Austerity as an Idea

by Henry on March 8, 2013

My review of Mark Blyth’s forthcoming book, Austerity: A Dangerous Idea can be found here. After I wrote the review, Dani Rodrik published a piece arguing that economists needed to pay less attention to interests, and more to ideas:

Interests are not fixed or predetermined. They are themselves shaped by ideas – beliefs about who we are, what we are trying to achieve, and how the world works. Our perceptions of self-interest are always filtered through the lens of ideas. … So, where do those ideas come from? Policymakers, like all of us, are slaves to fashion. Their perspectives on what is feasible and desirable are shaped by the zeitgeist, the “ideas in the air.” This means that economists and other thought leaders can exert much influence – for good or ill. John Maynard Keynes once famously said that “even the most practical man of affairs is usually in the thrall of the ideas of some long-dead economist.” He probably didn’t put it nearly strongly enough. The ideas that have produced, for example, the unbridled liberalization and financial excess of the last few decades have emanated from economists who are (for the most part) very much alive. … Economists love theories that place organized special interests at the root of all political evil. In the real world, they cannot wriggle so easily out of responsibility for the bad ideas that they have so often spawned.

Blyth thinks very similarly about how ideas dominate interests, and how we need to take account of this studying the economy. As I summarize his take (building not only on the austerity book, but his previous work too):

Blyth cares about bad ideas because they have profound consequences. We do not live in the tidy, ordered universe depicted by economists’ models. Instead, our world is crazy and chaotic. We try to control this world through imposing our economic ideas on it, and sometimes can indeed create self-fulfilling prophecies that work for a while. For a couple of decades, it looked as though markets really were efficient, in the way that economists claimed they were. As long as everyone believed in the underlying idea of underlying markets, and believed that everyone else believed in this idea too, they could sustain the fiction, and ignore inconvenient anomalies. However, sooner or later (and more likely sooner than later), these anomalies explode, generating chaos until a new set of ideas emerges, creating another short-lived island of stability.

This means that ideas are fundamentally important. The world does not come with an instruction sheet, but ideas can make it seem as if it does. They tell you which things to care about, and which to ignore; which policies to implement, and which to ridicule. This was true before the economic crisis. Everyone from the center left to the center right believed that weakly regulated markets worked as advertised, right up to the moment when they didn’t. It is equally true in the aftermath, as boosters of neoliberalism have moved with remarkable alacrity from one set of bad ideas to another.

{ 158 comments }

1

Cian 03.08.13 at 4:16 pm

He’s a fantastic speaker. He can explain complex economic ideas like nobody. Can’t wait to get my hands on this book. Thx.

2

rf 03.08.13 at 4:38 pm

Kindred Winecoff had an interesting post on this a few months ago that’s worth repeating (not having read the book) where he argues the ‘political question is ultimately of a distributional, rather than ideational, nature.’

http://ipeatunc.blogspot.co.uk/2013/01/austerity-politics-materialism-vs.html

“What form is chosen is a political question. Each of these imposes costs on a different groups of people, so the political battle is of a distributional nature. Blyth insists (sometimes) that this is not the case, that austerity is the result of a cognitive or ideological blunder, and expresses a preference for a policy which is not politically feasible, nor normatively desirable (at least for much of the eurozone): turn the ECB into a “bad bank”, and load it up with all of the underperforming assets being carried by eurozone banks.* While this would be great for some eurozone countries, it would be horrible for others. Which is why I think this political question is ultimately of a distributional, rather than ideational, nature.”

3

Kevin Donoghue 03.08.13 at 4:52 pm

It’s odd that people so often quote Keynes in this context. Doesn’t the way his ideas were received tell against his view? The people who sabotaged the efforts of Lorie Tarshis to promote Keynes’s ideas did so because they thought they were dangerous even where they were correct.

In my admittedly limited experience of dealing with powerful people, they don’t evaluate a new idea in terms of whether it is true or false. They ask themselves, is this the sort of thing we want the Minister (or the Governor or the Board) to be looking at?

4

JW Mason 03.08.13 at 5:13 pm

Seems funny to advise people to pay less attention to interests in this context, since as far as I can tell the amount of attention that interests get in discussions of austerity is currently about zero. I think it would be nice if people did acknowledge that people — workers and owners, say — do sometimes have diverging interests, that might play some role in the politics of austerity. But no, the czar is always well-meaning, just misinformed.

Ah well. I’m somehow reminded of the New Massesreview (and) of The General Theory:

Keynes ends on the note that ideas are more powerful than vested interests, and he points out that even the madmen in authority are distilling their frenzy from the academic scribblers of a few years back. … It is in character that a man who gives no thought to the problem of how great social changes come about should make a statement with such confidence. … When a Mussolini in power orders, as he did, the construction of a “Fascist theory,” much as he would order a new uniform, it is small credit to the academic writers or the idealist philosophy of history. Hitler’s use of the scribblers to construct a platform he never intended to carry out, is surely a better example of the use of confusing ideas by vested interests than of the power of ideas over vested interests. The regrettable conclusion is inevitable that Keynes’s association with cabinet ministers and other gentlemen who have “made history” has given a bias both to his theory of history and to his theory of the state…

5

Bruce Wilder 03.08.13 at 5:30 pm

Everyone from the center left to the center right believed that weakly regulated markets worked as advertised, right up to the moment when they didn’t. It is equally true in the aftermath, as boosters of neoliberalism have moved with remarkable alacrity from one set of bad ideas to another.

I’d like to think that ideas are important. I do think ideas, and the quality of ideas — critical method, etc. — are important. But, it is difficult to gaze upon neoliberalism, in its trivial errors and willful blindness, and see anything but rank corruption as its point of origin.

Are we really to take neoliberalism seriously, as a set of ideas? Or, is the concession that fashion rulz also a concession that while ideas matter, these ideas are crap? Or, are we now to take fashion seriously? I’m confused.

‘This… stuff’? Oh. Okay. I see. You think this has nothing to do with you. You go to your closet and you select… I don’t know… that lumpy blue sweater, for instance because you’re trying to tell the world that you take yourself too seriously to care about what you put on your back. But what you don’t know is that that sweater is not just blue, it’s not turquoise. It’s not lapis. It’s actually cerulean. And you’re also blithely unaware of the fact that in 2002, Oscar de la Renta did a collection of cerulean gowns. And then I think it was Yves Saint Laurent… wasn’t it who showed cerulean military jackets? I think we need a jacket here. And then cerulean quickly showed up in the collections of eight different designers. And then it, uh, filtered down through the department stores and then trickled on down into some tragic Casual Corner where you, no doubt, fished it out of some clearance bin. However, that blue represents millions of dollars and countless jobs and it’s sort of comical how you think that you’ve made a choice that exempts you from the fashion industry when, in fact, you’re wearing the sweater that was selected for you by the people in this room from a pile of stuff.

6

Rich Puchalsky 03.08.13 at 5:39 pm

“It is equally true in the aftermath, as boosters of neoliberalism have moved with remarkable alacrity from one set of bad ideas to another.”

But this is evidence that ideas don’t matter. As Krugman wrote recently, at first advocates for austerity used to call on the Confidence Fairy. The Confidence Fairy never showed up, and no one really believes in it any more. Similarly, the other ideas that were cited as justifying austerity have fallen away. But austerity itself has not, because it is the policy that oligarchs prefer based on their interest, not on their ideas.

The U.S. justification for the Iraq War was another, similar case. All kinds of high-sounding ideas were given as justification, adopted from one or another neo-conservative thinker — the need to bring democracy to dictatorships, the War Against Terror, the pre-emption of regimes seeking to develop WMDs. No one believed those for long, but the war continued.

The Keynes quote is flattering to people who work with ideas. Naturally they’d like to see themselves as driving events, rather than providing public justifications for them. But, as happened with Responsibility To Protect, that isn’t how it works.

7

rf 03.08.13 at 5:46 pm

I think Iraq is a good example of when ideas do matter, the interest based explanations for the war are much less convincing. Some thing can fail, fail miserably, and continue but that doesn’t negate the importance of ideas in driving the policy (at least initially)

8

Bryn Davies 03.08.13 at 5:51 pm

Didn’t Marcuse have something useful to say about all this?

9

Rich Puchalsky 03.08.13 at 5:51 pm

But which idea was supposed to have driven the Iraq policy, rf? They changed with bewildering rapidity. And now that we know more of the history involved, we know that Cheney and co were determined, before 9/11, to use the first excuse that came up for attacking Iraq. I’m sure that Cheney had some kind of idea in his head, but since it was never publicly articulated, is it really an “idea” that can influence others at a distance rather than an interest?

10

P O'Neill 03.08.13 at 6:16 pm

A long struggle has to start somewhere and if Robert Chote is to be the man of the hour, so be it.

11

Bruce Wilder 03.08.13 at 6:17 pm

@ rf

Oil is unconvincing?

It seems to me that the Iraq War is an example of how interests, dragged low by authoritarian secrecy and greed and sociopathic leadership can filter ideas down to a tangled web of incompetence and impotence and lies, so dense and self-defeating that it almost calls into question, whether some rational appreciation of interests could have been involved at the motivating origin.

There’s definitely a reflexive relationship between ideas and the institutional structure of power, that goes beyond the mere apologetic rationalizations and propaganda of power-in-action. I, personally, find it difficult to attribute much leverage or power in the intellectual turns in that reflexive loop-de-loop. But, maybe, there’s something to the thesis that the corruption of ideas by power tends to make power, impotent.

I note the extreme example of the claims for absolute monarchy at the beginning of the modern era. The apologetics of Hobbes for the Stuarts became the foundation of political science; the Enlightenment philosophes fermented the French Revolution, serving and celebrating the rationalizing potential of “enlightened” despots building their states. It worked out as well as it did (allowing that it was a bloody mess all around) because Charles I and Louis XVI were made ineffectual dolts, by absolute power, despite the profusion of ideas they were offered. In their way, Cheney, Bush, Rove and, yes, Obama, Bernanke, Olli Rehn — take your pick — are stumbling around, because corruption makes them so stupid (or selects them for stubborn stupidity of a seemingly “useful” sort).

12

rf 03.08.13 at 6:19 pm

Rich

Well, not wanting to go of topic, but Andrew Filbert identified 4 ideas that drove the war – 1 the idea of a benevolent US hegemony that defines the purpose of US power – 2 what he calls ‘Manichean primordialism’, which frames the threats the US faced – 3 the importance that had become attached to ‘regime type’, which offered a solution/explanation to the perceived problem (a regional rival in Iraq that could not be negotiated with) – 4 and then the belief in the efficacy of force, which could be used to implement that solution (remove the regime)
If you want to concentrate on the neo-cons specifically, a lot of these ideas shaped their opinions on how they wanted to transform the Middle East, and in the initial stages of the war, the ‘plug in and play’ phase, you can see this in the immediate dismantling of the state, market liberalisation, structural adjustments, lack of concern for the security etc.
That’s not to say that interests weren’t important, but that these ideas of US purpose/power/threats/solutions shaped those interests. The other alternatives (oil, the Israel lobby etc) don’t seem to hold up as well

13

Billikin 03.08.13 at 6:22 pm

I think that austerity is deeply rooted in our Indo-European heritage. In the US, anyway, we may have become more hedonistic, but a Puritan austerity still beckons. There is still a connection between debt and guilt, as well. Perhaps austerity has greater appeal in India, the land of the fakirs. There tapas (austerity) and yajna (sacrifice) are significant religious ideals. And the god, Shiva, is a god of creative destruction. Perhaps many economists are secretly priests of Shiva. ;)

14

Mathmos 03.08.13 at 6:25 pm

#6

“The Keynes quote is flattering to people who work with ideas.”

It’s also reassuring to the intellectual class as a whole because if politics isn’t a contest of ideas, then what is it a contest of? And what role is the intellectual to play in it?

15

rf 03.08.13 at 6:27 pm

Bruce
I’m not saying oil was irrelevant, it was probably more important to specific actors, but I don’t think it was primarily about oil. You have to deal with the fact that US oil companies haven’t don’t particularly well after the invasion, and indeed geopolitical rivals have. (That could be due to incompetence, or less emphasis on oil in the US FP establishment in the mid 00s as they became more aware of domestic energy reserves, but I don’t think that holds up) It doesn’t even make sense as being about oil in the same way that Gulf 1 did (not wanting a rival to control a significant amount of regional oil production. And indeed the Iraqi regime as it stands, is not particularly favourable towards the US)

16

JW Mason 03.08.13 at 6:29 pm

“It is equally true in the aftermath, as boosters of neoliberalism have moved with remarkable alacrity from one set of bad ideas to another.”

But this is evidence that ideas don’t matter. As Krugman wrote recently, at first advocates for austerity used to call on the Confidence Fairy. The Confidence Fairy never showed up, and no one really believes in it any more. Similarly, the other ideas that were cited as justifying austerity have fallen away. But austerity itself has not, because it is the policy that oligarchs prefer based on their interest, not on their ideas.

Right.

Rodrik has it exactly backward. There’s an enormous amount written — volumes and volumes — about the ideas behind austerity, and what’s wrong with them. There is almost nothing written about what interests austerity might serve. Seriously, what is he even talking about? Do you think, if you put him on the spot, he could come up with even one example of the position he’s criticizing?

(OK, people do sometimes talk about conflicting national interests. But that’s it.)

17

rf 03.08.13 at 6:32 pm

Austerity as it’s implemented in specific countries might serve class interests in those countries, but as a policy emanating from the EU core it serves national interests. For sure

18

Bruce Wilder 03.08.13 at 6:43 pm

Re: Robert Chote, cited by P O’Neill in a comment above.

There’s something very strange and, ultimately, I fear, disabling about the rise of institutionalized “forecasts” that re-ify theories into (counterfactual and incommensurable) projections. In U.S. politics, the CBO performs a similar role to that played by Chote’s Office for Budget Responsibility, and the IPCC is assuming a similar role in climate change politics. The myth of the neutral “fact” checker tends to play into the pseudo-religious roles technocratic economists play in our politics, particularly the political rituals of cable news or op-ed “debate” and “analysis”.

Chote reminds me of nothing so much as a dignified, learned, earnest court astrologer to Emperor Rudolph, or perhaps a flamen in service to the pre-christian Pope, Julius Caesar, reading entrails and managing calendar reforms, in between performing rituals.

19

rf 03.08.13 at 6:43 pm

As an example, why have US policy makers reacted so differently to their own countrys banking and debt problems than they did to the same problems in Latin America and East Asia?

20

Rich Puchalsky 03.08.13 at 6:51 pm

I think the problem intellectuals have when talking about interests is that they they tend to think of interests as being superrational, or at leaat structurally determined in some way. As if you could figure out what the single best policy for the oligarchical class is, or what the single best policy for the national interest of the U.S. is, and that must be the interest involved. I don’t think that this is either possible or true even as an approximation. Interests pretty much come down to what we’d call “feelings” in an individual.

Let’s take rf.’s quote from Andrew Filbert as an example: “4 ideas that drove the war – 1 the idea of a benevolent US hegemony that defines the purpose of US power – 2 what he calls ‘Manichean primordialism’, which frames the threats the US faced – 3 the importance that had become attached to ‘regime type’ […] 4 and then the belief in the efficacy of force”. What are these, really? 1: we are the best and should be in charge, 2: anyone against us is evil, 3: people should be like us, 4: we’re strong and can do what we want. Those aren’t ideas. They’re barely even interests, as most people understand them. They’re straight from the id.

And that’s really where austerity is coming from. No one is listening to a dead economist or a live one. It’s all “I like being rich, and I hate poor people, and we shouldn’t spend my money on those slackers”.

21

Bruce Wilder 03.08.13 at 6:53 pm

Billiken @ 13: austerity is deeply rooted in our Indo-European heritage

If not our genes.

Political rhetoric is designed to be more hypnotic than cognitively persuasive. The stupidity of neoliberalism is really playing an handmaiden role (majorly sexist metaphor!) in debasing critical cognition, as preparation for reaching the limbic system, the lizard brain, with the really dumb stuff, that is emotionally resonant as long as no one thinks.

22

Barry 03.08.13 at 7:03 pm

One of the things Krugman says is that when people ask for action A while burning through reasons B, ~B, C, ~C (which are incompatible with each other) is that they’re lying, pure and simple. They want to do A, and (B, ~B, C, ~C ) are just useful lies.

Similarly, the whole edifice of right-wing economics was informed by prior political beliefs, and is largely impermeable to contrary facts. In the end, the goal was to (a) loot and (b) use the collapse to loot further (by bailouts and an ‘austerity’ which never applied to the rich).

23

Barry 03.08.13 at 7:04 pm

Or, shorter and more temperate, I look at who benefits and who loses from these ‘ideas’, and note a curious consistency I don’t assume that they really believe in them.

24

Henry 03.08.13 at 7:09 pm

A couple of confusions here. When Rodrik is critical of interest-based explanations, he is clearly pushing back against a set of arguments as follows. In the Beginning Was the Market. And the Market Looked Around and All It Saw Was Self-Interest Turning from Private Vice into Public Virtue, and Tending Towards the Eden of an Arrow-Debreu Equilibrium. And The Market Saw That It Was Good. But Then, the Snake of Government Crept Into the Market and Whispered the Words ‘Organized Special Interests Can Use Government Coercion To Distort Markets and Create Effective Monopoly’ Into the Ears of Economic Actors. And Lo, Those Actors Were Cast Out of the Garden, to Wander the Wilderness of Politics Until They Repented The Error of Their Ways. Or somesuch. Which is a story that I imagine few, if any, folk around here believe.

If we want to get away from this creation myth, we can proceed in one of two different directions. One is to posit some alternative story about exogenously created interests, which highlights the conflicts and tensions that the Garden of Eden story leaves out. Classic Marxist accounts of the class struggle, and how it creates interests are the most obvious example. The advantage of these is that they certainly highlight the political aspects. The disadvantage is that they are too determinist. 19th century accounts of the falling rate of profits, creation and immiseration of the working class and so on are at best an imperfect guide to the 21st century (Erik Olin Wright’s Real Utopias book has a nice brisk chapter on this written from a clearly sympathetic perspective).

The other is not to throw out interests in favor of ideas, but to treat interests as to some degree endogenous. That is, to argue that people’s conceptions of their interests will in large part be shaped by the ideas that they hold about the world and how it works. The advantage of this is that it is true to life, and also explains stuff that the classical Marxist account has difficulty with (one of the things that E.P. Thompson brought to the fight was exactly an account of how apparently given class interests were in fact endogenous, and of the ‘making’ of the English working clas). The disadvantage is that if taken too far, it can shade into pure idealism.

