Showing posts from April, 2011

Theory and Practice

Bob Murphy recently asked me, "Do you believe in the very concept of economic theory at this point?"

Well, on one level, how could one not "believe" in economic theory? There is obviously tons of it. It would be like not believing in trees.

But Bob surely means "Do you approve of economic theory?" or "Do you think economic theory is..." Is what? Well, hmm, there's the rub.

I think economic theory is a fine thing. I teach it. Some times I even engage in it.

But is it true? Well, there certainly are true and false conclusions in economic theory. For instance, it is false that an increase in demand will, ceteris paribus, result in a lower price for a good, and true that it will result in a greater quantity demanded.

But is economic theory true, strictly speaking, of the world? Well, no, because no theory is. Every theory is literally false, in that a theory is always a partial and abstract description of the world, and, as such, defective. And …

How Could Anyone Know Less About Hayek...

and even know how to spell his name?

George Soros writes:

"Friedrich Hayek is generally regarded as the apostle of a brand of economics which holds that the market will assure the optimal allocation of resources — as long as the government doesn’t interfere. It is a formalized and mathematical theory, whose two main pillars are the efficient market hypothesis and the theory of rational expectations.

"This is usually called the Chicago School, and it dominates the teaching of economics in the United States."

It's really hard to imagine how anyone could do worse than Soros and still know how to spell 'Hayek', since:
1) Hayek did not think the market will "assure the optimal allocation of resources."
2) Hayek's theories were not "formalized and mathematical."
3) Hayek rejected anything like "the efficient market hypothesis."
4) Hayek was most definitively not a member of the Chicago School.

Soros's piece is stunning in its …

Talk About Interfering in the Internal Affairs of Foreign Countries!

There once was a prince. He hoped that a larger nation, one near to his tiny republic, would help the republic fight its large, rapacious neighbor. "How can I best ensure the support of that larger nation?" he wondered.

He finally hit upon the perfect plan: He had himself made king of the larger nation, taking it over as though it were his sock puppet! Then naturally it fought on the side of his beloved republic.

Savage Bog-trotters and Goatish Monks

What happens if you let the Irish run loose:

"Yourselves forced to fly destitute of bread and harbour, your wives prostituted to the lust of every savage bog-trotter, your daughters ravished by goatish monks, your smaller children tossed upon pikes... whilst you yourself have your own bowels ripped up..." -- Popery and Politics in England: 1660 - 1699, quoting Henry Care

The author, in the course of the sentence, got so worked up by the savage bog-trotters and goatish monks that he forgot "yourselves" had already fled (deserting your wife and kids, by the way!) in the first clause, and has you sticking around getting disemboweled in the final one.

Macroeconomic History

An interesting post by Brad DeLong here. The first item in it that is too little noted is that JB Say changed his mind about general gluts:

'Yet Say changed his mind. By 1829, in his analysis of the British financial panic and recession of 1825-6, Jean-Baptiste Say was writing that there could indeed be such a thing as a general glut of commodities after all: "every type of merchandise had sunk below its costs of production, a multitude of workers were without work. Many bankruptcies were declared..."'

That's correct. In the Malthus-Say debate, Say conceded to Malthus. Which makes a comment like this one interesting:
"Say emerged victoriously from his polemics with Malthus and Sismondi."

Well, except in his own eyes!

Secondly, DeLong clarifies something that only became apparent to me last year: the deepest divide in macro is between those who believe that general overproduction is possible and those who think that only sectoral imbalances can occur. Th…

Voegelin on Turgot

In Turgot's project of secular salvation, "Mankind faces a rich and meaningful existence through artificial fertilizers and irrigation projects."

Voegelin is my inspiration in the art of the understated but crushing put-down.

Adaptation of Piece of Crap Novel...

I Was Working as a Waitress in a Coktail Bar...

that much is true. Now, I like this song, and I admire the songwriters for expressing their position so honestly. But notice how thoroughly they live in the world of Pascal's "second self," that self that exists solely in the mind of others:

You were working as a waitress in a cocktail bar
When I met you
I picked you out, I shook you up and turned you around
Turned you into someone new

Now five years later on you've got the world at your feet
Success has been so easy for you
But don't forget, it's me who put you where you are now
And I can put you back down too

Don't, don't you want me?
You know I can't believe it
When I hear that you won't see me
Don't, don't you want me?

