New APPS: Art, Politics, Philosophy, Science

Ted Sider's "Knee-Jerk Realism" and the Continuum Hypothesis.

[The following is the consequence of discussion with F.A. Muller, Lieven Decock, and Victor Gijsbers. They should be blamed for my mistakes.--ES]

A few weeks ago I complained that Ted Sider's approach to "knee-jerk realism" is dismissive toward views that do not share his (ahum) fundamental outlook (and I mused a bit about the sociology of knowledge that facilitates such dismissiveness). One worrisome consequence is that Sider fails to see objections to his view when they ought to be staring him in the face. Consider the following two passages from Ted Sider's Writing the Book of the World:

I hold that the fundamental is also determinate. "The fundamental is determinate" is not particularly clear, and improving the situation is difficult because there are so many different ways to understand what "determinacy" amounts to, but perhaps we can put it thus. First, no special-purpose vocabulary that is distinctive of indeterminacy...carves at the joints. Second, fundamental languages obey classical logic. The combination of these two claims is perhaps the best way to cash out the elusive dogma that vagueness and other forms of indeterminacy are not "in the world." (137)

The continuum hypothesis is sometimes said to be indeterminate. But suppose that mundane set-theoretic truths, such as the axiom of extensionality, are fundamental. Then by the combinatorial principle, the continuum hypothesis must be determinate, since it can be stated using only expressions that occur in mundane set-theoretic truths (namely, logical expressions and the predicate ∈). Thus we have a surprising result: the fundamentality of the mundane truths of set-theory requires the non-mundane continuum hypothesis to be determinate. (151)

Now, first,  the "sometimes said to be," is an odd locution. After all, it was proven that if ZFC is consistent then the continuum hypothesis can neither be proven nor disproven in it (see here for a good intro). Second, in the context of Sider's program ("mundane set-theoretic truths"), abandoning ZFC is not on the table.  Third, I know that One's modus ponens is another's modus tollens, but Sider has no "result" here--he ought to be facing up to the fact that there is a straightforward objection against his claim that the "fundamental languages" obey classical logic and mundane set theory: there is no reason to think the continuum hypothesis is determinate. To think otherwise is an act of faith (recall my observation about the odd religiosity of his so-called "knee-jerk realism"). So, I stand by my earlier claim that there is something troubling about an agenda-setting book that wishes away obvious problems with the program.

Are there any philosophical problems that our age instantiates?

I've been reading Walter Cerf's wonderful preface to the Harris and Cerf edition of Hegel'sDifferenzschrift. The nicest thing about it is the long speech that Cerf imagines Schelling and Hegel making upon a visit to Kant, explaining to the snoozing man how critical philosophy leads to speculative philosophy. It's just a wonderful pulling together of so many important dialectical strands in German Idealism.

Another thing kind of weirded me out though. Cerf really interestingly notes how the conceptual divisions that Hegel attempted to overcome were not some kind of abstract game but in some sense constitutive anxieties of the age. The root distinction between particular and universal has all sorts of historical resonances such as issues concerning the relation between an autonomous, yet alienated, individual and the community that both nurtures and stifles him (and it is a "him" with Hegel). In order to be able to be intellectuals, the young Hegel and friends lived in a kind of painful monastic self-denial that exacerbated these tensions (cf. Kierkegaard), and they (unlike Soren) really did for a time at least hope that the French Revolution would somehow be the historical overcoming of them.

Of course existentialism turned necessity into a virtue, taking the very tensions that Hegel and friends analyzed to not be things that could be sublimated, but instead things just constitutive of the human condition. Some strains of Speculative Realism go this one better, and see these tensions as inscribed in the non-human universe itself. Tristan Garcia is to some extent a metaphysical (that is British, not American) Hegelian with no Aufhebung.

Reading Garcia and Cerf together made me wonder if our current time has any constitutive tensions analogous to all of the particular/universal dichotomies that haunted Hegel. With Garcia, I think many of Hegel's are still with us. But to some extent we are used to many of them now. Again, the tension between liberal autonomism and communitarianism, and crap aspects of both, are just facts of life we all unsuccessfully navigate now in ways big and little. What interests me tonight is whether there is anything like this that future Walter Cerfs might describe as distinctive of our point in history? I realize that this is probably a silly game, but I'm interested if anyone has any suggestions.

Crowd-funding Philosophy

Sometimes an idea just is in the air. Last week in the context of our blogging (originally by Dennis, then more recently yours truly, and Catarina) about the ABC conjecture our very own Dennis des Chene reminded me that the source of the most recent discussion, written by Caroline Chen, requests that "If you enjoy this story, we ask that you consider paying for it. Please see the payment section below." How many philosophers did? (I finally did in context of writing this story!) Now, Daan Oostveen, a journalist writing for a Dutch weekly, contacted me about my views on crowd-funding in philosophy. According to Wikipedia, crowd funding is a "collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations." I often write these blog posts in an espresso-bar/fashion-store that was funded in this fashion (the owners were even on Dutch TV about it).

Now, I certainly expect that (like blogging!) crowd-funding could be a viable financing model for some philosophers.  At NewAPPS we self-consciously decided not to accept advertisements, but if we had I expect we might have had some nice extra cash to fund our annual APA lunch. Crowd-funding is an especially viable funding source for non-academic (or marginal-academic) philosophers, who (a) use  performance-like or primarily digital methods. It might even help develop these fields--something I wish we could do at NewAPPS (but I have come to the conclusion we lack interest and talent in these areas). Also, for charismatic people (b) whose philosophical views and methods lean closely toward self-help/therapeutic/religious spheres/pratices crowd-funding may even be lucrative. (In Holland the glossy Filosofie Magazine has made philosophy a life-style for educated folk near retirement looking for alternatives to religion.)

University Technocrats to Scholars: Keep Books Out of your Office

The headline to this post was not written by folk at the Onion. The managers at the Free University of Amsterdam have decided that university staff have to share office-space efficiently.  This has had a surprising consequence for the theologians and philosophers (the first departments with new-look offices). As the Dutch newspaper, Trouw, reported: "bookcases are now 'something for home'; department employees have up to 3.8 meters of books per person now. In addition, there should be a common department bookcase." If you go to the official university web-page of Dutch philosopher of science, Hans Radder, one can find under "Office hours:" "We don´t have offices anymore. For an appointment, please send an email."

