conversableeconomist

H.L. Mencken on Capitalism vs. Socialism

This characteristically pungent comment is  from H.L. Mencken’s 1956 collection, Minority Report: H.L. Mencken\’s Notebooks (Johns Hopkins University Press edition, 1997, p. 264):

The chief difference between free capitalism and State socialism seems to be this: that under the former a man pursues his own advantage openly, frankly and honestly, whereas under the latter he does so hypocritically and under false pretenses.

It can be useful to toss this distinction into discussions of socialism and capitalism. Is the argument for old-style, full-blooded state-based socialism a claim that a change in the economic and political system will lead to preferable outcomes, even though the nature of people remains essentially the same? Or is it an argument that by altering the economic and political system, human beings will also act in fundamentally different ways? Or that socialism will attract a different kind of people to leadership roles, who will on average act in different ways than democratically elected leaders?

conversableeconomist

When the Desire for Learning Hit Winston Churchill

In his 1930 memoir A Roving Commission: My Early Life, Winston Churchill offers a vivid description of how a desire for learning washed over him like a tidal wave when he was 22 years old. The passage is vivid and memorable for a number of reasons. One is that it makes someone who has spent most of his life in a higher education environment, like me, ponder what proportion of students–then or now–have a similar desire for learning.

Another is that in this chapter, following the passage quoted below, is the source of a common quotation, when Churchill writes: \”It is a good thing for an uneducated man to read books of quotations.\”

The passage that follows is quoted from from Chapter IX: Education at Bangalore:

It was not until this winter of 1896, when I had almost completed my twenty-second year, that the desire for learning came upon me. I began to feel myself wanting in even the vaguest knowledge about many large spheres of thought. I had picked up a wide vocabulary and had a liking for words and for the feel of words fitting and falling into their places like pennies in the slot. I caught myself using a good many words the meaning of which I could not define precisely. I admired these words, but was afraid to use them for fear of being absurd. One day, before I left England, a friend of mine had said: \’Christ\’s gospel was the last word in Ethics.\’ This sounded good; but what were Ethics? They had never been mentioned to me at Harrow or Sandhurst. Judging from the context I thought they must mean \’the public school spirit,\’ \’playing the game,\’ \’esprit de corps,\’ \’honourable behaviour,\’ \’patriotism,\’ and the like. Then someone told me that Ethics were concerned not merely with the things you ought to do, but with why you ought to do them, and that there were whole books written on the subject. I would have paid some scholar to at least to give me a lecture of an hour or an hour and a half about Ethics. What was the scope of the subject; what were its main branches; what were the principal questions dealt with, and the chief controversies open; who were the high authorities and which were the standard books? But here in Bangalore there was no one to tell me about Ethics for love or money. Of tactics I had a grip: on politics I had a view: but a concise compendious outline of Ethics was a novelty not to be locally obtained.
This was only typical of a dozen similar mental needs that now began to press insistently upon me. I knew of course that the youths at the universities were stuffed with all this patter at nineteen and twenty, and could pose you entrapping questions or give baffling answers. We never set much store by them or their affected superiority, remembering that they were only at their books, while we were commanding men and guarding the Empire. Nevertheless I had sometimes resented the apt and copious information which some of them seemed to possess, and I now wished I could find a competent teacher whom I could listen to and cross-examine for an hour or so every day. 

Then someone had used the phrase \’the Socratic method.\’ What was that? It was apparently a way of giving your friend his head in an argument and progging him into a pit by cunning questions. Who was Socrates, anyhow? A very argumentative Greek who had a nagging wife and was finally compelled to commit suicide because he was a nuisance! Still, he was beyond doubt a considerable person. He counted for a lot in the minds of learned people. I wanted \’the Socrates story.\’ Why had his fame lasted through all the ages? What were the stresses which had led a government to put him to death merely because of the things he said? Dire stresses they must have been: the life of the Athenian Executive or the life of this talkative professor! Such antagonisms do not spring from petty issues. Evidently Socrates had called something into being long ago which was very explosive. Intellectual dynamite! A moral bomb! But there was nothing about in The Queen\’s Regulations. 

Then there was history. I had always liked history at school. But there we were given only the dullest, driest pemmicanised forms like The Student\’s Hume. Once I had a hundred pages of The Student\’s Hume as a holiday task. Quite unexpectedly, before I went back to school, my father set out to examine me upon it. The period was Charles I. He asked me about the Grand Remonstrance — what did I know about that? I said that in the end the Parliament beat the King and cut his head off. This seemed to me the grandest remonstrance imaginable. It was no good. \’Here,\’ said my father, \’is a grave parliamentary question affecting the whole structure of our constitutional history, lying near the centre of the task you have been set, and you do not in the slightest degree appreciate the issues involved.\’ I was puzzled by his concern; I could not see at the time why it should matter so much. Now I wanted to know more about it. 