You know I don't believe you
When you say that you don't need me
It's much too late to find
You think you've changed your mind
You'd better change …

Mea Culpa

There were several comments, including one by Bobby M., that I meant to publish, but my phat thumb hit 'delete' instead of 'publish.' Oh felix culprit!

I must learn not to handle comments on my iPhone.

Will Wilkinson Is Dumbfounded

Paul Krugman makes a basic Aristotelian point, that commerce isn't and shouldn't be everything, especially in certain important relationships, leaving Will Wilkinson with his jaw hanging.

Since Wilkinson's ideological gag reflex is probably immune to rational criticism, it is likely to be more useful to ask what strange personality disorder makes someone so blind to the de-humanizing effects of excessive commercialization? Any suggestions?

Foreign Affairs Through a Kristol Ball

Bill Kristol: "It's a complicated place, Yemen. We're going to have to be involved there."

And if it wasn't complicated? I bet we'd have to be involved then, as well!

The Religion of Social Salvation

"The inadequacy of pleasure-pain psychology, the poverty of utilitarian ethics, the impossibility of explaining moral phenomena by the pursuit of happiness, the uselessness of the greatest happiness of the greatest number as a principle of social ethics -- all these have been demonstrated over and over again on a voluminous literature. Nevertheless, even today this complex of ideas holds a fascination for a not inconsiderable number of persons. This fascination will be more intelligible if we see the complex of sensualism, utilitarianism, and so on, not as a set of verifiable propositions but as the dogma of a religion of socially immanent salvation." -- Eric Voegelin, Crisis and the Apocalypse of Man

Scene from in Front of My Apartment Building

Nurse: Come out the door. He's holding the door for you. (Indicating my son.)

Elderly man: Why should I come out the door?

Nurse: Because we are going for a walk.

Elderly man: Where?

Nurse: Just around the block. [He passes through the doorway.] Now, put your hand on the railing.

Elderly man: Why should I put my hand on the railing?

Nurse: So you won't fall.

[He puts his hand on the railing, but stops moving. My son continues to watch in fascination.]

Nurse: Now step down, step down!

Elderly man: Why should I step down?

My son: You should step down because the time has come for the people of Uganda to be free!

Those Damned Statists!

One of the most telling rhetorical tics one finds amongst radical libertarians is to refer to every single person who does not buy their entire program as a 'statist'. Now, when Mises used that term, he was referring to people like, say, Mussolini, who were engaged in some form of state worship, who were making the State a God on earth. This made sense.

But many rad-libs today apply it to every person who does not want to destroy the State as a social institution. This is an extraordinary usage, as though I went around calling every person who does not think Major League Baseball should be abolished a 'baseballist', or everyone who doesn't mind opera houses an 'operist'. It says a lot more about those who are using the term than it does about those to whom they are applying it.

Or, to quote me from a few years ago:

'The cast of characters appearing in the Gnostic’s dream world can be divided, neatly and without remainder, into the adherents of the party…

See, Here Is What You Can't Do...

Veronique de Rugy claims that "The wealthy disproportionately fund the United States federal government." But she is just analyzing the legal incidence of these taxes. What is foul play is for free-marketers to sometimes use the legal incidence of a tax when that comes out to their advantage, and other times make the point that the legal incidence is economically unimportant.

And Those Are the Foundations of Strong, Healthy Teeth, as Well

Matthew Kaminski writes:

"What's too often overlooked is that the foundations of capitalism are those of democracy as well: rule of law and an independent judiciary, a private sector able to thrive free of state favor or caprice, competition and open borders for goods, people and capital."

Hmm. The rule of law is compatible with all sorts of market arrangements besides American-style capitalism. An independent judiciary is, in fact, an anti-democratic measure -- a good one, to my mind, but still anti-democratic. And what do open borders have to do with democracy? Open borders are most often an elite project forced on a reluctant populace.

So I'm thinking Kaminski just chucked a bunch of stuff he likes into a list.