For folk that can read Dutch the economic sub-text of the piece in Trouw is instructive; the chair of the philosophy department, Rene van Woudenberg is, quoted as follows: "We had the choice between expensive rental spaces where people can store a lot of stuff and own books; or we could choose to spend our budget on  staff with more limited office space. We have chosen the latter. Not in an expensive new office-office, but with a renovation in the old university building, which saves a lot, because every square meter has a price." Oddly, the piece does not mention that the Free University has been notorious for its financial blunders with derivatives (see here and even here) and a considerable loss due to Icelandic investments (initially belittled by the university).

Weekly Philo of Economics: Central Banking with materially flawed models

The idea that there is something like an efficient market in scientific ideas (EMISI), supporting a ruling 'paradigm,' is very dangerous in the policy sciences. Even if we assume that scientists are individually pure truth-seekers, imperfections in scientific markets can produce non-epistemic (and epistemic) externalities (recall here, including criticism of a famous paper by Aumann). EMISI provides cover for 'The Everybody Did It' (TEDI) Syndrome (recall here). With Merel Lefevere, I have been exploring in what circumstances the presence of TEDI Syndrome is indicative of collective negligence (or a negative externalities). One possible consequence of our approach is that those scientists/institutions that interface with policy should seek out  critics and critical alternatives to the existing paradigm. Jon Faust, an economist, sometimes acts as such an in-house critic at the United States Federal Reserve (the Fed) and the Riksbank. Two of his relatively non-technical papers (here and here) prompted this post.

Central Banks rely, in part, on models developed by academic economists to set monetary policy. Yet, Faust notes two problems in the way the intellectual supply-chain works: (i) there is almost no venue for "high-level conversation" about "academic work and its relation to actual practice." (53) (ii) State of the art models are often applied without full knowledge of all their possible consequences in the real world because these models models "have substantial areas of omission and coarse approximation" (55)  In light of (i) and (ii), Faust's aim (iii) is to help central bankers and the modellers develop "a formal literature on best methods and practices for using materially flawed models in practical policymaking," (55) or "how to make the most responsible use in policymaking of what we now know." (60) My first reaction was, 'it is about time;' my second, more generous response was warmth in my philosophical heart that Faust is engaging in philosophy of scientific methodology and non-ideal regime/institution construction. His main idea is to adapt a kind of policy protocol from a literature that "goes under names like “human relevance of animal studies” and “interspecies extrapolation” (57) in the practice(s) of Toxicology.

A Currency Strategist explains.

"In fact, the very success of the owners of capital in securing the elephant’s share productivity gains and ensuring low effective taxes, lies at the very heart of the credit crisis."--Marc Chandler; read the whole article. [HT Bookforum--a very cool blog.]

Weekly Philo of Economics: articulating an optimal blend of competition and cooperation in society

Unlike geometry, economic theory does not consist of theorems which must be a sacred seal set upon some part of a man's, or a woman's, life. The ethics of commerce must draw on ethics as a whole, and for this, we, however “we" are constituted, must draw on ourselves through an inward look, of picturing something that we cannot see, of making a composite and being satisfied with a rough outline that allows us to cope and carry on. The question, and now I keep repeating myself as in a stutter, is how are we to do this? How is one to foster an optimal blend of competition and cooperation in society and in theorizing about that society, to control self-interest and to acknowledge the possibility of self-deception, to prevent one particular picture overshadowing the composite, putting the analyst and the analyzed, the theorist and theorized, on the same plane of existence so that an ethics of theorizing, rather than a narrative of self-serving or group-serving domination, can emerge? (Khan 2003: 19)

M.A. Khan, a  mathematical economist (whose career I helped celebrate this week-end), concludes an important essay on Alfred Marshall, Frank Hahn, Joan Robinson, and Keynes (all Cambridge economists who engaged in serious reflection on their craft and its role(s) in society) with the lines quoted above. Now as Khan puts it, “Economists do not have a comparative advantage when it comes to ethics,” (Khan 2005: 40) so he turns  to philosophy, but not philosophical theory (recall his criticism of Singer). Rather, inspired by Wittgenstein and Cavell and aided by philosopher-economists from the past, Kahn turns primarily to an extended self-examination. Now, the aim of his ethic is “to cope and carry on” without domination. So, the aspirations are in some sense quite minimal. But, of course, a moment's reflection makes one realize that a society without domination and with an "optimal blend of competition and cooperation" is, of course, far beyond present existence anywhere. Even a dominance-free theorizing about such a society may still be beyond our reach. (Yes, I expect protests from our political philosophers and ethicists.) Khan's focus on "society" (and not, say, a system of individuals [recall here]) makes him altogether a strange bird among contemporary economists, yet an heir to Adam Smith. 

Peter Singer, class warfare-ist

Obesity is an ethical issue, because an increase in weight by some imposes costs on others... [a] way to achieve the same objective would be to set a standard weight for passengers and luggage, and then ask people to get on the scales with their luggage. That would have the advantage of avoiding embarrassment for those who do not wish to reveal their weight...the point of a surcharge for extra weight is not to punish a sin, whether it is levied on baggage or on bodies. It is a way of recouping from you the true cost of flying you to your destination, rather than imposing it on your fellow passengers.--Peter Singer [HT Feminist Philosophers.]

I'll leave it to others to dissect the use of racialized/gender stereotypes [e.g., "a slight Asian woman" vs "a man who must weigh at least 40 kilos more than she does"] by Singer in the piece.  Let's also grant Singer that air travel is not a "human right" (and stipulate that Singer could grant some exceptions). In effect, Singer advocates differential pricing. This is not uncommon: in higher education Stateside we are familiar with tuition discounts ("financial aid") based on, say, need.