So I resolved to read history, philosophy, economics, and things like that; and I wrote to my mother asking for such books as I had heard of on these topics. She responded with alacrity, and every month the mail brought me a substantial package of what I thought were standard works. In history I decided to begin with Gibbon. Someone had told me that my father had read Gibbon with delight; that he knew whole pages of it by heart, and that it had greatly affected his style of speech and writing. So without more ado I set out upon the eight volumes of Dean Milman\’s edition of Gibbon\’s Decline and Fall of the Roman Empire. I was immediately dominated both by the story and the style. All through the long glistening middle hours of the Indian day, from when we quitted stables till the evening shadows proclaimed the hour of Polo, I devoured Gibbon. I rode triumphantly through it from end to end and enjoyed it all. I scribbled all my opinions on the margins of the pages, and very soon found myself a vehement partisan of the author against the disparagements of his pompous-pious editor. I was not even estranged by his naughty footnotes. On the other hand the Dean\’s apologies and disclaimers roused my ire. So pleased was I with The Decline and Fall that I began at once to read Gibbon\’s Autobiography, which luckily was bound up in the same edition. When I read his reference to his old nurse: \’If there be any, as I trust there are some, who rejoice that I live, to that dear and excellent woman their gratitude is due,\’ I thought of Mrs. Everest; and it shall be her epitaph. 

From Gibbon I went to Macaulay. I had learnt The Lays of Ancient Rome by heart and loved them — and of course I knew he had written a history ; but I had never read a page of it. I now embarked on that splendid romance, and I voyaged with full sail in a strong wind. I remembered then that Mrs. Everest\’s brother-in-law, the old prison warden, had possessed a copy of Macaulay\’s History, purchased in supplements and bound together, and that he used to speak of it with reverence. I accepted all Macaulay wrote as gospel, and I was grieved to read his harsh judgments upon the Great Duke of Marlborough. There was no one at hand to tell me that this historian with his captivating style and devastating self-confidence was the prince of literary rogues, who always preferred the tale to the truth, and smirched or glorified great men and garbled documents according as they affected his drama. I cannot forgive him for imposing on my confidence and on the simple faith of my old friend the warder. Still I must admit an immense debt upon the other side. 

Not less than in his History, I revelled in his Essays: Chatham; Frederick the Great; Lord Nugent\’s Memorials of Hampden; Clive; Warren Hastings; Barere (the dirty dog); Southey\’s Colloquies on Society; and above all that masterpiece of literary ferocity, Mr. Robert Montgomery\’s Poems. From November to May I read for four or five hours every day history and philosophy. Plato\’s Republic it ap peared he was for all practical purposes the same as Soc rates; the Politics of Aristotle, edited by Dr. Welldon him self; Schopenhauer on Pessimism; Malthus on Population; Darwin\’s Origin of Species: all interspersed with other books of lesser standing. 

It was a curious education. First be cause I approached it with an empty, hungry mind, and with fairly strong jaws; and what I got I bit; secondly because I had no one to tell me: \’This is discredited.\’ \’You should read the answer to that by so and so; the two together will give you the gist of the argument.\’ \’There is a much better book on that subject/ and so forth. I now began for the first time to envy those young cubs at the university who had fine scholars to tell them what was what — professors who had devoted their lives to mastering and focussing ideas in every branch of learning — who were eager to distribute the treasures they had gathered before they were overtaken by the night. But now I pity undergraduates, when I see what frivolous lives many of them lead in the midst of precious fleeting opportunity. After all, a man\’s Life must be nailed to a cross either of Thought or Action. Without work there is no play. When I am in the Socratic mood and planning my Republic, I make drastic changes in the education of the sons of well-to-do citizens. When they are sixteen or seventeen they begin to learn a craft and to do healthy manual labour, with plenty of poetry, songs, dancing, drill and gymnastics in their spare time. They can thus let off their steam on some thing useful. It is only when they are really thirsty for knowledge, longing to hear about things, that I would let them go to the university. It would be a favour, a coveted privilege, only to be given to those who had either proved their worth in factory or field or whose qualities and zeal were pre-eminent. However, this would upset a lot of things — it would cause commotion and bring me perhaps in the end a hemlock draught.

conversableeconomist

"The Book of My Enemy Has Been Remaindered"

Of course, this poem by Clive James isn\’t about economics specifically. But in its over-the-top pettiness and ornate vindictiveness, surely it speaks to every academic who holds a grudge against those of opposing views.

“The Book of my Enemy Has Been Remaindered”

The book of my enemy has been remaindered
And I am pleased.
In vast quantities it has been remaindered
Like a van-load of counterfeit that has been seized
And sits in piles in a police warehouse,
My enemy\’s much-prized effort sits in piles
In the kind of bookshop where remaindering occurs.
Great, square stacks of rejected books and, between them, aisles
One passes down reflecting on life\’s vanities,
Pausing to remember all those thoughtful reviews
Lavished to no avail upon one\’s enemy\’s book —
For behold, here is that book
Among these ranks and banks of duds,
These ponderous and seemingly irreducible cairns
Of complete stiffs.

