’ Dilemma experiments are a nice touch here, especially when someone decided to run them with actual prisoners. The Phillips machine was a fun one-off. But I can’t think of anything that rises to the level of psychology’s Milgram Experiment, much less the things that have been done in the “real” sciences of biology, chemistry and physics.

Occasionally economists get some power within companies, or start their own. But coming up with a new strategy for a hedge fund or designing auctions for Google doesn’t really get into “madness” territory either. Economists are forever telling the government what to do, but rarely get listened to. During total war they have been vested with lots of power over the economy, though I haven’t heard of any particularly crazy things they did with this power. Levitt’s long con to catch terrorists was a nice touch. Armen Alchian used economics to discover that lithium was the moderator for the atomic bomb, but his only plan to use that information was to write a paper about it, and he abandoned even that at the request of the government.

But is there anything an economist has done that rises to the level of a Tesla, Mengele, Musk, or TunaPig? Anything an economist might do that could match a single invention of Drs Kreiger, Evil, or Horrible?

Marx? GiveDirectly founders? Shleifer? Jeff Sachs?

In general, PhD economists (myself certainly included) are too much thinkers rather than doers. The closest people we have to mad economists are probably people who learned some undergraduate economics, then went out to change the world- people like Elon Musk or Dread Pirate Roberts.

Who am I forgetting? What would a real mad economist look like?

Operation Paperclip

I just finished the great book of the same name by Annie Jacobson. I had heard of the program that brought Nazi scientists to America, but didn’t realize how big it was- several hundred scientists- or just how complicit in the holocaust many of the scientists were- from the slave labor that built Werner von Braun’s rockets, to medical experiments on unconsenting prisoners, to high positions in the SS, to straight up murder.

Nazi science shows the amazing things that can be accomplished with tons of money, no bureaucracy, no morals, and an endless supply of slave labor. Rockets, chemical and biological weapons all went from ideas to mass production in a few years. Most of the medical “experiments”, though, seem more like simple torture than attempts to learn anything.

The Paperclip program is classic example of Crisis and Leviathan- war (WWII) and the threat of war (Cold War) lead to bigger government and more relaxed moral standards. If we don’t do it, the Russians will.

I definitely didn’t realize the interaction between a lot of the craziest shit our military / intelligence / industrial complex was doing at this time. Paperclip scientists were involved in MK-ULTRA, Bluebird and Artichoke, dramatically accelerating the US chemical and biological weapons programs, and in dispersing pathogens in the US.

It was Richard Nixon that unilaterally shut down the US chemical weapons program in 1969- well done. Nerve gas is scarier shit than I realized. Even Hitler never used it, though they had thousands of tons of tabun. This makes Saddam Hussein, and our support of him during the Iran-Iraq war, look even worse.

One big lesson that I take from the book, though the author never mentions it- the importance of institutions. Almost all of the scientists who did the worst things in Nazi Germany ended up being successful, ethical scientists in the US, once they were placed in a system with very different incentives. In fact, the Paperclip scientist who did some of the worst things for the US, Fritz Hoffmann, was one of the only anti-Nazis in the program; but he was working in weapons areas where the US military had the fewest moral qualms at the time.

Annie Jacobson does a great job turning history and original historical research into an informative page-turner. My one disappointment with the book is in its moral dimension. Jacobson claims to dodge the question, saying that the morality of the paperclip program is up for each individual to decide. But she is always implying that it was a bad idea, while avoiding a real discussion. In particular, she never brings up the obvious analogy to the everyday criminal justice system. In one sense, Paperclip was an amazing rehabilitation program; there was almost no ‘recidivism’ among the scientists. But it certainly failed to exact retribution on bad actors, and may have created a deterrence-reducing moral hazard effect (perhaps knowing of such a program will lead others to commit crimes they would otherwise be afraid to). How valid was the argument that ‘if we don’t take them, the Soviets will’? Would the US and the world really be a better place if we had hung Werner von Braun and co as war criminals instead of letting them join NASA and help get humanity to the moon?
Science is power- both for what it allows humanity as a whole to do, and for scientists themselves. When governments realize the power of your ideas and abilities, you can get away with a lot. Nazis, Soviets, Americans, British, French all realized this- more than they do today. You’d think we would at least have standing visa offers to all scientists who aren’t war criminals, after expending so much money and effort to get those who are.

