Wednesday, November 30, 2011

Understanding Social Interactions is Difficult

To begin with, we don’t have a good theory of social behavior from which to start.
—David Weinberger, discussing the difficulties of taking enormous amounts of data and and using it to predict the future of the world.  December, 2011. “The Machine That Would Predict The Future.”  Scientific American.  Pages 52-57.
On December 17, 2010, Mohamed Bouazizi, a street vendor in the small Tunisian town of Sidi Bouzid, set himself on fire in a protest against the local culture of corruption.  That singular act set into motion a popular revolution that burned across the Arab world, leading to uprisings that overthrew decades of dictatorial rule in Egypt, Libya, and beyond, upending forever the balance of power in the world’s most oil-rich region.
What model would have been able to foresee this?
—David Weinberger.  December, 2011. “The Machine That Would Predict The Future.”  Scientific American.  Pages 52-57.

Somewhat defending Barney Frank

I want to roll the dice a little bit more in this situation towards subsidized housing.
—Senator Barney Frank, chairman of the Financial Services Committee in 2009.  This remark was made on September 25, 2003, as reported by The Wall Street Journal on November 29, 2011 (Editorial: The Barney Frank Era).

I am not saying Barney Frank played no role in the housing bubble and subsequent recession, but economics does not predict that a subsidy in a good will cause a bubble in that good. Look in any economics textbook, and it will assert that house subsidies should result in more houses being built than is [socially] desirable, but that equilibrium with a subsidy is just as stable as an equilibrium without the subsidy.
Of course, there is no economic narrative that allows economics to predict when a bubble will occur, but unless Senator Frank was spreading false information about the future value of houses, he cannot be blamed for the bubble.
I should also like to add that, while I do not share Senator Frank's politics, I have seen him on TV many times, and believe that he has more respect for American democracy than anyone else. When others complain about the squabbling that goes on in Congress, only Mr. Frank and George Will (what a pair!) raise their heads to remark that that is exactly what Congress is supposed to do. If you want political stability with no debate among political leaders, it can only be found in a dictatorship.

Tuesday, November 29, 2011

Libertarian Paternalism

     This is my theory about Libertarian Paternalism.  There are people who will insist on "nudging" others, for a variety of reasons, some of them well-intentioned. If you don't give them something to nudge (if you don't let them set the status quo for retirement account savings rates, or influence whether fruits come first or last in a school cafeteria) they will eventually begin to shove, and they will justify their shoving as an attempt to prevent society from you.
     You will have become "the man" who oppresses society.  Let them nudge just enough to occupy themselves, and keep them out of the bigger decisions.  Because if they ever get the power to shove, everyone and everything will seem to need shoving.

Econophysics is a joke

     A nascent economic field is emerging where physics attempt to compensate for economists' failures by applying the mathematical rigor inherent in physics. An article in Science News might confuse the economist, for it wrongly suggests that economists only assume normality in data, and describes how the econophysicists have rediscovered the log-normal distribution (and other transformations of normality) that economists have used for decades.  Consider the quote below...

Economic theory suffers from ideological differences that render policy decisions dependent on the predispositions of those in power.  Physics transcends partisan political debates—the speed of light is the same for all parties, gravity warps everybody's spacetime in precisely the same way and quantum physics confuses everybody regardless of age, sex or national origin.

—Tom Siegfried. "From the Editor: Perhaps physics can also solve economics puzzles." ScienceNews. November 5, 2011. Page 2.

Economists: try not to laugh.  
This quote is incredibly naive. Economics cannot operate independent of political debate, because political debate is inherently a part of economics—economic questions often involve a political answer.  
Plus, economists disagree on the efficacy of a fiscal stimulus for the same reasons physicists disagree on whether the universe has twelve dimensions or an infinite number of dimensions. Data do not allow a final verdict on the stimulus question, nor do data precisely reveal the number of dimensions our universe possesses.
Moreover, before physicists believe their mathematical skills could be fruitfully applied to political economy, they should do two things. First, drop in on a Ph.D economics course to see just how much mathematics economics already employs. Second, they should think about the complexity of human psychology and social culture. They might conclude that people are as evasive and frustrating source of study as the electron.

Wednesday, November 23, 2011

Sometimes they actually say it...

A perfect democracy can come close to looking like a dictatorship, a democracy in which the people are so satisfied they have no complaint.
—Huey Long, 1933 (Williams, Huey Long, p. 762)

Tuesday, November 22, 2011

Sustainability means activism

   I am on a Task Force regarding General Education at OSU, and recently hosted two Public Forums where any faculty, staff, or student can come and have their thoughts heard.
  One thing I have learned is that people love the word "sustainability", and it seems to be defined as activism in support of any legislation that is ostensibly motivated by good intentions.

and the pope knows not how to respond...

Guyuk asked [Pope] Innocent IV the obvious questions: How do you know whom God absolves and to whom He shows mercy?  How do you know that God sanctions the words you speak?  Guyuk pointed out that God had given the Mongols, not the pope, control of the world from the rising sun to the setting sun.  God intended for the Mongols to spread his commandments and his laws through Genghis Kahn’s Great Law.  He then advised the pope to come to Karakorum with all of his princes in order to pay homage to the Mongol Kahn.
—Jack Weatherford in Genghis Kahn and the Making of the Modern World.  2004.  Page 263.  Three Rivers Press: NY, NY.