The book of my enemy has been remaindered
And I rejoice.
It has gone with bowed head like a defeated legion
Beneath the yoke.
What avail him now his awards and prizes,
The praise expended upon his meticulous technique,
His individual new voice?
Knocked into the middle of next week
His brainchild now consorts with the bad buys
The sinker, clinkers, dogs and dregs,
The Edsels of the world of moveable type,
The bummers that no amount of hype could shift,
The unbudgeable turkeys.

Yea, his slim volume with its understated wrapper
Bathes in the blare of the brightly jacketed Hitler\’s War Machine,
His unmistakably individual new voice
Shares the same scrapyard with a forlorn skyscraper
Of The Kung-Fu Cookbook,
His honesty, proclaimed by himself and believed by others,
His renowned abhorrence of all posturing and pretense,
Is there with Pertwee\’s Promenades and Pierrots–
One Hundred Years of Seaside Entertainment,
And (oh, this above all) his sensibility,
His sensibility and its hair-like filaments,
His delicate, quivering sensibility is now as one
With Barbara Windsor\’s Book of Boobs,
A volume graced by the descriptive rubric
\”My boobs will give everyone hours of fun\”.

Soon now a book of mine could be remaindered also,
Though not to the monumental extent
In which the chastisement of remaindering has been meted out
To the book of my enemy,
Since in the case of my own book it will be due
To a miscalculated print run, a marketing error–
Nothing to do with merit.
But just supposing that such an event should hold
Some slight element of sadness, it will be offset
By the memory of this sweet moment.
Chill the champagne and polish the crystal goblets!
The book of my enemy has been remaindered
And I am glad.

Clive James
From The Book of My Enemy (2003)

conversableeconomist

Charles Schultze: The "Do No Direct Harm" Rule

In his 1977 book, The Public Use of Private Interest, Charles L. Schultze described how American politics is shaped by what he called the \”do no direct harm\” rule. If you have a tendency to spend your summertime days thinking about why government often favors a regulatory approach, rather than a price-based approach (like pollution regulations rather than pollution taxes) to achieving policy goals, it offers food for thought. 

Schultze pointed out that in our market-oriented society, we generally accept that markets will sometimes shift in ways that cause losses as well as gains. But in our political decisions, he argues, we don\’t want to accept that direct harms might occur. Thus, when politicians become involved in a decision they prefer to operate through regulations, with administrative procedures as a back-up. Such regulations are often justified as a matter of fairness, and making sure that variation in individual cases is taken into account. But an economy full of regulations is also one that continually empowers politicians, both to write new rules and to intervene in administrative processes. Schultze wrote:

[W]e tend to subject political decisions to the rule, \”Do no direct harm.\” We can let harms occur as the second- and third-order consequences of political action or through sheer inaction, but we cannot be seen to cause harm to anyone as the direct consequence of collective actions. The rule is far from absolute, and exceptions abound. But it does strongly influence policy. …

The rule of \”do no direct harm\” is a powerful force in shaping the nature of social intervention. We put few obstacles in the way of a market-generated shift of industry to the South or the substitution of synthetic fibers for New England woolens, events that thrust large losses on individuals, firms, and communities. But we find it extraordinarily difficult to close a military base or a post office. We have elaborate procedures for changing zoning regulations and provide case-by-case adjudication where losses in property values may occur. But movements of private industry  that destroy property values occur at will. When we intervene through regulation, we try to write the regulations and provide administrative discretion to take care of as much individual variation in circumstances as possible so as to prevent harms that can be immediately imputed to the regulation. Such regulations then grow at an exponential pace as experience in a far-flung economy steadily generates thousands of specific problems.
More important, efficient ways of achieving results are often precluded by fear of some direct losses. The impersonal and blind-to-equity operation of effluent charges or incentive-reimbursement schemes for Medicare is eschewed in favor of regulations and case-by-case adjudication. When a large loss to a specific firm or industry threatens, we ease the regulations. …

In a similar vein, once government takes on responsibilities for providing services such as day care or skilled nursing-home care (under Medicare), an extension of the \”do no direct harm\” principle inevitably leads to the assumption by government of responsibility for the quality of services delivered. Increasingly detailed and ambitious standards of quality are developed that shift the policing mechanism from consumer choice to government regulations. …

Because incentive-oriented approaches to social intervention rely on decentralized reactions to prices, they seem to deprive government of control of case-by-case results. If nothing else, this would make legislators nervous. They would have to forgo the opportunity to provide their programs with all sorts of adjudication procedures drawn up to take care of specific losses. They would also forfeit the opportunity to second-guess administrators and to provide services to constituents through intervention in administrative decisions. 

