Joseph Schumpeter [wrote in] History of Economic Analysis (1954):
The first thing to observe about this concept [of the balance of trade] is that it is in fact an analytic tool. The balance of trade is not a concrete thing like a price or a load of merchandise.
Yes (although it is even more accurate to describe the balance of trade as an accounting convention). If, for example, it had been decided to record purchases and sales of real estate on the current account rather than on the capital account, the size of each country’s current-account deficit or surplus would be different even though absolutely nothing real in the national or global economy would be changed. And yet to hear any of the many protectionists bemoan their country’s trade- or current-account deficit is to hear people who typically mistake this accounting convention for a concrete thing. Such complaints almost always reflect utter misunderstanding of so-called “trade balances.”
Don Boudreaux, “Bonus Quotation of the Day…”, Café Hayek, 2018-01-21.
May 24, 2020
QotD: The “balance of trade”
May 23, 2020
QotD: Computer trade show tchotchkes
You can see them staggering back to their hotel rooms, arms full of corporate-branded freebies, where they have prepared an empty suitcase specifically for shipping it all back to their BOFH Central at the end of the show.
Sure, it’s all crap. It’s usually the likes of childish desk toys, cable tidies that will snap within the week, pencils and logo-shaped erasers (as if you use such items all the time, right?), and Swiss army knives that will be routinely confiscated as you pass through airport security for the trip home. No matter, just turn up to the expo and companies will toss gifts at you like you were the GitHub messiah taking a seaside donkey ride into sysadmin Jerusalem.
Well, nobody tosses any in my direction. No blotchy ballpoint pens for me. No evil-smelling pads of sticky-notes that don’t stick to anything. No spongey stress balls. No smartphone stands. No sharply angular keyfobs that stab into my bollocks when I sit down.
Me, when I visit an IT exhibition stand on the cadge, I have to provide evidence of my media accreditation, two forms of photo ID, an electricity bill, birth certificates of my family going back four generations (originals only, please) and a DNA swab before I qualify to receive a boiled sweet.
Alistair Dabbs, “‘Don’t tell anyone but I have a secret.’ There, that’s my security sorted”, The Register, 2020-02-21.
May 22, 2020
QotD: “Scientific” racism
Science played little role in this chain of influence. Pointedly, Gobineau, Chamberlain, and Hitler rejected Darwin’s theory of evolution, particularly the idea that all humans had gradually evolved from apes, which was incompatible with their Romantic theory of race and with the older folk and religious notions from which it had emerged. According to these widespread beliefs, races were separate species; they were fitted to civilizations with different levels of sophistication; and they would degenerate if they mixed. Darwin argued that humans are closely related members of a single species with a common ancestry, that all peoples have “savage” origins, that the mental capacities of all races are virtually the same, and that the races blend into one another with no harm from interbreeding. The University of Chicago historian Robert Richards, who traced Hitler’s influences, ended his book titled Was Hitler a Darwinian? (a common claim among creationists) with “The only reasonable answer to the question … is a very loud and unequivocal No.”
Steven Pinker, “The Intellectual War on Science”, Chronicle of Higher Education, 2018-02-13.
May 21, 2020
QotD: Gullibility and belief in conspiracy theories
Anecdotal thinking vs. statistical thinking. We evolved to do the former so it is natural; science teaches us to do the latter, and it is unnatural. What is natural is to connect two temporally-close events as causally connected. A happens and then B happens. So they must be causally connected, right? I vaccinated my child and shortly after he was diagnosed with autism. They must be connected, right? Not necessarily (and in this case definitely not).
Patternicity: the tendency to find meaningful patterns in both meaningful and meaningless noise. If you already believe in UFOs or Bigfoot, strange lights in the sky or shadowy figures in the trees are interpreted as a meaningful pattern that supports the belief. Often such patterns carry an additional component that I call …
Agenticity: the tendency to infuse those patterns with intentional agents who act in the world. From conspiracies to ghosts, angels, demons, and gods, we tend to impute agency to the goings on around us, as if there’s someone/something out there pulling the strings.
Confirmation Bias: we look for and find confirming evidence for what we already believe and ignore or rationalize away disconfirming evidence. Once you believe that, say, “the Jews” are running the world, or that the U.S. government (or the Bush administration in the case of the 9/11 truthers) is involved in vast global cabals to control oil, it is easy to interpret daily news stories about the goings on of governments in the light of the conspiracy theory in question. Every bit of minutia becomes pregnant with meaning. It’s not chance or contingency, it’s a Vast Right Wing (or Left Wing) Conspiracy!
Michael Shermer, interviewed by Claire Lehmann, “The Skeptical Optimist: Interview with Michael Shermer”, Quillette, 2018-02-24.