A Naive Economist Analyzes Climate Data

Has global temperature risen significantly in the last century?  I’m sure this post will settle the global warming debate once and for all.

Seriously though, I am surprised how economists feel the need to qualify their discussion of the subject by saying “I’m not an expert”.  True, economists are not experts on climate, but many are leading experts on the analysis of time-series data.  One of the biggest debates in economics for the last 3 decades is about the trend in a time series- not temperature, but gross domestic product.

I am not an expert even on this narrower subject, but in some sense this is an advantage- I don’t know enough to cheat.  I can’t keep trying different approaches until the results come out the way I want, because I only know a couple of approaches.  Compare this to graphs, where I know enough to get exactly the results I want.  Here is a graph of global temperatures since 1881, data from NASA:

Hard to see an upward trend there.  Case closed?  Well, check out the temperature anomaly (difference from the average), graphed in a different way:

Now that’s an upward trend if I’ve ever seen one!  These two graphs are two basically legitimate ways to look at essentially the same data, but they seem to point to opposite conclusions.  This is one reason statistical tests are important- they can’t be fooled by changing axes or adding a constant to the whole series.  Of course, the disadvantage is that they require a lot more knowledge to use and analyze than graphs do.

You can already see the result of one statistical test- the regression equation on the second graph that was used to draw the trend line.  It estimates that temperature is increasing .006 degrees Celsius each year, and that this simple increasing-temperature model predicts 75% of the variation in the annual data.  A regression on the first graph shows the same thing (rescaled), though I did not include it as it would undermine the how-to-lie-with-graphs point.  Time is strongly significant in this regression (p-value 0.00)- so this basic analysis says the increase in temperate is statistically significant.

A more advanced way to test for a trend in data is an Augmented Dickey-Fuller test.  This test also suggests there is an upward trend- technically, that we cannot reject the null assumption of a unit root (more technically, it looks like it is ARIMA(0,1,3), for those who care).  So, according to my naive analysis, there certainly seems to be an upward trend in temperature.

What does this really tell us?  Perhaps not much.  First, I assumed that the dataset from NASA is correct.  Second, I chose to analyze 130 years, but there is no reason to choose this number except that it is how much data I had; the results are certainly sensitive to the number of years included.  Finally, I have done nothing to test the idea that increased carbon is causing this increase- perhaps I will in another post.  So, with those three grains (big rocks?) of salt, it looks like we have global warming.

The Future: Like the Past, but cooler

Making predictions about the future is a notoriously tricky business.  It is often done by extrapolating from past trends.  As often as this method fails us, its hard to imagine a better heuristic than the belief that the future will be like the past, only more so.

Extrapolating current trends in combinations that should be obvious yield conclusions that are, to me at least, surprising and inspiring. Here are two trends:

Recent scientific history, say of the last 60 years, has been filled with major discoveries that appear to have vast explanatory power and with widespread technological applications.

The average expectancy of an American is 78 and continues to increase.

If the past is any guide to the future, me and my generation are likely to witness discoveries of the magnitude of DNA, events like men landing on the moon, new ubiquitous technologies like computers and cell phones.

On top of the science, new developments in the social sciences, in society, and in world politics will be ever interesting if not so distinctly progressive.

All manner of surprises await us, so many before we even consider the real breaks from the past, the “unknown unknowns” that open up entirely new fields of endeavor and ways of thinking.

Here’s to the future!

It slices, it dices, it cures polio

“Once upon a time, there was a man who was convinced that he possessed a Great Idea.  Indeed, as the man thought upon the Great Idea more and more, he realized that it was not just a great idea, but the most wonderful idea ever. The Great Idea would unravel the mysteries of the universe, supersede the authority of the corrupt and error-ridden Establishment, confer nigh-magical powers upon its wielders, feed the hungry, heal the sick, make the whole world a better place, etc. etc. etc.

The man was Francis Bacon, his Great Idea was the scientific method, and he was the only crackpot in all history to claim that level of benefit to humanity and turn out to be completely right.”

The people at Overcoming Bias say the awesome powers of science mean rational people must be extra skeptical of its methods.

I wonder whether another crazy idea will ever be so successful again.  Its enough to make a man want to hang out in the British Museum and put pen to paper for a few decades.