Singer ignores need or ability to pay entirely in his analysis. It is unclear why that ought not be included in this "ethical issue."  Evidently, "true cost" does not mean subjective utility. Need is not irrelevant to Singer's proposal because Singer talks about "true cost of flying" without calling attention to all the subsidies offered to airlines, airports, and aircraft manufacturers by the general public (Singer uses the vocabulary of "public transport" without irony by the way); these may well involve non-trivial financial transfers from the poor to the middle classes and rich. Given that Singer selectively focuses on body weight (and shapes) when talking about "true cost" of flying, one cannot help but feel that he is selectively using (Euro/US-centric) upper-class moral sentiments to advocate policies that will disproportionally impact others.

Until economists share data and replicate results, they should probably keep quiet about policy.

By now most folk will have heard about the paper by a group of UMASS-Amherst economists that showed that a famous paper with claims about the relationship of growth and debt, which (together with the book aimed at the public) played a non-trivial role in providing the academic justification for austerity policies, by famous economists Reinhart and Rogoff were based on mistakes in the treatment of data.  (Here is a response by Reinhardt & Rogoff, which is remarkably lacking in generosity to their critics and also lacking in humility about the magnitude of their error. It reads as if it was written by lawyers rather than academics-in-search-of-truth.)

George Gale pointed me to this news-story, which recounts how a PhD student, Thomas Herndon, "first started looking into Reinhart and Rogoff's work as part of an assignment for an econometrics course that involved replicating the data work behind a well-known study." Beyond the significance that politics may be guided by flawed science, here is a part of the story that transcends partisan politics; economics (like many other sciences) has terrible practices in sharing and replicating data (here's a link to recent scholarship on this.) My economist friend, David Levy, has been publishing about these issues for at least two decades (here's a link to a paper in Social Epistemology), so I am not optimistic that we will see a change in ethos in the field any time soon.

Update: Recall this earlier story about Jeffrey Sachs.

Weekly Philo of Economics: Of Picturing Something that we Cannot See (I) [Milton Friedman, Alfred Marshall, and Khan]

Random variables and elementary particles have neither values nor intentions; they may constitute a system but surely do not make a society.--An Economic Theorist (2004).

Whenever we get a glipse of economic man he is not selfish. On the contrary he is generally hard at work saving capital chiefly for the benefit of others. (Marshall 1885: 28)

Milton Friedman and Anna Jacobson Schwartz gave A Monetary History of the Unites States an epigraph from Alfred Marshall. Friedman's engagement with Marshall was not superficial; his one serious contribution to the history of economic theory was on the Marshallian Demand Curve (1949). Friedman's famous (1953) methodology essay, "The Methodology of Positive Economics," is sprinkled with references to and quotes from Marshall. One role for Marshall in Friedman's hands was against the 'Walrasian' general equilibrium analysis associated now with names such as Arrow, Debreu, and McKenzie, among others. 

One such a name, Frank Hahn, once remarked (1984) in print:

Some friends [of economic theory] in what might be called roughly, and a bit unfairly, 'Chicago' economics -- have taken the theory in practical applications a good deal more seriously than at present there is any justification for doing. Paradoxically, they are rather hostile to its abstract foundations, yet are happy to put a great deal of weight on them. (75)

The "paradox" of [A] friendship to economic theory when applied accompanied with hostility to its "abstract foundation," is said  to be the "primary interest" of MA Khan's essay (2004) "Self-Interest, Self-Deception and the Ethics of Commerce." (I would give it the subtitle: "a Wittgensteinian reading of Four "False Prophets" of Cambridge Economics.") Of course, the mathematical economists, Hahn and Kahn, know that there is no formal paradox in [A]--as long as the abstract foundations (associated by Friedman with Walras) are treated as dispensable in practice. Khan also owns up to a form of [B] "self-interest," that is, [B*] "the ethics of commerce," one that somehow requires Khan [C] to "understand" himself, that is, to be philosophical. (I write "that is, to be philosophical" not because of the occurrence of the word "ethics," but rather in recognition that within theoretical economics there is no place for self-understanding, while we philosophers still pay lip-service to Socratic wisdom.) Initially, Khan leaves the relationship between [A]-[C] ambiguous; his way of self-examination passes through Marshall's (1885) Inaugural Lecture The Present Position of Economics.

Discussion of Adjunct salaries

A political science blog discusses the low salaries of adjuncting here. [HT Josh Wood.]

Weekly Philo of Economics: the architect of neo-Liberalism (Harberger) and his theoretical critic (Khan)

Let's distinguish among three uses of "neo-Liberalism:"

1. The imposition of markets absent rule by discussion (imperfectly approximated in Liberal Democracies)--often, by way of a dictator, foreign aid institutions [IMF, World Bank, etc.], foreign experts [e.g., Post-Communist Russia]); this is generally associated with 'shock therapy' of some sort and often occurs in times of 'crisis' or 'emergency.'
2. The use of market-friendly-rhetoric within democracies to justify "privatizing" government services; the privatized entities become private (quasi-) monopolies managed by a rent-seeking, credentialed, managerial class.
3. The tendency by the financial services industry to 'privatize gain and socialize risk' at the expense of their much poorer fellow tax-payers. 

Now (2) and (3) are deplorable, but only (1) primarily involves social engineering by experts.

Of course, in practice (1-3) can be blended in all kinds of ways: often the 'privatized' industries come with various implicit government guarantees, so then an instance of (2) turns into an instance akin to (3).  There may be more uses of "neo-Liberalism" that I am overlooking, of course! But I want to distinguish between these three varities of neo-Liberalism from instances of what is known as "economic imperialism." Economic imperialism occurs when the methods and doctrines of economics are extended into domains not previously associated with economics. Gary Becker's work on the family is a paradigmatic instance of economic imperialism. (As I have pointed out "economic imperialism" predates Becker; it was probably first diagnosed by the sociologist Talcott Parsons a few generations before Becker.)

Neo-Liberalism and economic imperialism are both commonly associated with so-called "Chicago economics." But distinct aspects of economics have been brought to bear to support the varieties of neo-Liberalism. In my previous blogging I have focused quite a bit on how aspects of finance theory paved the way for (3). Below I focus on the way the economics profession became/is implicated in (1). A key figure is the "Chicago"-economist, Arnold Harberger. Harberger's entanglement with neo-Liberalism is not merely academic; he was the key mentor to the Chilean (and other Latin American) "Chicago Boys" prior to and at the time of the dictatorships of the 1970s. The understandable focus on Milton Friedman by critics of "Chicago" has made informed discussion of these matters more complicated. As I have tried to explain, there are genuine technical differences in the ways Friedman and Harberger practice economics. (This is not meant to exonerate Friedman's role(s) in (1-3) nor his attempts at defending the Chicago Boys [see my piece].)

