My favorite part:
Efficiency is the Chicago School's defining value. The free market economists who came before--most notably Austrian Friedrich Hayek--offered a philosophical critique of the political consequences of state regulation and control of the economy. But Milton Friedman, his colleague George Stigler and the entire Chicago School focused on the actual economic problems of state control, namely, inefficiency. They rejected Keynes' contention that markets function best with routine government intervention and instead harkened back to Adam Smith's classical conceptions of equilibrium. Chicago School theories gained popularity when global capitalism hit a major funk in the '70s--a period of slow growth and high inflation. Friedman argued, plausibly, that it was too much government that had caused the problems. What may seem a subtle rhetorical shift had major consequences. It transformed what had been conservatism's moral argument about capitalism bestowing the most benefits on those who worked the hardest--and the inherent injustice of a coercive state forcibly redistributing capital--into a technical argument about the inefficiencies associated with non-free-market solutions and the perverse incentives that made any social programs destined to fail. Thus, arguments about the way the world should be were converted into assertions about how the world actually was. Or, to put in terms that economists favor, normative arguments became positive ones. In the textbook Sanderson uses, author Michael Parkin defines the difference this way: positive statements are about "what is" and they "might be right or wrong." Normative statements are about "what ought to be" and because they depend on values, they can't be tested. "Be on the lookout," Parkin warns, "for normative propositions dressed up as positive propositions." Parkin's warning, however, turns out to be surprisingly difficult to heed. Neoclassical economics smuggles a great many normative wares underneath its positive trenchcoat, both in its assumptions about how humans operate--as individuals rationally maximizing their utility--and its implied preference for "markets in everything." Because neoclassical economics always presents itself as a value-neutral description of the world, its ideological commitments can be adopted by those who learn it without any recognition that they are ideological. This is the source of some very spirited debate within the field itself. A growing global movement of "heterodox" economists has criticized the ideological confines and blindspots of the neoclassical approach. As Nobel Laureate Joseph Stiglitz put it, the dominance of the neoclassical model is a "triumph of ideology over science."
What may seem a subtle rhetorical shift had major consequences. It transformed what had been conservatism's moral argument about capitalism bestowing the most benefits on those who worked the hardest--and the inherent injustice of a coercive state forcibly redistributing capital--into a technical argument about the inefficiencies associated with non-free-market solutions and the perverse incentives that made any social programs destined to fail. Thus, arguments about the way the world should be were converted into assertions about how the world actually was. Or, to put in terms that economists favor, normative arguments became positive ones.
In the textbook Sanderson uses, author Michael Parkin defines the difference this way: positive statements are about "what is" and they "might be right or wrong." Normative statements are about "what ought to be" and because they depend on values, they can't be tested. "Be on the lookout," Parkin warns, "for normative propositions dressed up as positive propositions."
Parkin's warning, however, turns out to be surprisingly difficult to heed. Neoclassical economics smuggles a great many normative wares underneath its positive trenchcoat, both in its assumptions about how humans operate--as individuals rationally maximizing their utility--and its implied preference for "markets in everything." Because neoclassical economics always presents itself as a value-neutral description of the world, its ideological commitments can be adopted by those who learn it without any recognition that they are ideological. This is the source of some very spirited debate within the field itself. A growing global movement of "heterodox" economists has criticized the ideological confines and blindspots of the neoclassical approach. As Nobel Laureate Joseph Stiglitz put it, the dominance of the neoclassical model is a "triumph of ideology over science."
So when are you going to join the ranks of the heterodoxy, and write a book. Ideas are weapons, Jerome. And thus far Europe has preserved the Social Democratic model, but with Sarkozy and Merkel, how long can it last? I'm with Polanyi on this. And I think that in order to fight Hayek, Von Mises, and Friedman, we have to turn substantivism.
Economies ares embedded in social structures. They are not interlinked markets, that are subject to "rational" calculation. The formal, (mathematical), understanding of society and economics must be calibrated upon substantive understandings of human values that there are no sufficient numerical understandings of.
How much is a 4 year old boys life worth?
Should there be a market for organs?