Schultze goes on to argue that the underlying issue is a lack of understanding of how price-mechanisms and markets work. In describing how politicians see the world, he writes:

Somehow the cars get into showrooms and the loaves of bread onto the grocery shelves, but the whole thing is like an oft-repeated high-wire act: we don\’t really understand how it\’s possible, but it\’s been done so often we are no longer surprised. … Because the way in which markets achieve results is both indirect and seldom understood, it is not surprising that more direct techniques of social intervention are usually chosen. If we want to achieve a specific reduction in polluting wastes, what could be more natural than specifying in law the desired outcomes and requiring people to meet them? If we want producers to adopt measures that reduce industrial accidents, why not simply require that the measures be undertaken? If there is too little commuting by mass transit and too much by automobile, what could be a more appropriate remedy than providing the money to build mass-transit facilities? If we think people should have more day care or training opportunities, why shouldn\’t the government establish and subsidize day care and training centers? 

I find it hard to grasp the concept that electrons can best be described as a probability density function. To me, either they are there or they are not there. Luckily, I am not called upon to legislate on how to shift electrons about. In the same vein, it is devilishly hard to convince someone that an indirect, roundabout, and seemingly less certain way of accomplishing the objectives of social intervention should be preferred to a simple specification of required outcomes.  

conversableeconomist

Thorstein Veblen: Economics "is a `Science\’ of Complaisant Interpretations, Apologies, and Projected Remedies"

I always enjoy reading Thorstein Veblen, partly because his writing strays back and forth across the line between \”raising questions of real interest\” to \”just plain old dyspeptic and cantankerous.\” His 1918 essay \”The Higher Learning In America:A Memorandum On the Conduct of Universities By Business Men\” is full of comments from both categories, often closely overlapping. 

It\’s also the source of one of the liveliest insults to the field of economics, that economics is \”a `science\’ of complaisant interpretations, apologies, and projected remedies.\” Veblen also argues that this isn\’t because economists and other academics have been paid off, but only because they have been selected and trained for their narrow intellectual horizons. Here\’s Veblen (the direct critique of economics starts in the third paragraph):

Critics of the latterday university policies have from time to time called attention to an apparent reluctance on the part of these academic scientists to encounter present-day facts hand-to-hand, or to trace out the causes to which current conditions are due. Distempered critics have even alleged that the academic leaders in the social sciences are held under some constraint, as being, in some sort, in the pay of the well-to-do conservative element; that they are thereby incapacitated from following up any inquiry to its logical conclusion, in case the conclusion might appear to traverse the interest or the opinions of those on whom these leaders are in this way pecuniarily dependent.

Now, it may be conceded without violence to notorious facts, that these official leaders of science do commonly reach conclusions innocuous to the existing law and order, particularly with respect to religion, ownership, and the distribution of wealth. But this need imply no constraint, nor even any peculiar degree of tact, much less a moral obliquity. It may confidently be asserted, without fear of contradiction from their side, that the official leaders in this province of academic research and indoctrination are, commonly, in no way hindered from pushing their researches with full freedom and to the limit of their capacity; and that they are likewise free to give the fullest expression to any conclusions or convictions to which their inquiries may carry them. That they are able to do so is a fortunate circumstance, due to the fact that their intellectual horizon is bounded by the same limits of commonplace insight and preconceptions as are the prevailing opinions of the conservative middle class. That is to say, a large and aggressive mediocrity is the prime qualification for a leader of science in these lines, if his leadership is to gain academic authentication. …

A single illustrative instance of the prevalence of this animus in the academic social sciences may be in place. It is usual among economists, e.g., to make much of the proposition that economics is an \”art\” — the art of expedient management of the material means of life; and further that the justification of economic theory lies in its serviceability in this respect. Such a quasi-science necessarily takes the current situation for granted as a permanent state of things; to be corrected and brought back into its normal routine in case of aberration, and to be safeguarded with apologetic defence at points where it is not working to the satisfaction of all parties. It is a \”science\” of complaisant interpretations, apologies, and projected remedies.

The academic leaders in such a quasi-science should be gifted with the aspirations and limitations that so show up in its pursuit. Their fitness in respect of this conformity to the known middle-class animus and apprehension of truth may, as it expediently should, be considered when their selection for academic office and rank is under advisement; but, provided the choice be a wise one, there need be no shadow of constraint during their incumbency. The incumbent should be endowed with a large capacity for work, particularly for \”administrative\” work, with a lively and enduring interest in the \”practical\” questions that fall within his academic jurisdiction, and with a shrewd sense of the fundamental rightness of the existing order of things, social, economic, political, and religious. So, by and large, it will be found that these accredited leaders of scientific inquiry are fortunate enough not narrowly to scrutinize, or to seek particular explanation of, those institutional facts which the conservative common sense of the elderly businessman accepts as good and final; and since their field of inquiry is precisely this range of institutional facts, the consequence is that their leadership in the science conduces more to the stability of opinions than to the advancement of knowledge.