Playing the right kind of games

So I’m not going to get into the game of thinking thoughts too many, of trying to break down the wrong of raping an unconscious person in terms of psychic discomfort at disapproval.  It’s the wrong game to play.--Jacob T. Levy at BHL.

This seems to me the right kind of response to the pseudo-philosophy [Trigger warning: the post discusses rape] of Steven Landsburg, an economist and popularizer at Rochester.

As Levy writes, Landsburg's post

demonstrates, first, the familiar problems with blunt hedonic utilitarianism that has been detached from utilitarianism’s roots as a moral theory, and, second, the selection effect about what kinds of people are attracted to that theory. Lansburg [sic] is entirely too pleased with himself for being willing to Think Challenging Thoughts (thoughts that pretty much get covered in a first semester moral philosophy class as the frosh learns why blunt hedonic utilitarianism is not a very good theory), and determined to get through his cute hypotheticals for the fun of it, regardless of whether they convey anything useful or not.

It's just a fact of the matter that economists are not trained to be philosophers (and they are no better at it [recall here and here] than we are at economics [here]). But (not unlike philosophers) they do get socialized into thinking they are really smart boys (recall this). Since the Samuelsonian, revealed preference revolution cut the link between economics and hedonic utilitarianism (utility curves are not supposed to refer to mental pleasure entities entities, they are just a ranking of choices--recall this post), Landsburg is not even bringing any of the standard economic's tools to bear on the case. He is simply out of his depth. (Of course, that's just a daily fact of life in blog-land, the problems start when one forgets this.)

Now, the interesting issues here pertain to Levy's decision to speak up about Landsburg's moral and intellectual obtuseness without giving Landsburg credibility in doing so.

Whose property-rights, whose growth...

This report introduces a very interesting article, "Property Insecurity," by Terra Lawson-Remer (go to pp. 145), on the complex relationship between property-rights and growth. [HT Michel Heijdra.] I hope to give it more attention some other time.

An appreciative Remark on Derrida

Thus in order to be an original, he is obliged to contribute to the ruin of a language, which a century sooner he would have helped to improve. Though such writers may be criticised, their superior abilities must still command success. The ease there is in copying their defects, soon persuades men of indifferent capacities, that they shall acquire the same degree of reputation. Then begins the reign of subtil and strained conceits, of affected antitheses, of specious paradoxes, of frivolous turns, of far-fetched expressions, of new-fangled words, and in short of the jargon of persons whose understandings have been debauched by bad metaphysics. The public applauds: frivolous and ridiculous writings, the beings of the day, are surprisingly multiplied." --Condillac, An Essay on the Origin of Human Knowledge, 

In Condillac the "frivolous" is that "which seems worthless" (Commerce and Government. {Condillac is one of the great eighteenth century economists.})

Let's grant his enemies that Derrida's writings and social consequences instantiate such a reign of "subtil and strained conceits, of affected antitheses, of specious paradoxes, of frivolous turns, of far-fetched expressions, of new-fangled words, and in short of the jargon." According to Condillac, "bad metaphysics" is a science that enters into the "nature and causes" of things. (2) We can make the analogy work if we allow that Derrida's followers are the product  of a scientific age (or Husserlian phenomenology). Yet, the passage from Condillac would also exonerate Derrida in a certain sense; he would be the product of a historical circumstance--he would be born too late to contribute to the improvement of his language.

Weekly Philo of Economics: Khan VS Peter Singer on the limitations of theoreticians [with notes on Rogoff vs Stiglitz]

"In the late 1980s, I once enjoyed the privilege of being in the office next to yours [Joseph Stiglitz--ES] for a semester. We young economists all looked up to you in awe. One of my favorite stories from that era is a lunch with you and our former colleague, Carl Shapiro, at which the two of you started discussing whether Paul Volcker merited your vote for a tenured appointment at Princeton. At one point, you turned to me and said, "Ken, you used to work for Volcker at the Fed. Tell me, is he really smart?" I responded something to the effect of "Well, he was arguably the greatest Federal Reserve Chairman of the twentieth century" To which you replied, "But is he smart like us?" I wasn't sure how to take it, since you were looking across at Carl, not me, when you said it. [Rogoff was a child chess-prodigy.--ES] My reason for telling this story is two-fold. First, perhaps the Fund staff who you once blanket-labeled as "third rate"—and I guess you meant to include World Bank staff in this judgment also—will feel better if they know they are in the same company as the great Paul Volcker. Second, it is emblematic of the supreme self-confidence you brought with you to Washington, where you were confronted with policy problems just a little bit more difficult than anything in our mathematical models."--From an Open Letter by Kenneth Rogoff to Joseph Stiglitz. [I thank Hülya Eraslan for calling my attention to it.]

Beyond the clash of personalities (and even institutions), this decade old letter raises several  issues of significance to economics and philosophy. There are several important issues lurking in Rogoff's letter none of which he develops: (a) the gap between the most sophisticated mathematical models and the complexities faced by policy-makers; (b) the informal/social metrics by which entry in the very top of the discipline is governed (we philosophers have similar conversation, alas); this ((b)) matters because (c) these departments are (i) both the guardians of professional journals [recall] as well as (ii)  the credentialing place for entry into the highest policy regions Stateside (and, thus, internationally); (iii) these metrics create opportunity for all kinds of biases (as we philosophers are also starting to recognize).  If (a) is not well understood, then with certain personality types, it also leads to (d) expert-0verconfidence, and (e) the use of scientific reason as a species of cultural imperialism (recall this post); philosophers are not immune to this (see below). In order to tackle these issues in a sophisticated, even philosophical fashion from within economics, one could do a lot worse than by way of engagement with the writings of the mathematical economists, Ali Khan (Hopkins). [Disclosure: I'll be speaking at a Fest in his honor in May.] This week, I'll focus on Khan's confrontation with Peter Singer's ethics. (For a good introduction to this exchange, see here.)