Should individuals be able to willing sell their own freedom for a price to enter into voluntary servitude?
Economics has deluded itself into the belief that it is the master science. But as Polanyi tells us, the commodification of human life and the natural environment destroy the social foundations upon which the market rests. As Stiglitz says in the intro to the 2001 edition of Polanyi's Great Transformation, societies do not willingly committ suicide. Free market economics pushes social order to the brink, and when society draws back out of a sense of self preservation, economists tell us that the reason for market failure doesn't lie in extremist market fundamentalism, but instead they problem is that society by protecting itself refused to allow the market to complete the task at hand. The problem isn't that the market was allowed to go to far, it's that it wasn't allowed to go far enough. So said Stiglitz.
And the give and take between the advance of "economic" thinking replete with the commodification of human life and society's self protection makes the double movement. In the 1970's the neoliberals pushed economic thinking and the neoliberal paradigm onto society destroying the protective measures instituted by society in the post war period. Banks were deregulated, utilities privatized, social security nets removed from beneath the fall of the working classes. This can only happen so long before society recognizes that it is committing suicide and protects its self.
In the United States, the Bush years have seen unabated advance of market fundamentalism as what remained of the social safety net has been shredded. Economists of the orthodox variety falsely believe that that can sucessfully kill society (because there is no such thing, society belonging to the same set of antiquated social conventions as religion.)
But societies will not willingly committ suicide, and the farther econonomic thnking insinuates itself into what is rightfully the preserve of social values the more severe the response. The choice is between social democracy so that social values may be preserved, or dictatorship where the work of the market is completed and the intrinsic value of human life is reduced to a matter of numbers. In time society will reassert itself (see Spain) but at what cost? And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
If you read some long-term neoclassical economic models, like for instance Nordhaus and Boyer's climate damage model (RICE/DICE 99) you won't only find out how much a 4 year old is worth, but also that he/she's worth about a 1000 times more in the US than in Sub-Saharan Africa.
Neoclassical economics, bringing amorality to you this summer!
"I'm with Polanyi on this. And I think that in order to fight Hayek, Von Mises, and Friedman, we have to turn substantivism. Economies ares embedded in social structures. They are not interlinked markets, that are subject to "rational" calculation. The formal, (mathematical), understanding of society and economics must be calibrated upon substantive understandings of human values that there are no sufficient numerical understandings of.
I was introduced to Hayek and Polanyi by the same man, and this quote is indicative of their relationship:
Hayek and Polanyi were of like mind on many issues, but we should not make Hayek into a follower of Polanyi. (from a journal article [pdf] found at Mises.org)
(from a journal article [pdf] found at Mises.org)
The following describes a vital aspect of Hayek's thought:
The most revealing part of Law, Legislation, and Liberty is the Epilogue... 'The Three Sources of Human Values'....Not every part of behaviour is either hereditary or the result of deliberate intention. It can also result from traditions, rules, and institutions, which are the product of a social rather than a biological evolution, and are thus the result of human action, but not of conscious human intention. Prof. Brad DeLong, from text for Econ 161, Berkeley
Prof. Brad DeLong, from text for Econ 161, Berkeley
Further (and contrary to the empirical evidence, but absolutely necessary for public choice theory) there is the notion (reified to the Nth degree by Caplan in the links I posted) that people are more rational when they are paying than at any other time.
The irony is of course, that in fact "rational" is in this construct simply a synonym for "miserly." In reality "generosity" is sometimes the "rational" action, but economics does not allow for that.
This is most evident in discussions over intellectual property, where the introduction of the question of payment creates largely artificial scarcity.
If I gain 100 pounds by exploiting someone who has nothing and they continue to have nothing, by economics there is only gain. No loss is measured. Sure you can construct "opportunity costs" models for simple situations, but no-one bothers to do this on a large scale. This is part of why various democratic decisions are so mystifying to economists, they are too lazy to attribute any value to the ending of widespread exploitation that seems (to them) to come at the cost of economic growth.
Whether the increases in the legal protection of intellectual property since 1976 have conferred net benefits on the U.S. economy is uncertain.