The result is by no means that nothing is accomplished in this field of science under this leadership of forceful mediocrity, but only that, in so far as this leadership decides, the work done lies on this level of mediocrity. Indeed, the volume of work done is large and of substantial value, but it runs chiefly on compilation of details and on the scrutiny and interpretation of these details with a view to their conformity with the approved generalizations of the day before yesterday, — generalizations that had time to grow into aphoristic commonplaces at a date before the passing generation of businessmen attained their majority.

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Robert Nozick: Utility Monsters and Experience Machines

One of the classic problems of economics involves how to make comparisons between the welfare of different people. As a common example, imagine taxing a high-income person and redistributing the money to a low-income person. In the utilitarian framework beloved of economists, a high-income person would receive less \”utility\” or happiness from that additional income than a low-income person would gain from receiving a transfer. Thus, it is argued, redistribution from high-income to low-income will increase the overall happiness or utility of society.

At this point, economists often plunge into questions of incentives, and how taxes on the rich or transfers to the poor might potentially affect incentives to work, acquire skills, innovate, and so on. But some philosophers take a different track, focusing instead on the assumption that utility can be so quickly linked to income, or even that utility itself is the appropriate goal for human well-being. Economists mostly don\’t root around in these questions very deeply. However, the philosopher Robert Nozick was not a utilitarian. Here\’s are some thoughts from his 1974 classic in philosophy, Anarchy, State, and Utopia that runs through some of these issues. I\’ll intersperse some thoughts of my own.

What if people vary substantially in how much happiness they get from income, or from consumption? Maybe some people are \”utility monsters,\” meaning that they get so much happiness from consumption that we should all be transferring our income to them, because the sum-total of utilitarian social happiness rises when they consume more. Nozick writes:

Utilitarian theory is embarrassed by the possibility of utility monsters who get enormously greater gains in utility from any sacrifice of others than these others lose. For, unacceptably, the theory seems to require that we all be sacrificed in the monster’s maw, in order to increase total utility. …

If utilitarianism is based on subjective feelings, then perhaps the best possible social investment would be in some brain implants or drugs to give people an extremely high degree of perceived subjective happiness. Nozick questions the idea of whether subjective happiness is all that matters by asking whether people should thus be encouraged to hook up to an \”experience machine\” that would let them experience whatever they wanted.  Nozick writes: 

Suppose there were an experience machine that would give you any experience you desired. Superduper neuropsychologists could stimulate your brain so that you would think and feel you were writing a great novel, or making a friend, or reading an interesting book. All the time you would be floating in a tank, with electrodes attached to your brain. Should you plug into this machine for life, preprogramming your life’s experiences? If you are worried about missing out on desirable experiences, we can suppose that business enterprises have researched thoroughly the lives of many others. You can pick and choose from their large library or smorgasbord of such experiences, selecting your life’s experiences for, say, the next two years. After two years have passed, you will have ten minutes or ten hours out of the tank, to select the experiences of your next two years. Of course, while in the tank you won’t know that you’re there; you’ll think it’s all actually happening. Others can also plug in to have the experiences they want, so there’s no need to stay unplugged to serve them. (Ignore problems such as who will service the machines if everyone plugs in.) Would you plug in? What else can matter to us, other than how our lives feel from the inside? Nor should you refrain because of the few moments of distress between the moment you’ve decided and the moment you’re plugged. What’s a few moments of distress compared to a lifetime of bliss (if that’s what you choose), and why feel any distress at all if your decision is the best one?

What does matter to us in addition to our experiences? First, we want to do certain things, and not just have the experience of doing them. In the case of certain experiences, it is only because first we want to do the actions that we want the experiences of doing them or thinking we’ve done them. (But why do we want to do the activities rather than merely to experience them?)

A second reason for not plugging in is that we want to be a certain way, to be a certain sort of person. Someone floating in a tank is an indeterminate blob. There is no answer to the question of what a person is like who has long been in the tank. Is he courageous, kind, intelligent, witty, loving? It’s not merely that it’s difficult to tell; there’s no way he is. Plugging into the machine is a kind of suicide. It will seem to some, trapped by a picture, that nothing about what we are like can matter except as it gets reflected in our experiences. But should it be surprising that what we are is important to us? Why should we be concerned only with how our time is filled, but not with what we are?