Gushing over Libertarians

As loyal readers of NewAPPS may recall, I warmly welcomed the founding of  Bleeding Heart Libertarians (BHL), which has been a wildly succesful blog. While I have followed BHL regularly (and sometimes blog about issues of shared interest [e.g., here, here, here, etc.), I had also grown a bit wary of the general fondness for expert-rule among some of the BHL crowd. (As always with a group blog, one is not allowed to make claims about the whole group.) But ever since Sarah Skwire started blogging at BHL my enthusiasm has been rekindled. (Take a look at, for example, this post--trigger warning it discusses rape.) She challenges Libertarians to live up to their own best principles and, in doing so, challenges us all to think through how fondness for state institutions (the military, prisons, etc.) facilitates a rape-culture.

'In the of challenging Libertarians to live up to their own best principles (and reminding us all of the vitality and the need of the tradition today) genre' is a another post by Roger Koppl, who does not blog at BHL (but is certainly a kind of fell0w-traveler), about the significance of income-inequality at Thinkmarkets.

The Euro on the Brink

I try to avoid commenting on economic events, and hopefully my pessimism means that the nadir has already been passed.--ES

In september 2008 as the liquidity crisis that followed the fall of Lehman unfolded, the US Federal Reserve and the Treasure extended insurance and guarantees to Certificates of Deposit and Money Market funds--relatively, uncomplicated financial products used as (slightly higher yielding) bank deposits by professional and the investing middle-classes alike. Essentially this extended deposit insurance to instruments that were sold, marketed, and used as the new kind of bank-deposits. These decisions prevented a classic (yet modern-day) system-wide bank-run. I view this as the key decision that prevented financial collapse and 1930s style depression and the one most able to withstand scrutiny from the most skeptical enquirers of later generations. It is really a stroke of luck (or providence) that Ben Bernanke, arguably one of the foremost living authorities on monetary policy in the 20s and 30s, is at the helm of the Fed. (It is extremely rare to find a top economist of his generation with a deep interest in economic history; for obvious reasons that is changing rapidly.)

The beginning of the Euro's End?

I try to avoid commenting on economic events, and hopefully my pessimism means that the nadir has already been passed.--ES

In order to bail-out Cypriot banks, Cyprus's bank-depositors are being asked to contribute to the bail-out. Not just the rich Russians who treat Cyprus as a money haven, but also local depositors. It is quite predictable this will lead to bank-runs in Cyprus and any other country where citizens have good reason to fear future bank bail-outs (Greece, Spain, Portugal, and Italy come to mind, but even other countries dealing with the aftermath of real estate bubbles -- the Netherlands and Ireland -- may move back into the danger-zone). This development is quite ironic because nearly all of the European regulators' and politicians' actions since the start of the financial crisis has been in the service of preventing another liquidity crisis rather than confronting the reality that a majority of Europe's politically well-connected banks are insolvent if they were forced to do honest accounting (and absent more bailouts).  Given that Europe's technocrats are running out of money and good options in light of ongoing economic sluggishness (and decline), I think the Euro's end may be nearing.  We will either see (a) attempts to inflate our way of this (officially unthinkable in Germany); (b) a split-up of the Eurozone (officially unthinkable in Brussels), but not impossible in the aftermath of bankruns; (c) Greece-style austerity in a good chunk of the EU leading to considerable political instability (and more economic decline)--this is being tested in Spain; (d) attempts to postpone the big crisis decisions and muddle through until after 22 September (when Germany holds Federal ections) when German tax-payers can be asked to foot the bill for a genuine restructuring of European banks.

UPDATE: Cyprus' parliament has not approved this yet. Apparently they are trying to change the terms. The banks will stay closed for at least two more days. (They had been closed for a holiday-weekend.) One wonders at what point barter will replace cash.

Weekly Philo of Economics: Analytical Egalitarianism makes the New York Times

In this week-end's New York Times, the economist, Tyler Cowen, reminded us of the noblest features of the history of economics: the "egalitarian and civil libertarian core." (On his his own blog, Cowen also calls it "cosmopolitan" for good reasons because the piece attacks the nationalist bias in much public policy economics.) In particular, he argues that these are linked: "If you treat all individuals as fundamentally the same in your theoretical constructs, it would be odd to insist that the law should suddenly start treating them differently." Cowen's additional claim, the economist's mantra that "economic analysis is itself value-free," is more problematic. Let's leave aside the non-trivial, problematic jump from positive analysis to normative advocacy (recall the Summers-Khan exchange.) As I have argued elsewhere, non-trivial values are inevitably smuggled into what counts as an "individual" (and "same") as well as any attempts to aggregate these. 

I was especially pleased  that Cowen linked his treatment to the scholarship of my friends and mentors, Sandra Peart and David Levy, on what they have called “analytical egalitarianism.” (Here and here [the latter contains a contribution by (ahum) me].) On Cowen's account analytic egalitarianism rejects the competing theoretical approaches that:

postulate natural hierarchies of religion, ethnicity, caste and gender, often enforced by law and strict custom. Economists too often forget that we are part of this broader battle of ideas, and that we are winning some enduring victories.

Quite right! But even so Cowen does not seem to have fully grasped the crucial insight of analytical egalitarianism. In effect, Cowen treats analytical egalitarianism as a theory that [a) postulates a homogeneity of human nature (when it comes to motives to action). This is indeed a necessary condition in analytical egalitarianism. But it is not sufficient: what needs to be added is that (b) the theorist has to be included in his or her model with the same motivational setup as the subjects studied. (To be clear (a) and (b) are jointly necessary for analytical egalitarianism, but they are also not sufficient.) Too often economists tacitly treat their own public utterances and policy-suggestions as themselves disinterested or un-incentivized (by considerations other than  truth) and the product of a value-neutral method. Why does this matter?