Christopher Columbus Loves Genghis Kahn

   Christopher Columbus did not know know the Mongolian Empire was no more.  All he knew was that Eurasia had lost the safe and prosperous trade routes the Mongols had once provided, and he wanted to resurrect this lost source of trade.  So when we set his sails westward, he wasn't looking for India (contrary to what you learned in school), he was looking for the Mongol Court.
   Indeed, no emperor valued free trade more highly than Genghis Kahn.  His descendants and military ensured merchants safe travel.  Shelters were erected with provisions every thirty miles, and in some areas, guide to lead merchants entering new territory.  Passports and credit cards were created, as well as paper money.
   Perhaps most importantly, he abolished taxes and tolls that increased transportation costs without increasing the value of the goods traded.
   (This is something America's founders understood well, when in an amalgamation of fiercely independent states, they prohibited states from charging fees to merchants transporting goods across state lines.  Facts like these are causing me to rethink the idea that decentralized power is always a more desirable power.)
   It should be noted that this free-trade ideology was not just an ideology based on gains from trade, but the manner in which Mongol tribes instituted shares, where each ruler of one area of the empire shared some of his tribute with all other Mongolian warriors, requiring a safe and convenient transportation system.  The shares helped reinforce Mongolian cohesiveness. 
   However, it is not like the U.S. has a free trade policy due to ideology alone.  Lobbying by exporters plays a vital role in ensuring free trade.
   Whatever you think about Genghis Kahn, when it comes to trade, he is an economist's ideal ruler.

Jack Weatherford.
Genghis Kahn and the Making of the Modern World.
Three Rivers Press.

Monday, November 21, 2011

What little I know about taxes and income inequality

My god it is confusing trying to understand the truth about income disparities.  Here are a few facts I feel comfortable, with no attempt to tell you what they mean.

Fact 1:  The richest people are indeed getting richer, and the proportion of their income taken by taxes is not rising.  This is a graph Rolling Stone has posted on their website and was within an interesting article I read.

Fact 2: The federal tax system is indeed a progressive tax.  The poorest 20% of Americans in 2006 paid federal taxes equal to 4.3% of their income.  As you move the the higher quintiles, this percentage increases: 2nd, 10.3%; middle, 14.2%; fourth, 17.6%; highest quintile, 25.8%; and the top one percent of Americans pay 31.2% of their income to federal taxes.  When you include all taxes, it is possible to find the top 1% paying slightly less of their income than the top ten percent, but at least some of this seems to be due to state and local taxes.

Fact 3: There is little evidence that the really high marginal tax rates in the past (like the 70% marginal tax rate around the middle of the 20th century) brings in more tax revenues, and it may actually reduce tax revenues by deterring economic activity and diverting activity into less valued enterprises.

Fact 4:  It is very difficult to determine the extent to which statistics take into account corporate taxes.  A corporation can't be taxed.

Fact 5:  A large percent of total income is captured by the richest people, but the percent of total taxes they pay is much larger.  In fact, the poor get much of their public goods for free.

Fact 6:  In some ways there is large income mobility in the U.S., and in some ways there isn't.  People move around a lot within the top and bottom quintiles, but they tend to stay in the top and bottom quintiles over time.

Fact 7:  Because people regularly ignore fringe benefits, study household income without accounting for changes in divorces rates, and misrepresent the data to support their ideology, it is almost impossible to discern whether income inequality is becoming larger and if the poor are better off.

Fact 8:  When people do try to correct for the deficiencies in Fact 7, it appears that everyone (the rich, the poor, the middle class) increased their incomes between 1979 and 2007.  However, if you ignore benefits and the composition of U.S. households, and choose your time period carefully, you can make it appear the poor are getting poorer.

Fact 9:  The rich increased their wealth by a larger percentage than the poor in the last thirty years, but again, both probably got richer during this period.

Fact 10:  Discussions of income inequality are also clouded by the corporate tax.  It is absurd to think a corporation can pay a tax.  Do cows pay a cow tax?  If the rich get most of their money from stocks, then their tax rate is the 35-37% corporate tax rate plus the capital gains tax of around 15%.  So, a rich person whose only income is from stocks is going to pay 50% of his taxes to the federal government, and then must pay state and local taxes of around 10%.  The result is that these individuals will pay more of their income to taxes than they keep for themselves.

Fact 11:  When you use Gini Coefficients--economists' favorite measure of income inequality--there has been no rise in income inequality in the last fifteen years.  There only appears to be inequality when you look at households without adjusting for the number of workers in that household.

Because no one reads this blog, I left out the references.  Email me if you would like the reference to something.

About the rich and the taxes they pay

We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share...Such loopholes sometimes makes it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary--and that's crazy...Do you think the millionaire ought to pay more in taxes than the bus driver, or less?
--Ronald Reagan in 1985, quoted in: Dickinson, Tim. November 24, 2011. "The Party Of The Rich." Rolling Stone.

