John Q

A little bit I plan to include in the chapter on the Great Moderation, linking on to a critique of post-70s macroeconomics. As always, comments and criticism gratefully (and, mostly, I hope, gracefully) accepted

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Following the successful wingnut attack on Van Jones, the Washington Independent reports that Glenn Beck’s next target is Cass Sunstein, with the pretext being his discussion of organ donation in Nudge, his book with Thaler on how small framing effects can have big effects on outcomes (. I see this as a positive development in all sorts of ways.

Update Sunstein’s appointment was approved by the Senate on a near party line vote 57-40. Six Republicans (Bennett, Collins, Hatch, Lugar, Snowe,Voinovich) voted Yes. The No votes included Bernie Sanders who opposed Sunstein for much the same reasons I would and some Blue Dogs notably including Ben Nelson, who followed the Beck line (all of the Dems voted for cloture). Obama’s only real chance of achieving anything is to dump both the filibuster rule and the Blue Dogs. End update

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Thanks to the continued tyranny of distance as regards the transport of books, my copy of George Scialabba’s book, What are Intellectuals Good For arrived about the time the CT seminar on the topic went live. I had a variety of thoughts on reading the book, but in a lot of ways they reinforced the point made by the transportation delay: the public intellectual business, even now, is quite nationally specific. This is not to say that Scialabba is in any way parochial: on the contrary, his cosmopolitan outlook is a striking contrast with the insularism that characterises many metropolitan intellectuals, not to mention their eponymically provincial counterparts.

Still, reading his discussion of the New York intellectual scene is rather reminiscent of looking at a map of the NYC subway system. It’s fascinating, I’ve visited some of the stops and heard a lot about others, and there are some big achievements to admire, but as regards getting around Brisbane, it doesn’t have a lot of immediate use to me.

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In any book on policy thinking, the easy bit (not all that easy!) is to write about what’s wrong with existing ideas, in my case the zombie ideas I’m writing about. The chapter plan for my book includes, in each chapter, a section on “What next”. As regards the Great Moderation, which was essentially an interpretative claim about the data, it’s not really clear what to include. I’m leaving the details of macroeconomic thinking and policy for another chapter and writing about how society should handle risk. Comments and criticism appreciated as always.

I’m in the process of setting up a site at wikidot.com where the whole draft will be presented in wiki format. But I’ve been travelling and haven’t managed to get it going yet.
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Quite a while ago, I raised a question about the practical implications of the “rapture” doctrine, held by large numbers of evangelicals.

Do they install automatic watering systems for their gardens and arrange for unsaved neighbours to feed the cat? Or do they just pay into their IRAs as if they expect the world to last forever?

Now it appears, some enterprising atheists have set up a service addressing one of the problems I raised. In the event of rapture, they guarantee that , assured of being left behind, they will look after the pets of those who are taken up. (video here)

As I mentioned, I’m at a conference on Logic, Game Theory and Social Choice. Attending a session on experiments in voting theory (some very interesting ones for which I will try to find links) I started thinking about a case for Instant Runoff/Single Transferable/Preferential systems (like many Australians I’m a big fan of this system which works well for us, with none of the disasters we’ve seen produced in the US and UK by plurality voting). For those interested, an outline of an idea is over the fold. It’s not my field, so I’m quite prepared to be told my argument is wrong, well-known or both.

Note 29/8 I initially put up this post with another, related, claim, convinced myself that this claim was wrong, and deleted it, leaving the post as a placeholder until I could do something better. The first few comments refer to this.

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I’ve been in Japan for the last few days, at a conference on Logic, Game Theory and Social Choice where, among other things, we’ve had some interesting discussions on electoral mechanisms. Meanwhile, Japan appears to be on the verge of tipping out the almost-permanent LDP government.