Weekly Philo of Economics: when Larry Summers was just an Imperialist Economist and a footnote to Derrida

Before "Larry Summers" became synonymous with expert for hire by Wall Street, he was the Harvard President, who suggested, while claiming that he wished to "provoke,"  that "there are issues of intrinsic aptitude, and particularly of the variability of aptitude," that might explain the relatively low presence of women "in high-end scientific professions." Summers insisted that his is an "entirely positive" not "normative approach." (Summer 2005; he is deploying a standard distinction among economists.) The lecture set off a furore that contributed to his eventual resignation from Harvard (it surely did not help he was in charge of a nearly US$ 1 Billion loss on speculative investments). But...before his notoriety Summers was one of those economists that effortlessly move between academia and government (while generally serving the interests of the wealthy). Such folk become prominent within public policy economics through highly regarded academic work, which won Summers the John Bates Clark Medal (1993) and which partially accounted for his selection as Chief economist at The World Bank (1991-3). As the politically influential, but nevertheless academic Vice-President of the World Bank,  Summers was invited to Pakistan to give The Quaid-i-Azam Lecture in 1992, "Investing in All the People," to the Pakistan Society of Development Economists. The main point of Summers' lecture, which has been cited close to 300 times and is easily found on the internet, is:

Investing in the education of girls may well be the highest return investment available in the developing world. As such, increasing the level of female education is an especially high priority in Pakistan.

So, before Summers became synonymous with sexism in academia he was an advocate of underprivileged women's education. (A topic Summers continues to talk about.) The paper was admiringly profiled in Business Week, and created the meme of Summers as "iconoclastic Liberal." For those that like their irony fully symmetric, I note that the 1992 magazine article treats Summers as an academic "provocateur." Summers' Pakistani hosts asked a mathematical economist hailing from Waziristan, MA Khan (then as now at Johns Hopkins), to offer comments (see here). Rather than dazzle his famous American colleague and "the Pakistani Minister of Defence and Minister of Water and Power" (quoted from Richard H. Sabot's response to Summers) with state of the art mathematical technique, Khan quotes Derrida and Clifford Geertz in the process of calling Summers "reckless."

A.N. Prior: Historian of Philosophy!

What follows is a minor pet-peeve: there is a CFP for the Arthur Prior Centenary Conference in August 2014 in Oxford. It looks like a wonderful event. I am a bit annoyed that Prior's role as a historian of philosophy is not part of the list of official topics of the conference. For, Prior is absolutely crucial figure in the revival of interest in the history of philosophy within an Analytical context.  In 1950 C. D. Broad reviewed Prior's Logic and the Basis of Ethics in Mind, and aptly summarized it as follow:

"This book is concerned primarily with the so-called 'naturalistic fallacy' in ethics, with the history of its occurrence and the refutations of it in the works of English moralists before the publication of Principia Ethica, and with the logical questions involved... The first and last chapters are explicitly devoted to the refutation of this fallacy, the former to the logic and the latter to the history of such refutations. Chapters II, III, and IV deal with the autonomy of ethics, with special reference respectively to Cudworth, to Clarke and Reid, and to Sidgwick and his contemporaries. Chapter V, entitled Promising as Special Creation, is concerned with a theory as to the nature of promises which was held by Reid and has been revived by Mr. Carritt. The remaining three chapters are devoted to theories which identify or assimilate moral fittingness and unfittingness with truth or falsity. Chapter VI deals with the early history of this doctrine with special reference to Wollaston and Adam Smith; Chapter VII with a form of it which Mr. Prior ascribes to Dr. Popper; and Chapter VIII with one which he ascribes to Professor Findlay."

Weekly Philo of Economics: Spinoza, Hume Adam Smith, and the "Love of System" (with help from Toland)

The same principle, the same love of system, the same regard to the beauty of order, of art and contrivance, frequently serves to recommend those institutions which tend to promote the public welfare. When a patriot exerts himself for the improvement of any part of the public police, his conduct does not always arise from pure sympathy with the happiness of those who are to reap the benefit of it. It is not commonly from a fellow-feeling with carriers and waggoners that a public-spirited man encourages the mending of high roads. When the legislature establishes premiums and other encouragements to advance the linen or woollen manufactures, its conduct seldom proceeds from pure sympathy with the wearer of cheap or fine cloth, and much less from that with the manufacturer or merchant. The perfection of police, the extension of trade and manufactures, are noble and magnificent objects. The contemplation of them pleases us, and we are interested in whatever can tend to advance them. They make part of the great system of government, and the wheels of the political machine seem to move with more harmony and ease by means of them. We take pleasure in beholding the perfection of so beautiful and grand a system, and we are uneasy till we remove any obstruction that can in the least disturb or encumber the regularity of its motions. All constitutions of government, however, are valued only in proportion as they tend to promote the happiness of those who live under them. This is their sole use and end. From a certain spirit of system, however, from a certain love of art and contrivance, we sometimes seem to value the means more than the end, and to be eager to promote the happiness of our fellow-creatures, rather from a view to perfect and improve a certain beautiful and orderly system, than from any immediate sense or feeling of what they either suffer or enjoy. There have been men of the greatest public spirit, who have shown themselves in other respects not very sensible to the feelings of humanity. (The Theory of Moral Sentiments, IV.1.11, 185)

Smith identifies a particular intellectual, even theoretical feeling: the so-called, "love of system." In the passage above, "the love of system" is mostly identified with positive consequences through its ability to compensate for our all-to-human lack of emotional interest in the well-being of others. It do so, especially, when such love of system slides into the spirit of system and when that, in turn, is mixed into public spiritedness. However, as most readers of Smith have noticed later in The Theory of Moral Sentiments (TMS) in passages added to the sixth edition of TMS (1790), Smith emphasizes the horrible things that can occur when this love of system is transformed into a "spirit of system" and turns into the ideologically-driven "madness of fanaticism." (TMS VI.2.2.15, 232) Commentators tend to discern in this allusions to the unfolding French Revolution. And it might be thought that what is being targeted is the influence of Rousseau, who as many commentators have noted is, in fact, clearly alluded to in the pages just before the passage quoted at the start of this post. (TMS IV.1.8-9, 182-3)  But nowhere does Smith refer to Rousseau's philosophy, which with he was very well acquainted, as a "system," and it has never been satisfactory shown why from Smith's vantage point the French Revolution would have involved "love of system."

Is Straussianism all wrong, everywhere, all the time?