This article on to claim that the top 400 richest Americans pay only 17% of their income in taxes (federal taxes, I presume). At first, I wanted to say that this does not include the corporate income tax, which certainly should be included. But then, I recently read an article illustrating how, with some many tax exemptions available to corporations, the effective corporate tax rate is rather flat and small (about 5%, I believe).

The tax code is so complex, and discussions of taxes so contaminated with ideology, it is impossible to have an intelligent conversation about it.

Friday, November 18, 2011

Podcast interview on farm animal welfare

Here is a podcast interview with me regarding a paper I recently published in Applied Economic Perspectives and Policy.

Wednesday, November 16, 2011

A Pulitzer winner talks about writing and liberty

It is the function of the novelist to tell timeless and universal truths through the device of a fashioned narrative.  A story’s significance as a piece of art cannot be divorced from its message, any more than a society’s prospects for freedom and prosperity can be divorced from its underlying principles.  The write and the man are one and the same, as are the culture and its common beliefs.
—Mario Vargas Llosa.  November 8, 2011.  “Literature and the Search for Liberty.”  The Wall Street Journal.  A19.

What is lost on the collectivists, on the other hand, is the prime importance of individual freedom for societies to flourish and economies to thrive.  This is the core insight of true liberalism:  All individual freedoms are part of an inseparable whole....Many cling to the hopes that the economy can be centrally planned.  Education, health care, housing, money and banking, crime control, transportation, energy and far more follow the failed command-and-control model that has been repeatedly discredited.  Some look to nationalist and statist solutions to trade imbalances and migration problems, instead of toward greater freedom.
—Mario Vargas Llosa.  November 8, 2011.  “Literature and the Search for Liberty.”  The Wall Street Journal.  A19.

The search for liberty is simply part of the greater search for a world where respect for the rule of law and human rights is universal—a world free of dictators, terrorists, warmongers and fanatics, where men and women of all nationalities, races, traditions and creeds can coexist in the culture of freedom, where borders give way to bridges that people cross to reach their goals limited only by free will and respect for one another’s rights.  It is a search to which I’ve dedicated my writing and so many have taken notice.  But is it not a search to which we should all devote our very lives?  The answer is clear when we see what is at stake.
—Mario Vargas Llosa.  November 8, 2011.  “Literature and the Search for Liberty.”  The Wall Street Journal.  A19.

Monday, November 14, 2011

The power of Atlas Shrugged

Last year I purchased a copy of Atlas Shrugged for an ambitious student with an interest in political economy. Last week she boarded a plane with the book in hand. Impressed with her reading, a passenger struck up a conversation with her. By the time the plane landed she was asked to travel to Chicago for an internship interview with Thompson Reuters. You've probably heard of them.

So awesome a quote

I would hazard a guess that 90% of great scientists start out as heretics.  The problem is that 90% of scientific heretics are talking nonsense....I was asked how you can tell when a scientific heretic is right rather than mad.  I confessed that, as I’ve grown older, I’m becoming more confused on this point.  The problem is not just that vindicated heretics are rare, but also that the heretic who’s right will be just as partisan—avidly collecting evidence to confirm his idea—as the heretic who’s wrong.
—Matt Ridley writing in The Wall Street Journal.  “Is That Scientific Heretic a Genius—or a Loon?”  November 12-13, 2011.  C4.

Thursday, November 10, 2011

Writing For The Public About Ethical Issues

Earlier this year I was asked to speak to an agricultural communications class titled Communicating Ethical Issues in Agriculture, and I chose to relay how I would write a book about ethical issues, if the book was intended for the general public and my ambitions were for a bestseller.

Writing For The Public About Ethical Issues

During my work as a graduate student in agricultural economics and economics, and for the first few years as a professor, my research efforts focused mainly on mathematical issues, such as the constructing of economic models and the creation of novel statistical techniques.  I did this not out of a love for math (though my love is ardent) but to acquire degrees and secure tenure.  Math is unambiguous and uncontroversial.  That is why it enhanced my academic career, but gave me little personal pleasure and almost no social recognition outside of economics.
When tenure was secure I altered my research to focus on controversial ethical issues, such as farm animal welfare.  The contribution of economics lies primarily in its ability to organize thoughts.  Ethical issues can make for frustrating deliberation, as answers are not easy to acquire and mistakes are punished deftly by bloggers and comments to internet articles.  However, a little knowledge of economics can clarify the world in profound ways.  It doesn't often give you the answer to ethical riddles, but it does allow you to talk about the riddle intelligently.
Writing about farm animal welfare was the best professional decision I have ever made, as it was only then I was invited to speak at conferences, asked for media interviews, and talk about.  I will not hide my desire for attention from society, and if attention is what one desires, writing about ethical issues can have desirable outcomes.
In these ethical adventures I have perused a sundry of ethical writings, from blogs about egg production in 2010 to the most daunting and erudite works of the eighteenth century.  When invited to speak to you today, I was conflicted about what I should say.  This is an unusual audience for me, and after careful consideration, I decided that I can best serve you by describing my conception of ethical writing by paid professionals.  Not amateur bloggers, and not academics who write one unprofitable book after another.  I am talking about professional writers whose pen provides their paycheck.  It is my impression that you seek to be one of these professionals, and if your desire is not to write but to conduct public relations campaigns, all of what I write extends to you nicely.