Obviously, there are a lot of reasonable places that one could find oneself in the spectrum of explanation based on somewhat endogenized interests (which includes, after all, people as different as Thompson, Weber and Schumpeter). But I don’t think that people should be flinging pooh at Blyth and Rodrik simply for arguing that ideas shape interests, unless they have a really, really good alternative account that they want to provide of how these interests are formed exogenously without being shaped at all by the ideas that people have in their heads.

On the specifics of the recent crisis, very obviously interests have played an important role – but the ideas that actors hold are often what have meant that this coalition rather than that coalition has formed. If we were to posit a counter-factual world – in which Keynes had never been born and Keynesian ideas about aggregate demand had never been formulated – we would have seen very different debates and very different coalitions.

Nor does this really flatter the idea makers, since they are no more forging their ideas in a vacuum than anyone else. They too are working from a combination of self-interest and world-view, where the two are inextricably commingled.

Finally, contrary to suggestions above if I’m reading them right, there is nothing at all anti-political about these claims. Instead, they highlight the need to figure out the implicit and explicit alliances between the makers of ideas and those who would like to use them. Blyth does this in his previous book, _Great Transformations_, where he talks about the back-and-forth relationship between the Mont Pelerin people and some businesses. Rodrik is more or less explicitly a neo-Polanyian (his book on globalization is quite explicitly an effort in combining stats and very simple economic models with a Polanyian account of globalization transforms politics).

25

Barry 03.08.13 at 7:11 pm

Somebody linked to this (it’s open in another window, and I can’t remember where I clicked) http://slackwire.blogspot.com/2012/06/pain-is-agenda-method-in-ecbs-madness.html

“Pain Is the Agenda: The Method in the ECB’s Madness “

26

rf 03.08.13 at 7:12 pm

Rich
It’s a specific conceptualisation of an international system that the US can dominate (and thankfully to the benefit of all!) which framed threats in a specific way and encouraged/excused specific policies to be implemented in specific ways against specific targets ..of course we can complicate it, it’s only a small piece of a complex whole..it was, to my mind, the driving force behind the war as it actually happened..although I think it was ineveitable one way or the other

“I think the problem intellectuals have when talking about interests is that they they tend to think of interests as being superrational, or at leaat structurally determined in some way. As if you could figure out what the single best policy for the oligarchical class is, or what the single best policy for the national interest of the U.S. is, and that must be the interest involved. I don’t think that this is either possible or true even as an approximation. Interests pretty much come down to what we’d call “feelings” in an individual.”

Well yes. Isn’t this the point? You’re the one who claimed ideas were unimportant initially because the ideas had failed..

27

Bruce Wilder 03.08.13 at 7:20 pm

In a partial defense of Filbert, which really reinforces what Rich Puchalsky wrote, the opening gambit in Bush Administration rhetorical rationalizations for their Iraq policy was to resurrect the rhetorical frameworks of Wilsonian internationalism, particularly as executed during and after WWII. There really were “ideas” there, back in the day, but they were reduced and corrupted in the small minds of the Project for a New American Century, which acted like an incompetent chef clarifying rancid butter.

GWB giving his ultimatums to Saddam, the talk of mushroom clouds, the Secretary of State lying to the Security Council about “weapons of mass destruction” — it was meant to recall earlier, historical drama, with its emotional associations. And, in their way, I think some of them actually believed some of their own b.s., though they betrayed their lightly held “good intentions” with a lack of follow-thru. I’m sure somebody sincerely thought the Occupation and Reconstruction could and would transform Iraq, before most of them got busy skimming the billions.

This is how history comes to repeat its most earnest tragic struggles as later farce.

28

Bruce Wilder 03.08.13 at 7:25 pm

rf: “I think it was inevitable one way or the other”

That’s a basic contradiction in terms, but it illustrates why Keynes’ reference to politicians being slaves to dead scribes has some plausibility. The way the system of political discourse distills a disciplined conventional wisdom and excludes critical thinking, even or especially on the supposedly “expert” technocrat level, is remarkable. We don’t so much make choices, as come to be convinced that we have no choices other than the choice being made.

29

rf 03.08.13 at 7:34 pm

There really isn’t any contradiction between Filbert and Rich’s position as far as I can see. You can identify the specific ways a policy was conceptualised while also acknowledging the social, cultural, class etc aspects that shaped the environment/policy maker

It’s not a contradiction really, I dont think, to argue that something was going to be done about Iraq one way or the other (and a large ground invasion would be my unsupported counterfactual) and to acknowledge the specific way it did actually happen..it would have happened differently under Gore, with slightly different justifications/outcomes..but I’ve confused myself slightly so maybe it is a contradiction..in fact it probably is

30

Omega Centauri 03.08.13 at 7:39 pm

Certainly with austerity, as Rich said “its straight from the id”. We have a strong propensity to think morally, and we concieve of an economic god who rewards/punishes based upon our moral actions. Combine that the the moral confusion, that debt=immoraility, and we become Austrian’s. Then recognize that politics as far as the world of ideas is involved usually degenerates into a race for the bottom (or at least a race for the most emotionally salient).

31

Bruce Wilder 03.08.13 at 7:42 pm

The thing I keep stumbling over, and am confused by, in something like the analysis Henry @24 presents, is that the neoliberal ideas are so stupid. The power of neoliberalism appears to be in its extreme resistance to critical thinking. The degeneracy of economics as a research programme, the regress in basic competence in economics — these are important drivers. And, I agree with Rodrik that it is important in politics to have ideas about how the world works, because politics becomes policy. But, these ideas, feature for evolutionary fitness to the political environment, their stupidity.

There’s a lot of attention given to the self-destructive potential of austerity, but I can almost understand how someone could be sincerely of the opinion that government should “get out of the way”. Almost. But, the determination of macroeconomists to overlook the necessity of banking and financial regulation just leaves me stupefied. Even after the fact, economists purport to be unable to see a trillion dollar housing bubble, let alone question its wisdom, or responsibility of regulators. Really, there are people, who think letting massive frauds go unpunished, the financial industry essentially unregulated, while flooding the world with liquidity — anyone thinks this is going to end well?

32

Bruce Wilder 03.08.13 at 7:47 pm

Omega Centauri @30

But, isn’t this more a matter of the hooks for manipulative Public Relations and propaganda than a genuine competition of ideas in public discourse that matters to the choice of policy? Where’s there any power in ideas, except as a means for the powerful to manipulate?

33

Adrian Kelleher 03.08.13 at 7:48 pm

Leftists are as a rule reluctant to imagine that right-wing reactionaries have within them the slightest shred of humanity. While right-wing reactionaries’ resulting hurt feelings may concern them little, should this assumption lead them into error then that would be harder to discount.

For example when the city of Teruel fell to the Republicans in the Spanish Civil War orthodox military assumptions would have led to the conclusion that Franco’s next move would come anywhere but there. But Teruel, ideally suited for defense and exactly where his enemy had already concentrated its forces, was precisely where Franco next attacked.

The strategically incorrect battle on ground of his enemy’s choosing made perfect sense in his mind. He viewed the war as a moral struggle and a purification of the country by blood, and Teruel was a natural expression of this. The assumption that he was a leader driven by calculations of tangible gain would simply have obscured this truth.

Similarly, but on a much greater scale, Stalin refused to accept the implication of the vast amount of intelligence accumulating during the early summer of 1941 indicating an imminent German invasion of the Soviet Union. He simply couldn’t believe Hitler would do such a thing while already in a war with enemies as far afield as Vancouver and Sydney.

It was entirely characteristic of Hitler to later blame Germany itself when he was catastrophically defeated. This wasn’t a change of heart somehow. In fact it was a manifestation of a consistent feature of his thinking going back to 1941 and long before: the idea that the war — the fighting itself, abstracted from any material objective — would be a moral struggle in which German superiority would not only be demonstrated but enriched. Soviet victory altered the war’s moral significance not at all and Hitler went to his death knowing that instead it would be the USSR that would rule the world for a thousand years.

To consider these only as strategic mistakes is to miss the point. To the dictators, the assessment of profit and loss was not in either case determined solely or even largely by material calculations.

But these are merely illustrative examples. War and dictatorship each vastly simplify matters and render obvious factors that are universal though usually less malignant features of human affairs: love, hate, pride, jealousy, esteem, and moral merit to name but a few.

Concentrating on the motives and actions of enemies also relieves the argument of a second burden: that of proving ideas are of any actual use. If it remains necessary to consider the realm of ideas in order to understand others’ political choices even when it is assumed the ideas themselves, or even ideas as such, are of no value then it is clear that no practical politics can ignore them.

It is not an achievable aim to show via observation that the ideas of intellectuals are of merit. Materialists, including notably in this context public choice theorists, have therefore tended to disregard them. Examples from Mao to Jesus illustrate why this is misguided. Time and again such figures have transformed the world even though their resources were not a millionth of their adversaries’.

34

Adrian Kelleher 03.08.13 at 7:49 pm

This encapsulates the argument in musical form.

As does this. Their vocal technique needs a bit of work, but the principle’s the same.

35

Barry 03.08.13 at 7:51 pm

“It’s not a contradiction really, I dont think, to argue that something was going to be done about Iraq one way or the other (and a large ground invasion would be my unsupported counterfactual) and to acknowledge the specific way it did actually happen..it would have happened differently under Gore, with slightly different justifications/outcomes..but I’ve confused myself slightly so maybe it is a contradiction..in fact it probably is”

The contradictions were (a) we didn’t need to do anything, (b) to the extent that actual WMD’s were a threat, Hans Blix was taking care of them, (c) Spending several months telling Saddam that we were going to kill him for real this time would have given him months to give any actual weapons to Al Qaida, (d) the Bush administration quite systematically made anti-preparations, so to speak assuming a 100% best case outcome – in war! with no contingency for actually doing the alleged job.

And that’s just a start.

36

Rich Puchalsky 03.08.13 at 7:57 pm

“Well yes. Isn’t this the point? You’re the one who claimed ideas were unimportant initially because the ideas had failed..”

No, I claimed that ideas were unimportant because when the ideas failed, no one was particularly discomforted by this. The ideas were transparent justifications, that were replaced by other transparent justifications, that in the end were replaced by nothing, but policy continued in the same path nevertheless.

Some people take this continuance of policy as revealing an interest, as in “the Iraq War must have been about oil after all, because those policies were still pursued after all the justifying ideas were no longer held.” I don’t. Insofar as some policy entrepreneur had an idea, it’s essentially unrecoverable, and the policy continued not because it made sense in the way that “let’s get control of Iraq’s oil” makes sense, but because it made sense in the way that “I like the feeling of power” makes sense. It wasn’t a conceptualization of an international system, it was everyone feeling a little better about themselves that they were conquerors.

As for Henry’s summation that this is “to argue that people’s conceptions of their interests will in large part be shaped by the ideas that they hold about the world and how it works”, I think that this goes back to years-ago discussions that Holbo had about what is an idea really. Is any conception about how the world works “an idea”? If so, then all of these kinds of statements become tautologically true. Culture exists, culture tells us our gender and class and all of those things and that we have “interests” and “ideas” that go along with them. That doesn’t mean that what countries or systems do is determined by those interests or ideas, especially in cases where both the idea and the apparent interest have fallen away but the action goes on.

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JW Mason 03.08.13 at 7:57 pm

When Rodrik is critical of interest-based explanations, he is clearly pushing back against a set of arguments as follows.

No, I don’t think that’s right. He clearly means “interests” in the sense of organized political groupings. That’s why he qualifies it as “special interests,” and why Keynes, in the passage he quotes, refers to “vested interests.” I certainly don’t care for the Capitalized Fairy Tale any more than you do, but Rodrik is not attacking it. You’re reading that into him. He’s attacking the different (correct and important) idea that policy outcomes are shaped by organized political actors.

As for the rest of 24, I basically agree with the position you’re aiming for, but I think you’re bending the stick the wrong way to get there. You need more Marx, not less. :-).

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rf 03.08.13 at 8:02 pm

Well that seems to back up my initial argument then Barry! (A) you didn’t need to do anything, so why did you? (B) If it wasn’t about WMDs then why did it happen (since they weren’t a threat – although I still err on the side of thinking those in the administration thought he had WMDs, and used it as an excuse) (C) Why did you spend those months warning Saddam (D) Bush’s lack of preparation can quite easily be explained by this freedom agenda – we invade Iraq, ‘free’ the people, implement extensive economic reforms, begin to dismantle the state/security forces, and Bingo we have a free, prosperous, liberal Iraq aligned closely with the US, friendly towards Israel, a good natured member of the international community and a regional inspiration

39

rf 03.08.13 at 8:05 pm

Anyway without getting into ‘Gores war’, I do think something ‘had’ to be done..in that policy wasnt going to change towards Iraq to the extent needed to avoid war

40

rf 03.08.13 at 8:06 pm

Although I misread your point Barry so ignore my 38

41

Henry 03.08.13 at 8:24 pm

JWM – I don’t think he is, or not in the sense that you think he is. The Garden of Eden stuff comes in more towards the end, I think, when he talks about the fond illusions of economists, rather than theories of power. When he does talk about simple power based explanations, he says:

It is a compelling narrative, one with which we can readily explain how politics so often generates perverse outcomes. Whether in democracies, dictatorships, or in the international arena, those outcomes reflect the ability of narrow, special interests to achieve results that harm the majority. Yet this explanation is far from complete, and often misleading. Interests are not fixed or predetermined. They are themselves shaped by ideas – beliefs about who we are, what we are trying to achieve, and how the world works. Our perceptions of self-interest are always filtered through the lens of ideas.

This is not a denial that power is important. What it is is a statement that powerful actors’ understanding of their self interest is going to be shaped by their ideas about how the world works. The distinction here is between an exogenous factors > material interests > power to achieve those interests > outcomes story and an >endogenously formed interests > power to achieve those interests > outcomes one. For Rodrik, what is crucial about the second story as opposed to the first, is that economists cannot pretend that they played no role in it. If interests are not exogenously determined, and in fact are determined by ideas, it is plausible that economists, who are responsible for a lot of the guff about market efficiency etc played a substantial causal role in shaping the outcome. This in turn means that they should be held accountable for it. If, in contrast, ideas have no role in shaping interests and outcomes, then what economists said or didn’t say is presumably irrelevant, and they get off scot-free.

Furthermore, I think that there’s a lot of empirical value to this way of looking at the world. The perceived self-interest of e.g. large American firms changed dramatically between the 1930s and 1950s, and changed dramatically again between the 1970s and today. I’m strongly convinced that ideas, whether honed by economists, right wing think tanks, political entrepreneurs or other actors played a substantial role in this transformation – not the only factor by any means, but an important one. Leaving ideas out of your explanations of structural economic change means that you miss out on a lot of important stuff. Doesn’t mean that your theories are worthless by any means – all theories have to leave out plenty of important stuff, or they are not theories. But ideas aren’t just some kind of frothy superstructure that is only relevant as an ex post justification for stuff that would have happened anyway.

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Henry 03.08.13 at 8:25 pm

Or shorter me (and maybe this clarifies our disagreement to make it more useful), while you want more Marx, I want Marx with a stiff shot of Weber.

43

geo 03.08.13 at 9:00 pm

I know the questions of causality and the relationship of ideas and interests are almost limitlessly complex. But on the whole, I’m with Bruce, Barry, Rich, and JW and against Henry, rf, Adrian, and Rodrik (Keynes too) in this debate. Neoliberal economics is impervious to criticism: the weeding out of unconvinced graduate students from economics departments, the increasing reliance of universities on private donors, the hyperfunding and publicizing of bad economic ideas (through think tanks etc), and the concentration of media ownership in the hands of large corporations and right-wing moguls are the reasons for neoliberalism’s survival. It’s good for business, and business is in the driver’s seat.

Likewise, the resurgence of conservatism in the last three decades is often attributed to a conservative intellectual revival. Nonsense. Conservatism has exactly one good idea: be careful; go slowly; think about unintended consequences. That’s it. The New Right has prospered because business never accepted the New Deal and finally figured out in the 1970s how to roll it back: buy the media; privatize higher education; coordinate strategy through the Business Roundtable and the US Chamber of Commerce; bring Southern and Midwestern evangelicals into local and national politics; bribe legislators and their staff members with the prospect of lucrative post-political employment; gerrymander and keep Democratic constituencies from registering to vote; and hire armies of public relations flaks and lobbyists. A huge investment, but it’s paid off royally. Ideas have had very little to do with it. The intellectual poverty of conservatism is clear in Irving Kristol, and more than clear in William Kristol.

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bob mcmanus 03.08.13 at 9:04 pm

But ideas aren’t just some kind of frothy superstructure that is only relevant as an ex post justification for stuff that would have happened anyway.

Even strawman Marx, let alone 20th Century Marxians (Gramsci?), have never claimed there was no relation, interaction, or dialectic between base and superstructure.

The problem is that the intellectual elites would prefer to just bodysurf the froth and ignore the changing material tides.

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bob mcmanus 03.08.13 at 9:19 pm

And to be honest, I do prefer to study for instance the changing rate of profit since the 70s or the organic composition of capital rather than Mont Pelerin vs the New Left or other Social Democratic explanations of Leftist decline. It is complicated, but from a global perspective, the evidence for ideology leading economics is very unsatisfactory.

And it is a dialectic, and capital can change the base, or adapt to changing material conditions, in order to adjust the superstructure more easily as the other way around. As an example, monetarist policy and 401ks led the ideology rather followed. The oil shocks and baby booms were more important than Lewis Powell. De-industrialization needs overseas opportunities.

Even the Right has to work in conditions not of their making.

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LFC 03.08.13 at 9:23 pm

Henry @42: “I want Marx with a stiff shot of Weber.”

Like this: “Not ideas, but interests — material and ideal — directly govern men’s conduct. Yet very frequently the ‘world images’ that have been created by ‘ideas’ have, like switchmen, determined the tracks along which action has been pushed by the dynamic of interest.”

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The Raven 03.08.13 at 9:34 pm

I think the basic idea of austerity has a lot to do with cultures from places with harsh climates and limited resources where, genuinely, severe discipline is required just to survive. It is easy to believe that a depression is in some sense similar to a bad season; a thing one must economize (note the word) to survive. The observations that one is not living in such a place and that the limits are far different than we imagine are not easy to assimilate.

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Mao Cheng Ji 03.08.13 at 9:35 pm

All kinds of ideas are flying around, millions of them. Some get picked and used for rationalizations.

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The Raven 03.08.13 at 9:50 pm

Mao Cheng Ji@48: People and societies build their lives around ideas, though. It is not all rationalization; some ideas truly define societies and individuals.