Given the justified lack of popularity of the neo-cons (and Leo Strauss' purported influence on them), I suspect many of our readers will say 'yes.' Moreover, many of the best historians of philosophy have a deservedly visceral, negative response to Straussians who substitute numerological obsessions and evidence-free arguments about hidden meanings (in which everything is reduced to will to power) for serious scholarship. Let's call what's being rejected "vulgar Straussianism."  

Even so, esoteric readings of our philosophical past crop up in surprising places. For example, consider two recent books emanating at the time from Vancouver. First, in her important book, Epicureanism at the Origins of Modernity (Oxford), Catherine Wilson writes (purportedly quoting Malebranche): "that the crux of a philosopher’s doctrine is to be found in those passages where he defends an unpopular thesis; his defense of accepted theses has no informational value." (p. 148) Let's call this "Wilson's Dictum." In context Wilson is commenting on Walter Charleton's use of the dialogue format; a genre that lends itself to multiple readings and, thus, esotericism.

Note that Wilson's is not evidence-free reading; you only get to attribute an unpopular thesis to an author if s/he asserts it once and would have motive not to call repeated attention to it. Primed by Wilson's focus on Epicureanism, I noticed that Adam Smith  states very clearly in his own voice: “Fortune, which governs the world” (The Theory of Moral Sentiments 2.3.1, [p. 104 in the Glasgow edition]) in a chapter which according to its (perhaps now ironic) title describes the "final cause" of our psychological constitution. Of course, a sentence fragment does not settle the matter against a Providentialist interpretation of Smith, but if one takes Wilson's dictum seriously, merely piling on the Providentialist and Deist passages fails to undermine the credibility of the (shall we say) more neo-Epicurean reading of Smith, which was, by the way, Reid's (see this nice paper by David Fate Norton J.C. Stewart-Robertson, although Reid's argument is different). 

Weekly Philo of Economics: parenthood, L.A. Paul's "What Mary Can't Expect..." and Uncertainty

Res Philosophica has just announced a cfp "on the topic of transformative experiences for a special issue of the journal." The invited speaker line-up is fantastic. Papers are invited that explore "the implications of the possibility that certain major life experiences are phenomenologically transformative: that is, they are relevantly just like Mary’s when she leaves her black and white room." (For a refresher on Mary see here.) One of the invited papers, "What Mary can’t expect when she’s expecting," by the eminent metaphysician, L.A. Paul, was first called to my attention after my post on the lack of available vocabulary for the emotional life of fatherhood. Paul argues that:

[H]aving one’s own child is an epistemically transformative experience. If it is impossible for me to know what it is like to have the transformative experience of seeing and touching my own child, to know what emotions, beliefs, desires, and dispositions will be caused by having a child, and by extension to know what is like to have the emotions, beliefs, desires, and dispositions caused by having my child, it is impossible for me to gauge the expected value, in phenomenal terms, of having a child. If I cannot gauge the expected value of having my child, I cannot compare this value to the value of remaining childless. And if I cannot compare it to the value of remaining childless, I cannot—even approximately—determine which act would result in the highest expected value. And thus, on the standard model, I cannot use our ordinary, phenomenal-based approach to rationally choose to have my child, nor can I rationally choose to remain childless.

Now the point of the paper is not to argue that becoming a parent is fundamentally an irrational act; Paul allows that there may be ways of thinking about rationality far removed from standard rational choice models that can capture the rationality of such a decision. Paul's paper also allows that models that merely capture the extrinsic features of having children (predator-prey models in ecology, Malthusian growth models in economics and ecology, etc.) do a good job explaining or predicting observed regularities. Paul's approach is even compatible with the possibility that we can experimentally induce utility curves for prospective parents to estimate their willingness to pay for a child.

Humanist Spinozism (Thomas More, Utopia)

Recently I posted about some fine 'law & economics'-style reasoning in Thomas More's Utopia. In the midst of a critical treatment of the practice of executing convicted thieves, a further argument is added (during an exchange between Raphael Hythloday and John Morton, Archbishop and Cardinal of Canterbury, and at that time also Lord Chancellor of England):

To be short, Moses' law, though it were ungentle and sharp, as a law that was given to bondmen; yea, and them very obstinate, stubborn, and stiff-necked; yet it punished theft by the purse, and not with death. And let us not think that God in the new law of clemency and mercy, under the which he ruleth us with fatherly gentleness, as his dear children, hath given us greater scope and license to execute cruelty, one upon another. Utopia

In context, Hythloday ("talker of nonsense") offers a battery of arguments against the severity of the criminal law of England. Now one of these arguments appeals to the authority of revelation to insist that much capital punishment may be immoral. As if Hythloday is a traditional natural law thinker, he claims that even a "law made by the consent of men" does not make it moral. (More is writing in a period in which the Tudor dynasty has just consolidated its rise to power by the force of arms.) After all, "why may it not likewise by man's constitutions be determined after what sort whoredom, fornication and perjury may be lawful?"

But Hythloday's appeal to revelation is also a bit unusual. For, in the passage quoted at the top of this post Hythloday relies on an explicit and a more daring implicit contrast. The official contrast (i) is between Moses's legal code and the more gentle rule of Christianity. But there is also an implied contrast (ii) between the way one rules a barbarous people (recently liberated from tyranny) and the way one rules a more civilized people. (The implied contrast between the barbarous and civilization, which is extremely popular in later early modern writing, would have been familiar to More from Aristotle's Politics.) The implied contrast (ii) effectively historicizes the Bible, whose commandments are now understood as fitted to a people at a particular time and place in need of strict rule. This strategy is pursued more relentlessly in Spinoza's Theologic0-Political Treatise (e.g., chapter 5; III/75).

Weekly Philo of Economics: It Pays to be Tough on Crime (More's Utopia)

From the early annals of Law & Economics:

[T]here is nobody that knoweth not how unreasonable, yea, how pernicious a thing it is to the weal public, that a thief and an homicide or murderer, should suffer equal and like punishment. For the thief seeing that man, that is condemned for theft in no less jeopardy, nor judged to no less punishment, than him that is convict of manslaughter; through this cogitation only he is strongly and forcibly provoked, and in a manner constrained to kill him whom else he would have but robbed. For the murder once done, he is in less care, and in more hope that the deed shall not be betrayed or known, seeing the party is now dead and rid out of the way, which only might have uttered and disclosed it. But if he chance to be taken and descried, yet he is in no more danger and jeopardy, than if he had committed but single felony. Therefore whiles we go about with such cruelty to make thieves afraid, we provoke them to kill good men.--More, Utopia (Raphael Hythloday to John Morton, Archbishop and Cardinal of Canterbury, and at that time also Lord Chancellor of England).