Genres of Ethical Writing

Non-fiction communication of ethical issues can be parsed many ways, but to facilitate clarity, I will group all writings about ethical issues, excluding fiction like Uncle Tom's Cabin, into one of three groups.

(Genre 1)  Reporting of DetailsThe front pages of newspapers typically provide straightforward narratives about who, what, when, and how.  An example would be an article about how Smithfield Foods is delaying their transition away from gestation stalls to group pens, written without any context as to why their transition was forced upon them by activist groups and consumers, and written without any apparent opinion of the writer about whether the transition is “good” or “bad.”
While such writings would ostensibly seem to provide valuable information, I argue that details provided without context is avoid devoid of information.  If you are trying to learn about the farm animal welfare issue, and are not told why some people avoid gestation stalls and why companies love them, the aforementioned article will provide you information but not understanding.
An issue is made into an ethical issue through context, by the ardent support of an action by one group and fierce opposition by another, through insight into why one group's opinion differs from another, and the objective consequences of either side winning.  Without this context, it is difficult to write about ethical issues and simultaneously export knowledge.
(Genre 2)  Holistic Academic BooksI consider my book, Compassion by the Pound, to a holistic and academic treatment of the farm animal welfare issue.  The term holistic is used to signify that my book attempts to communicate and scrutinize almost every view of how animals should be treated, to reflect almost all scientific studies about the issue, and to “connect the dots” in every perceivable pattern.  By academic I mean that the book has a dispassionate irreverence for the reader.  Although the book is certainly written for an audience, the logic and science employed should stand on its own, such that all eager readers with a panoramic intellect and long attention span should arrive at the same conclusion.  The author cares little for whether the reader agrees with the book's conclusions, because reader approval or disapproval has no impact on the book's logic, and hence will have little impact on the author's view of her own work.
Initially, one might suspect that these holistic academic books might be the best reference for ethical issues, the verbosity, length, and erudition typically asks for too much of the readers' time.  These books do not sell well.  They are not read.  They have little to no impact.  Indeed, they are not written to have an impact, sell well, or obtain social approval.  The motivation resides solely in the author's personal and relentless search for truth.
(Genre 3)  Short Works Imparting Partial UnderstandingIt are these books that make a difference, make money, and meet social approval.  Every point made is done so succinctly, like the farmer who strives to grow one-hundred-eighty-five bushels of corn using the least amount of fuel and fertilizer possible.  Yet, because these books must facilitate understanding while also remaining profitable, they must be tailored to the readers' interests, and while they may read an article for its intellectual treats, these treats must be found concomitant with other rewards.
Note that the term short works does not imply a work short in number of words, but in relevance to the number of issues on trial.  A book on food may be long, but as long as the author is stingy in regards to the supporting evidence for their claims, it belongs to this third genre.

Successful Advocacy Through Communication

In an ideal world—ideal from the viewpoint of an academic—I would help you learn how to communicate an understanding of ethical issues, you would communicate with efficacious narratives and speeches, and you would be appraised based on the actual learning imparted.  However, to be successful, meaning your communication is profitable, the world is not so simply and your objectives are not so simple.
In what follows, I outline what I believe to be the steps of effective writing.  A good writer may remark, “Is there any need to also way 'what I believe' as you would only say what you believe,” but I use that verbose statement to warn you that my writing is not profitable.  While I have some valuable advice to offer, anyone who seeks my advice alone will eventually regret not seeking additional advice.