 Thirdly, plugging into an experience machine limits us to a man-made reality, to a world no deeper or more important than that which people can construct. There is no actual contact with any deeper reality, though the experience of it can be simulated. Many persons desire to leave themselves open to such contact and to a plumbing of deeper significance. This clarifies the intensity of the conflict over psychoactive drugs, which some view as mere local experience machines, and others view as avenues to a deeper reality; what some view as equivalent to surrender to the experience machine, others view as following one of the reasons not to surrender!

We learn that something matters to us in addition to experience by imagining an experience machine and then realizing that we would not use it.

I am not as confident as Nozick seems to be that people would avoid the \”experience machine.\” He goes on to consider other machines, like a  \”a transformation machine which transforms us into whatever sort of person we’d like to be (compatible with our staying us)\” or a  a \”result machine. which produces in the world any result you would produce and injects your vector input into any joint activity …\” Nozick writes: 

We shall not pursue here the fascinating details of these or other machines. What is most disturbing about them is their living of our lives for us. Is it misguided to search for particular additional  functions beyond the competence of machines to do for us? Perhaps what we desire is to live (an active verb) ourselves, in contact with reality. (And this, machines cannot do for us.) Without elaborating on the implications of this, which I believe connect surprisingly with issues about free will and causal accounts of knowledge, we need merely note the intricacy of the question of what matters for people other then their experiences.

Yet another challenge to utilitarianism is that if the goal of society is to have the greatest sum of happiness of the members of that society, how does that society address issues related to the total number of people in the society? For example, is a society with a much larger number of people who are an average level of happy a \”better\” society than one with a smaller number of people who are extremely happy? Can one place a social value on policies that result in a smaller population, based on the loss of utility from those who are not actually ever born? Worse still, what about someone who gets extreme happiness from killing someone who is unhappy, and in this way increases the sum-total of social happiness. Nozick writes: 

Utilitarianism is notoriously inept with decisions where the number of persons is at issue. (In this area, it must be conceded, eptness is hard to come by.) Maximizing the total happiness requires continuing to add persons so long as their net utility is positive and is sufficient to counterbalance the loss in utility their presence in the world causes others. Maximizing the average utility allows a person to kill everyone else if that would make him ecstatic, and so happier than average. (Don’t say he shouldn’t because after his death the average would drop lower than if he didn’t kill all the others.) Is it all right to kill someone provided you immediately substitute another (by having a child or, in science-fiction fashion, by creating a full-grown person) who will be as happy as the rest of the life of the person you killed? After all, there would be no net diminution in total utility, or even any change in its profile of distribution. Do we forbid murder only to prevent feelings of worry on the part of potential victims? (And how does a utilitarian explain what it is they’re worried about, and would he really base a policy on what he must hold to be an irrational fear?) Clearly, a utilitarian needs to supplement his view to handle such issues; perhaps he will find that the supplementary theory becomes the main one … 

Nozick died back in 2002. I met him once, briefly, two decades before that, when I was teaching a summer course in political philosophy to high school students at the Phillips Andover summer session.  My memory of the encounter is that  I stuttered through an attempt to tell him how much I enjoyed Anarchy, State and Utopia, and he was very kind.

conversableeconomist

Dorothy Sayers: On Susceptibility to Propaganda and Advertisement

Dorothy Sayers (1893-1957) is probably best-remembered as the author of the (fabulously good) Lord Peter Wimsey detective novels and stories. But she also received first-class honors modern languages and medieval literature from Oxford in 1915, before women were officially awarded degrees, and later in life also published books of poetry, theology, and a well-regarded translation of Dante\’s Divine Comedy. In 1948, she wrote an essay titled \”The Lost Tools of Learning\” (available various places on the web). A quick taste:

\”Has it ever struck you as odd, or unfortunate, that today, when the proportion of literacy throughout Western Europe is higher than it has ever been, people should have become susceptible to the influence of advertisement and mass propaganda to an extent hitherto unheard of and unimagined? Do you put this down to the mere mechanical fact that the press and the radio and so on have made propaganda much easier to distribute over a wide area? Or do you sometimes have an uneasy suspicion that the product of modern educational methods is less good than he or she might be at disentangling fact from opinion and the proven from the plausible?

Have you ever, in listening to a debate among adult and presumably responsible people, been fretted by the extraordinary inability of the average debater to speak to the question, or to meet and refute the arguments of speakers on the other side? Or have you ever pondered upon the extremely high incidence of irrelevant matter which crops up at committee meetings, and upon the very great rarity of persons capable of acting as chairmen of committees? And when you think of this, and think that most of our public affairs are settled by debates and committees, have you ever felt a certain sinking of the heart? …

For we let our young men and women go out unarmed, in a day when armor was never so necessary. By teaching them all to read, we have left them at the mercy of the printed word. By the invention of the film and the radio, we have made certain that no aversion to reading shall secure them from the incessant battery of words, words, words. They do not know what the words mean; they do not know how to ward them off or blunt their edge or fling them back; they are a prey to words in their emotions instead of being the masters of them in their intellects. We who were scandalized in 1940 when men were sent to fight armored tanks with rifles, are not scandalized when young men and women are sent into the world to fight massed propaganda with a smattering of `subjects\’; and when whole classes and whole nations become hypnotized by the arts of the spell binder, we have the impudence to be astonished.