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Kindred Winecoff 03.08.13 at 9:50 pm

I agree with most of what Henry’s written here, but there’s another aspect which concerns me, and that is how Blyth is defining “austerity”. It’s one thing to say that interests are not exogenously given and that ideas matter. It’s another to suggest that there is one idea in particular — austerity — which has existed in one basic identifiable form (albeit with mutations) from Adam Smith until now. I.e., the entire history of capitalism. And that it has generally held by the same classes of people over this time: financiers and other capitalists. If that’s the case, then why not just take it as “exogenously given”? Or, rather, as a likely (not inevitable) result of the inherent contradictions of capitalism as a system, in a Polanyian sense? Because that would make ideas the product of interests — i.e. rationalizations — rather than the other way around.

So Henry writes @24: “But I don’t think that people should be flinging pooh at Blyth and Rodrik simply for arguing that ideas shape interests, unless they have a really, really good alternative account that they want to provide of how these interests are formed exogenously without being shaped at all by the ideas that people have in their heads.”

Maybe reference to material conditions as the crucial element in driving interests is not a good account. YMMV. The question is whether Blyth provides such an account. The book hasn’t been released commercially so I haven’t read it. But I have read Blyth’s other recent writings, and I’ve seen his hour-long lecture version of the book’s argument, and from those I’m not sure if he does. It comes down to what he means when he says “austerity”. Henry’s review says almost nothing on this point. Blyth doesn’t define it in the version of the lecture on YouTube, and in the Q&A he partially demurs — since it’s an idea he doesn’t want to restrict it too much by associating it with a narrow set of contextual policies, which I understand — before saying that it has something to do with the idea that fiscal consolidation will be expansionary.

Well, this is not the Schumpeterian view, which is that short-run austerity is painful but necessary for long-run performance. It’s not even the Ricardian equivalence/Treasury View, which is that fiscal expansion during a recession will be neutral, and so it’s not what Keynes was arguing against either. I don’t think it’s the view of the German finance ministry today; I think they’ve always known that they were going to crucify Greece, and the Greeks themselves certainly never believed that the policies they’ve been forced into would be expansionary. And using the same term to describe present-day Greece with, say, the UK isn’t very helpful: the policy responses (and goals and outcomes) in the two places have been very different.

Does it all come from Alesina? Well if so then it isn’t a “zombie” idea (as Quiggin’s blurb suggests), as it is a *break* from the history of austerity-as-idea, not a continuation of it.

So what does the idea of austerity mean? This is important, because if you want to claim that ideas drive interest-formation (and therefore policy and outcomes), you really have to be able to articulate what those ideas are. This is, as I understand it, the goal of Blyth’s project. Everything hinges on it. Without it you could explain recent crisis politics in more or less materialist terms without losing any explanatory power. Or you end up with Rodrik, making assertions — ideas drive everything — but no theoretical contribution regarding how that happens or what it looks like. (Anyway, “political economy” does not reduce to mainstream saltwater economics, so I’m not really sure what Rodrik’s going on about. If he were correct then Blyth’s book wouldn’t exist, nor would Graeber’s or Fukuyama’s or McCloskey’s or etc.)

As I said, I haven’t read the book so maybe it’s all in there. But if so I’m afraid Blyth might have buried the lede, which would be unfortunate.

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LFC 03.08.13 at 10:01 pm

Of course, there’s the position that interests are ideas of a particular kind. But at this point that would probably just muddy the waters.

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Rich Puchalsky 03.08.13 at 10:12 pm

Henry: “But ideas aren’t just some kind of frothy superstructure that is only relevant as an ex post justification for stuff that would have happened anyway.”

I don’t know how you’d prove a negative in this case. You can observe the failure of the positive case for ideas — for instance, you can observe that austerity is going strong even once the idea of the Confidence Fairy went away, and that the Iraq War kept going strong once its supposedly motivating ideas died. But in order to prove that ideas are nothing but a superstructure, you’d have to know “what would have happened anyway”. And no one does.

Bruce: “But, isn’t this more a matter of the hooks for manipulative Public Relations and propaganda than a genuine competition of ideas in public discourse that matters to the choice of policy? Where’s there any power in ideas, except as a means for the powerful to manipulate?”

The problem with observing that people were manipulated into war (which is, itself, true) is that it seems to imply that there was a manipulator, a sort of Bond villain with a master plan who was not fooled by his own propaganda. But that doesn’t appear to be true. As far as people can generally tell, the elites are bigger fools than anyone else, and they believe their own tripe. Not at the level of ideas — none of this propaganda is based on ideas, as such — but in terms of the basic psychological scripts in question.

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Adrian Kelleher 03.08.13 at 10:15 pm

Rather than Mao or Jesus, an example maybe more relevant to the present day is Martin Luther. This is because the origins of the Protestant reformation were not the typical causes of conflict: a declining resource base, international tensions, or whatever.

The consequent wars of religion had exactly opposite causes: increased prosperity and international cultural exchange. Prosperity implied the broader spread of education and international cultural exchange then dispersed non-Latin bibles all over Europe. This destroyed the monopoly power of the Catholic church to interpret scripture.

Pursuit of self-interest (greater prosperity and the material means to defend against enemies) therefore implied the dismantling of the structure of power holding everything together, and there wasn’t a damn thing that anyone could do to stop it. If you were a Count or a Duke of the era then bread and circuses weren’t the solution, they were the problem.

I was tempted to sign off with the quip “and nobody made any money”, but this wouldn’t be correct. Henry VIII for example exhibited the moral flexibility needed to thrive in the new environment. But his profit, or the general truth that interests are important in any political situation, doesn’t alter the fact that at that time a narrow focus on material considerations would have been an error of the greatest magnitude.

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Henry 03.08.13 at 10:24 pm

geo – which raises the question ‘what are intellectuals good for ‘…

Rich

I don’t know how you’d prove a negative in this case. You can observe the failure of the positive case for ideas — for instance, you can observe that austerity is going strong even once the idea of the Confidence Fairy went away, and that the Iraq War kept going strong once its supposedly motivating ideas died. But in order to prove that ideas are nothing but a superstructure, you’d have to know “what would have happened anyway”. And no one does.

This is completely and entirely fair – and why I said that I’m ‘convinced’ rather than ‘I know.’ However the same critique applies to any reasonably complicated account of social change, including the materialist ones (one of the reasons that theories of causal influence in the social sciences these days are really theories of counterfactual worlds in thin disguise).

Kindred – I don’t have a copy of the book to hand, but that isn’t Mark’s argument. He traces it back to arguments among classical economists, but doesn’t hold that it is some unchanging constant across the ages – rather that it is a modern manifestation of a long lasting theoretical aporia. And I think that saying that ‘political economy’ includes Blyth, Graeber, etc and therefore ‘ is a bit of a straw man. People have a pretty good understanding of what the field, network, call it what you will of economics is, and it has more or less self-consciously defined itself against people like those you name (as these have sometimes defined themselves against it) since the Methodenstreit and the rise of marginalism. Marion Fourcade and other sociologists have done nice work both in exploring the discipline of economics as a sociological artefact, and looking at specific national differentiating patterns within it.

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rf 03.08.13 at 10:31 pm

“you can observe that austerity is going strong even once the idea of the Confidence Fairy went away, and that the Iraq War kept going strong once its supposedly motivating ideas died.”

I don’t get this objection. Why would a policy suddenly stop (whether Iraq, or austerity) just because the ideas that drove it have been diminished? The ideas don’t have to sustain it, just provide the initial impetus surely? I mean Al Qaeda continue regardless!

56

Mathmos 03.08.13 at 10:38 pm

#46
Exactly it, George. The struggle of ideas occurs on a plane tilted completely on the side of those powerful enough to make their interests into dogmas.

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Kindred Winecoff 03.08.13 at 11:18 pm

I didn’t write “unchanging across the ages”. I wrote: “one idea in particular — austerity — which has existed in one basic identifiable form (albeit with mutations)”. If that’s not his argument then his title (and lecture) is very deceiving. All I’m trying to do is figure out what he’s trying to say. Your review suggests the basic argument is that “ideas are important”. Well okay, but why/how is *this* idea important? Or, as a first step, what is this idea even about?

It seems like the working definition of “austerity” is something like “any action taken to slow the growth of sovereign debt prior to the return of full employment”. I’m not saying that definition is absurd on its face; I just think it’s qualitatively different from what it used to mean (from the interwar years to the Washington Consensus): that a country must maintain high interest rates and devalue internally, in order to run a primary surplus, when its external debt burden becomes too great to service.

As for “political economy”, those words are in Blyth’s professional title. McCloskey I know would consider herself a political economist, and if Acemoglu & Robinson are poli econ then so is Fukuyama. Graeber is arguable, I admit, but he’s more political economy than Lucas, an applied mathematician, or Rogoff, an atheoretical empiricist. My point is that if Rodrik and his peers have spent their whole careers ignoring what other social scientists are doing that’s their problem. (I know that hasn’t been Rodrik’s attitude, but he’s acting like it is.) So I’m not buying Rodrik’s argument on this point, because to do so would involve denying my own existence: “political economy” is not owned by economists. I’d appreciate it if Rodrik would point out the folks who have been doing for decades what he wants economists to start doing now. There’s precedent for it: Kindleberger tried in his 1986 AEA Presidential Address.

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rf 03.09.13 at 12:39 am

It’d seem to prove the opposite, that his position can’t be reduced to material interests but is the result of a series of ideational/psychological/cultural factors, beginning with his ideas on Turkish democracy, and moving outwards from there

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William Timberman 03.09.13 at 12:51 am

Ideas, interests, power — and we haven’t even mentioned psychology, except obliquely. The frustrating nature of attempts to tease out the threads of these intertwined motivations, and to attribute hegemony to one or the other of them, seems to lie in the fact that any conclusions one can reasonably draw — general conclusions, at any rate — are most likely doomed to end either in chicken-and-egg problems, or in infinite regressions of one kind or another. Was Keynes right? Was Marx? Neither of them? Both of them? It seems to me that these are as much philosophical as empirical questions.

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JW Mason 03.09.13 at 1:08 am

powerful actors’ understanding of their self interest is going to be shaped by their ideas about how the world works

In principle this is undeniably true, and it would be an important contribution in some contexts. But in a context where idealistic explanations of policy are entirely dominant — where the mere existence of powerful actors, let alone the means by which they pursue their interest — is almost entirely excluded from discussion, this same statement moves us away from a balanced appraisal of the relation between interests and ideas.

Class is in some sense “endogenous,” yes, but only in the longue duree, with respect to the fundamental organization of production and political and legal structures of society. On the conjunctural level of something like debates over austerity, capital and labor are quite exogenous. And anyway, you can’t seriously tell me that in today’s austerity debates, the problem is that conflicts between workers and owners of capital are treated as *too* fixed. I mean, come on: They aren’t acknowledged at all.

Yes, sure, on some deep level, capital is an idea. But the cohesion of the owners of capital as a class depends very little on anything economists do or say. In a discussion of austerity that presents itself entirely as a debate among economists — where a phrase like “owners of capital” already marks you out as a freak — to say that the important thing is to recognize the responsibility of economists is perverse.

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JW Mason 03.09.13 at 1:12 am

Or shorter me (and maybe this clarifies our disagreement to make it more useful), while you want more Marx, I want Marx with a stiff shot of Weber.

In which case, since what’s actually on the bartop is a bottle of 200-proof Weber, you should want what I want. :-)

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John Quiggin 03.09.13 at 1:24 am

To complicate things a bit further, central bankers are powerful actors whose interests are served by austerity, but the existence, independence and power of central banks is very much the result of ideas, not class interests that exist independently of, and prior to public policy.

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John Quiggin 03.09.13 at 1:26 am

@JWM There are parallel discussions going on. In some of them, influenced by public choice theory or vulgar Marxism, the dominance of interests is taken for granted, while in others, as you say, it is ignored.

In the case of austerity, the idea has an appeal that goes well beyond the interests that actually benefit from it.

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JW Mason 03.09.13 at 1:26 am

the existence, independence and power of central banks is very much the result of ideas, not class interests that exist independently of, and prior to public policy.

That is one point of view, for sure.

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JW Mason 03.09.13 at 1:30 am

In some of them, influenced by public choice theory or vulgar Marxism, the dominance of interests is taken for granted, while in others, as you say, it is ignored.

Which discussions are those? Honestly, I don’t see any vulgar Marxism out there at all. (Which is too bad — as the late Bob Fitch used to say, vulgar Marxism explains 90 percent of what happens in the world.) But I will make the concession that discussions in terms of national interests are fairly widespread.

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rf 03.09.13 at 2:04 am

“central bankers are powerful actors whose interests are served by austerity”

It might be, probably is, a stupid question..but why are central bankers ‘interests served by austerity’?

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rf 03.09.13 at 2:28 am

Actually forget that question, it was stupid. I had a think about it..

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Anarcissie 03.09.13 at 4:37 am

I suppose I’m being dumb (again) but I’m not seeing the contrast between ideas and interests. To be sure, the words have different connotations, but interests are first perceived and processed as ideas — even very simple ones like a desire for power, indeed, even a desire for ice cream. If no one perceives any interest in an idea it is unlikely to be retained, much less promulgated. Elaborate ideas about how the world works may be interest-ing because of their moral or aesthetic qualities, but generally I think they are thought to serve interests as instruments, even if they are as abstruse as ‘Believe on the Lord Jesus Christ and ye shall be saved’ or ‘From each according to his ability, to each according to his need.’ I am probably not getting the concepts in use here, and I beg clarification.

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greg 03.09.13 at 5:27 am

Henry @41:

“…What it is is a statement that powerful actors’ understanding of their self interest is going to be shaped by their ideas about how the world works. “

And the ideas of powerful actors about how the world works are formed by their experiences of how the world works about them. in their local environment, in which they are successful. Because these ideas worked in their (limited) experience, these ideas are impervious to refutation. However, these ideas are limited in application, and (typically) do not apply to the larger world beyond their experience. Yet the powerful try to extend these ideas, their ways of thinking, to the larger world. The results diverge from their intention, both in space, and in time.

It’s local, linear, vs global, non-linear thinking. You have to think local to amass power. But to exercise power on the global stage, this kind of thinking is no longer appropriate.

GWB et al. were capable of manipulating the American electorate, but the likely results of the wars in Iraq and Afghanistan were beyond their conception. However, this distant failure does not convince the neocons of their error. Neither do the failures of austerity convince the austerians of their error. To them, these are failures of practice, not of theory. The cure, to them, is to practice harder, to do more of the same, rather than reject a theory which they know to be correct.

It is, of course, unfortunate, that the powerful are so limited in their thinking, and thus pursue a course which will harm all of us, the powerful as well. Society faces numerous pressing problems, and business as usual, pursuing linear solutions to non-linear problems, probably will not solve them.

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Kindred Winecoff 03.09.13 at 5:49 am

I’d like to retract something I wrote above (@57): “It seems like the working definition of “austerity” is something like “any action taken to slow the growth of sovereign debt prior to the return of full employment”.”

I went back and re-watched Blyth’s lecture to make sure I was remembering it properly, and that’s not his working definition. There’s one bit in the Q&A where Blyth does state exactly what he means by austerity: “It’s a claim that if you cut public debt you will grow”. I.e., expansionary austerity. He specifically says that not all/any cuts are austerity, just those which are intended to spur short-run growth by changing expectations: Alesina’s model.

As I mention above, this is very different from the classical conception of austerity-as-purge. It’s different from the Treasury View that expectations would make fiscal stimulus neutral (ie multipler=1). It’s very different from the Washington Consensus, which knew austerity would be damaging in the short run but insisted on it for reasons of political economy: donor nations wanted to be paid back, and recipient governments couldn’t make credible commitments to future adjustment policies, so it all had to happen up front. (Rogoff, who was senior economist at the IMF during those days, likened it to chemotherapy: it makes the patient sick at first, but well later.) It’s different from moden-day “tighten the belt” soft Keynesianism (or whatever we’re calling it) as well.

So Blyth is making a pretty provocative claim about the power of Alesina’s idea, which was obscured in my mind by my (and I think his) associating it with previous conceptions of austerity. In my opinion, the eurozone crisis is better seen through a bargaining/credible commitment lens than an expansionary austerity lens. Maybe his book will persuade me otherwise. Either way I’m sure I’ll enjoy the intellectual history.

Anyway, everyone should watch the lecture. It’s very good in many ways. The bit I quote above is at the link below, and you can find the earlier segments on the sidebar.

71

ponce 03.09.13 at 7:58 am

@43

“The New Right has prospered because “

Geo,

How has the right prospered?

Despite a massive campaign backed by the Walton family, the “death tax” is now locked in at 40%.

And the capital gains tax just jumped 58%.

72

hix 03.09.13 at 9:25 am

” and we concieve of an economic god who rewards/punishes based upon our moral actions.”

No “we” dont. Americans do. There goes another projection down the toilet.

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Random Lurler 03.09.13 at 9:42 am

The idea that interests or ideas are endogenous is ambiguous because it seems that ideas evolve each one separately by its inner logic; instead it seems to me that the history of ideas is very dialectic, with usually two groups proposing two opposed ideas, every time updating their own idea to counter opponent ‘s innovation.
In this situation it seems that the two opposing groups are somehow predetermined by some exogenous circumstance .
Go, dialectic materialism !

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Agog 03.09.13 at 12:38 pm

I think JQ’s point is well-put, viz. “In the case of austerity, the idea has an appeal that goes well beyond the interests that actually benefit from it.”

The point I took from the Rodrik piece is that our interests can be highly uncertain, therefore we can be swayed by ideas to act against them. And since he was addressing economists (I infer), he ends with the rebuke that they should take responsibility for the damage their stupid ideas have done.

Of course very few people believe that austerity is a good idea because of anything any economist or other thinker has argued. I’d guess that for many it’s an urge that’s way more primitive, connected to fasting and other self-purification rituals (I Am Not An Anthropologist though). But he’s right because there are ‘policy makers’ who should be opposed to austerity based on the interests that they represent who have been swayed by the bullshit cascading down from the likes of Alesina.

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Rich Puchalsky 03.09.13 at 1:38 pm

Anarcissie: “To be sure, the words have different connotations, but interests are first perceived and processed as ideas — even very simple ones like a desire for power, indeed, even a desire for ice cream.”