May 20, 2020
QotD: Behavioural economics, aka the applied theory of bossing people around
Adam Smith spoke of “the man of system” who “seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.” Thaler and his benevolent friends are men, and some few women, of system. They hate the Chicago School, have never heard of the Austrian School, dismiss spontaneous order, and favor bossing people around — for their own good, understand. Employing the third most unbelievable sentence in English (the other two are “The check is in the mail” and “Of course I’ll respect you in the morning”), they declare cheerily, “We’re from the government and we’re here to help.”
We humans face a choice of treating people as children or as adults. A liberal society, Smith’s “liberal plan of [social] equality, [economic] liberty, and [legal] justice,” treats adults as adults. The principle of an illiberal society, from Thaler’s to the much worse kind, is that you are to be corrected not through respectful dialog that treats you as an equal, but by compulsion or trickery, which treats you like a toddler about to walk into traffic.
Wikipedia lists fully 257 cognitive biases. In the category of decision-making biases alone there are anchoring, the availability heuristic, the bandwagon effect, the baseline fallacy, choice-supportive bias, confirmation bias, belief-revision conservatism, courtesy bias, and on and on. According to the psychologists, it’s a miracle you can get across the street.
For Thaler, every one of the biases is a reason not to trust people to make their own choices about money. It’s an old routine in economics. Since 1848, one expert after another has set up shop finding “imperfections” in the market economy that Smith and Mill and Bastiat had come to understand as a pretty good system for supporting human flourishing.
Dierdre McCloskey, “The Applied Theory of Bossing People Around”, Reason, 2018-02-11.
May 19, 2020
QotD: Amour-propre
Really there is nothing new under the sun, and the concept comes much earlier from Saint Augustine of Hippo who in his City of God calls it in Latin, amor sui, and puts it about the centre of his review of human tawdriness. That, in turn, is how it came to Pascal: via the French Augustinians, with whom Pascal was in thick, about the time he was writing his Lettres provinciales. One might add, contre Rousseau (and perhaps with Joseph de Maistre) that it goes back farther, to Adam and Eve.
Ye devill appeals to Eve’s amour-propre. She then appeals to Adam’s. That’s how this whole wretched mess got started. Note that this couple predeceased all Rousseau’s noble savages, and that the field anthropologists have since discovered that the primitive tribal types are a lot like us. Which is to say, bad, in many colourful ways, and quite invariably self-regarding.
David Warren, “Amour-propre”, Essays in Idleness, 2016-06-01.
May 18, 2020
QotD: Science, evidence and “cognitive creationism”
What can we do about this problem? First, we must acknowledge that for most issues most conservatives and liberals are pro-science. Recent surveys show that over 90 percent of both Republicans and Democrats in the U.S., for example, agreed that “science and technology give more opportunities” and that “science makes our lives better.” In other words, anti-science attitudes are formed in very narrow cognitive windows — those in which science appears to oppose certain political or religious views. Knowledge of a subject helps a little. For example, those who know more about climate science are slightly more likely to accept that global warming is real and human-caused than those who know less on the subject. But that modest effect is not only erased when political ideology is factored in, it has an opposite effect on one end of the political spectrum. For Republicans, the more knowledge they have about climate science the less likely they are to accept the theory of anthropogenic global warming (while Democrats’ confidence goes up).
In another Scientific American column I wrote about this “backfire” effect, in which the more information you give someone that contradicts a cherished belief, the less likely they are to change their mind; in fact, they double-down on the belief. But this only applies to important political, religious, or ideological beliefs.
If you don’t have a dog in the fight then the facts can change your mind. But the cognitive dissonance created by facts counter to beliefs by which you define yourself will almost always be resolved by spin-doctoring the facts, not by changing your mind. Thus, when I engage in debate or conversation with creationists, for example, I don’t give them the choice between Darwin and Jesus, because I know who’s going to lose that one. Instead, I try to convince them that evolution was God’s way of creation, just like people in Newton’s time and after came to believe that gravity was God’s way of creating solar systems. I don’t believe that myself, of course, but the point is to get people to embrace science, not to win an argument. With climate deniers, I know from research and personal experience that when they hear “global warming” they think “anti-capitalism,” “anti-freedom,” “anti-American way of life.” So I take that off the table by showing them how investing in green technology is going to be one of the most lucrative enterprises in the history of capitalism. I call this the Elon Musk Model.
Michael Shermer, interviewed by Claire Lehmann, “The Skeptical Optimist: Interview with Michael Shermer”, Quillette, 2018-02-24.