This complaint from Sayers strikes me as having an uncomfortable amount of truth. Yes, it may underestimate the extent to which people have always been susceptible to a propaganda rooted in emotion-laden words. But it seems to me as if the targeting and sophistication of propaganda is increasing. Conversely, it is not clear to me that people have over time become correspondingly better at dealing with these issues, and it is not clear to me that those who have higher levels of formal education are better at dealing with them, either.

The solution offered by Sayers in her essay is magnificently irrelevant: as student of medieval literature, she recommends a return to the principles of the Trivium and the Quadrivium in classical education. I suspect Sayers of recommending for others what would have worked well for her–but she was quite far from being a typical student or person.

conversableeconomist

George Stigler: Market Failure Much Smaller than Political Failure

George Stigler once made the case for a market-based economy (in an entry about \”Monopoly\” in the Concise Encylopedia of Economics) just by arguing that it beats the alternatives. 

A famous theorem in economics states that a competitive enterprise economy will produce the largest possible income from a given stock of resources. No real economy meets the exact conditions of the theorem, and all real economies will fall short of the ideal economy—a difference called \”market failure.\” In my view, however, the degree of \”market failure\” for the American economy is much smaller than the \”political failure\” arising from the imperfections of economic policies found in real political systems. The merits of laissez-faire rest less upon its famous theoretical foundations than upon its advantages over the actual performance of rival forms of economic organization.

Of course, this view is reminiscent of the famous comment by Winston Churchill (in a speech before the House of Commons on November 11, 1947) defending democracy on the grounds that it at least beats the alternatives. Churchill said:

Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time.

Such broad characterizations always deserve some pushback. For example, \”democracy\” in the real world typically comes with many safeguards against direct rule by immediate decisions of the population: the rules for how political representatives are elected, dividing power among branches of government, constitutions that set certain limits on what democratically-elected representatives can decide, and so on. These rules vary in substantial ways across nations that would be fairly classified as \”democracies.\” Similarly, countries that would be fairly classified as market economies have many safeguards against the unfettered domination by market forces, and such rules vary considerably across countries.

But pushback to the pushback is fair game, as well. Looking around the world, we don\’t have any examples of countries with successful model of state-run economic organization that have consistently over the long-term provided a higher level of standard of living or faster growth than the many countries with  market-based systems–that is, not just a different set of constraints and rules to a fundamentally market-oriented economy, but a genuinely different model where the economy is run primarily through the political system. That fact tends to confirm Stigler\’s suggestion that real-world political failures in economic management can be severe.

conversableeconomist

How Adam Smith\’s Idea of the Division of Labor Led to the Digital Computer

Herbert Simon and Allen Newell tell the story of how Adam Smith\’s ideas directly led to the development of the digital computer in an address delivered to the  Twelfth National Meeting of the Operations Research Society of America, Pittsburgh, Pennsylvania, November 14, 1957. The lecture was published in Operations Research, January-February 1958, under the title \”Heuristic Problem Solving: The Next Advance Operations Research\” (pp. 1-10).   For those who like their stories with some credentials attached, Simon and Newell shared the Turing prize, sometimes referred to as the \”Nobel prize in computing\” in 1975, and Simon won the Nobel prize in economics in 1978.

Simon delivered the lecture, and said:

I should like to tell you a true story, culled from [Charles] Babbage\’s writings, about the history of the computer. I like this story because it illustrates not only my earlier point about the many mutual relations of the professions in our field, but also because it gives the underdogs like myself-trained in \’soft\’ fields like economics and political science something we can point to when the superior accomplishments of the natural sciences become too embarrassing for us. As you will see, this story shows that physicists and electrical engineers had little to do with the invention of the digital computer–that the real inventor was the economist Adam Smith, whose idea was translated into hardware through successive stages of development by two mathematicians, Prony and Babbage. (I should perhaps mention that the developers owed a debt also to the French weavers and mechanics responsible for the Jacquard loom, and eonsequently for the punched card.)

The story comes from a French document, which Babbage reproduces in the original language. I give it here in translation:

\”Here is the anecdote: M. de Prony was employed by a government committee to construct, for the decimal graduation of the circle, logarithmic and trigonometric tables which would not only leave nothing to be desired from the standpoint of accuracy, but which would constitute the most vast and imposing monuinent of calculation that had ever been executed or even conceived. The logarithms from 1 to 200,000 are a necessary and essential supplement to this work, It was easy for M. Prony to convince himself that even if he associated with himself three or four experienced collaborators the longest reasonable expectation of the duration of his life would not suffice to complete the undertaking. He was preoccupieed with this unhappy thought when, finding himself before a bookstore, he saw the beautiful edition of Adam Smith published in London in 1776. He opened the book at random and chanced upon the first chapter, which treats of the division of labor and where the manufacture of pins is cited as example.