It’s confused by t he fact that “interests” is also being used as a kind of term of art — as in “organized political interests”. But yes — if people want ice cream because they have been given the idea of ice cream, you approach a level at which “ideas” are taking over what we normally regard as culture. That’s the stage at which “ideas create your interpretation of what your interests should be” becomes almost tautologically true. People get their notions about their class interest from somewhere — is it from the writings of some intellectual? Or is it from offhand comments from their parents when they’re 5 years old, and from how they interact with other kids at school? If both of those count as “ideas”, then yes everything is strongly influenced by ideas.

My own opinion is that influence is much more based on human universals that don’t come up to the level of “ideas” or “interests” than most people seem to think. For instance, how do you make a prominent global warming denialist? You don’t take someone who already has some kind of intellectual capital and convince them. Because there’s really no way you can, if it comes down to science. No, you invite them to socialize at your right wing think tank. Listen sympathetically to their stories. Give them food and attentive company and align your enemies — those people who are trying to oppress your industry — with whoever they don’t like. They go to a couple of conferences, have a good time, and then very quickly they begin to join a whole world view in which global warming is obviously a nonproven theory that would have destructive consequences if people spent money trying to avoid it. And it’s not because they’ve been convinced by an idea — although they will learn and parrot all of the rationalizations quickly enough — it’s because they like hanging out with their new friends and it gives them a new sense of meaning.

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Mark English 03.09.13 at 1:41 pm

geo @43

Could the apparent “intellectual poverty” of conservatism be related, I wonder, to the conservative (though not necessarily neoliberal) aversion to seeing human affairs in terms of abstractions?

In fact, I would count this as good conservative idea no. 2.

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Random Lurker 03.09.13 at 1:57 pm

“to the conservative (though not necessarily neoliberal) aversion to seeing human affairs in terms of abstractions?”

Huh? I never had reason to suspect that conservatives have this aversion.

Some conservatives depict “progressives” as eggheads who don’t understand reality and live in a world of sterile abstractions, but this is just a retorical choice (mine ideas are “natural”, while yours are “ideologies”) that often even progressives indulge in.

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rf 03.09.13 at 2:09 pm

“For instance, how do you make a prominent global warming denialist? You don’t take someone who already has some kind of intellectual capital and convince them. Because there’s really no way you can, if it comes down to science. No, you invite them to socialize at your right wing think tank. Listen sympathetically to their stories. Give them food and attentive company and align your enemies — those people who are trying to oppress your industry — with whoever they don’t like. They go to a couple of conferences, have a good time, and then very quickly they begin to join a whole world view in which global warming is obviously a nonproven theory that would have destructive consequences if people spent money trying to avoid it”

But this doesn’t sound that far away from Blyth et al You’re describing someone being socialised into accepting and supporting an idea. The idea doesn’t have to be factually correct. Or at least that’s my interpretation. You seem to be closer to a constructivist position on this. (I think)

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rf 03.09.13 at 2:18 pm

Except in that case the interest is shaping the idea..so maybe you’re not

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Rich Puchalsky 03.09.13 at 2:21 pm

It’s not that Blyth et al are wrong, exactly — but really, does this count as an idea? If you start to agree with whoever you’re sleeping with because you’re sleeping with them, does that mean that ideas are really involved in any way? If so, then yes, everything is an “idea”, but the usual components of the transmission of ideas — that someone propounds an intellectual position, and that you are convinced by them — are missing. Do you mean “meme”, perhaps? One could analyze the inexorably expanding Internet distribution of cat videos as the influence of ideas.

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rf 03.09.13 at 2:32 pm

“but really, does this count as an idea?”

Maybe I’m clutching at straws a bit.
But you are complicating it, moving away from class/labour dichotomies or easily defined material interests and acknowledging (to some extent) that ideas are important, even to powerful interests. (Why else would you be wasting your time trying to sell global warming denialism to someone?) So if it’s important for that objective, trying to undermine the case for global warming, then the opposite is also important, trying to sell the case for global warming. YMMV on this, but I think you seem to be closer to it than not

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Omega Centauri 03.09.13 at 3:01 pm

hix@72.
My impression of the folks around Merkel is that they are influenced by “public-deficits=>hyperinflation=>Hitler”. If this is true, how does it substantially differ from the economic gods will punish immoral behavior. I’m not using gods here to denote powerful supernatural forces, but rather the more amorphous meme that the universe will arrange punishment for cheaters.

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Rich Puchalsky 03.09.13 at 3:16 pm

I believe that people have interests, both personal ones and in the “organized political interests” sense, and clearly I believe that there are organized attempts at political influence in favor of particular interests. I just don’t think that the ideas involved are very important. The interest comes first, and the ideas are made up out of whole cloth to support it, and are basically disposable.

Even the interests aren’t as abstract as people who study ideas seem to think. The whole set of tactics used by the fossil fuel industries against global warming science came out of the tobacco industry. So you could say that there was a tobacco industry interest that started it all. But what that really was was a few rich people who happened to own tobacco companies who saw the emerging science about the hazards of smoking and thought something like “I want to be rich, I have to do something about this”. The opposition of science to the greed of a few selfish rich people isn’t the clash of ideas, or even a clash of interests.

Getting back to my cryptic mention of Holbo earlier, he once wrote a series of blog posts that involved what I paraphrase as “If someone is making a series of irritable mental gestures, do you have to treat those as ideas?” And I think the answer is no. There may be ideas involved in the science around anthropogenic global climate change — the ideas on which we base science itself, the particular ideas involved in current research topics on climate, etc. But there are none on the other side. There are only a series of feeble rationalizations and in-group against out-group gestures which come down straight to the id, as I wrote above. If people want to construct that as the influence of right-wing ideas, they are the ones doing the constructing — they are giving something coherence which doesn’t actually have it, because they study ideas and therefore what they study must be an idea.

It’s not a clash of science vs anti-science in the case of austerity or resistance to aggressive war, at least not in quite the same way. But the basic principle is the same. You can observe that the pro-austerity people are not dismayed when their ideas fail, and either quickly pick up new ones to justify the same policy, or shrug and don’t bother with a new one once their policy is entrenched. Therefore, ideas aren’t important to them, and never were. Why should you treat their justifications as being more important than they do?

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geo 03.09.13 at 3:19 pm

ponce@71: I didn’t mean that the Right has won every single battle and achieved every single goal, just that during much of the last three decades they’d succeeded in capturing the three branches of the federal government and many state governments and turning American policy rightward in many respects: progressive taxation, environmental, financial, labor, occupational-safety, and product-safety regulation, executive secrecy, intellectual property, etc.

Mark @76: I can’t agree that conservatives don’t see human beings in terms of abstractions. Conservatives worship at the altar of the biggest and most destructive abstraction of all: the “free market.” Their endless invocations of “freedom” come down, concretely, to the freedom of employers to exploit workers. I think they far outdo the left in the abuse of abstractions.

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Anarcissie 03.09.13 at 3:21 pm

Conservatism, at least in political economics, would mean adhering to the New Deal.

If we’re talking about the ideas and practices of the Right, then it seems to me they are anything but conservative. It seems pretty daring to want to junk an apparently working arrangement of fifty years’ standing (as it was in the 1980s).

Rejecting abstraction would mean abandoning political theory altogether, and would itself be a kind of abstraction (‘abstraction is bad, so don’t do it.’) I don’t think either Right or Left can be accused of neglecting theory, however. It’s like the problem with philosophy. We know words can be used to befuddle people, but once someone starts practicing this vice, others will adopt similar techniques if only in self-defense. Hence, although ‘philosophy is the disease for which it is supposed to be the cure’, we’re stuck with it. And so also with political theory.

A current lack of popular, commanding theories could be explained by the failure of the presently well-known ones to ‘work’ (that is, to serve the material, moral or aesthetic interests of important persons). But I am sure there are plenty of others waiting their turn, stage left and stage right, kept out of sight for the moment by the facts of power.

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William Timberman 03.09.13 at 4:29 pm

The problem with abstractions is that they’re static, static when what we want is is to reliably locate ourselves in something that never, ever stands still. We can look at the image in a kaleidoscope and describe its architecture, and it’s effect on us, with complete specificity, even eloquence. Trying the same exercise while the barrel is being turned is another kettle of fish. Beyond the obvious fact of its coruscations, what else can we say about the movement that so fascinates us? Not much. We can dig deeper, of course, and dismantle the mechanism, and if, thanks to our ancestors, we know a little physics, and a little engineering, we can come up with all sorts of new and intelligent things to say about the kaleidoscope, but in doing so, we’re already far from the original flood of images and their effects on us that we were initially trying to understand.

When we read the work of a first-rate historian, Eric Hobsbawm’s Age of series, say, or Tony Judt’s Postwar, what we get is an artfully strung-together series of anecdotes, statistical abstracts, snippets of contemporary descriptions and analyses, and the strategic interpolation of occasional what-ifs which serve to remind us that what we’re reading is, in fact, the playing out of that a priori act of comprehension which drove the author to write what we’re now reading in the first place. Do we share that comprehension? Well, we can certainly infer it, and if we’re strong-minded enough, we can even formulate objections to it on the fly, assuming that we have objections. In the end, though, what we’ve done is to impute movement to something which again, is essentially static, and the author’s contribution to future developments in the real world is not so much to reveal something as it is to point the reader, to change his or her orientation as he re-engages with that real world. What comes of all this sleight-of-mind can only measured further down the road, when some other historian snaps a picture as the juggernaut rumbles by him. And so it goes….

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Mao Cheng Ji 03.09.13 at 4:38 pm

“A thought once uttered is a lie.” Including this one, of course.

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engels 03.09.13 at 4:55 pm

The individuals composing the ruling class possess among other things consciousness, and therefore think. Insofar, therefore, as they rule as a class and determine the extent and compass of an epoch, it is self-evident that they do this in its whole range, hence among other things rule also as thinkers, as producers of ideas, and regulate the production and distribution of the ideas of their age: http://www.marxists.org/archive/marx/works/1845/german-ideology/ch01b.htmthus their ideas are the ruling ideas of the epoch.

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geo 03.09.13 at 5:09 pm

What Marx and engels said.

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lupita 03.09.13 at 5:12 pm

If I were to choose one idea that neoliberals cling to for dear life, it would not be austerity but competition. Competition has expanded from microeconomics (firms compete for market share) to macroeconomics (cities and countries compete for industries, global capital, confidence of investors, credit ratings) and individuals (the best resume, school, grades, bonus, spouse). The idea is that competition promotes growth, innovation, creativity, and prosperity and ensures the common good. Austerity has recently entered the picture as a way to get all levels, from individuals and countries, to behave like CEOs. If the idea of austerity does not accomplish its mission of promoting more competition, and so far it has, then it will be unceremoniously discarded as the idea of WMD and something else will be found to replace it; however, competition is the irreplaceable idea in Occidentalism.

Opposing competition as the vehicle to ensure the common good, are values such as solidarity, loyalty, obedience, and humility that are central to cultural traditions such as Confucianism, Catholicism, and Islamism. Note that austerity can just as easily fit these traditions as it does Occidentalism at this juncture.

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Barry 03.09.13 at 5:57 pm

Omega Centauri: “My impression of the folks around Merkel is that they are influenced by “public-deficits=>hyperinflation=>Hitler”.”

Which, please note, is simply not true. This leaves out the Great Depression, which took the Nazis from a minor party to close enough to seize power.

The idea that the Weimar hyperinflation caused the rise of Naziism is to my mind not an innocent mistake; the right doesn’t really mind a depression leading to a rightward shift in politics.

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rf 03.09.13 at 5:59 pm

Yeah I see what you’re saying Rich

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ponce 03.09.13 at 6:08 pm

@84,

Geo,

Sure, the Republicans have had a few electoral victories in the past 20 years or so.

But it’s been a bad couple of decades for conservative ideas.

“Death taxes,” “Preventative” War, “Christian” morals, etc.

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rf 03.09.13 at 6:11 pm

“Yeah I see what you’re saying Rich”

Which isn’t snarky, more .. ‘I take your point’

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Lawrence Stuart 03.09.13 at 6:14 pm

I suppose there are two issues at play here. There is the specific dispute between competing discourses within political economy on the relative importance of ideas v. interests in shaping economic policy. Then there is the broader question of what ‘interests’ are, anyway.

I don’t have the ability to speak directly to the first, but I might have something to add the second, which, I hope, illuminates if only a little the issues underlying the first. So here I go into the philosophical weeds.

Interests are ideas (well I’d say they are narratives of value-but that’s my set of ideas about ideas). What else could they possibly be? Do they constitute a natural force independent of human thought? Have interests, like gravity, always ‘been there?’

The salient issue is whether one can reduce all ideas to interests, and further reduce all interests to class ideologies. Certainly our post modern condition makes it difficult to disentangle ideas from values, but let us bracket that problem, and focus on the narrative that claims ideas are class interest in drag.

Such a narrative turns on the claim (the idea!) that what is necessary to physical human life (labour) is the source of all human values. It elevates the necessary (and, historically speaking, largely despised) to the status of the good. It begins with Locke’s defense of the limitless acquisition of private property, culminates in Marx with the abolition of private property in the name of limitless public abundance. The two strands of thought represent very different interests, but they share the same underlying idea.

In both discourses the idea (labour as the source of all values) becomes sedimented as ‘fact.’ But this fact implies a specific set of ideas about the world. To wipe the slate clean for Locke’s tabula rasa requires an act of willful imagination. Every actual human consciousness is always already imbricated in a pattern of meaning: not only is the slate always inscribed, but the ‘objective’ world is always already a narrative of the world. Wiping away this narrative tradition to begin again on the basis of labour-as-source-of-value is itself a rhetorical or narrative trope. Marx takes up this trope and uses it in his own way.

Because both Marx and Locke rely on the sedimented idea of labour-as-source-of-value, but represent this ‘fact’ according to their different interests, I can say that interests form a subset of ideas. And because they share a common interest in the sedimented fact of labour-as-source-of-value, I can also say that class interests form a subset of the subset ‘interest.’ For where does this common interest in labour-as-source-of-value come from, if not from some source other than (their clearly antithetical) class interest?

So I suppose the moral of the story, and it’s rather tenuous relation to the issue raised in the OP, is to support the notion that exogenous ideas (often sedimented as ‘facts’) can and do have a rather significant importance in the articulation and expression of interests.

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Peter Dorman 03.09.13 at 6:40 pm

Once again I’m late into the game—probably after the final buzzer has sounded, in fact. But I have some thoughts on this discussion, and it will help me to write them down, even if they go mostly unread. Before saying anything else, though, I’d like to commend the CT community for a really first-rate comment thread. It doesn’t get much better than this.

We are in the realm of the theory of ideology here: how do we understand the interplay of interests and ideas? If there is a satisfying theoretical framework to start from, I haven’t seen it. All the theories I’m familiar with, beginning with Marx’s, are dismayingly partial, capturing a small portion of the problem and useful at best only in a few historical contexts. But this is all we have to work with. Here are a few elements:

1. Ideas serve as rationalizations. This has now been given an evolutionary spin. Our minds evolved the ability to intellectualize as a means to get others to do our bidding. The economic arguments for austerity, on this view, do not play a causal policy role; they are tools for getting people to go along with it. This is close to the vulgar Marxist understanding, isn’t it?

2. Ideas are generalizations from local interest-based problematics, or, if you’re a hammer everything looks like a nail. Example: businesses have to cope with cash flow crunches, failed investment strategies and the like all the time. You have to find a way to cut back, suck it up and hang on, while implementing new strategies for generating earnings. This is so obvious it hardly needs to be stated. Such a mental framework is easily generalized to an economy-wide level, despite its fallacy of composition problems.

3. Ideas are self-rationalizations. (This may be a corollary of #1, or maybe it’s the other way around.) Yes, we pursue our self-interest, but no one is happy looking into that mirror. So we construct elaborate idea-constructs to convince ourselves that we are acting in the general interest, or that there is no alternative, or we are performing virtue in some other sense. Austerity is taking the hard medicine, toughening up. It’s enduring the chemotherapy that will make us all healthy again. The purging metaphor might fit here as well; the act of purging is, in itself, no fun.

4. Ideas evolve in the context of interest communities, but their relationship to interests become increasingly indirect and opaque over time. In the beginning the interest basis for an idea like austerity might be clear. For instance, wealthy lenders to sovereigns want to be paid back, period. But then the other mechanisms, 1-3 above, kick in. People write and think about them. There are dissenting views, and dissents from the dissents. Particular variations on the theme are given a helpful nudge from powerful patrons. After a century or two, you can’t see the fingerprints of material interests so easily in the intellectual constructs, but if you examine the historical record you can see evidence of where they came from. What distinguishes this perspective is that it accords more importance to the internal logic and dynamics of the ideas, which can generate features that are not otherwise deducible. These are their spandrels, to double-borrow a metaphor. If Blyth is conducting this type of analysis, he shouldn’t have to commit to a transhistorical “essence of austerity”; identifying the lineage is enough.

One final point: it should be obvious, but somehow it always has to be repeated that the theory of ideology is about belief, not truth. The question is why an idea is adopted, not how much truth value it has. This gets muddy only because the adoption of clearly truth-impaired ideas, like austerity in a downturn, is such an interesting and important part of the larger question.

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bob mcmanus 03.09.13 at 6:55 pm

96: 4 implies some of this, but as I read through the thread it feels a little abstract, individualistic, and disembodied, and I felt an urge to mention history and geography. Ideas and interests are grounded in place and time.

David Harvey, Lefebvre etc

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Mao Cheng Ji 03.09.13 at 7:00 pm

I remember reading somewhere (Dawkins?) that the only purpose of any – any! – communication is to manipulate the recipient to sender’s advantage. So much for the ideas…

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John Quiggin 03.09.13 at 7:47 pm

@JWM As it happens, and right on topic here’s a link to Tyler Cowen arguing that the advocates of monetary contraction in the eurozone represent the class interest of unionized/inside workers in the Netherlands and Germany. The Economist (!) points out that this bears no relationship to reality, and mentions the kinship of this kind of public choice argument to vulgar Marxism

http://marginalrevolution.com/marginalrevolution/2013/03/different-framings-when-people-agree.html
http://www.economist.com/blogs/democracyinamerica/2013/03/economics-and-ideology?fsrc=scn/tw/te/bl/rightforthewrongreasons

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Bruce Wilder 03.09.13 at 7:48 pm

ponce: it’s been a bad couple of decades for conservative ideas. . . . “Death taxes,” “Preventative” War,

Maybe, in your alternative reality, where Obama is not evil, but here, in the singular reality, which is the actual universe, conservative ideas have been triumphant. We’ve reduced inheritance taxes substantially — even Obama’s deal reduced them (compared to what they would have been the expiration of the Bush cuts, and the Bush cuts had reduced them to pretty much zero)! We’ve advanced from preventative war to perpetual war and war not just against states, but against abstractions. We’ve just had a GFC, in which the banksters and rentiers making up the the 1/10th of 1% have come out with an effective grant of immunity from Obama and more than 90% of gains in the so-called recovery have gone to the topest of the top, and corporate profits are setting records, while unemployment and underemployment have drifted downward only as the labor force has shrunk and wages (of non-CEOs) have declined.