May 17, 2020
QotD: The egalitarian model of bias
Bo Winegard, “‘Equalitarianism’ and Progressive Bias”, Quillette, 2018-02-07.
May 16, 2020
QotD: Division of labour in the modern world
In another example — the making of a woollen coat — Smith emphasises that the division of labour allows us to use machines, even “that very simple machine, the shears with which the shepherd clips the wool”.
The shepherd has the perfect tool for a focused task. That tool needs countless other focused specialists: the bricklayer who built the foundry; the collier who mined fuel; the smith who forged the blades. It is a reinforcing spiral: the division of labour lets us build new machines, while machines work best when jobs have been divided into one small task after another.
The rise of the computer complicates this story. Computers can certainly continue the process of specialisation, parcelling out jobs into repetitive chunks, but fundamentally they are general purpose devices, and by running software such as Microsoft Office they are turning many of us into generalists.
In a modern office there are no specialist typists; we all need to be able to pick our way around a keyboard. PowerPoint has made amateur slide designers of everyone. Once a slide would be produced by a professional, because no one else had the necessary equipment or training. Now anyone can have a go — and they do.
Well-paid middle managers with no design skills take far too long to produce ugly slides that nobody wants to look at. They also file their own expenses, book their own travel and, for that matter, do their own shopping in the supermarket. On a bill-by-the-minute basis none of this makes sense.
Why do we behave like this? It is partly a matter of pride: since everyone has the tools to build a website or lay out a book, it feels a little feeble to hand the job over to a professional. And it is partly bad organisational design: sacking the administrative assistants and telling senior staff to do their own expenses can look, superficially, like a cost saving.
Tim Harford, “Why Microsoft Office is a bigger productivity drain than Candy Crush Saga”, The Undercover Economist, 2018-02-02.
May 15, 2020
QotD: Gandhi and the rise of Hitler
When Hitler attacked Poland, however, Gandhi suddenly endorsed the Polish army’s military resistance, calling it “almost nonviolent.” (If this sounds like double-talk, I can only urge readers to read Gandhi.) He seemed at this point to have a rather low opinion of Hitler, but when Germany’s panzer divisions turned west, Allied armies collapsed under the ferocious onslaught, and British ships were streaming across the Straits of Dover from Dunkirk, he wrote furiously to the Viceroy of India: “This manslaughter must be stopped. You are losing; if you persist, it will only result in greater bloodshed. Hitler is not a bad man …”
Gandhi also wrote an open letter to the British people, passionately urging them to surrender and accept whatever fate Hitler had prepared for them. “Let them take possession of your beautiful island with your many beautiful buildings. You will give all these, but neither your souls, nor your minds.” Since none of this had the intended effect, Gandhi, the following year, addressed an open letter to the prince of darkness himself, Adolf Hitler.
The scene must be pictured. In late December 1941, Hitler stood at the pinnacle of his might. His armies, undefeated — anywhere — ruled Europe from the English Channel to the Volga. Rommel had entered Egypt. The Japanese had reached Singapore. The U.S. Pacific Fleet lay at the bottom of Pearl Harbor. At this superbly chosen moment, Mahatma Gandhi attempted to convert Adolf Hitler to the ways of nonviolence. “Dear Friend,” the letter begins, and proceeds to a heartfelt appeal to the Führer to embrace all mankind “irrespective of race, color, or creed.” Every admirer of the film Gandhi should be compelled to read this letter. Surprisingly, it is not known to have had any deep impact on Hitler. Gandhi was no doubt disappointed. He moped about, really quite depressed, but still knew he was right. When the Japanese, having cut their way through Burma, threatened India, Gandhi’s strategy was to let them occupy as much of India as they liked and then to “make them feel unwanted.” His way of helping his British “friends” was, at one of the worst points of the war, to launch massive civil-disobedience campaigns against them, paralyzing some of their efforts to defend India from the Japanese.
Here, then, is your leader, O followers of Gandhi: a man who thought Hitler’s heart would be melted by an appeal to forget race, color, and creed, and who was sure the feelings of the Japanese would be hurt if they sensed themselves unwanted. As world-class statesmen go, it is not a very good record. Madeleine Slade was right, I suppose. The world certainly didn’t listen to Gandhi. Nor, for that matter, has the modern government of India listened to Gandhi. Although all Indian politicians of all political parties claim to be Gandhians, India has blithely fought three wars against Pakistan, one against China, and even invaded and seized tiny, helpless Goa, and all without a whisper of a shadow of a thought of ahimsa. And of course India now has atomic weapons, a satyagraha technique if ever there was one.
Richard Grenier, “The Gandhi Nobody Knows”, Commentary, 1983-03-01.