What Your Readers Want
(1)  The author is a personal consultant to the reader, and readers seek a relationship with their media.  Readers know that details are not necessarily information, and that because communicating context concomitant with the details is so important, readers seek to develop a relationship with the author, or with a publication.
Furthermore, there is no one “context” for everyone to report.  The context partially depends on your reader.  The setting surrounding Prop 2 in California[1] was far different for a farmer and a consumer.  Prop 2 entailed higher egg production costs, which can not only hurt egg production profits but even corn prices.  For consumers, Prop 2 meant some of the animals used to produce their food would experience less suffering.  Differences in personal values dictate different contexts, and so readers will patronage an author or publication who shares their values.  There is a reason Democrats read The New York Times, and Republicans read The Wall Street Journal.
The world is a complicated place, and yet our nature requires us to develop an identity, one dictating our view on most every subject, an outlook with a resolute idea on how the world would be better.  Thomas Huxley stated, “Try to learn everything about something, and something about everything.”  To do the latter, we cannot perform vast readings on every conceivable subject.  Instead, to learn something about everything, we must read or hear a condensed version of everything.  Yet a subject can be condensed infinite ways: whose condensed version will you read?  Answer:  those who share your values and beliefs.
(2)  The communication must be consistently bias and slanted towards the reader's beliefs and values, in order to reinforce the relationship between reader and author.  Face it, if you are to be read, you must tell small lies, distort other people's statements, and neglect to tell the whole truth frequently.  Disagree with me, and you will be the first profitable communicator to defy this assertion.  The reader needs to know they can trust you.  The reader needs to be assured of your values and intellect.  To achieve this, you must repeatedly speak the mantra of your loyalty.  Just as English subjects shouted, “Long live the Queen,” throughout their empire to demonstrate their loyalty, so must you cower—at times, not all the time—to your reader as if she were Queen.
(3)  The reader must finish your writing with more confidence in their identity, a sharpened depiction of their adversaries, and tools for defending their identity in public.  Christians do not visit Hindu priests or Mosques to hear another point of view.  Young adults do not thoroughly investigate all religions, they take the religion of their family.  Catholics attend Mass to be reminded of their divine rituals, and Protestants attend fiery sermons challenging them to read the Bible themselves, to be reminded why the Protestant Reformation occurred and why they are its offspring. 
Similarly, writers who consistently challenge the values and beliefs of their readers do so at their professional peril.  Readers who are urged to doubt themselves will doubt the author first.  You are the reader's guide to an intricate and complex world.  If you make them doubt their destination, they will doubt you, and every word you write.
(4)  To provide readers with intellectual tools that remain with them after your article is put down, they must be given a few lines of logic, a few carefully selected scientific results, and nothing else.  The whole truth cannot be imparted. 
People memorize selections from Alexander Pope's Essays on Man (The monk's humility, the hero's pride / All, all alike, have reason on their side; Hope springs eternal from the human breast / Man never is, but always to be, blessed) but never the entire poem.  Your reader asks you to arm her with a few implements for intellectual battle, but has only two hands for battle.
(5)  Readers need to hear a story.  Have you ever wondered why books written by your English teachers can't be found in Barnes and Nobles?  For almost one-hundred years it has been fashionable among the literary avant-garde to write books without a plot, and with poor character development.  Yet, their books are shunned by the vast majority of people, who patron crime, mystery, and romance novels—for good writing, but mostly for plot.
We understand the world through story.  We hear the “story” of Christian salvation and the “story” of how America triumphed over evil in both world wars.  We emphasize the ease of salvation but hastily skip over the part about the meek and poor inheriting the earth.  Americans revere the World War II soldiers who triumphed over evil Hitler, but try to forget that we are also guilty of eugenics, and performing medical research on black Americans without their consent. 
“Never let the truth get in the way of a good story,” a friend of mine often remarks, not entirely in jest.  Let that also be the advice for you.  I am not asking you to be entirely dishonest, but advising you to gloss over aspects of ethical issues which contain excessive nuance; twist the story so that your reader is either the victor or the martyr; claim that for space considerations you must ignore details which blur the qualities of the protagonist, soften the harshness of the antagonist, reduce the intensity of the conflict, or complicate the story's moral—so long as you do so with the readers' consent.
Of course, never alter the truth such that you are vulnerable to attack from your reader's adversaries.  The beauty of writing short narratives is that you can use its succinctness as justification for the omission of details.

The Denouement—You are a storyteller, a guide to a complex world, an entertainer, and your reader's embellished reflection.
There is a poem that states:

Man sees the world not as it is,
but as what the world can be.
He rearranges the stars, from where they are,
to their every possibility.

Your reader is looking for something in the world: her place within it.  You must help her find this place, amidst a thousand frustrating ethical dilemmas.  Your reader is looking for a pattern of stars in the sky, and for you to be her guide in the universe, you must help her find it.  They will only follow the trajectory of your finger as you point in the sky if they trust you, and to trust you, they must be assured you are looking for the same pattern.  In this pattern, there must be beauty, and it is no coincidence that constellations are often named after characters of Greek myths.  You are the storyteller, and well-crafted stories are beautiful.
Throughout this essay it may seem that I have asked you to repeatedly forsake your integrity, your honesty, your character.  To some extent this is true, but so long as you write for customers, you must comply with their desires.
Yet there is one place where you can make your moral stand, where integrity is preserved at all costs, and you will sacrifice customers for the sake of your soul.  As your readers look to the stars for a pattern, and seek your counsel, you must trace out a pattern among the shimmering lights:  but only—and this is the essence of your moral constitution—only trace that pattern if it truly exists.  Never let the stargazer attempt to rearrange the stars, because there are same facets of ethical issues that are as immovable as the distant stars.

[1]Prop 2 was a referendum whereby voters cast their ballot for or against a measure which would provide laying hens, hogs, and veal calves larger space allotment.  For sows, this meant the ability to merely turn around!

Prepared Remarks About "Gasland" Documentary

Tonight I will serve as a panelist and moderator for a discussion following the documentary Gasland. If given the opportunity to make a few short remarks, this is what I have prepared.

In my Introduction to Agricultural Economics class I give a few lectures about environmental pollution and regulation, and to demonstrate what a world without regulation would look like, I always show them the scenes from Gasland where kitchen sinks and streams burst into flames. I do so because students are amazed and appalled when they see water from a kitchen seek burst into flames. I do so because of the video's effectnot because the video is actually a good depiction of a regulation-free world, and I immediately tell the students that I have deceived them slightly, because it turns out that the flammable sink water in Gasland was likely naturally contaminated by gas, and not the result of horizontal fracking.