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Barry 03.09.13 at 8:17 pm

Seconding Bruce.

Adding on to Peter Dornan – by now, it’s clear that right-wing neoliberal economic policies (to the extent that is under discussion) are bad for not just some of the people in the developed world, but probably a very large majority. Basically, they end up being ‘distribute wealth and freedom upwards, risk, cost and constraints downward’.

Policies like that need some really sweet sugar before people will accept them.
Many of the ‘ideas’ are just that – sugar to hide what’s coming, what’s happening, and the pain of the damage. And when not hiding, they are to distract and point people in the wrong direction.

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Barry 03.09.13 at 8:22 pm

Adding on to Bruce – in many ways, it’s disturbing just what ‘stuck’ even after the GFC and the other debacles of the Bush – well, debacle.

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Rich Puchalsky 03.09.13 at 8:33 pm

“Maybe, in your alternative reality, where Obama is not evil, but here, in the singular reality, which is the actual universe, conservative ideas have been triumphant.”

I generally agree with Bruce Wilder’s summation in that comment, but his first sentence is off. It’s not conservative *ideas* that have been triumphant, but conservative *policies*. That’s a really important distinction for this thread. The wealthy families with an interest in reducing inheritance taxes are apparently happy to let the idea of Death Taxes die as long as their inheritance taxes are actually reduced. And even though Obama may have won election in part by scorning ideas like Preventative War, something like Responsibility To Protect can be promptly minted to do the same thing.

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ponce 03.09.13 at 8:58 pm

@100

Bruce,

The only Republican idea that is ascendant is the idea that Republicans should shield themselves from reality at all cost.

A herd of mooncalves always ready to be fleeced by conservative thinkers like Glenn Beck and Rush Limbaugh.

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Bruce Wilder 03.09.13 at 9:17 pm

Timberman @ 86

I wouldn’t say abstractions are static. An abstraction is not a photograph, and even if it is a picture, the essence of its construction is not the mapped correspondence in image to a moment in time. The essence of abstraction is compression. Our puny little brains feature this weirdly teeny tiny cache of short-term memory in consciousness through, which every thought and intention and plan and analysis must pass. To arrive at any kind of sophisticated understanding or theory, or even to construct a sense of continuing identity from memories, we have to use compression “algorithms” to squeeze information (data and analysis) though the channel of the cache, where its difficult to squeeze much more than the seven to ten digits of a phone number.

As it turns out, humans can perform remarkable feats of compression, just as Intel Inside processors can, with a JPG or ZIP file. It can be very, very powerful stuff. Some artists in Florence figured out that by ordering the size and apparent overlap of two-dimensional images in a painting in a certain mathematically ordered way, which viewers could be taught to interpret, they could present, and their audience could “see” three-dimensions, where their were only two. And, that changed the kind and power of the narratives that could be depicted in paintings, and the Renaissance in art began. Voila! Perspective!

E = mc² is an extremely powerful idea. The physics of that is in the compression algorithms — how a human can “unpack” that idea into, say, an atom bomb or the standard model. Darwin’s evolution through selection of inherited variation by environmental fitness is another highly compressed idea; how that gets unpacked in the course of puzzling out explanations for myriad phenomena of the living world is modern biology.

Economics consists of taking some fairly elaborate ideas about how the world works, in the form of models, working through a series of those models, and then packing up that knowledge in a tiny, now familiar little nutshells. Economist’s love Marshall’s Cross: supply and demand sloping left and right and crossing in the middle at the optimal(!) price. Got to love it!

Wal-Mart executives love their abstractions, too. Statistics on yesterday’s sales, last year’s sales, same-store sales year-over-year, hours worked, units sold, units in inventory, etc. etc.

Abstractions are everywhere in modern life. Numbers. Letters. Traffic signals and signs. Any reasonably complex behavior has to be scripted and compressed to get thru that tiny little cache of short-term memory we call consciousness. Not even “thru”, because once we’ve managed to learn something, like riding a bicycle, it just goes on a fast track thru the unconscious mind, and the conscious mind provides just enough rationalization to put that knowledge to work in intentional travel, and, of course, to panic in emergencies.

The vast majority of what we talk about as “ideas” are rationalizations, ex post facto stories we tell about the past, whether a mere moment ago, or years or decades or centuries past our personal experience. For some in this thread, acknowledging ideas as rationalizations seems to de-legitimize ideas. All I can say about that is, get over it. But, here’s the thing, the stories we tell about the past, even though the reality of the past may be fixed and unchanging, these stories are dynamic. Because they are, necessarily, highly compressed. Poetically, I could say that all that is left of the past are the shadows, but even the shadows are gone, really; all that is left is decaying detritus and footprints waiting on the beach for the waves to come. We have very little data about the past, even the past of our own personal experience, let alone the American Civil War or Julius Caesar conquering Gaul, and even that small amount of data has to be compressed into a political slogan, or a sentence or two, which, in turn, can be unpacked into a paragraph, an essay of a few pages, a scholarly tome — whatever — and taught, and critically assessed and revised. Historians are engaged in endless revisionism; it’s what they do: constantly re-imagining the past, testing their way of summarizing and unpacking that story against a reasoned appreciation of the very limited data left in the dustbin.

Because abstractions are compressions, and the really important part is how they are imaginatively unpacked, they are inherently dynamic. Computer science and information theory talks about, and compares the “lossiness” of various compression algorithms. Do you lose information and does the information you lose really matter?

Economics, the academic activity, is mostly a similar set of arguments about what can reasonably distilled from the elaborate and detailed study of various models, and whether a particular way of packing and unpacking that information is lossy in an important way.

Ideas can be very, very powerful, when they can pack a lot of analytic power or account for a lot of detailed information, and allow our pea-sized consciousness to make a choice, or initiate the appropriate scripted behavior. The revisionism of retrospective rationalization, is dynamic. We can and do keep changing the story of the past, and that changes the future. He, who controls the past, controls the future, if you like.

Seeking a more elegant compression method, expanding the scope of a generalization, these kinds of “internal” logic to ideational distillation can be socially corrosive, when they revise the stories that give meaning to our lives and collective experience. I alluded in an earlier comment to the case of Hobbes, who self-consciously tried to be the Thucydides of the English Civil War, imparting a disenchanted explanation to the remembering of events driven by competing enchantments, and, in so doing, helped the English to strip enchantment from their politics, and usher in a modern, pragmatic, secular politics (and the Enlightenment). He offered the Stuarts the poison pill of a neatly compressed, rationalized apology for divine-right monarchical absolutism, which stripped away completely the divine-right part.

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Bruce Wilder 03.09.13 at 9:24 pm

Rich Puchalsky @ 103

Your criticism fully accepted at this end.

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Ensigne Pudoris 03.09.13 at 9:29 pm

JQ: “In the case of austerity, the idea has an appeal that goes well beyond the interests that actually benefit from it.”

To reply: It is a fairly well established fact that absolute happiness is not what people care about; rather, relative happiness rules the day. Hence, the increased spending power of a well-paid worker is still felt as a loss by the “job creator” whose power over the workforce is thus diminished. And vice versa.

Moreover, there are two ways that interests can lead VSP to spout arguments for . There is the broad class interest (which I think is what you’re talking about). But there is also the particular career interests of a given individual, in a world where countless institutions are predicated on the (already incoherent) notion that spending is out of control and taxes must be cut.

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Bruce Wilder 03.09.13 at 10:38 pm

Peter Dorman @ 96

If the thread is not already dead, I have enough caffeine in me right now, to kill it.

Humans are story-telling animals, right? Mostly, our stories, at their more primitive and basic and pervasive, are about imparting “meaning” in the pastime of entertainment. Homer and Hesiod, Genesis, the Gospels, chivalric tales, the Catholic Mass, the Declaration of Independence, Lincoln’s Gettysburg address, Longfellow telling the tale of Paul Revere’s Ride, Grimms’ fairy tales, Alex Haley’s Roots.

The weird thing is that our capacity for communicating meaning symbolically, with ritual and language, evolved not just into drama, but philosophy (and those two, simultaneously in historical time, if you believe the philologists on Greece). And, philosophy morphed analysis, logic and math, with a truth-value very different from that of mythic story-telling, which entrances us with meaning. Analysis is practically powerful, just as religion (mythic storytelling) is socially powerful, but analysis does tend to dis-enchant.

What Anarcissie @ 68 said about ideas and interests being different connotations of a single denotation seemed remarkably insightful to me, and because of what Mao Cheng Ji said @ 98, about every communication being a manipulation (I would have said that every argument is a contest between hypnotists). Early on in this thread, JW Mason sliced to the core of what is wrong with Dani Rodrik’s supremely smug little essay: the hiding of the conflict of interests.

Ideas and interests both arise in the context of organizing production and distribution of goods and wealth and work (and redemptive suffering!-) in social cooperation. There’s a dialectic and there’s a political contest, as well as coordination of activity, with an exercise of power founded on organization and the power, organization creates. Ideas have a resource cost and require organization, and organization requires ideas and communication, both of the meaningful, mythic kind necessary to motivate and mobilize, and of the analytical sort, necessary to the control of nature, as well as people in society.

I won’t reiterate my earlier comment about the imperviousness of neoliberalism to criticism being one of its most important design features. Geo @ 43 made the point more succinctly than I could.

I do think more could be usefully made of criticizing the pragmatic gambit, which moderates, in particular, over utilize in their (so far) impotent attacks on neoliberalism. I am referring to any use of the rhetorical charge that a theory has failed to “work”, from Left or Right. I’m tempted, always, to ask, with irony, what do you mean, “work”? Krugman loves to lecture that economics is not a morality tale. Obviously, for most people vitally concerned with the political contest, and disinterested in the wonky details of Central Bank architecture and operation, and even for many, who are interested in the wonky, economics very much is, and has to be, a morality tale, or at least has to be able to tell a morality tale, which can instruct political parties, movements and leaders, as well greater and lesser participants in the political economy. Economics is social cooperation amidst and, frequently, despite not just divergent but sharply conflicting interests, and prescriptive ethics must be at the core of making an economy work. Which prescription for ethics is a core issue for economics as a doctrine, as well as for the political struggle for power.

Ideas and interests become different connotations of the same categorical denotations, not because the political economy is messy, but because the actual political economy (as opposed to the one of ideal Chicago-style theory) is institutionalized, and the institutions coordinate social cooperation by creating a symbolic, virtual reality, within which people react in scripted or rule-driven ways to signals, in effect manipulating virtual levers. This institutional virtual reality — this Matrix — is the shared, social interface to the physical reality beneath, where we may glimpse some hint of personal human welfare, if we wish to peer there. Society is made up of institutions and the institutions work by spinning out fictions. Money, debt, the financial sector — they are all fictions: literally fictive storytelling, using symbols to communicate . . . (wait for it) . . . abstractions.

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chris 03.09.13 at 10:52 pm

It seems pretty daring to want to junk an apparently working arrangement of fifty years’ standing (as it was in the 1980s).

ISTM that this just goes back to ideas growing out of interests, because you and I say it’s working, and the Koch brothers reply, “Working for whom?”

Having decided it’s against their interests, they then must come up with an idea to argue against it, or pay someone to do so. But the idea is the tool, it is not the work. This explains why it can so readily be modified or abandoned.

Having said this I’m now going to flip around — sort of — and acknowledge that it’s perfectly possible for people to be mistaken about their own interests; if poor whites in the US understood their own interests better the Republican Party would be finished. So in a sense, you could say that it’s ideas all the way down; ideas about interests drive ideas about policies. The actual interests don’t show up except in the weak tendency for wrong ideas to eventually get rejected. Eventually can be an awful long time though.

the usual components of the transmission of ideas — that someone propounds an intellectual position, and that you are convinced by them — are missing

I doubt that this is actually “the usual” method of transmission of ideas. (Although it may depend on the idea.) Religion, for example, is most often transmitted by “my family and other people around me were doing it”, hardly ever by intellectual argument; but custom and bandwagons are enough to let religions not only endure for centuries, but also convince people to kill and die in the name of God.

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LFC 03.09.13 at 11:13 pm

Wendt in Social Theory of Int’l Politics has a sort of nice passage (pp.94-95) where he argues that the Marxist ‘material base’ is not just ‘material’ since the relations of production (as distinguished from the forces of production) are ideas (or are ideational, if you prefer to put it that way) — albeit they are ideas that are also ‘objective’ social facts.

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LFC 03.09.13 at 11:17 pm

P.s. Which I think may be more or less what B. Wilder is saying in (some of) 108.

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rf 03.09.13 at 11:19 pm

“Ideas and interests become different connotations of the same categorical denotations, not because the political economy is messy, but because the actual political economy (as opposed to the one of ideal Chicago-style theory) is institutionalized, and the institutions coordinate social cooperation by creating a symbolic, virtual reality, within which people react in scripted or rule-driven ways to signals, in effect manipulating virtual levers. “

This is more or less the argument put forward by Blyth’s first book, IIRC, and if I’m reading your post correctly.

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William Timberman 03.09.13 at 11:23 pm

Bruce Wilder @ 105

In some ways, I like your metaphor better than mine, but the characteristic of abstraction-as-compression that makes it like a photograph is that the compressed symbol of what is in fact a complex set of experiences more often than not loses its original moorings, and thus no longer stands for something else, but rather becomes something in itself, something quite different from what we believed it to be when we first created and took possession of it. One might even say — in fact now and again somebody or other has said — that it takes possession of us.

Over time our heads get filled with these things, and it takes a good bit of unpacking indeed to see just how they’re connected with our movements on the dance floor. Lots of work for both dramatists and philosophers, although none of it is likely to be as well compensated as the jobs handed out to the dismal scientists and shills supposedly in charge of the choreography.

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Anarcissie 03.10.13 at 3:15 am

it’s perfectly possible for people to be mistaken about their own interests

There are two views (ideas) of a person’s interests, one from the inside looking out, and the other from the outside looking in, or at least on. Both are almost certain to be at least partially mistaken. However, I would guess the inside-looking-out idea would usually be the more accurate (if you could measure accuracy in the mess of the multidimensional, non-linear psyche, all of the values whereof compose the person’s aggregate interest).

In saying ‘works’ about the New Deal, I meant for the ruling class of the era, who would be the ones designing arrangements.

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Lawrence Stuart 03.10.13 at 4:47 am

There’s a very interesting tension between the cybernetic metaphor and the ‘imaginative unpacking’ of compressed data in your post. You are saying on the one hand that abstractions work by separating thought into perception and reflection: the body perceives, the intellect processes, and as your cybernetic metaphor suggests, the goal is lossless transmission. Algorithms aren’t creative.

On the other hand, you talk about how the dynamic (imaginative) quality of unpacking compressions is ‘really important’ (something with which I completely agree). Which leads me to question the idea that abstractions are the only way of compressing information. Images (visual or verbal) require an act of imaginative re-creation: the ‘unpacking’ of the image suggests an infinity of responses instead of compelling a single, ‘lossless’ one. So while your image of the past as footprints washed by the rising tide suggests a fear of loss, the creative unpacking of the ‘debris’ suggests a constant renewal: not that same dull round of things, but neither a complete rupture with tradition. Rationalizations? Sometimes, yes. But visionary imaginings (à la Hobbes) as well.

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Lawrence Stuart 03.10.13 at 4:53 am

Ooops. My 115 refers to what Wilder said up yonder there somewhere.

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Tim Wilkinson 03.10.13 at 1:34 pm

The higher you get up the food chain, the less confusion there is about the basic interest of gaining power. It’s the middle management of firms who are prone to fads in management theory, the second rank of politicians who take seriously the latest wonk-porn bestseller or the bought-and-paid-for product of the Harvard economics dept.

It’s been clear (I thought) from the start that, for example, the Cameron govt was using ‘austerity’ as a convenient pretext to (1) dismantle the welfare state under the guise of cuts which don’t actually save much money even; (2) further disempower workers and consumers lest they hamper the ‘wealth creators’, rather than being particularly interested in reducing the deficit; and that given this, a continued multi-dip recession is a feature rather than a bug. (A very close analogue of JWM’s comments about the ECB, linked somewhere above.)

I think one needs to distinguish between producers and consumers of ideology (or between various degrees of ingenuousness about it) to try and get anywhere with this conversation – of course some from the producer class can start believing its own bullshit, and that’s for the most part a good thing for said class (there aren’t enough high-functioning psychos capable of sustaining constant, conscious lying through their teeth) though in some cases it can give rise to a certain amount of ‘blowback’ which may have to be dealt with – e.g. McCarthy.

The real key is to almost convince oneself of the truth of whatever convenient theory is being espoused while maintaining a little mental compartment that retains contact with reality. At the limit this is unnecessary, where basic ideas such as ‘we have God on our side’ or ‘we know better than women’ or ‘what’s good for M&M Enterprises is good for the country’ are concerned: these can be believed wholeheartedly without too much danger of making a false move (as evaluated from the pre-Kool-aid standpoint).

That’s because they are normative and have little impact on beliefs relevant to technical matters. Some kind of fact/value distinction or specturm needs to be observed here – especially since at the general level, this conversation seems to be premised on ‘interests’ as taking the role of ‘desires’ and ‘ideas’ that of ‘beliefs’ in a ‘Humean’ account of reason. On a basic belief-desire model, there are of course instrumental desires (for means), which are derived from ‘ultimate’ desires (for ends) in conjunction with beliefs. One possibility is that a means may be fixated on and confused for an end, even after the belief that underwrites it is found inaccurate.

(I get the impression the discussion is actually far more specific – ‘interests’ being more like the aims of ‘interest groups’ and ‘ideas’ being straightforwardly factual beliefs. Note that interests are neither exogenous nor endogenous where interest groups such as pressure groups or lobbying organisations are concerned – the interests are the raison d’etre of the group in question. For present purposes this means they can be treated as exogenous.)

Where neoliberal ideology is concerned, the ‘producers’ or top-level ideologues such as the media, business and finance moguls who attend (e.g.) Builderberg meetings are in no danger of getting carried away with market rhetoric (e.g. trying to promote competition); they understand, probably in most cases quite consciously, that the rhetoric is actually a wrapper for an interest in maintaining something like the status quo, only with reduced consumer and worker power.