Hardly had he perused the first pages when, by a stroke of inspiration he conceived the expedient of putting his logarithms into production like pins. He was giving, at this time, at the Ecole Polytechniques, some lectures on a topic in analysis related to this kind of work–the method of differences and its applications to interpolation. He went to spend some time in the country and returned to Paris with the plan of manufacture that has been followed in the execution. He organized two workshops which performed the same calculations separately, and served as reciprocal checks.\”

The anecdote is footnoted to Charles Babbage\’s 1832 book, On the Economy of Machinery and Manufacturers, on p. 45. It is quoted by Babbage from an 1820 work  Note sur la publication, propose par le gouvernement Anglais des grands tables logarithmiques et trigonometriques de
M. de Prony. Simon and Newell then resume in their own voice:

It was Prony\’s mass production of the mathematical tables, in turn, that suggested to Babbage that machinery could replace human labor in the clerical phases of the task, and that started him on the undertaking of designing and constructing an automatic calculating engine. Although the complete absence of electrical and electronic components, and his consequent dependence on mechanical devices, robbed him of full success in the undertaking, there is no doubt that he understood and invented the digital computer–including the critically important idea of a conditional transfer operation. It would be hard to imagine a more appropriate illustration of the unexpected ways in which human knowledge develops … 

conversableeconomist

W.H. Auden: "Thou shalt not sit/ With statisticians nor commit/ A social science"

W.H. Auden wrote a poem delivered to Phi Beta Kappa graduates at Harvard University in 1946 called \”Under Which Lyre.\” It contains a line often clipped and quoted, without context: \”Thou shalt not sit/ With statisticians nor commit / A social science.\” The full poem is at the link, but here are the stanzas surrounding the line about committing a social science, which also speak to rebellious academics:

Thou shalt not do as the dean pleases,
Thou shalt not write thy doctor’s thesis
On education,
Thou shalt not worship projects nor
Shalt thou or thine bow down before
Administration.

Thou shalt not answer questionnaires
Or quizzes upon World-Affairs,
Nor with compliance
Take any test. Thou shalt not sit
With statisticians nor commit
A social science.

Thou shalt not be on friendly terms
With guys in advertising firms,
Nor speak with such
As read the Bible for its prose,
Nor, above all, make love to those
Who wash too much.

Thou shalt not live within thy means
Nor on plain water and raw greens.
If thou must choose
Between the chances, choose the odd;
Read The New Yorker, trust in God;
And take short views.

What is Auden up to here? Adam Kirsch offered a short and readable exegesis of the context in \”

\”A Poet\’s Warning: In a witty 1946 poem, W.H. Auden contrasted the way of \”experts\” with the Hermetic path of the trickster,\” published in Harvard magazine on the 50th anniversary of the poem in November/December 2007.

The poem is being delivered at the \”Victory Commencement,\” the first graduation ceremony in Harvard Yard after the end of World War II. To give a sense of the occasion, honorary degrees were awarded to the chiefs of the U.S. Army, Navy, Marines, and Air Force. Kirsch writes: \”The University itself had been integrated into the war effort at the highest level: President James Bryant Conant had been one of those consulted when President Truman decided to drop the atomic bomb on Japan. William Langer, a professor of history, had recruited many faculty members into the newly formed Office of Strategic Services, the precursor to the CIA.\”

The \”lyres\” in the title of the poem refer to a choice between two ways of looking at the world. As Kirsch writes:

This is the war between the two sensibilities, the two social and spiritual visions, that Auden names Apollo and Hermes. Apollo, the Greek god of light and music, becomes for Auden “pompous Apollo,” the patron saint of “official art.” Against him, Auden sets Hermes, the trickster god, protector of thieves and liars, who is “precocious” and undisciplined. Both of these gods can make a kind of music, but Auden asks the reader to decide “under which lyre” he will take his stand. The comedy of the poem, and its prescience, lies in Auden’s description of Apollo, the presiding spirit of what he calls “the fattening forties.” The danger to postwar America, the poet suggests, lies in the soft tyranny of institutions, authorities, and experts—of people who know what’s best for you and don’t hesitate to make sure you know it, too.

Auden was far too thoughtful a social commentator to go all-in for advocacy of Hermes, the trickster. But the poem offers a series of elegant jibes and gentle mockery of the pompous academic (and political) officialdom of the time.

Afterword: The tradition of a Phi Beta Kappa poem has continued at Harvard. Dan Chiasson wrote the 2019 poem, \”The Math Campers,\” about students at a summer math camp to devise an equation so that the summer will never end.