Krugman Is Either Having a Brain Freeze, or...

more likely, he is just being utterly mendacious, because he writes this in response to the Landsburg post I discuss below:

"There are multiple things wrong with this claim, but the most fundamental, I think, is that it represents a remarkable misunderstanding of the reasons why we have taxes in the first place. They don’t primarily exist as a way to induce lower private consumption, although they may sometimes have that effect; they are there to ensure government solvency."

Aaaargh! Eck! *#!%#&^!@4! Landsburg was NOT (and yes, I am shouting) contending that taxes exist as a WAY to reduce private consumption. He was saying that, as a matter of fact, they will do so. And the tax falls upon whoever has their consumption reduced by the tax. And that won't necessarily be the person upon whom we put the legal tax burden. And what Landsburg is saying is that placing the legal incidence of the tax on Kendrick in the interest of "taxing the rich" does not necessari…

Not Understanding Sunk Costs

Once you've studied whether something is economical, you apparently should be obligated to go ahead whatever answer you find:

'"The city has once again wasted $300,000 of taxpayer money in scuttling the plan," said Bob Diamond, president if the Brooklyn Historic Railway Association...

These Can't Both Be True, Correct?

Steve Landsburg notes that the economic incidence of a tax is separate from its legal incidence. So, if you try to tax, say, savings accounts of the rich, you can't really say upon whom the real burden of the tax will fall. I think that's right.

But then it can't also be right to complain that high marginal rates discourage productivity, because that argument assumes the tax burden stays right where one puts it, doesn't it? Or have I missed something?

Columbia Street Newspaper War!

And I'm one of the combatants. (My general is running The Columbia Street News.)

Ping Pong with Susan Sarandon?

My toothless friend Jamie challenges her to come play him for teeth.

Do You Remember...

how we was talkin' bout overacting, and understated comedy?

Well, watch this wonder of self-control at work. Man, what Mike Meyers and Jim Carey could learn from her! Either of them would have delivered all of those intros with dozens of winks and contorted faces, just to make sure: "Look at me, I'm being FUNNY!"

(Hat tip to Thoreau.)

What's Killing You?

Sitting. (Hat tip to Danny Shahar.)

Realistic Politics

"But what we in politics wish to know is whether Mr. Minister X understands his business, whether he has initiative, whether he is informed, whether he steals more than is absolutely necessary, whether he lies more than is publicly beneficial, and so on..." -- Eric Voegelin

The Ultimate "Front Porch Republic" Song

Jonathan Richman, "New England":

See, I come from Boston.
I'm gonna tell you about how I love New England.
It's my favorite place.
I've been all around the world, but I love New England best.
I might be prejudiced.
But it's true, I love New England best.

Well, now...

You know, ladies and gentlemen,
I've already been to Paris,
I already been to Rome
And what did I do but miss my home?
I have been out west to Californ'.
But I miss the land where I was born.
I can't help it.
Oh, New England.
Oh, New England.

I have seen old Israel's arid plain.
It's magnificent, but so's Maine.
Oh, New England.
Oh, New England.


"The philosophical foundations of these rights are flimsy and jerry-built. There is no credible theory in which the particular freedoms of deregulated capitalism have the standing of universal rights... In truth, rights are never the bottom line in moral or political theory -- or practice. They are conclusions, end-results of long chains of reasoning from commonly accepted premises. Rights have little authority or content in the absence of a common ethical life. They are conventions that are durable only when they express a moral consensus. When ethical disagreement is deep and wide an appeal to rights cannot resolve it... Looking to rights to arbitrate deep conflicts -- rather than seeking to moderate them through the compromises of politics -- is a recipe for low-intensity civil war." -- John Gray, False Dawn

How Japan's Protectionism Helped It Rise...

Mass Media Idiocy

I just heard an ad on TV where the announcer declared, "We all want a world with fewer chemicals."

Well, given that the entire material world is made of chemicals, did she mean that the world should have less matter? And why, exactly, did she want this? But whatever, we "all" want this!

Why Radical Anti-Statism Increases State Brutality

Thoreau over at Unqualified Offerings calls the TSA pat down of a six-year-old girl "molestation."

Oh, come on -- "molestation"? I just watched the video, and I did not see the least indication that the female TSA agent had any sexual interest in the girl. I assume the girl had set off an alarm. Well, some people will stick a bomb on a kid. So what is the TSA agent supposed to do? Ignore the alarm? We lose our ability to complain about real violations when we call what happened here "molestation." Perhaps we need a better procedure, but the TSA agent obviously was not engaged in molestation as the word is usually used.