Even those a bit further down the chain who promote business interests under the rubric of teh market clearly behave in such a way thaht they can’t be regarded as (per impossibile) both understanding the neoliberal position and taking seriously as an ‘idea’ – it’s a cypher. The pseudo-economists, think-tank wankers, and opinionisers who churn out propaganda in support are certainly behaving exactly like disgusting scumbags; but they are not responsible for pulling the wool over the eyes of those who employ or reward them; just (almost) everyone else.

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rf 03.10.13 at 2:12 pm

Henry linked above to an older Rodrik piece, not the one he wrote recently that’s causing so much controversy. The newer article might clarify to a better extent his position for those who think he’s being mealy mouthed or ‘ignoring interests’. So here it is:

http://www.project-syndicate.org/commentary/how-economists-killed-policy-analysis-by-dani-rodrik

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rf 03.10.13 at 2:17 pm

And this was Thomas Oatley’s response with links to Phil Arena’s etc

http://ipeatunc.blogspot.co.uk/2013/03/paradoxically-you-had-me-at-hello.html

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Lawrence Stuart 03.10.13 at 4:01 pm

@108 “Which prescription for ethics is a core issue for economics as a doctrine, as well as for the political struggle for power.”

Aye, no doubt. But ethics is a spiritual thing, and in a dis-enchanted age, spirit is in short supply. Would it be unkind to suggest that the left, in its rush to embrace the hard world of material causality, has left itself breathless? Unable to summon enough pneuma to counter the stern puritan exhalations of the right?

“Society is made up of institutions and the institutions work by spinning out fictions.”

Hence in my giddier moments I imagine a revival of the the poor trivialized trivium, spinning out critical grammars, logics, and rhetorics of these stories — and who knows, perhaps even counter fictions.

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rf 03.10.13 at 5:01 pm

As an addendum, according to #70 above, Blyth lays out explicitly which ideas influenced policy.. “expansionary austerity. He specifically says that not all/any cuts are austerity, just those which are intended to spur short-run growth by changing expectations: Alesina’s model.”
So all those ‘cultural’, (German fear of hyperinflation, pain after the party), ideological, cognitive factors etc mentioned above are the background that influenced how receptive people would be towards the policy of austerity.. and that doesn’t demand you ignore institutional, political, geopolitical, material based etc explanations .. it’s one part of a rich tapestry..although a part, I guess, that gives ideas primacy
So Blyth’s argument (I guess) lives or dies on how important we think ‘Alesina’s model’ model was in influencing policy

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rf 03.10.13 at 6:46 pm

And as an addendum to my addendum (and the last thing I’ll say as I’m talking to myself at tis point) but it seems JQ’s link to the economist @99 seems to undermine Kindred’s point that I linked to @2 (and found convincing) that the ‘political question is ultimately of a distributional, rather than ideational’.. if the policies are being pushed/supported in the European core on the core, then the distributional argument isn’t as strong. (Or am I missing something?)

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Adrian Kelleher 03.10.13 at 6:58 pm

Two points…

The first is that claims about the malleability of ideology in the hands of the powerful should be made with care. Like all arguments about “the masses”, when taken to extremes such claims are even worse than endorsements of aristocracy. They amount to the claim that aristocracy is the only possible form of government regardless of what the laws or the ruling ideology may state.

Second below…

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Igor Belanov 03.10.13 at 6:59 pm

Tim Wilkinson:

“I think one needs to distinguish between producers and consumers of ideology (or between various degrees of ingenuousness about it) to try and get anywhere with this conversation”

Exactly. Ideas do prove important in elections for example, when the actual life experience of voters is limited and their ‘world view’ is supplemented by information they receive through other sources such as politicians, journalists and a man they met at the pub who happens to be a racist. Thus certain British voters in areas where you are unlikely to see a black person or a Pole end up believing that the country is being swamped with immigrants, and people who have never been in a social security office or on a council estate think that all claimants are scroungers who receive a fortune to stay at home.

Policymakers and political actors, on the other hand, are in much closer control of their interests and at the same time in a position to develop ideas that can articulate these interests in forms that can sway the opinion of others. Sometimes these ideas become so successful that the person articulating them really starts to believe in their own hype.

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Adrian Kelleher 03.10.13 at 7:10 pm

[[Okay, this is dense and I suppose wonkish. It nonetheless presupposes no specialist knowledge (apart from the first few paras — some may choose to skip down to the italics). I hope at least one or two people will grind through it because I it demonstrates what it is about the OP that makes it unusual as well as potentially threatening to a powerful and damaging but barely acknowledged vested interest.]]

Economics works via models of the world some of which, such as the macroeconomic models employed by governments and central banks, have broad implications for law and administration. They may even best be considered as major autonomous centres of power. The methods and underlying assumptions on which they’re founded is therefore a critical concern as whoever specifies these essentially gets to paint the world in chosen ideological colours.

If a given model assumes economic rationality then in that model there really is no such thing as society, and neither is there any politics, culture or history. This assumption strongly supports the idea that each gets what he or she deserves, and imbues all conclusions with a strongly neoliberal tint.

Similarly, if a model assumes efficient markets then amongst other things all returns on investment are earned via deferred gratification and the acceptance of risk. Efficient markets are fair and simply by assuming markets are indeed efficient it’s possible to generate further information suggesting that this is indeed true: that all is for the best in the best of all possible worlds. Nobody ever learns anything because everybody knows everything already, and there are no periods of manic optimism or pessimism.

Such assertions radically simplify the calculation and measurement requirements for the construction of economic models. The resulting mathematical frameworks may then be based econometric data alone, and their creators can directly or indirectly claim objective distance from their works.

The models may be non-linear or linear, meaning they may characterise systems with memory or lacking it.

For a linear (no-memory) system to mimic the behaviour of real-world economies it would need to model the human mind but this is not an achievable objective. Therefore, in linear models an economy that has just suffered a crippling market crash, say, will behave identically to another that hasn’t so long as the econometric data are identical. This is obviously unrealistic.

Non-linear systems mimic human memory by essentially having the past reach into the present. That’s to say that two economies having instantaneously identical econometric data may evolve differently depending on their differing histories. The problem with this is that it’s clearly magical: no scientist will admit to really believing that the past somehow sends informational rays into the present. The extra elements embodying memory, let’s call them the non-linear variables, are moreover purely statistical artefacts. Not are no real-world analogues known, they’re not even hypothesised.

Non-linear models are only ever used in the physical sciences as short-cuts to simplify what are understood more fundamentally as linear systems, but in economics no fundamental linear system is imaginable because bridging the gap between the configuration of matter and energy in persons’ brains and their economic behaviour is not realistic.

Such trifling objections are apparently insufficient to prevent governments and central banks basing many vital decisions on models such as these. Like the competence of the self-selecting and perpetuating caste who minister to them, they are immune to any amount evidential refutation.

This leaves us right back with the linear systems which airbrush away all the potential for mania and despair we’re now all painfully aware can cause chaos.

But there’s a way out of this, and the issues in the OP are the gateway. People already possess a method for divining the thoughts and intentions of others that’s been refined over hundreds of millions of years: it’s called intuition. Intuition is an unsettling idea for any scientist, but actually it’s impossible to live a normal existence without making innumerable guesses about others’ intentions and feelings.

Without intuition any sociological insight is impossible. This is a literal truth so pervasive and yet so unbearable we’ve somehow contrived to forget it. We imagine our ideas about Catholicism or Marxism, or fashions for hairstyles or clothing, or their propagation through society or their psychological, sociological or economic effects can be rendered objective so long as sufficient determination is expended on the task but this simply is not true. These things are ultimately abstractions lacking any method of biological encoding or cognitive meaning consistent from individual to individual. No method exists of reaching into the human mind to render physically comprehensible the organic chaos that underpins abstractions invented in the first place for the very purpose of simplifying the incalculable complexity of reality.

Intuition is not shareable and cannot be 100% reliable but it’s a matter of historic fact that individuals are alive today who applied their intuitions about human psychology to economics and econometric data and who sought to warn the world of the impending disaster in lucid and simple terms for years prior to 2008.

George Soros and Nouriel Roubini are two famous examples, but there were numerous others. These people employed abstract reasoning to fill in the gap between what can be measured and what cannot, but this denied them the opportunity to bolster their credibility with the meaningless mathematical rituals the modellers employ. It also threatens the immense power held by the very people who failed to understand their warnings because it undermines the models’ false objectivity that elevates their conclusions to an undeserved special status, excludes others with insights potentially equally or more valuable and invests in them exclusive rights to perpetuate their membership and to fill jobs like those of Mario Draghi or Ben Bernanke.

Since 2008, central banks and the rest have attempted to amend their models, but they remain oblivious to one fact best illustrated by anecdote. Let’s say I leave my house one morning and scan the driveway for ice. I may miss a patch and fall anyway, or I may spot and avoid it. If I fall, it’s entirely reasonable to return to the front door, look again, and conduct a sort of investigation into how an accident happened in spite of my vigilance. This sort of sensible inquiry is what the central bankers imagine they’ve conducted in recent years.

If on the other hand you are waiting at my front door when I emerge and you tell me “watch out, there’s ice right there”, and I fall anyway then this kind of post-mortem is pointless. In this scenario, what I would require is psychological evaluation and support. Re-evaluating my ice-scanning procedures would be useless. This is the actual state confronting the modellers: they were alerted to disaster but refused to believe it. Yet somehow they’re undisturbed by the fact that they used their meritless mathematical rituals and arcane power to drown out the voices of those who really understood what was happening. It’s a scandal of pseudoscience to rival phrenology, social Darwinism and Lysenkoism.

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chris 03.10.13 at 8:55 pm

#114: There are two views (ideas) of a person’s interests, one from the inside looking out, and the other from the outside looking in, or at least on. Both are almost certain to be at least partially mistaken. However, I would guess the inside-looking-out idea would usually be the more accurate (if you could measure accuracy in the mess of the multidimensional, non-linear psyche, all of the values whereof compose the person’s aggregate interest).

ISTM that if you can accept that e.g. a drug addict can have an interest opposed to his present desires, the concept of a ressentiment addict (and, correspondingly, a ressentiment pusher) isn’t that far-fetched. And I don’t see why you would assume that the view from inside would be “usually the more accurate” — doesn’t this just raise the question of accurate with respect to what?

Although I suppose you could raise the same objection to my previous claim that people can be mistaken about their own interests — in order to be mistaken, there has to be a fact of the matter for one’s own belief to diverge from. If the concept of interest turns out to be too vague, subjective, or unknowable to be nailed down, then isn’t this whole thread built on sand? How can you say whether ideas are more important than interests if you don’t even know what an interest is or how to know it when you see it?

#123: They amount to the claim that aristocracy is the only possible form of government regardless of what the laws or the ruling ideology may state.

From a sufficiently cynical viewpoint, this claim is perfectly consistent with all of human history. Maybe benevolent or enlightenedly self-interested aristocrats actually are the best you can hope for.

#125: If on the other hand you are waiting at my front door when I emerge and you tell me “watch out, there’s ice right there”, and I fall anyway then this kind of post-mortem is pointless.

I think there is one reasonable counterargument to this: if false alarms are so common that the alarm itself is useless, the only way you can distinguish between a false and true warning is to spot the ice yourself, and then you know that the person warning you about it was correct. Stopped clocks are right twice a day, prophets of doom maybe only twice a decade, but neither is necessarily a reliable guide to what is actually going on.

This, of course, in no way excuses their failure to spot the dangers themselves, since it was literally their job to do so. But if correct, it does mean that “you were warned” doesn’t add much to their failure; they’ve been warned about 9 of the last 3 hazards, and it’s only in hindsight that you can be confident that this time was different.

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Tim Wilkinson 03.10.13 at 9:18 pm

Ah, the cock-up theory of history.

Moving on. The links rf provides @ 118-9, and the interposed ‘Phil Arena’ piece (btw, ‘vomitoria’ did exist but were exits for stadium spectators and nothing to do with puke). the most noticeable thing to me about these was that they were set in a world in which the only people who matter are the ‘vested interests’, policy makers, policy analysts/advisors and academics, and the discussion is about various lines of communication between these groups – conceived of as having static membership – exerting varying degrees of influence. A subsidiary point is that the influence of ‘vested interests’ on the academics and policy analysts was not discussed.

Rodrik’s piece, for example, considers political (or ‘parapolitical’) theories about the influence of vested interests on the state, finds that if those theories are entirely true then ordinary political-economic theory can have no influence, and concludes that it’s best not to focus on the parapolitical. Note that the possibility of acting on the parapolitical theories so as to rectify the situation doesn’t get a look in – after all, none of the important constituencies will want to act on them – nemo custodiet custodes ipsos. (Cue loud throat clearing from the populace.)

(BTW, of course Rodrik is alluding to Public Choice models, which are specifically designed to denigrate the role of state action in favour of free markets – which as we know are free from rent ‘seeking’, collusion and all that.)

So the only issue under discussion is haggling about how much elbow room the iron laws of Vested Interests allow: Rodrik think we can at least enlighten the VIs a bit, in the hope that we can at least prevent ill-effects that are due to their making mistakes (it’s not clear why he should suppose that enabling the villains of the piece to avoid fucking up should be considered a good idea).

‘Arena’, to be fair, does mention a ‘wider audience’ – dismissively, in passing, but his main point is that somehow good policy (not parapolicy) advice stands some chance of influencing politicians (and I agree, as he suggests Rodrik does, that there is some elbow room here, and not an all-encompassing, omnipotent conspiracy (which is close to being a contradiction in conception in any case).

I found Oatley’s peice rather baffling in places, but it clearly shares the assumptions of the other two.

—-

I should end there, but having gone to the trouble of figuring them out, can’t resist pointing out the problems I diagnosed in Oatley’s piece, even though they are largely beside the point as far as I’m concerned. So, to ‘Fisk’ (sorry, Robert) the tail end of it:

First, the issue isn’t whether political economists think ideas matter . The issue is whether ideas are independent of the processes we model and thus can be manipulated by outsiders to any greater extent than the actions of the people whose behavior Rodrik hoped to change but now realizes are responsive to vested interests.

This might seem to be contemplating the idea that academics might be influenced by the VIs, but I don;t think it is really:

Rodrik seems to believe that ideas can be manipulated by outsiders to produce better outcomes. Hence, he seems to believe that ideas are outside of the political economy processes that otherwise shapes behavior and outcomes. One might wonder if Rodrik is about to repeat the quest that he has just abandoned.

Yep, here academics are ‘outsiders’. O has, though, slipped into overgeneralising and talking of ‘ideas’ as if this were a useful analytic category – this doesnlt really matter much here, but is a distinctly unuseful move. More importantly, he writes of ‘poliotical economy processes’ as if there were only one level of same, where in fact there are two.

Second, the issue isn’t whether human agency can bring about change or not. The issue is whether we can derive useful policy advice from a (general equilibrium) empirical model that accurately captures how the interactions among incentivized agents produce policy outcomes. Rodrik’s point, and he is absolutely correct, is that we cannot. Such a model can produce redundant advice (do what you have an incentive to do and are thus already doing) or it can offer advice that the agents whose behavior we have modeled have no incentive to accept (do something that you have no incentive to do). Hence, the better we are at explaining policy choices as a function of political incentives, the less our models can generate useful policy advice. Even in models based solely on human agency.

Unless we address ourselves to some outside force which might be able to alter the incentives, either by chainging the incentivising forces or selecting personnel whose ‘preferences’, and thus incentives, are different.

Third, the issue isn’t whether scholarly inquiry has an “impact on the world.” The issue is whether positive political economy generates knowledge that can be applied usefully to promote policy change. Rodrik argues, and reasonably so, that the answer is no. – but there are two different points here: one is that higher-order, ‘parapolitical’ theories are necessarily inert since they are either redundant or guaranteed to be ineffective by theor own lights. The other is that – given the truth of those ‘parapolitical’ theories, then lower-order political-economic theories are bound to be ignored. The latter can be assimilated to the former if the academics are among those controlled by the VIs; but I don;t think O does this. In which case, it doesn’t follow that technical political-economy findings must be ineffective at all; just that they will be used for the VI’s ends and not (uintentioanlly) to further the general welfare, public good etc.

O’s apparent failure to distinguish between these two levels means, FWIW, that his conclusion is incorrect:

In short, Rodrik makes two points. One, positive political economy is useless for policy advice. Two, we can affect policy advice by changing how people conceptualize their identities and interests. For my money, this position defined by these two points is utterly incoherent.

—-

BTW, Lawrence Stewart @95 – Locke famously did not provide a ‘defence of the limitless acquisition of private property’. There was a non-spoliation/non-waste proviso, and even given money to provide a ‘store of value’ – on which he took a distinctly Graebnerian view, regarding the institution of money as involving a social contract – there was the ‘enough and as good’ proviso which has been variously interpreted, but certainly places limits on acquisition.

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Tim Wilkinson 03.10.13 at 9:19 pm

1st sentence above in resp to AK 125

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Lawrence Stuart 03.11.13 at 3:12 am

@127 ” Locke famously did not provide a ‘defence of the limitless acquisition of private property’. “

That’s a fair cop. Would you give me Smith?

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QS 03.11.13 at 5:29 am

Neoliberalism and austerity is a class position and politics. Does the discussion really need to go any further?

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Tim Wilkinson 03.11.13 at 10:24 am

Lawrence S – less confidently, I’d say not; surely not explicitly. I don’t think he covered that kind of territory, really. Depending what kinds of ‘limitation’ are to be ruled out (express and implied? de facto and de jure?) for something approaching the full fruitcake openly presented I think you’d need to look to Austria, really, or a certified loon like Rand.

Which is not, of course, to say various useful savants haven’t written things very helpful to those wanting to resist any limits being put on (their own) appropriation.

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Adrian Kelleher 03.11.13 at 11:15 am

@chris

From a sufficiently cynical viewpoint… [the claim that aristocracy is the only possible form of government] …is perfectly consistent with all of human history. Maybe benevolent or enlightenedly self-interested aristocrats actually are the best you can hope for.

But if self-identified democrats make the same assertion they’re being inconsistent.

[I]f false alarms are so common that the alarm itself is useless, the only way you can distinguish between a false and true warning is to spot the ice yourself, and then you know that the person warning you about it was correct. Stopped clocks are right twice a day, prophets of doom maybe only twice a decade, but neither is necessarily a reliable guide to what is actually going on.

But the warnings were not merely binary red light/green light signals. They were accompanied by detailed analytic work relating contemporary economic data to the well-studied history of economic bubbles.

This version of events has since become the orthodox history — a version commonly related by same persons who resisted its implications until after the fact.