Now, hear me out before you judge what I am trying to say. There are some truths communicated in Gasland, there is no doubt about that. However, it seems that many of the facts purported by the documentary Gasland are not true—or, at least, questionable. But to me, strange as it may sound, that is okay. This is because I do not view documentaries primarily as information sources. In fact, I would argue that it is very difficult to produce a successful documentary without much of its facts being called into question. I like showing well-known documentaries in class: like Food Inc. and Capitalism: A Love Story, but I do not do so for the information they relay. I do so for the attention they earn and the discussion they encourage.

A documentary that is completely factual is, unfortunately, boring to most people—more importantly, it would not motivate the activist within us. Activism of any sort requires symbols, traditions, beliefs, experiences, and notions in which the activists can use to define their cause, enhance the uniformity of their beliefs, and reinforce their enthusiasm for promoting the common good. That is exactly what Gasland does, and it is important, because a moderate level of activism is healthy for a democracy. I promise you this: we need energy companies questioned about their actions constantly; we need regulation of any energy extraction; we need laws that allow us to sue companies if they are at fault for environmental damage. There is such thing as too much activism, of course, but Gasland helps to ensure we do not have too little.

So, what dangers does fracking pose? After searching around for what I thought to be a reliable source, I settled on Scientific American magazine. Here is what I learned. Horizontal fracking differs little from vertical fracking, which has gone on for decades. But there is a difference, and that difference is that we simply don't know much about horizontal fracking, we will only learn by experience, and there are some potential dangers unique to horizontal fracking. One promising technology is an additive companies can add to their chemicals, whereby if the gas contaminates water supplies, this additive will allow us to determine which company (if any) is at fault. We can then sue them. For a lot of money. Knowing this, companies will be more responsible.

As we learn more, both government and environmental interest groups should be allowed to monitor, report, and interpret data collected from horizontal fracking. Gasland helps to ensure this is the case. After all, if it were not for Gasland, we would not be here tonight talking about horizontal fracking.

Wednesday, November 9, 2011

Reasons to love Genghis Kahn

Yes, I know, he ruthlessly murdered countless people.  If a town did not surrender at his arrival, he took the life of almost every soul, serving as an example to subsequent towns, who did indeed learn the proper lesson and immediately surrendered the town and paid a hefty tribute.  That is one reason among many he was able to establish the largest empire of all time (in terms of people; second largest in terms of land area): he didn't have to fight all of them.

Yet, like many powerful emperors, he did some good, and is likely to have given the Mongol people on the Asiatic steppes a more enriched life.  Before Genghis, the Monguls were scattered tribes constantly warring with each other, looting each other's livestock, and stealing each other's wives.  Genghis ended this division, provided stability, and provided his people a surprising array of freedoms.  Here are some of his admirable edicts established after he became Kahn of all the Mongul people and the Tatars.

Genghis Kahn

  • forbade the kidnapping of women for wives
  • forbade abduction of Mongols for use as slaves
  • forbade slavery of Mongols
  • declared all children to be legitimate
  • outlawed the selling of women into marriage
  • outlawed adultery (between married people of separate households)
  • punished animal rustling with death (is that a good thing?)
  • prevented the Tragedy of the Commons in hunting for wild animals by only allowing animals to be hunted between September and April and preventing hunters from killing more than what they needed for food, and
  • in what some historians to be the first instance of a ruler doing so, Genghis Kahn ensured complete and total religious freedom for everyone.
Thanks to Genghis Kahn, his people lived in security and peace, assured of their right to property, given human rights many people do not have today, and provided women a level of freedom none of their ancestors possessed.  Though he raped Europe, Genghis Kahn was in many ways a blessing to his people.


Jack Weatherford
Genghis Khan and the Making of the Modern World
2004.  Pages 68-70.
Three Rivers Press: NY, NY.

Tuesday, November 8, 2011

Low unemployment rates for agricultural economics degrees

Of the ten college majors with the lowest unemployment rate, agricultural economics degrees have the seventh lowest rate, of just 1.3% of agricultural economics graduates in the labor force who cannot find a job (source).

This is partly due to the fact that agricultural economics degrees are valuable and versatile, but I also think the low rate is due to the fact that agricultural economics (and agribusiness) students have a strong work ethic, and many students would consider it an embarrassment to be on the government dole.

Monday, November 7, 2011

Great Hobhouse Quotes

From Social Evolution and Political Theory (1911)

If the process of the universe is inherently opposed to the ethical order, it follows that the ethical order is inherently opposed to the process of the universe.  In this state of things the position of humanity would be very unfortunate.
——Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911, page 10).  The Columbia University Press.

Mathematical arguments drawn from the assumption that human actions proceed with the statistical regularity that might be found in a flock of sheep are often exceedingly difficult to refute in detail, and yet they rest on an insecure foundation.  Man is not merely an animal.  He is also a rational being, and accordingly, he reacts to new circumstances in a way that can only be determined by taking the possibility of rational purpose into account.
—Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911, page 15).  The Columbia University Press.

The past, when it is seen at all, appears always in a halo of romance.
—Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911).  The Columbia University Press.

Those who are most zealous for social improvement will indeed be the last to minimize the evils that exist.
—Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911).  The Columbia University Press.