But, as a (non-Japanese speaking) visitor, I can hardly tell there was an election on. I’ve seen no rallies or badges, only a handful of posters and one loudspeaker truck, with a decidedly non-strident woman’s voice issuing what may have been a political message. The English language media I have access to (Asahi Shimbun and so on) has been giving the election about the level of coverage I’d expect for a boring state election at home. I’ll give some very ill-informed thoughts over the fold, but can readers say anything from their own knowledge, or point to useful sources?

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Another section of the Great Moderation chapter from my book. I’m getting a lot of value from the comments, both favorable and critical, so please keep them coming.

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Another longish extract from my book project. Corrections and suggestions of all kinds are welcome. I’m also thinking it might be good to have a website where it’s possible to look at, and comment on, all the draft chapters, but I suspect people prefer the atmosphere of a comments thread. Any thoughts on this?

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The current working title for the book is Zombie Economics: Six Dead Ideas that Threaten the World Economy (suggestions for a better subtitle are welcome) and that requires a new intro.

Also, I’ve come to the view that “market liberalism”, as opposed to “economic liberalism”, is a better name for the viewpoint, based on the efficient financial markets hypothesis and other ideas criticised here, that has dominated policy thinking in recent decades.

Any thoughts on these points, or the revised intro, would be most welcome.
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Over at my blog a couple of days ago, we were discussing Steven Pinker’s The Blank Slate, a book which I thought, when I reviewed it in 2002, was much below the standard of his earlier work, though no worse than the average book about the ‘nature-nurture’ controversy. In particular, I thought his discussion of war and violence was hopelessly confused, putting forward a Hobbesian view of violence as the product of rational self interest as if it was consistent with the genetic determinism that was the central theme of the rest of the book.

Now, via John Horgan at Slate, I’ve happened across this broadcast by Pinker at TED (which, by the way I’ve just discovered and is excellent). The broadcast has a transcript which is great for those of us who prefer reading to listening.

In this piece, Pinker appears to me to change sides almsot completely, from pessimist to optimist and from genetic determinist to social improver. Not only does he present evidence that war and violence are declining in relative importance, his explanation for this seems to be entirely consistent with the Standard Social Science Model he caricatured and debunked in The Blank Slate. He’s still got a sort of rational self-interest model in there, but now Hobbes is invoked, not for his ‘nasty, brutish and short’ state of nature, but for his argument that the Leviathan of social order will suppress violence to the benefit of all.

But even more striking is this:

[Co-operation] may also be powered by cosmopolitanism: by histories and journalism and memoirs and realistic fiction and travel and literacy, which allows you to project yourself into the lives of other people that formerly you may have treated as sub-human, and also to realize the accidental contingency of your own station in life; the sense that “there but for fortune go I.”

I agree entirely, but we seem to have come a long way from the African savannah here.

Writing a critique of the Efficient Markets Hypothesis in terms rigorous enough to stand up to scrutiny, but comprehensible to the average reader hasn’t been easy, and I still have a lot more work to do. But thanks to the help I’ve had from commenters here and at my blog, and from other readers, I hope to make a go of it. Now comes the hard bit: suggesting some alternatives, both in theory and policy. I’m not by any means satisfied with this draft. In particular, I need to go back and get a better linkage to the question “if the market price for assets is not the “right” price, what is?”. But, I thought I’d do better getting some help and criticisms now, rather than trying for some more polish first.

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In my discussion of the efficient markets hypothesis, I’ve asserted at various times that if (strong or semi-strong) EMH holds, then the market price of an asset “the best possible estimate of the value of the asset” or, more simply, the “right” price. Quite a few commenters asked me to spell out what this means, and there was some useful discussion. This really is the central issue in evaluating the EMH, so I want both to get it right and to express myself as clearly as possible for non-specialist readers. There’s a draft over the fold. I await your brickbats and (hopefully) bouquets.

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Another section from the forthcoming book. Casting suggestions for the blockbuster movie will be gratefully accepted, along with more prosaic correction of errors, omissions, and of course, compliments. I’m trying to get a nice HTML version, but will see how it goes

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