Similarly, if one calls every war an instance of "mass murder," then one loses the vocabulary to distinguish between, say, the Finns heroically defending themselves against the invasion of the USSR, and the fire bombing of Dresden.

Furthermore, the more hostility such rhetoric generates against the police, the TSA, the military, a…

Another Day on the Job...

The Most Confused War Ever?

OK, with new announcement from the Mad Bombers of the West, I now declare this to be the most muddled war the US has stumbled into in my life. We are going in not for regime change but to protect civilians, except we're not leaving until there is regime change, except we're not really going to do what's needed to actually cause regime change. So, given Gaddafi Junior is young and probably not acceptable either, we could still be bombing Libya in, oh, say, 2050 or so.

I'm going to go drive nails into my head for a while. It will be less painful than thinking about this clusterf*%k.

The Great Gatsby

I watched the (1974) movie last night. (There have been four movie versions of the book made. Query: What is the most movie versions of any single book ever made?)

My brief thoughts: Robert Redord and Sam Waterston were both quite good. In fact, they were good enough that, with the exceptions of Lois Chiles and Roberts Blossom, the rest of the cast must have wanted them fired, because everyone else looked so bad by comparison.

Perhaps the worst was Mia Farrow. I don't know that I had ever seen her act before, so I was rather surprised, since I had assumed, given her Woody Allen connection, that she could act. As Daisy, she was supposed to be a woman who could keep three men in orbit around her by her charm and seductiveness. Instead, she played a shrill and dopey waif who could not have kept .3 men in her thrall. That Gatsby would go to such lengths to win her was unbelievable.

Scott Wilson was also terrible as Mr. Wilson. The overacting when he goes to do you-know-what to you-kno…

Jumping on Sharks

PRELIMINARY NOTE: I have acquired fairly strong evidence (from Brad DeLong and from perusing the site) indicating that The Hill simply assigns headlines to articles with no author input. If this is so, then my statements below indicating that Bowles and Simpson chose the title of their piece from The Hill would be wrong. This was an innocent mistake -- I had never encoutered The Hill before, and had no idea they did this -- but a mistake nonetheless. That I was mistaken about this makes DeLong's post more understandable, and Mankiw's less so, although I still find DeLong's evaluation to be a little harsh. This is discussed further in the updates below.


Brad DeLong has somewhat of a reputation for being unfair to those with whom he disagrees. For instance, today he accuses Greg Mankiw of "jumping the shark." (I don't think he is using that phrase properly, by the way: Wikipedia says it means becoming absurd, while DeLong is accusing Mankiw of bei…

Some People Say Newt Gingrich...

flip-flopped on Libya. But I think he's been completely consistent: his position throughout has been that whatever Obama is doing must be incorrect!

I Don't Mind Foods...

that come right out and tell me they are making me fat. But the ones that try to keep it a secret? Now that really raises my dander!


Scenario One

"Can you suggest to me why Flaubert should be considered a better writer than Dickens?"

"Well, perhaps his novels weigh more?"


"Could it be that they are more positively charged?"

"What are you talking about?"

"Well, we need evidence to argue this point! Things that can be measured and quantified!"

"No, you are confused: that's what science treats as evidence. What we need here is literary evidence: characterization, plotting, imagery, symbolism."


Scenario Two

"My dear, I'd like some evidence that you still love me."

"All right, attach these electrodes to my head, and take this blood sample for analysis."


"Well, we need hard, scientific evidence, don't we?"

"For science, yes. But you are confused... in a relationship, I need evidence like you buying me some flowers, or taking me out to the movies, or kissing me good…

You Choose, I Choose, We Choose!

Jim, Mary, and I are each sitting at our own homes, wondering what to do. Without any communication, each of us happens to look in the paper and see that Source Code is playing nearby. We each leave our home and walk to the theater.

A good description of what happened: "I decided to go see Source Code, and so, by chance, did Jim and Mary."

Jim, Mary, and I are each sitting together at a bar. We are thinking we should head somewhere else, and Mary decides to look in the paper and see what movies are showing. She shows Jim and me the listings and asks, "Have you heard anything about any of these?" Several minutes of discussion ensues. The upshot of it all is that the three of us head off together to see Source Code.