@Tim Wilkinson

Ah, the cock-up theory of history.

Without conceding anything, the conspiracy you imply could be robustly verifiable and you would still need to counter your political adversaries’ narrative of events.

You may be happy to ignore them but the fact is that their power has increased rather than decreased in recent years. For instance in the euro area they are now tasked with monitoring compliance with the fiscal compact, a role of great influence.

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Tim Wilkinson 03.11.13 at 12:47 pm

AK – you would still need to counter your political adversaries’ narrative of events

I agree and don’t think I’ve said anything to the contrary. Exposing the power relations underlying the failure to heed warnings etc. ought to make it easier to challenge the undeserved special status of these peoples’ claims and (apparent) presuppositions.

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LFC 03.11.13 at 4:58 pm

@TWilkinson 127

Phil Arena is a political scientist who blogs and comments under his real name. It is not a pseudonym (nor, as you seem to imply, some kind of joke referring to stadiums) and there is no justification for putting his name in quotation marks.

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Tim Wilkinson 03.11.13 at 5:33 pm

I meant to explicitly query that since I thought it could go either way – apologies to PA should they be required. The aside about vomitoria was in response to something (can’t recall what) that I read on or via CT – PA’s name genuinely did remind me of it.

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Bruce Wilder 03.11.13 at 5:34 pm

Phil Arena uses a striking analogy to ridicule Rodrik’s reasoning:

If I told you that I used to believe that weather patterns were entirely determined by natural phenomena until I realized that this meant I had no control whatsoever over whether it will snow tomorrow, at which point I took up the ancient practice of animal sacrifice, you would laugh at me, yes? I certainly hope so.

This analogy helped me see what troubles me about Rodrik’s argument, though it because I saw Arena’s analogy applying in an exactly opposite way from the one Arena seems to intend.
If “austerity” = “animal sacrifice”, and the neoliberal doctrines of conventional political economy = the superstitions of the old religion, Arena’s analogy puts Rodrik’s argument into a completely different cast.
I don’t think Rodrik makes it at all clear, whether he’s rejecting conventional political economy, because the doctrines are wrong in some scientific (logical, conceptual, moral, factual) sense, and, because he doesn’t declare himself on that socre, it isn’t really clear, contra Arena, whether Rodrik thinks the explanatory power and/or prescriptive power of that framework of ideas has proven too weak or too great or irrelevant. (Read against Blythe, “irrelevant” is hard to credit.)
[The power of a framework of ideas, of a paradigm (you knew that word was coming), may be the way in which such a framework or dialectic channels and entraps (“enslaves”, to recall Keynes) imaginative thinking. “Enslaves” does not have to be entirely a bad thing; maybe, it helps to get politicians working together, pulling in the same direction, legitimizing (yes, even legitimizing “sacrifice”), etc.
A paradigm, a generative research programme, is a good thing; a degenerative research programme is a bad thing.]
Rodrik’s argument sidesteps, and Arena calls him out on the sidestep. Oatley notices that the sidestep is the issue, in particularly telling terms:

the apostasy is rather odd coming from a person of Rodrik’s stature

To me, the “apostasy” was not the odd part; what was odd was that Rodrik did not criticize the conventional economic doctrines on their own terms. Rodrik seems to concede the “predictive” or analytic power of economics, as a premise for his argument for its impotence. Maybe, Rodrik thinks that bit of flattery gives his argument some jiu jitsu leverage.
It would be quite a different argument to suggest that the framework of neoclassical economics has many scholarly shortcomings, and those shortcomings are the foundation of neoliberalism, so that the destructive power of neoliberal policy is not just because it channels and legitimates the parasitism of an elite class, but because its lack of intellectual integrity dis-empowers and de-legitimates democratic political process and organization. It might not be quite the same thing as discovering that the Fathers of the Church are husbanding child molesters, but that would be a decidedly more inflammatory, and accurate, metaphor than Arena’s, or Rodrik’s, for the state of economics and economic policy-making.

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Tim Wilkinson 03.11.13 at 5:50 pm

As I read him, though he does make one remark which might suggest such a superstitious attitude to belief, I don’t think he does do that sidestep. He suggests that the public choice stuff is necessarily ineffective if correct; that doesn’t mean the same applies to ordinary political economy. Maybe I’ve applied a bit too much charity in reconstructing the argument, but that’s how I read it – basically, governors are not in a position to govern themselves so providing them with information whose only application is to governing governers is pointless.

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Bruce Wilder 03.11.13 at 7:09 pm

I read something else into his argument that ideas matter, because they shape our concept of interests through our concepts of ourselves, and that something is, that the determinism of the public choice analysis of incentives driving the behavior of politicians and bureaucrats is illusory, a product of “just so” stories identifying supposed incentives with specific behaviors those incentives supposedly elicit.

To be fair to Public Choice, the more sophisticated practitioners recognize that their frameworks lead down a path toward political constitutionalism, the idea that there are meta-level choices that distribute power and control. So, Rodrik going all Montesquieu and Spirit of the Laws with his remarks about how ideas can affect the values and identities elites adopt on a meta-level, and, therefore, on how they respond to incentives on an operational level, is not obviously, apostasy, either.

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Jerry Vinokurov 03.11.13 at 11:54 pm

Sorry to inject a bit of pedantry into this excellent discussion (which I have not quite finished reading), but this:

The problem with this is that it’s clearly magical: no scientist will admit to really believing that the past somehow sends informational rays into the present. The extra elements embodying memory, let’s call them the non-linear variables, are moreover purely statistical artefacts. Not are no real-world analogues known, they’re not even hypothesised.

Non-linear models are only ever used in the physical sciences as short-cuts to simplify what are understood more fundamentally as linear systems

is, I am sorry, woefully inaccurate. Really, really wrong. In fact, nonlinear behavior is quite the norm in many fields of physics (to say nothing of other fields as well); the one most people are probably best familiar with is the hysteresis of magnetic systems, but there are countless others. Not only is “the past… send[ing] informational rays into the present” a bad characterization, but in fact those rays are “sent” all the time (for sufficiently lenient definitions of “sent”). Physics is full of path-dependent systems, which are not at all “statistical artifacts” (whatever that means).

I think economics as a discipline would do well to note the path-dependency often encountered in physical systems (after all, economists are often derided for having “physics envy” so one might think they’d be more, not less receptive to that point), but it’s really unnecessary to butcher basic science in making this point.

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Adrian Kelleher 03.12.13 at 2:32 am

The phrase was chosen to be colourful to illustrate why a preposterous concept is, uh…, preposterous.

To take your example, the area inside the B-H curve in a ferromagnetic body exhibiting hysteresis is scaled in Joules. Referred to as hysteresis loss, it’s dissipated as heat with the area inside the curve being equal to the loss per cycle. Such systems are therefore not closed.

When modeled as a closed system, the hysteresis would disappear. Phonons, alterations to the crystal structure and so on would account for the missing energy, but then it would be apparent that the system is not following a cyclical path — each polarity reversal alters the body in question. Modeling based on the true state of the body would reproduce the pseudo-hysteresis without the magical influence from the past.

But why don’t you enlighten me — name a fundamental physical law
exhibiting temporal non-locality. And how, pray tell, is this evaluated at the moment of the big bang?

Answers on a postcard to the Nobel Prize Committee, Royal Swedish Academy of Sciences, Stockholm.

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Jerry Vinokurov 03.12.13 at 6:33 am

I really have no idea what any of the above is supposed to mean. I’m not sure you do either.

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Adrian Kelleher 03.12.13 at 8:34 am

You’re half right then. That’s progress.

Take a look, e.g., here. Notice how modeling always proceeds based on the instantaneous state of the crystal. This is because the hysteresis itself is an emergent property resulting from thermal dissipation. Viewed from the quantum perspective, say, it becomes an entirely linear system.

Alternatively, a in a perfectly “soft” material the hysteresis loop narrows until it becomes an arealess S-curve, the energy dissipation becomes zero over the cycle and the path dependency disappears also. See e.g. here.

No I made one simple request: specify a physical law not derivable from others more fundamental that exhibits temporal non-locality.

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Adrian Kelleher 03.12.13 at 8:36 am

*Now I made…

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Jerry Vinokurov 03.12.13 at 2:19 pm

You’re half right then. That’s progress.

We seem to disagree on which half, though.

Take a look, e.g., here. Notice how modeling always proceeds based on the instantaneous state of the crystal. This is because the hysteresis itself is an emergent property resulting from thermal dissipation. Viewed from the quantum perspective, say, it becomes an entirely linear system.

Look, I understand what’s going on here. I also understand that hysteresis is an emergent property of the physical system; this isn’t exactly news or anything. I don’t know why you think this helps any argument you’re making. Also, it is just not true that “viewed from the quantum perspective it becomes an entirely linear system.” The basic exchange Hamiltonian that is used to model magnetic materials is nonlinear (you can linearize it via various tricks, e.g. mean field theory). And if you want to see fundamental physical equations which are themselves nonlinear, you have to look no farther than the Einstein field equations of general relativity.

Actually, I feel like this makes the physics/economics analogy more fruitful. Which is to say: even if you don’t think individual trajectories (people in econ, spins or domains in our dual physics world) have histories, the system itself most certainly has a history. In other words, path dependence is a real phenomenon, and you need to pay attention to the path just as much as to the dynamics of the individual trajectories. Indeed, from a certain perspective, you might not even want to pay attention to the individual trajectories, seeing as how they’re basically incalculable under certain conditions.

Alternatively, a in a perfectly “soft” material the hysteresis loop narrows until it becomes an arealess S-curve, the energy dissipation becomes zero over the cycle and the path dependency disappears also. See e.g. here.

That’s true, but I still don’t understand what you’re trying to get at here. Let me bring back a part of what I originally quoted:

Non-linear models are only ever used in the physical sciences as short-cuts to simplify what are understood more fundamentally as linear systems

This just isn’t true. It actually doesn’t even make sense; I can’t think of any circumstances under which a non-linear theory would be viewed as simpler than a linear one, for the simple reason that linear theories are usually way more tractable. There’s a reason why you linearize non-linear equations but not the other way around. I fully admit that there might be some esoteric situations in which you could be better off working in a non-linear theory, but if there are, I haven’t run into them through 10 years of undergraduate and graduate physics education.

No I made one simple request: specify a physical law not derivable from others more fundamental that exhibits temporal non-locality.

I still don’t understand what this is supposed to mean, or why it matters. This wasn’t even part of the original bit that I objected to. The nearest thing I can come up with is that you seem to think that temporal non-locality (which I’m still not sure what that is) is needed to model human memory, or something like it, without which economic models are incomplete. I too think that economics should take psychology more seriously, but I don’t think this has anything to do with temporal non-locality, any more than a psychologist needs it to do psychology properly.

I think the criticism that economic calculations are simplified for tractability rather than for truth is a reasonable one. If all you’re saying is that intertemporal maximization of abstract utility functions under a set of constraints is not exactly the way that humans actually operate, then I’m with you. I get off the train though when you start making outlandish claims about the presence or absence of non-linearities within physics and talking about what self-respecting scientists will or will not do without, seemingly, having any idea what those scientists actually do. Again: to make cogent criticisms of economic theories it is not necessary to twist other, unrelated theories beyond all recognition. It doesn’t do anyone any favors.

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Adrian Kelleher 03.12.13 at 5:28 pm

A climbdown of some grandeur is apparent.

The reason I ask for an fundamentally path-dependent physical law is pretty straightforward: if such a law existed, by definition it would exhibit intertemporal non-locality.

But there are no such laws. And that fact alone is sufficient to conclude that, modeled on the basis of their fundamentals as currently understood, all physical systems evolve based on their current state and no other factors.

Let’s see what it says here:

“There is an interesting analogy between the theories of quantum mechanics and general relativity involving apparent non-linearity.”

Note “apparent”.

“Both theories may be considered to be based on a purely linear foundation, represented by the Schrödinger wave equation for quantum mechanics and the flat Minkowski spacetime metric for general relativity. For quantum mechanics we then traditionally imagine something like a “collapse of the wave function” when a measurement takes place, and this operation introduces non-linearity to the theory.”

“Both theories may be considered to be based on a purely linear foundation” — QED, really. But anyway…

Note that A) wave function collapse is a hypothesis rather than an observation, and B) it introduces mathematical non-linearity but not path-dependence into quantum mechanics, unless you count the in this case trivial assertion that the event of wave function collapse is itself path dependence.

Regardless of when an observation is conducted and the wave function is held to have collapsed, the system still evolves thereafter dependent on its then current state and on no other factors — and any instant(s) may be chosen to conduct observations.

Instantaneous evolution is thus always linear, and path dependence can always be circumvented. And quantum mechanics is entirely sufficient on its own to explain apparent hysteresis in ferromagnetic materials without recourse to the concept of system memory so long as it’s modeled as a closed system.

“Analogously in general relativity we imagine “curvature” of the observational spacetime manifold in accord with the non-linear Einstein field equations.

“In the case of quantum mechanics there are alternative interpretations that do not explicitly involve a collapse of the wave-function, and that assume instead that the overall wave function always continues to evolve in accord with the purely linear Schrödinger equation. These are sometimes called “no-collapse” interpretations. According to some variants of this approach, we are asked to imagine a “branching” of the wave function into multiple alternate histories, leading to the so-called “many worlds” or “many histories” interpretations of quantum mechanics. Of course, it’s necessary for these theories to somehow account for the apparent collapse and non-linearity in the course of events. In other words, they must explain why we seem to observe only a single world with a single history. For this purpose, the idea of “decoherence” is sometimes invoked.”

Let’s forget non-linearity as an abstract mathematical concept — it’s path dependence we’re interested in. So, is the evolution of a system contingent on the current state only or is information about its history also needed?

The quoted text indicates that quantum reality is open to interpretations both including and excluding non-linearity. However this gives a misleading impression for the purposes of this argument. Any system evolves on the basis of its current state, and none are inescapably path dependent. That other history-dependent descriptions are possible is interesting but irrelevant — the point is that the current state is sufficent information to account for all that can be accounted for without any action at an intertemporal distance.

The author then goes on to describe a purely linear treatment of general relativity.

“Much less well-known is a somewhat analogous approach to general relativity, which we might call the “no-curvature interpretation”. This also involves “branching” into multiple layers while maintaining purely linear local evolution of each layer.”

The author continues with a detailed description. But I’ve neither any real understanding of this nor interest in it. The point is that so long as it’s characterisable in a linear way it can’t logically exhibit irreducible path-dependence.

All I care about is that, understood at a fundamental level, physical systems evolve on the basis of their current state and nothing else. “Non-linear” is used (correctly, if vaguely) by physicists all the time to refer to path dependence and you had no problem ascertaining that path dependence was what was in fact referred to, but path-dependence is *never* a required element of any model.

But let’s just apply a little common sense to the situation. Take the ferromagnetism example: it consists of fundamental particles governed by all the usual rules, but a quantum model of the crystal would be considered precise for all normal purposes. Where is the memory in this system? It can only reside in the system’s fundamental constituents and none of those embodies memory in its characterisation, or can do, and none requires a non-linear characterisation. The apparent non-linearity is an emergent characteristic, as the linked book illustrates.

The system is however vastly more manageable via a (path-dependent, obviously) hysteresis model. The utility of the hysteresis model lies in abstracting innumerable alterations in the state of the ferromagnetic body from cycle to cycle.

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Anarcissie 03.12.13 at 5:28 pm

chris 03.10.13 at 8:55 pm @ 126:
‘… If the concept of interest turns out to be too vague, subjective, or unknowable to be nailed down, then isn’t this whole thread built on sand? How can you say whether ideas are more important than interests if you don’t even know what an interest is or how to know it when you see it?’
That was the problem that got me interested in this discussion. For me, interests are values which are constructed and perceived as ideas. An interest is a kind of idea. And we form ideas mostly because we are interested in what the ideas are about. I don’t see a stark, mutually-exclusive contrast between ideas and interests.

In regard to the ‘accuracy’ of a person’s ideas of his or her interests as opposed to someone else’s, I meant something like connection, proximity, alignment. I will try to think of a more formal description if desired. The drug addict or the Republican may be pursuing their values as efficiently and rationally as possible. They may seem to not be pursuing their interests as seen from the outside because the outside observer has different values.

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Jerry Vinokurov 03.12.13 at 7:50 pm

The reason I ask for an fundamentally path-dependent physical law is pretty straightforward: if such a law existed, by definition it would exhibit intertemporal non-locality.

Ok, fine, but even taking this to be the case, why does it matter? It would certainly be scientifically interesting, sure, but seems to me to be besides the point. You’re analogizing economic and physical systems; thus, the fact that we can find non-linear systems that exhibit path dependence should be sufficient for whatever uses you wish to put it to with regard to economic systems as well. After all, these are system-level properties, as you yourself have acknowledged.

But there are no such laws. And that fact alone is sufficient to conclude that, modeled on the basis of their fundamentals as currently understood, all physical systems evolve based on their current state and no other factors.

No! That’s clearly not true! You’re just committing a very bad fallacy of composition. Let’s review: even if the “laws” (and parenthetically I note that it’s not terribly well-specified what counts as a “law” here, but it doesn’t matter too much for now) themselves are perfectly linear, once you compose a number of linear elements into a full-blown system, you can and do get nonlinear behavior. Ergo: physical systems do not evolve, on large timescales, based just on their current state. Or to put it in other words, microscopic reversibility is not equivalent to macroscopic reversibility: the dye never unmixes from the water. You may pejoratively refer to these things as “statistical artifacts” but I don’t know why you would do so, or what relevance it has. The second law of thermodynamics is in fact as much a “law” as Maxwell’s equations.

Let’s see what it says here:

“There is an interesting analogy between the theories of quantum mechanics and general relativity involving apparent non-linearity.”

Note “apparent”.

Yes, in the words of the author. Hardly definitive.

“Both theories may be considered to be based on a purely linear foundation, represented by the Schrödinger wave equation for quantum mechanics and the flat Minkowski spacetime metric for general relativity. For quantum mechanics we then traditionally imagine something like a “collapse of the wave function” when a measurement takes place, and this operation introduces non-linearity to the theory.”

“Both theories may be considered to be based on a purely linear foundation” — QED, really. But anyway…

Not QED at all (pun intended?). There’s a really important sentence that you left out: “Of course, it’s necessary for these theories to somehow account for the apparent collapse and non-linearity in the course of events.” So none of this saves you actually, because you still have to translate it back into the world of measurements and so on.