For another, F. A. Hayek:
A slavish application [to intellectual property] of the concept of property as it has been developed for material things has done a great deal to foster the growth of monopoly and...here drastic reforms may be required if competition is to be made to work. In the field of industrial patents in particular we shall have seriously to examine whether the award of a monopoly privilege is really the most appropriate and effective form of reward for the kind of risk-bearing which investment in scientific research involves.
What we learn when we learn economics
Gotta love this quote:
The more reading I do, the more sense the op-eds in the Wall Street Journal make.
But when equity and efficiency trade-offs do arise, economists like Sanderson are systematically biased in favor of efficiency because that's what they are experts on. Efficiency they can measure and analyze. Fairness? That's the turf of philosophers and politicians. This tendency is most pronounced in discussions of economic growth, and how the benefits of that growth should be distributed. Sanderson paraphrases his Nobel Laureate colleague Bob Lucas, who says that "once you start to think about the benefits of high growth, it's hard to think about anything else." In other words, first worry about how best to grow the pie, then how to slice it up. Let efficiency trump equity, create wealth, and then you can use the extra wealth you've created to alleviate inequality. This makes a certain amount of sense. But when this rhetoric comes to dominate our politics, the problem of inequality is never addressed. Now is always the time for growing, later is always the time to address concerns about equity. The result is predictable: In countries that have adopted the neoclassical policy prescriptions (including the United States), there has been an ever-widening gap between rich and poor.
This makes a certain amount of sense. But when this rhetoric comes to dominate our politics, the problem of inequality is never addressed. Now is always the time for growing, later is always the time to address concerns about equity. The result is predictable: In countries that have adopted the neoclassical policy prescriptions (including the United States), there has been an ever-widening gap between rich and poor.
Ah yes, but it could be redistributed, they say... In the long run, we're all dead. John Maynard Keynes
As Caplan sort of sees a economic illiteracy in the populace, the negative consequences of which might be remedied by giving people an economic literacy test before they're allowed to vote, I'd like to reciprocate by proposing that economists have to read 'A Modest Proposal' after finishing their freshman year and answer these two open questions:
Did Swift, within his historical setting, have a point?
If not, what is wrong with his logic?
Depending upon the quality of their response, we might judge whether they are allowed to study on and are permitted to give any policy advice, ever.
(As a guideline: Caplan, it seems, would not have passed this test)
http://economistsview.typepad.com/economistsview/2007/05/rational_is_not.html
http://www.washingtonmonthly.com/archives/individual/2007_05/011386.php
http://www.inthesetimes.com/article/3185/whos_afraid_of_democracy/
but they go to the heart of another side of the story. Economics doesn't have any deep attachment to democracy. Their main objection to authoritarianism has been that the "authoritarians" didn't follow "good economic advice."
This may be seen in the enthusiasm of various economists for Pinochet in Chile, but also in those "mini-Chinas that embrace free market principles" of Singapore and Hong Kong. So long as repression is used in the cause of market economics, they are all for it.
We have chosen as a society to put the civil liberties of the suspect, even if a foreign national, first.
What part of "everyone is equal before law" does Mr. Bliar not understand?... We haven't put anyone's civil liberties ahead of anyone else's. And what's this about "even if a foreign national"? Are foreign nationals lesser people? Don't you fight for universal human rights?
[Extremists'] right to traditional civil liberties comes first.
And here we switched from suspects to 'extremists', as defined by who and judged by who? I see my suspicion that for Bliar, "suspect" equals "guilty" (equals evil son of Satan) reinforced.
I believe
Faith-based politics. Some say that Bliar's lies and hypocrisy prove that his faith is not sincere. But I believe faith and hypocrisy don't contradict. Bliar strikes me like a true raving lunatic, one who believes the strength of his faith in his ideas is all te proof needed, one who above all believes in himself being right, and one who starts to believe his own lies and starts to believe his shifting positions were always his positions as soon as he repeated a lie twice.
this is a dangerous misjudgment.
No, it is a strawman, see above.
This extremism, operating the world over, is not like anything we have faced before.