There was probably never a time at which among civilized peoples there was so much diffused sensitiveness to any form of social ailment.  If we were briefed to defend our own time, the line to take would surely be, not that its evils are few or small, but rather that every evil calls forth a strong and persistent effort to cure it.
—Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911).  The Columbia University Press.

In sociology as in all sciences specialism is a necessity and it is also a danger.  It is a necessity for the simple reason that human capacity is limited and it is not given to man to acquire sound knowledge and adequate skill in many departments at once.  It is also a danger because social life is no more divisible into independent sections than the human body is divisible into independent organisms.
—Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911, page 5.).  The Columbia University Press.

Give a man a sheet of meal with a dint in it, he says, and ask him to flatten it out.  What does he do?  If he knows nothing of metal work, he takes a hammer and knocks the dint flat, only to find that it has reappeared elsewhere.  He applies the hammer again at the new point with the same result, and so he goes on till he convinces himself that dints are not to be levelled out by this direct and easy method.  So it is, urges Mr. Spencer, with society.  We find some evil or evils which we seek to prevent by direct and forcible means, only to find, says this critic of social effort, that a corresponding evil appears somewhere else.  We put down overt crime only to find that some form of secret vice is increasing.  A temperance crusade suppresses drunkenness, and it is discovered that those who used to drink now find an outlet for excitement in gambling.  Compensation for accidents is secured by law to workmen, and in consequence it is alleged that elderly workmen are refused situations.  Workmen form trade unions only to maintain and improve the conditions of their work, and no sooner do they succeed than their employers imitate them and form federations by which the unions are overpowered...Mr. Spencer did well to call attention, that every change, however good in itself, provokes unforeseen reactions, and that if we are to achieve permanent and assured good we must as far as possible keep in view the life of society as a whole and seek not jealously to magnify our own little sectional interest at the expense of the others, but rather to correlate it with the work that others are doing and endeavor to induce in them the same spirit.
—Leonard Trelawny Hobhouse in Social Evolution and Political Theory (1911, page 5.).  The Columbia University Press.

Friday, November 4, 2011

This blog posting is not accurate

For years I have heard individuals dismiss the validity of logic by making the following proposition:  This proposition is incorrect.  The recent Radiolab show Loops discussed this.  The idea is that because this statement can be neither true nor false, there is something empty about all logic, and something vapid about every statement.  Or, at least, the claim is that logic has its limitations.

Someone  probably offered this response decades ago, but I haven't heard it yet, so here it goes.

A tool cannot be used upon itself, and logic is a tool.  By simply stating that a proposition is automatically false, you are trying to use logic against logic, and that is not how tools work.  Suppose I have a hammer and tell you that you can hit anything within your reach with that hammer.  You then ask me, "Can I hit the hammer with the hammer?"  I answer impatiently, "No."  But I am not responding to a clever argument.  It is implicit when using tools that the tool cannot be used upon itself, because it is so obvious that it can't.

You can't hit a hammer with the same hammer, and you cannot make an proposition that the proposition is false.  Both the hammer and proposition are tools used for other endeavors, and should only be judged in their ability to do so.

Integrity in Macroeconomics

It takes a remarkable amount of integrity to make such an honest and humble statement about macroeconomics.

There are times when the economy works well and times when it doesn’t, and when it works well it’s easy to find a job and when it doesn’t work well it’s really hard to find a job, but we don’t really understand those differences.
—Russell Roberts in “Ramey on Stimulus and Multipliers,” EconTalk, October 24, 2011.

Rational Economic Man?

As Copernicus removed the earth from the centre of the universe and Darwin knocked humans off their biological perch, Mr. Kahneman has shown that we are not the paragons of reason we assume ourselves to be.
The Economist.  “Human Decision-Making: No so smart now.”  October 28, 2011.  Page 98.  Review of Thinking, Fast and Slow by Daniel Kahneman.  

These types of quotes have to end. While it is true that Kahneman documented many interesting economic behaviors, it is false to say that he created a revolution in now economists view man. Just because we write a constrained-utility-optimization problem on the board does mean that we believe it to be exactly how the human brain operates. Go into any economics classroom and you will hear the teacher stress to students that all models are false but some are useful*. We teach the sunk-cost fallacy for the reason that we know humans commit the fallacy—why else would the fallacy be interesting? Every economist brushes with his own behavioral anomalies everyday, and is not so stupid to believe he is the only one who has trouble saving money, tends to prefer the status-quo, values something less when he must explain why, and the like. I know of no economist who believes or once believed in the rational man that researchers like Kahneman and Ariely debunked. The authors taught us some things, there is no doubt, but there was no revolution.

*George Box

Food Safety: Who Regulates the Regulators?

Food-related scandals, often exacerbated by official negligence or corruption, can cause major political embarrassment in China.  In the approach to the Olympic games in Beijing in August 2008, the leadership's efforts to create an image of a safe and hygienic China led to the suppression of news about a widespread contamination of milk products with melamine, a chemical that can be toxic.  By the time the central government admitted the problem in September that year, tends of thousands of babies had been affected and several had died.
Public anger over the incident hastened the passing of a food-safety law in 2009 which was intended to tighten standards, improve supervision and impose tougher penalties on violators.  It appears to have done no more to alleviate public anxiety than did the execution in 2007 of a former head of the State Food and Drug Administration for taking bribes to certify products as safe.
The Economist.  “Food Safety in China: In the gutter.”  October 28, 2011. Page 49.