Raphael Hythloday's argument presupposes that criminals respond to incentives and make a rational cost-benefit analysis. Harsh laws that are said to deter crimes can, in fact, create incentives to commit even more crimes (say, by encouraging the elimination of pesky witnesses at no further cost to the criminal). Of course, it is possible that the Sovereign's incentives may not reside in preventing crimes; Hythloday insinuates in the text that the Sovereign is primarily interested in obtaining fines from criminals and recovering for himself "the thief-stolen thing." Moreover, a fearful, mutually suspicious and "troublesome and noyous in peace" population has other advantages to a Sovereign. Such a population desires a strong Sovereign, and is easier held in awe of it.

No wonder that governments promote tough-on-crime laws.

Weekly Philo of Economics: The Economist as Physician...Plato, Milton Friedman, and Jason Stanley

Jason Stanley continues his important series of opionator columns on the dangers to democracy of misleading public discourse. In his most recent one, Stanley also engages with the impact of misleading speech by experts (for example, Bernanke's coining of "fiscal cliff"). Along the way, he reminds the reader of a Platonic analogy:

Plato was right to regard his views as inconsistent with democracy. His view that citizens are not competent to make judgments about public policy, that economics and policy are areas of expertise like the physician’s, is profoundly undemocratic.

And then again here:

In the arena of contemporary fiscal policy, very much in the news now, Plato’s problem is particularly perplexing. Here, the analogy between someone competent to engage in decision making and a physician seems apt. It is natural to think that competent judgment about fiscal policy requires expert training in economics akin to a physician’s training in medicine. But if only experts can make the judgments here, it isn’t clear that democracy is possible.

Now, to be clear Stanley is not endorsing the analogy between economist and physician (I checked with him first). The Platonic analogy between the economist and the physician was trotted out in Newsweek by Milton Friedman when he was under attack for meeting with and advising Chile's dictator, Pinochet (for more of the context see my piece here):

In spite of my profound disagreement with the authoritarian political system of Chile, I do not consider it as evil for an economist to render technical economic advice to the Chilean Government, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean Government to help end a medical plague. (June 14, 1976)

Weekly Philo of Economics: the "gentle hand" of James Steuart, neo-Liberalism and Smithian theodicy

I have the same opinion of Sir James Stewarts Book that you have. Without once mentioning it, I flatter myself, that every false principle in it, will meet with a clear and distinct confutation in mine.--Adam Smith to William Pulteney Esqr, Member of Parliament, Kirkcaldy, 3 Sept. 1772

When an expert speaks to a member of parliament we should always be a bit mistrustful. However, in the Wealth of Nations (1776) Smith does not mention Steuart's nearly forgotten (1767) An Inquiry Into the Principles of Political Economy. (As Salim Rashid has explored, Smith is not generous in his citations.) So, we do not learn what Steaurt's true principles are by Smith's lights. James Steuart (1713-1780) had an exciting life, but after the publications of the Wealth of Nations Steuart's political economy became completely overshadowed by Smith's, despite their shared debts to Hume. This is a shame. For, while Steuart, who -- as the late Andrew Skinner has noted -- has a fantastic treatment of price-formation (a topic that is handled very schematically in Smith's Inquiry),  is not the most elegant writer, Steuart's Inquiry is prophetic of the world we live in: in Steuart's economic universe there are free markets alongside active government interventions. (What's missing in Steuart's treatment are the large bureaucratic agencies that simulate markets--Oskar Lange and data-mining came much later.)

In particular, according to to Steuart: "The duty of the statesman is to support the double competition every where and to permit only the gentle alternate vibrations of the two scales." (229; quoting from the Dublin edition of 1770). This is the only duty of the statesman mentioned by Steuart. Steuart's is, in fact, the vision of neo-liberalism, especially the ordo-Liberals (Röpke, Eucken, and to some degree Hayek), which -- as Foucault has nicely described -- also make it the state's primary goal to create and maintain the possibilities of free markets. (This is not to claim that Steaurt and the ord0-Liberals have the same ideas about the means of doing so.)

Adam Smith in The Birth of Biopolitics, reconsidered.

[This is a guest-post by Barry Stocker; check out his blog.--ES]

Recent comments by Eric and John on Foucault’s reading of Adam Smith have made me think about one aspect of Smith’s argument about domestic industry in Wealth of Nations IV.ii; and about the phenomenological aspect of Foucault’s thought.

Smith begins by arguing that ‘domestick industry’ benefits from the ‘invisible hand’, so that the individual with capital directs it to the use of domestic industry rather than foreign industry, for reasons of self interest rather than public good. It is only that this individual does not only think of the ‘revenue of society’, not that he is completely unaware of it. Foucault’s reading is typically schematic in seeing this passage as being about the complete invisibility of the public good. That schematism is part of Foucault’s creativity, but we should always be particularly careful about distinguishing between the sources Foucault uses and the way he uses them in service of developing a schema. Getting back to Smith, he moves onto the argument that free trade is better for a society than protectionism, that is that the revenue of a society benefits more from trade with other countries than the situation in which the stare creates impediments to that trade. This is a shift away from the initial point, and consciously or not, Smith is using a rhetorical strategy to move the hypothetical reader, who prefers state direction of the economy, to first accept free trade within a national economy, and then international free trade.

Returning to the invisibility of the hand, this is fascinating for Foucault, I suggest, because of an underlying familiarity with phenomenology, which clearly takes a lot from Merleau-Ponty as well as Heidegger though Foucault never chooses to to refer to Merleau-Ponty in his publications or lectures. A peculiar situation made even more peculiar when we remember that Merleau-Ponty was one of Foucault’s undergraduate teachers. However, the text by Merleau-Ponty that is key here is The Visible and the Invisible, sadly left unfinished on Merleau-Ponty’s death.