Oh really? It is worse than fascism, stalinism, 9th/20th-century anarchist terrorism, and all the various religious extremisms of the past millennia?... What a phenomenal loss of scale.
It needs to be confronted with every means at our disposal.
Every means? With nukes, airplanes, nuclear subs, police state, and all means of dirty war? Wouldn't that make Britain an extremist the world hasn't faced ever before?...
Tougher laws in themselves help, but just as crucial is the signal they send out: that Britain is an inhospitable place to practise this extremism.
That's how those never-before-seen extremists, the communists were dealt with in Germany -- in the thirties. Look what became of it. And look at the profiles of British terrorists since 9/11 -- as if there would be something common and easily recognisable among them. The only practicable thing that may come out from such rhetoric is concentration camps for all Muslims and darko immigrants. *Lunatic*, n. One whose delusions are out of fashion.
If you've done nothing wrong you have nothing to worry about, DoDo. Stop aiding and abetting terrorists. Bush is a symptom, not the disease.
I don't think this is really new, it is only the latest reincarnation of modern colonialism: we don't take over over other people just because we are stronger, but because we bring them something good. The Good News of Christianity, civilisation, enlightement and declaration of human rights, modernism, whatever. *Lunatic*, n. One whose delusions are out of fashion.
It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages. — Adam Smith in The Wealth of Nations
I understand that you have written this with dKos in mind, but why the simple left-right dualism? The neolibs started out as an extremist liberal minority, and while they took over much of the US and British right-wing first, they had significant influence on the center-left's policy in many counties from the nineties (US under Clinton, Britain under Bliar, Sweden, etc. etc.), while the right-wing wasn't that enthusiastic in many other places. *Lunatic*, n. One whose delusions are out of fashion.
They are not by neccesity evil but instead prevail in those countries where the Left fails to offer Social Democracy instead of Social liberalism. As in my country for many years, and as is starting in yours.
So my comment above about Polanyi and "protectionism". I sincerely hope that in 2008, there's a Social Democratic platform for the Democratic party. And I see only one candidate willing to offer that up. Thus, the fight for 2008 takes on special significance. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
It is reasonable to argue that, because
This has ugly consequences. For example, this principle says that it is proper (even obligatory!) to sell food with toxic additives, provided that this is legal and (taking everything into account) profitable. Likewise, if working conditions in an Indonesian factory can be greatly improved at little net cost, this principle says that doing so would be wrong, no matter how great the improvement or how small the net cost.
This widely held principle impose on corporate leaders what can amount to a fiduciary obligation to do evil, but if corporations act on behalf of their shareholders, how can it be right for them to do what informed shareholders would judge to be wrong?
If corporations exist to maximise value to their owners, then they must not do what their shareholders would reject, and should do what their shareholders would applaud. That is, they must act in a way consistent with the values of actual human beings, and must not act as mere profit-maximisers: Greed is wrong.
This is a radical idea, yet it follows directly from basic principles of the reigning free-market ideology. Words and ideas I offer here may be used freely and without attribution.
Homo oeconomicus, as almost universally misunderstood, is indeed a monster, and similarly debased economic thinking advocates that corporations be monstrous in the same way. That misunderstanding of rationality and of the proper purpose of corporations is poisonous and worth fighting. Words and ideas I offer here may be used freely and without attribution.
Dawkins likes to say that moral implications of scientific theories are irrelevent, that he is merely "describing how things are under evolution, not endorsing them as morally good". But the convictions that everything can be explained and done with selfishness alone do have social (and eventually biological and physical) consequences.
The two theories of economic and biological selfishness might have made the breakthroughs "independently". But I guess that Dawkins' categorical explanations were appealing and instructive to Chicago ideologs. After all, the implications that Nature works this selfish way (with "survival of fittest" included) and so impressively give a lot of excuse and confidence to implement the theory wholesomely.
I think that Dawkins' "approximation" of Nature workings needs to be updated. Greed has evolutionary downsides as well. To deal with them, much more subtle "selfishness" is needed. Pure selfishness as a basic behavioral mechanism requires a good deal of intentionality. A more basic premise is that of functional behavior: animals behave following inhereted or learned behaviour modes, which are usually adequately functional. Habits rule over rational optimizations.