Freedom of Speech in America

Scott Adams of the Dilbert Blog wonders about this “alleged freedom”.

“In the United States, we have freedom of speech, in the sense that the government won’t arrest you for speaking your mind. Yay for freedom!

But your fellow citizens will happily ruin your economic life if you say something unpopular in public. Some might say that has nothing to do with the right of free speech. It’s an example of free people acting in a free way. But to me, it looks like cutting out the middle man. There’s no point in electing a government to punish unpopular speakers when the citizens can do it themselves, and cheaper. It might look we have freedom of speech to you, but to me it looks like we just found the most efficient system for limiting it.

[Interesting side note: For this post I made a list of opinions you are not allowed to express in this country, and realized I can’t even publish the list without a social and economic penalty that wouldn’t be worth the benefit.]”

I myself have long though that restrictions on the freedom of speech only “count” if they are imposed by the government.

But some life experience and some exposure to such radical thinkers as Alexis de Tocqueville (who noted how Americans treated those with differing opinions in Democracy in America) has made me more sympathetic to Scott’s point of view.

As someone with no job to lose and little fear of social penalty (mostly because no one reads this), I thought it would be interesting to compile the list Scott could not- what are the opinions you just can’t hold without risking your job and/or access to public debate.

1) Outsourcing is good for the American economy

It’s the orthodoxy among economists, but death in the political arena as Greg Mankiw found out when he went from harmless Harvard professor to Bush economic advisor… and back again.

2) There are non-physical, non-trivial differences between men and women

Rather the inverse of the outsourcing question; this is the orthodoxy, I think, among ordinary men and women in everyday life; but its the kiss of death in the academy. Just ask Larry Summers, former Harvard president, now demoted back to Harvard professor after suggesting that men and women have differing abilities in math and science.

(maybe the real lesson here is to not be a professor at Harvard)

3) Genetic variation in intelligence is not distributed randomly

Ie, intelligence may correlate with other factors like (oh no!) race. This is the worst of all, as it brings out the hate from scientists, politicians, journalists, and ordinary people. Just ask James Watson, one of the men who first identified DNA. One response of his to the controversy made it into the Daily Mail:

“Our wanting to reserve equal powers of reason as some universal heritage of humanity will not be enough to make it so,” he says.

One of the sad truths of life is that wanting something good and beautiful to be true is not enough to make it so. (Exceptions to this are really cool and rare as unicorns)

I think that most people fail to realize this or choose to ignore it. Certainly I struggle against it. But if anyone should base their views on what they can prove to be true, rather than what they want to be true, it must be the scientific community. There are other issues where scientists appear fairly dogmatic; global warming is a mild case, evolution a stronger one. But Watson seems to have revealed some of the strongest scientific dogma of all.

That was kind of a tangent… anyway, I’d like to see your own ideas in the comments about what you can’t say in America.

Final quiz prep, in case anyone surprising is among my normally intelligent and educated audience: for those who missed Civics 101, protecting someone’s freedom of speech doesn’t necessarily mean you agree with them; in fact the whole point is to tolerate dissent. For those who missed Logic 101, the truth of an idea not dependent on those who believe it, or even those who put it forward; ie, just because scientists largely believe in evolution or the equality of intelligence across races for unscientific reasons doesn’t mean they aren’t true.

Discuss

Predestination

…it’s not just for Calvinists. I’ve been reading Carl Sagan, the astrophysicist, and remembering that there is no shortage of scientific materialists who don’t believe that we have any free will. I wouldn’t have thought they would really have anything in common; but there it is. Two communities that I mostly have a lot of respect for, holding as one of their core beliefs something I would really rather be false. Would you rather be a puppet held by physics and chemistry, or manipulated by a more traditional deity?

I wish I were a real boy!

String Theory

Watching the PBS documentary on Michael Greene’s The Elegant Universe. It’s fairly well done, though a bit slow and repetitive.
The most common criticism I’ve heard of string theory is that it is not really scientific at all, because it makes no testable predictions. This lack of observability and predictive power makes it completely useless, “not even wrong”. Greene insists that tests will emerge in the future. But the documentary makes the claim that string theorists predicted the existence of a gravity-particle in the 1980’s; and there are now experiments designed to detect these “gravitons” and “gravity-waves” (like LIGO ) I would think this is a great test, except that they completely fail to mention it in the documentary.