A good description of happened: "We decided to go see Source Code."

That was a group decision. The central tenet of methodological individualism, that only individuals choose, is plainly false.

"Wow, wait a second," you say, "each…

I Heard a Rumor...

that someone, somewhere in Algeria (or was it Morocco? or perhaps Chad?), might have been considering wiping out some people disloyal to the government over there.

Perhaps we had better go bomb the crap out of them to protect them?

Who Is Winning the Battle of Ideas?

If you read a site like that free marketers are winningthe battle of ideas.

That must be why support amongst the American public for free markets is plunging.

How Free Markets Came About

in 19th-century Britain:

'The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism. To make Adam Smith's "simple and natural liberty" compatible with the needs of a human society was a most complicated affair.' -- Karl Polanyi, The Great Transformation

PS -- Yes, I understand: That was not a trufry market. But it was the freest market that has ever existed, and it came about through massive state intervention.

PPS -- Don't the people who talk about "under a true free market X would never occur" and "true free markets would not have any Y" ever get a creepy feeling about how much that sounds like Marxists saying that the Soviet Union was not "true communism" and "under true communism there would never be Z"?

PPPS -- Of course, I was one of "those" people. And I was quite sure I was nothing whatsoever like the Marxists who prat…

Why I Don't Like Mike Meyers

The brief answer is: brutal overacting. I just caught a bit of Austin Powers while eating with my son the other day, and it struck me once again: watching anything with Mike Meyers onscreen -- he wasn't bad in Shrek is, for me, like having someone tell me jokes for a couple of hours while constantly shouting at me, "That's funny!!! Did you hear what I just said? It was really funny!!!"

I was thinking of Johnny English while watching Austin Powers, and thinking that when your acting is much less subtle than Rowan Atkinson's is, you are really, really overacting.

With Evolutionary Psychology, We've Hit Rock Bottom...

in the long decline of social theory: "The substance of order, thus, moved down in the ontological scale from God, through reason, pragmatic intellect, usefulness, production forces, and racial determinants, to biological drives." -- Eric Voegelin

Rachel Maddow Admits...

that Obama is willing to kick the Democrat base in its teeth.

This admission is a big step forward in our politics. What we need is realism, not dreamy-eyed idealism. Given where we are, let's focus on what might we hope to realistically achieve, rather than what we might dream of. Focusing on one's own fantasies, rather than reality, is not being pure, it is being immoral, as prudence, aka attending to reality, is a moral virtue, and imprudence is a vice.

The Weirdest NCAA Tournament I've Ever Seen...

just ended with the weirdest championship game ever. My team won, but I told my wife afterwards, "I feel like I just got to make out with the hottest girl in high school. But only after she downed twelve shots, and she kept moaning the football captain's name while we were kissing."

Butler made three two-point field goals in the entire game. My son's fifth grade team made more than that every one of their (24-minute) games this past season.

Just bizarre.

UPDATE: Jay Bilas of ESPN said "I felt bad for both teams." Greg Anthony on CBS basically complained that even getting paid a lot of money was not enough compensation for having been made to watch a game so terrible. Butler shot the second worst field goal percentage ever shot in any game in the history of the NCAA tournament.

Mises Proven Wrong

Praxeological principles can be refuted by empirical evidence.

Perhaps I Just Imagined I Read This

It's the only explanation, because I can't understand how people manage to even think things like this, let alone write them down where others can read them:

"Of course there was neither a conscious self nor a stream, but it now seems as though there was."

Right, Dr. Blackmore. And to whom does it "seem" as if there is a conscious self?

Is There Something Odd About My Visual Field?

I ran across this image and was really puzzled by what was supposed to be freaking me out. My problem was that the "scary" bit was the very first thing I noticed in the picture, even before I saw the red circle. But all sorts of people reported that the picture freaked them out when, after some time, the scary thing suddenly jumped out at them.

I also seem to notice things to the side of a car I'm in much more frequently than others with whom I'm riding. (Animals in the grassy verge or woods, for instance.) Do I have (suffer from?) peripherally directed vision? Is there such a thing?

Generalizations in the Social Sciences