Animals may have selfishness percetion - and it would be evolutionary useful indeed. But:
It is a kind of Occam's razor argument - everything follows from selfishness instinct, no need to assume other instincts, altruistic in particular. But when it comes down to this, even simpler basic assumption is behavioral - animals just behave one way or other, discated by inborne or learned instructions, and not surprisingly, most of their behaviours are useful to them most of the time, and they rarely are harmful to themselves.
Intentionally or not, Dawkins' implications are parallel to straight socio-Darwinistic arguments. In particular, his "selfish gene" metaphor super-emphisises the role of an individual - nothing matters but survival of the smallest subject. I think this a too narrow perspective. Whether you a gene or a slump worker, you can only be so much selfish most of the time - just do your part in the machinery of an organism or a mine company. Dawkins kind of denies meaningful selection on higher than genetic levels - but too often gene selection is just a pretty random game, with every "good-for-something" combination reproducible when circumstances are "normal" to it. Much more meaningful selection does happen on organism level, and sometimes - on group level, when cooperation is a straight necessity (though not necessarily sufficiency) for survival, however you spin that.
In particular, what is "ultimate selfishness"? It is either a tautology, or something no organism can "compute" in advance.
I think that niche constuction (or "over-extended phenotypes") has better explanations to offer eventually. In particular, "fighting" or utilizing "most greedy genes" might be an impressive cooperative (and real) "art" beyond Dawkins' approach.
Naturalistic legitimacy is not something to frown upon. We would be happy if our economies would function just as richly as natural environments. A more cooperative or wholistic understanding of Nature would have positive impact on human societies.
Dawkins is a prime example of why imputing intent to chemical reactions is one of the paths to science hell.
The competative interpretation is funnily interesting - you might probably say that a certain gene of George W controls all the planet. But the context/playground of the genes "battle" becomes so rich and incidental that it makes much more sense to talk a group of genes (and not only from the Bush family) cooperating in competition against other group of genes (say, "liberal" genes) - hence you have very sensible higher levels of selection.
Why the dots?
you might probably say that a certain gene of George W controls all the planet.
I may be mistaken, but this "controls" seems to imply a mistaken idea of what genes do -- the simplistic but widespread idea of genetic determination. But genes don't miraculously 'control' anything, they just have an effect under certain circumstances (circumstances which include both other genes and 'environmental factors'). No gene determines foot size, for example -- with the right diet, you grow much larger (not to mention having zero-sized feet if you cut off your leg in an accident).
it makes much more sense to talk a group of genes ... cooperating in competition against other group of genes
That makes sense only if the occurence of competing variants of the various genes in the group are correlated. There may be some correlation between some gene variants due to compatibilites, but not for the entire genome [varation] of most sexually reproducing species, or even any groups of genes you pick in their genome.
I note though that with Dawkins's original loose definition of 'gene', higher-level selection is a non-issue: what we'd view as separate genes with strongly correlated variants (based on the now accepted geneticist definition of gene) would be one gene in his treatment in those 20-30-years-old books. *Lunatic*, n. One whose delusions are out of fashion.
So the economy needs to be thought of as a garden, not as a wild ecosystem. And managing a garden as an ecosystem is hard to do, monoculture is easier as there are fewer different things to think about.
I guess what you're leading to is permaculture. But permaculture is not a natural environment, it's a managed environment. Bush is a symptom, not the disease.
Really? I thought the economy compells to think only about yourself. Who cares about Chinese workers, African kids?
I don't see our economies just us rich. Especially now, I see many wide one-way highways of growth, but I wonder, how the things will bend to ever lively cycles.
But if you do care then you have to manage the economy, because left to itself it's going to look a lot like a jungle. Bush is a symptom, not the disease.
I think that dominating greed is abnormal in Nature. There are no licenses and tax incentives there.
... the economy needs to be thought of as a garden, not as a wild ecosystem.
THAT is excellent Framing and could be developed into a counter-narrative/attack.