From my reading of that page, what the author is proposing is a common trick in physics. Namely, you can’t solve a problem in some primal space, so you transform into a dual space where the problem is tractable, solve there, and then transform back. The most straightforward example is the Fourier transform between time and frequency, but it occurs to me that the many-worlds interpretation and the author’s proposed “no-curvature general relativity” (for which, by the way, I couldn’t find a cite anywhere, leading me to suspect that this isn’t exactly a popular theory) are the same way. You don’t like the non-linearity of “standard” GR so you do a transformation into another space where you’ve eliminated that problem. But of course there is no free lunch; what you win in killing non-linear terms, you lose by having to consider these “multiple slices.” I have no idea if this actually works or not, in this case; I’m not a good enough topologist to tell. But even if it does work, it buys you nothing because you still have to come back to the original world and display the result of a calculation.

Note that A) wave function collapse is a hypothesis rather than an observation, and B) it introduces mathematical non-linearity but not path-dependence into quantum mechanics, unless you count the in this case trivial assertion that the event of wave function collapse is itself path dependence.

Well, it’s all hypothesis in some sense. I remain agnostic about what the “true” interpretation of QM is; so far, I haven’t seen anything that would have prompted me to commit to anything more than Bohr’s “shut up and calculate” program. In other words, insofar as “wave function collapse” is even a thing, I view it as a sort of useful metaphor. It’s just kind of a stand-in for “measurement” where “measurement” is mathematically “projection of a state onto an eigenstate of the Hamiltonian.” I freely admit that I am not an expert in foundational QM; that’s quite a distance from what I did in grad school. But it’s still a huge stretch to go from the various interpretations of QM to claiming that non-linearity doesn’t exist in physics or is some kind of fantasy.

Regardless of when an observation is conducted and the wave function is held to have collapsed, the system still evolves thereafter dependent on its then current state and on no other factors — and any instant(s) may be chosen to conduct observations.

Instantaneous evolution is thus always linear, and path dependence can always be circumvented. And quantum mechanics is entirely sufficient on its own to explain apparent hysteresis in ferromagnetic materials without recourse to the concept of system memory so long as it’s modeled as a closed system.

Ok, but you’re still just noting that microscopic reversibility is not the same as macroscopic reversibility. As for the last part of that, I don’t understand what “quantum mechanics… on its own” is supposed to be. As opposed to what? Hysteresis is the response of a ferromagnetic system to an applied field, that’s all. You get that response by writing down the exchange Hamiltonian and adding a term representing the interaction with the applied field. So there’s quantum mechanics. What you find is that once you parametrize your problem with respect to time, you get those hysteretic, i.e. path-dependent effects.

Let’s forget non-linearity as an abstract mathematical concept — it’s path dependence we’re interested in. So, is the evolution of a system contingent on the current state only or is information about its history also needed?

The answer to that question depends on the timescale involved. At very small timescales, you only need the last state. But at large timescales, you need the whole history.

The quoted text indicates that quantum reality is open to interpretations both including and excluding non-linearity. However this gives a misleading impression for the purposes of this argument. Any system evolves on the basis of its current state, and none are inescapably path dependent. That other history-dependent descriptions are possible is interesting but irrelevant — the point is that the current state is sufficent information to account for all that can be accounted for without any action at an intertemporal distance.

What does “inescapably” mean in this context? If I’m right about the maneuver attempted by the author of the above post, and if I’m also right about the analogy between dual-space transformations and various interpretations of QM, then you might “escape” path-dependence, but only if you’re prepared to give up something else, much like you can’t get the results of QM and a local hidden variable theory at the same time. Something has to give. Equally pressing is the problem of coming back from your dual space into the primal space you started with.

The problem with relying on the next microstate to be obtained even deterministically from the previous one is that it doesn’t scale. This is why non-linear systems go chaotic. No matter how good your computational equipment, sooner or later trajectories which differ by even the tiniest amount of noise may diverge exponentially, so following a single trajectory through such a space is pretty pointless. But that doesn’t mean you can’t say something about the long-term trends of the system.

The author then goes on to describe a purely linear treatment of general relativity.

“Much less well-known is a somewhat analogous approach to general relativity, which we might call the “no-curvature interpretation”. This also involves “branching” into multiple layers while maintaining purely linear local evolution of each layer.”

As I said before, I read this as a common trick (not used pejoratively here) from physics. You buy linearity at the cost of layers. Fine, let’s say it works. So what?

The author continues with a detailed description. But I’ve neither any real understanding of this nor interest in it. The point is that so long as it’s characterisable in a linear way it can’t logically exhibit irreducible path-dependence.

The problem is in the word “irreducible.” You’ve made a trade is what you’ve really done. Maybe it’s a good trade to make for computational reasons, but that’s all it is. That’s why the “logically” part doesn’t follow from what you’ve said; at best, you can say that you could reformulate the question in a non-linear fashion but at the expense of some other variable. That doesn’t mean that either linearity or non-linearity are “fundamental,” it means that you have to give in order to receive.

Let’s put it another way. Forgetting about larger questions concerning time, is time or frequency “more fundamental” in signal analysis? After all, you can transform at will between the two domains with a Fourier transform. So just as easily, I could say that signals are characterizable without regard to time. Have I thereby eliminated time or rendered it less fundamental because I’m able to work in a dual space that doesn’t use it? Of course not; I’ve merely made the same sort of trade.

All I care about is that, understood at a fundamental level, physical systems evolve on the basis of their current state and nothing else. “Non-linear” is used (correctly, if vaguely) by physicists all the time to refer to path dependence and you had no problem ascertaining that path dependence was what was in fact referred to, but path-dependence is *never* a required element of any model.

The problem is that your “not required” works only in a particular space. It’s quite clearly required if you want to do GR the “standard” way. Or to put it another way: what’s required is some mechanism that gets you the same results. If you work in the “primal” space, then you’re stuck with non-linearity. If you work in some other dual space where you’ve ditched non-linearity, then you’re stuck with some other feature that had better reproduce all those results when you come back to the primal. That doesn’t mean either of the two spaces is “fundamental” in any real sense.

But let’s just apply a little common sense to the situation. Take the ferromagnetism example: it consists of fundamental particles governed by all the usual rules, but a quantum model of the crystal would be considered precise for all normal purposes. Where is the memory in this system? It can only reside in the system’s fundamental constituents and none of those embodies memory in its characterisation, or can do, and none requires a non-linear characterisation. The apparent non-linearity is an emergent characteristic, as the linked book illustrates.

Yes, but again, so what? The memory is an aspect of microscopic behavior, this we know already and it was never in doubt. That very block above just says: you can take a bunch of simple elements and combine them into a complex system whose properties are not themselves properties of any individual elements within the system. Which is what I’ve been saying.

The system is however vastly more manageable via a (path-dependent, obviously) hysteresis model. The utility of the hysteresis model lies in abstracting innumerable alterations in the state of the ferromagnetic body from cycle to cycle.

Of course we make approximations for the purposes of tractability. I still don’t see path-dependence as some horrible kludge imposed from above on otherwise innocent models. It’s just the outcome of what happens when you write down equations that scale to the system level, in certain systems. Why is this supposed to be weird?

What I don’t get most of all is what this is all supposed to get us with respect to economics. If relatively simple systems like magnets can exhibit path-dependent effects (which, I continue to maintain, are real, for all that they are macroscopic properties of a system), how much more so human minds or societies? It’s pretty obvious that our lives are path dependent; we do the things we do, in no small portion, because we are influenced by the past and what that past has made us (case in point: had I not gone to grad school in physics, I might not be here typing up overly long technical comments on Crooked Timber). All of this seems to have started from a kind of weird statement you made way up at comment #125, where you called non-linearities a sort of magic. I took the entire surrounding post to be a commentary on the failure of economic models to deal with that sort of path-dependence properly, and all I really wanted to do was to note that non-linearity is not a magical kludge, that scientists do take it seriously, and that path-dependence in physics is a real thing. Insofar as economics wants to be like physics (not saying that’s actually desirable, although many economists seem to think so), then it should take path-dependence more seriously than it does.

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Adrian Kelleher 03.13.13 at 10:17 am

The mere existence of a nonlinear characterisation does not in itself imply nonlinearity. Any system expressible linearly can be expressed nonlinearly, the latter being the mathematically general case.

As regards general relativity, it’s linear for flat space. Where space-time curvature is significant its non-linearity derives from the self-coupling of gravity. As far as I can work out, this has no implications for causation but I really can’t say. See, e.g. here. Of course curved space-time has no relevance for any of the examples you allude to.

If you stopped for a moment and gave thought to the meaning of what you’re saying you’d realise it’s simply a quite daft idea. “True” path-dependence would mean that two systems possessing identical states would evolve differently depending on their history. The simple question then is: well, how is this possible?

Quantum mechanics does not permit it simply because no such mechanism exists. It follows that any system treatable fundamentally as a quantum system will have no inter-temporal element. The commonsensical question about a quantum system treated fundamentally (even hypothetically) is: well where does this memory reside, then?

Beyond that I’m at a loss as to how to proceed unless you get down to specifics about the systems you claim to be “really” path dependent. Obviously they can’t be any quantum mechanical systems…

So before, declaring any system “fundamentally” path-dependent imagine first that system broken down to the most fundamental level of human understanding. Where is the memory? Or is it claimed that information is exchanged inter-temporally in violation of quantum mechanics?

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reason 03.13.13 at 10:56 am

This discussion is completely lost. The current state IS the memory of what has happened, or is your bank account recreated every minute? So long as movements in one direction are easier than movements in another direction, random permutations in the path significantly determine the future path. Or is the earth just a cloud of dust?

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reason 03.13.13 at 10:57 am

oops
… random permutations in the PAST significantly ….

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reason 03.13.13 at 11:01 am

Basically all that path dependence means IN THIS CONTEXT is that the if we are forcasting the world 10 years ahead then knowing the current state lets us make a better estimate than if we only know the state 10 years ago – so history matters! This is at odds with the mean reverting properties of equilibrium models which are popular in economics.

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Adrian Kelleher 03.13.13 at 11:17 am

Well economics is straightforward in this context, at least conceptually. There’s no confusion about where the memories reside: inside people’s heads.

This doesn’t alter the physics side-discussion at all, though.

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Tim Wilkinson 03.13.13 at 9:24 pm

BTW, this kind of issue in physics goes back at least to the Eleatic paradoxes – see. e.g. ARE THERE REALLY INSTANTANEOUS VELOCITIES?. Presumably AK would say either that point velocities do really exist as part of the inventory of states at a given time, or that such properties are not ontologically fundamental, and that at a quantum level this issue doesn’t arise (I don’t know enough about QM to see how this could be the case).

For ‘path-dependence’ in economics, Axtell in The Complexity of Exchange points out, in essence, that the classical Walrasian equilibrium is quite radically unrealistic, requiring in effect a perfect central planner for its implementation.

When the free market is subjected to the same modest degree of realism that its proponents use to rubbish the idea of central planning, a different picture emerges. In this slightly less unrealistic model, Pareto-optimality (or P-efficiency), which gets treated as an equilibrium state (and is, in a sense), is shown to be path-dependent in the sense (IIU&RC) that a given distributed (i.e. less unrealistic) system may reach ‘Pareto-optimality’ by any of a number of routes, and that the underlying states of the system on which ‘Pareto-optimality’ supervenes can (and in fact generally will) differ. I think a term like ‘Pareto-exhaustion’ might be more apt to describe this property, which doesn’t encode much information about the underlying allocation at all.

There is nothing very mysterious about this – I’d always thought it obvious that Pareto-optima are in reality local and generally incommensurable (by a Pareto standard); and that Pareto-optimality is thus not really a useful or interesting property, nor one with much claim to a place in the ontology of the ‘market’.

I’m not sure that Axtell, whose focus is not really quite the same as mine, entirely appreciates this, since at one point (have checked, it’s p6) he compares pareto-optimality as instantiated in Walrasian equilibria (which IIUC are deterministic and thus unique) with Pareto optimality as achieved by a realistic – distributed – process of market trade in which the hidden free lunch of the Walrasian planner is unavailable, and states:

if computation is costly then when two equally efficient (i.e., Pareto optimal) market mechanisms having significantly different computational complexity are competing, the one ultimately selected will be the least costly one, i.e., the one requiring the least number of computations

The statement that if two distributions both share the ‘Pareto-optimality’ property, that means they are equally ‘efficient’ is really not justifiable, because here ‘efficient’ is being used in an ordinary sense, not in the highly specialised, unintuitive Pareto sense. Note that Axtell states: While Walrasian exchange has no effect on the wealth of individual agents—that is, Walras’ law holds—in distributed exchange environments some agents gain wealth while others lose it.

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Jerry Vinokurov 03.13.13 at 9:50 pm

The mere existence of a nonlinear characterisation does not in itself imply nonlinearity. Any system expressible linearly can be expressed nonlinearly, the latter being the mathematically general case.

I’m sorry, this is meaningless. No one adds arbitrary nonlinearities to equations for the fun of it.

As regards general relativity, it’s linear for flat space. Where space-time curvature is significant its non-linearity derives from the self-coupling of gravity. As far as I can work out, this has no implications for causation but I really can’t say. See, e.g. here. Of course curved space-time has no relevance for any of the examples you allude to.

If you don’t accept that GR is a non-linear theory, then I don’t know what to say. Words have meanings, and in physics, that particular terminology has a particular meaning, expressible in coherent mathematical notation. If you’re not going to play the game by the established rules, then we’re not going to play it; I’m not going to put in the time to try and understand what your idiosyncratic definitions mean.

If you stopped for a moment and gave thought to the meaning of what you’re saying you’d realise it’s simply a quite daft idea. “True” path-dependence would mean that two systems possessing identical states would evolve differently depending on their history. The simple question then is: well, how is this possible?

f(t) = g(h(t)) where f(t) is the state at time t and h(t) is the history of all prior instantiations. Voila!

Quantum mechanics does not permit it simply because no such mechanism exists. It follows that any system treatable fundamentally as a quantum system will have no inter-temporal element. The commonsensical question about a quantum system treated fundamentally (even hypothetically) is: well where does this memory reside, then?

And yet they exist. We are back to the emergence of path dependency from the collective dynamics of a system.

Beyond that I’m at a loss as to how to proceed unless you get down to specifics about the systems you claim to be “really” path dependent. Obviously they can’t be any quantum mechanical systems…

They can be and are.

So before, declaring any system “fundamentally” path-dependent imagine first that system broken down to the most fundamental level of human understanding. Where is the memory? Or is it claimed that information is exchanged inter-temporally in violation of quantum mechanics?

Break down the human brain into neurons. Where is the memory? And yet humans have memory. Unless you’re committed to some kind of weird dualism or nonphysicalism (in which case this conversation is entirely pointless anyway), it’s right there in the collective system dynamics.

I apologize for the threadjack. I was just hoping to correct what I saw as a fundamentally inaccurate characterization of physical processes, not get bogged down in a philosophical debate about QM interpretations and whether math really means what it says.

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Adrian Kelleher 03.14.13 at 1:31 pm

Do you really mean that if I place a 78 of Heartaches by the Number by 1950s easy listening star Guy Mitchell on the gramophone player it actually retrieves the great man’s voice from the depths of time? Or that, when I look at his image on the mantlepiece, instead of looking at a photograph I’m instead gazing directly upon his angelic face? I’d always considered these simply as encoded information no more connected to the events they record than entries in an accountant’s ledger are to the transactions to which they refer.

Human memory has subjective and objective facets, but is otherwise identical in principle. The subjective features are private to each individual: they aren’t shareable and (for the purposes of this conversation, fortunately) science has nothing to say about them. Reasoning not based on observation, such as induction, enables contingent conclusions to be drawn about the subjective elements but the answers they provide are naturally themselves subjective.

The objective features of brain function are more straightforward and can be observed via EEG traces, CAT or NMR scans and so on. By observing the effects of brain injuries or illnesses, of ECT, of various drugs, or of electrical stimulation of the cortex, it’s possible to see the objective effects of destroying or interrupting either the encoded information or of the means of reconstruction.

Absolute objectivity can be retained by observing alterations in subsequent behaviour and correlating these with the specific brain impact, subject to assumptions not normally controversial about causation which iteratively gain statistical weight.

Alternatively, the resultant information may be synthesised with the inductive reasoning already mentioned to draw more general conclusions contingent only on everyday assumptions about equivalence of basic psychological experiences. But this really isn’t necessary because to refuse solipsistically to believe in the subjective recollections of someone affected by brain trauma requires a refusal to believe they ever had recollections in the first place.

None of these observations suggest there’s any difference in principle between memory and those relics of Mitchell that are so dear to my heart. There isn’t the slightest reason to assume anything other than the obvious: that the record, the photograph and the objective aspects of memory each involve encodings recorded once and preserved informationally down to the present day. If the information is lost once it is lost forever. On the other hand, the means of reconstruction may be interrupted any number of times and yet successfully resumed later.

When Johnny is drunk and can’t find his way home, no doctor will agree that he has lost some mystical connection to the past any more than she would celebrate its retrieval when he sobers up. I don’t think anyone has believed otherwise since Descartes’ time.

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Jerry Vinokurov 03.14.13 at 2:36 pm

What are you even talking about? You asked me “where is the memory?” and I told you; I asked you “where is the memory in the human brain?” and then told you. Just like with other systems it’s in the collective dynamics. I don’t know why this is so hard to grasp. Nevermind that human memory is basically nothing like a recording and what any of this has to do with subjective or objective experience as such is beyond me.

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Adrian Kelleher 03.14.13 at 2:45 pm

The memory is not in any collective dynamics. It’s in an encoding. But I take it you either don’t contend, or no longer contend, that human memory requires a non-linear explanation.

So-far you’ve provided one (1) system you claimed to be non-linear, namely magnetic hysteresis, only to drop it when it was demonstrated to be linear when described more fundamentally. Are you at any point going to introduce a second into the conversation? Will I need to ask many more times?

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Adrian Kelleher 03.14.13 at 3:29 pm

On second thoughts, don’t bother. I want to get back to economics before you get me booted from the site.

If a system can be characterised as a Hamiltonian — and practically anything can — then it’s a linear system. Implicit in the Hamiltonian is the evolution to any arbitrary time in the future, and at each instance the sole factor determining future evolution is the instantaneous state.

I’d bet any reasonable amount of money on that, arbitrated by any certified authority you care to select (who isn’t a fringe theorist). Let’s say $2000, with any university lecturer in physics willing to put his name to a decision as the authority. That’s economics for you — enough cash for an inducement, not enough for a professional physicist to throw away his reputation.

The invocation of system dynamics is mysticism and nothing more. You haven’t even proposed a mechanism for the action across time that you claim.

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