Small farms are all we need

I fervently hope the person talking to Jeff Greene in the quote below never gains any political influence.

I found that no one could offer me a coherent explanation of why they hated Wall Street, and no one suggested a workable plan for regulation banks.  (One fellow told me all we need to do is establish more small farms.)
—Jeff Greene describing his mingling with the Occupy Wall Street Protestors.  “We Should Listen to the 99%.”  Wall Street Journal.  November 13, 2011.  A17.  (Not a quote I identify with)

Thursday, November 3, 2011

Don't hate the merchant, hate the game

In my readings of history I am continually baffled at various society's debasement of merchants.  In Medieval societies the merchant wasn't even included in the classes of society (three classes: the peasants, who worked; the clergy, who prayed; and the noble, who fought), as if merchants added nothing to social felicity.

Ninth century China was even worse.  The Chinese class system was divided as follows, with the highest class listed first.

  1. The Gentleman / Noble: "...The Gentlemen are at the top of the hierarchy because they manage the affairs of society, so their social utility is at the most..."
  2. Farmer / Peasant:  "...because they produce the food which everyone needs to survive."
  3. Artisan:  "...because while they don't produce food, they make things that are of use to everybody."
  4. Merchants:  "Merchants are at the bottom because they don't produce anything themselves.  They don't grow food, they don't make objects of utility.  What they do is take things that other people have produced, move'em around, and enrich themselves in the process.  So they are seen in the Confuciun system as being in a sort of socially-parasitic role.  They do perform a social function, but it is one which is tainted—it is morally less acceptable, because they enrich themselves from the production of others."

When I was first taught the four classes of utility...

  1. Form Utility
  2. Time Utility
  3. Place Utility
  4. Possession Utility
...I felt it stupid that it needed to be pointed out that someone who transports bread from where it is made to the time and place I want to eat the bread performs me a valuable service.  However, history shows us that what appears obvious to us now was not so obvious without a good education.

Perhaps the Chinese felt that no special skills were involved in being a merchant, whereas a farmer, artisan, and gentleman could not perform their duties without learning certain skills.
One only has to observe the sophistication of storage, transport, logistics, and retailing to understand that today's merchant possesses an array of valuable skills.  

If I were teaching the four classes of utility, I would definitely discuss this artifact of Chinese history to motivate what seems so obvious to us now.

Kenneth J. Hammond
"Five Dynasties and the Song Founding"
Lecture 14
From Yao to Mao: 5000 Years of Chinese History
The Teaching Company

Wednesday, November 2, 2011

Overrated Universities

As for the “practical” majors...they might not be as useful as once thought.  In a recent work called “Academically Adrift”, these authors tracked the progress of more than 2,300 undergraduates at two dozen U.S. universities.  They found that more than a third of seniors leave campus having shown no improvement in critical thinking, analytical reasoning, or written communications over four years.  Worse, the majors and programs often thought most practical—education, business and communications—prove to be the least productive.
—William McGurn in his Wall Street Journal column Main Street.  November 1, 2011. A10.

Galbraith on Keynes

“Never forget, dear boy, that academic distinction in economics is not to be had from giving a clear account of how the world works.  Keynes knew that; had he made his General Theory completely comprehensible, it would have been ignored.  Economists value most the colleague whom they most struggle to understand.”
—John Kenneth Galbraith in A Tenured Professor (1990), page 50.

Galbraith on lecturing

“Lectures,” said McCrimmon, “are our most flexible art form.  Any idea, however slight, can be expanded to fill fifty-five minutes; any idea, however great, can be condensed to that time.  And if no ideas are available, there can always be discussion.  Discussion is the vacuum that fills a vacuum.”
—John Kenneth Galbraith in A Tenured Professor (1990), page 39.

Galbraith on Tenure

“I’m going to be an economist, but I want to make my small contribution to the liberal agenda.  Peace, a better break for the poor and the inner cities, greater equality in income distribution, government assuming its proper responsibilities.  I haven’t got it fully worked out yet.”
“Most unwise,” said McCrimmon, adding with some emphasis, “most unwise.  And certainly impractical.”
“Why, sir?”
“You simply won’t get tenure.  Tenure was originally invented to protect radical professors, those who challenged the accepted order.  But we don’t have such people anymore at the universities, and the reason is tenure.  When the time comes to grant it nowadays, the radicals get screened out.  That’s its principal function.  It’s a very good system, really—keeps academic life at a decent level of tranquillity.”
“Suppose one waits until one has tenure to show one’s liberal tendencies?”  Marvin felt obliged to make some response.”
“The only sensible course,” said McCrimmon.  “But by then conformity will be a habit.  You’ll no longer be a threat to the peace and comfort of our ivied walls.  The system really works.”
—John Kenneth Galbraith in A Tenured Professor (1990), pages 38-39.

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