No, Dawkins doesn't talk about selfish instincts. He talks about genes, and the issue here is the possibility of selfish genes determining altruistic instincts. (Or cooperation-inducing instincts, or even self-harmful instincts.) Dawkins agues a great deal about potential conflict between the interests of individuals and the 'interests' of their genes. You really should read the book.
parallel to straight socio-Darwinistic arguments. In particular, his "selfish gene" metaphor super-emphisises the role of an individual - nothing matters but survival of the smallest subject.
How is that parallel to Social Darwinism? It is obviously reductionist, in which direction your critisism runs. But the problem with Social Darwinism is not making reductionist arguments (and that's not what they do), but confusing description (what happens and why) and desirability (what should happen), treating nature as some mythical force rather than changing and replaced by our artifical environment & culture, having no clue about the actual human genetic variance but making simplistic (racist) assumptions about it, and having a very narrow (again ideological advocacy parading as science) view of what can constitute 'fitness'.
Dawkins kind of denies meaningful selection on higher than genetic levels
What I'd accuse Dawkins of is denying the importance of evolutionary processes other than adaptive selection. In his later books and articles, when he confronts more scientific criticisms, that's pretty apparent -- he acknowledges things like genetic drift and macroevolutionary processes, but treats them as uninteresting detail when compared to the order-creating(/retaining/accumulating) selection. Dawkins's opponents ascribe this to his reductionism.
Much more meaningful selection does happen on organism level, and sometimes - on group level, when cooperation is a straight necessity (though not necessarily sufficiency) for survival, however you spin that.
...and you accuse others of sounding like Social Darwinists?...
First, you read the Extended Phenotype, but still don't appear to make a difference between genes and phenotype. Selection considered by Dawkins (or Darwin) always acts on the phenotype, be it an organism, a wolf pack or a termite mound. A phenotype is always the result of multiple genes acting in concert (sometimes genes of multiple species, as you say elsewhere). Question is, was there a genetic difference that made a difference? If there was no genetic difference, no biological evolution was involved. If there was difference but it made no difference, we have a case of genetic drift, not selection. (One of the things Dawkins recognises but thinks uninteresting.)
Now, if there was genetic difference and that mattered, how extensive is it? Surely not the entire range of cooperating genes in an organism: there isn't even difference in most. And by all likelyhood, not even the entire genetic variation present in the competing sides (be them organisms or groups of organisms), especially if for genes with variation within, not just between groups.
Viewing group-level conflicts as competition of gene alliances comes dangerously close to racism.
In particular, what is "ultimate selfishness"?
I'm not sure what you refer to. Could you give a quote? *Lunatic*, n. One whose delusions are out of fashion.
The pop social darwinism does like simplistic bottom line explanations. It is not exactly reductionism, but a common idea of "explaining something" nevertherless. I wonder whether they could be led to more proper thinking from there. Or will their explanations "Free Market saves poor" be just as rational or mystical as "God did this"?
What I refer more is the economic side of Social Darwinism - the world is just as it can be for the winners and looseers. Dawkins' notion of fittness does not look very rich to me - and that may feed the "common wisdom" meme of being good will skeptical and minding only your own interests.
I am surprised with you noticing social darwinism here:
I do not mean here survival necessity for group-level conflicts. Hard circumstances might be such that individuals have to cooperate because they would not survive one by one; I also can imagine that raiding or consuming similar kins would not be actually useful to overcome the whole hardship period. One of my thoughts is that extreme survival pressure may result in remarkable cases of symbiosis, and vice versa, most stunning symbioses must have appeared during extinction threatening times - an accidental symbiosis would be vitally useful immediately, while conventionally "selfish" strategies would mostly fail to get through.
In other words, individuals or species are forced to compete in cooperation sometimes. You can see this in the economy (with acquisitions and mergers, corporate alliances). The libertarian ideology does not acknowledge benefits of cooperation, but they are actually enjoyed within wealthy classes pretty much.
("Ultimate unselfishness" was mentioned in Torres' post I was responding to.)
Your arguments sound like one type of moral argument marshalled against Darwin a century ago (and by some creationists even today). *Lunatic*, n. One whose delusions are out of fashion.