May 14, 2020
QotD: Anti-dumping laws
As a result, antidumping law as it currently exists routinely punishes normal competitive business practices — practices commonly engaged in by American companies at home and abroad. It is therefore not the case that the law guarantees a level playing field for American companies and their foreign competitors. On the contrary, it actively discriminates against foreign goods by subjecting them to requirements not applicable to American products.
Brink Lindsey and Dan Ikenson, Antidumping Exposed: The Devilish Details of Unfair Trade Laws, 2003.
May 13, 2020
QotD: Compliments
Megan McArdle, “After 45 Birthdays, Here Are ’12 Rules for Life'”, Bloomberg View, 2018-01-30.
May 12, 2020
QotD: A jaundiced view of science fiction conventions
The first was that nobody at these gatherings, at least as far as I could tell, actually read science fiction, or much of anything else.
There were plenty of board gamers. (This was long before computer gaming or even Dungeons and Dragons; the hottest item on CRT was Pong, or early versions of Star Trek eating up mainframe time across the country.) There were plenty of self-proclaimed artists of one kind or another, and hordes of kids — of all ages — who loved to dress up in costumes.
Another thing I noticed was that these conventions, or “cons” as they were called, seemed to be the only social life most of their attendees had, a sort of portable soap opera migrating from city to city throughout the year. The atmosphere was heavy with prehistoric rivalries and hatreds, grudges and vendettas, sometimes going back decades.
Actually, the first thing I noticed — although I was too polite to put it first here — was that the vast bulk (and I use the term advisedly) of female attendees could have used a carload of deodorant and long-term memberships in Weight Watchers. Which, of course, was why events like these were the only social life they had. Nobody else wanted them hanging around.
L. Neil Smith, “The Security Syndrome”, The Libertarian Enterprise, 2005-01-15
May 11, 2020
QotD: Certainty is liberation
In short, absolutely nothing I did, or didn’t do, that final semester meant anything at all. I was as responsibility-free as an “adult” human can ever hope to get.
This had some interesting consequences. I got laid a lot more, for one thing — sorry about the crudity, but it’s a great illustration of the principle. The principle being: “When you truly don’t care, you project this invincible vibe that attracts people.” My friends were all shocked — not just about the getting laid part, but the fact that my whole personality seemed to change. I am not, as you might imagine, the most outgoing, happy-go-lucky guy, but that semester I was.
I mean, why not? I’d hit on varsity cheerleaders and sorority goddesses. I turned in wildly counter-intuitive assignments, just to see what would happen. I signed up for Intro to Conversational Chinese. Totally bombed it, but seriously, why not? I’ve always wanted to know if I have a knack for languages (turns out I don’t), and that was the hardest one in the course catalog. So long as I stayed alive and out of jail, I could do whatever the hell I wanted … so I did.
The lesson I drew from this: Certainty is liberation. It’s bliss. I still had anxieties, of course — e.g. how was I going to do in my new life, all the way across the continent? — but in my current context, I had no worries at all. I was King of the Dorm, because, quite simply, I could afford to be. I had three hots and a cot, endless free time, and a give-a-damn meter stuck on zero.
If I were quicker on the uptake, I’d have identified that instant as my turn to the Shitlord side of the Force. What in god’s name am I doing, hitting on the homecoming queen? Doesn’t matter. She could blow me off so viciously that dudes three blocks over would wince and cover themselves,* and I couldn’t care less. Why not shoot for the moon? If I win, I’m a dorm legend; if I fail, I’m still a dorm legend for having the balls to try it. In two months, I’ll be a thousand miles away and nobody will care about either of us.
*She didn’t. She didn’t go out with me, of course, but she was very nice and gracious, as most truly pretty girls are. Another valuable lesson learned.
Severian, “The Emotion is the Tell”, Rotten Chestnuts, 2020-01-24.
May 10, 2020
QotD: “Shirtstorm” and other forms of systematic patriarchal oppression of women
Which totally justified making a rocket scientist cry on the day of his greatest triumph. After all, people like him had ruined her life, right?
But it gets worse than that – there was an entire campus filled with supposedly educated (ah!) women terrorized by the statue of a sleep walking man.
And then there’s the ever-elastic definition of “sexual assault” which – I’m not making this up – can now be ratcheted down to “Looked at me in a way that made me feel uncomfortable” or, for that matter “failed to sexually assault me.” Oh, sorry, that last was the definition of racism. Some Palestinian woman looked at rape statistics and found that Israeli women are raped by Palestinian men in much higher numbers than Palestinian women are raped by Israeli men, and immediately concluded this is because Israelis are racist. It beggars the mind.
Another thing that beggars the mind is the progressive image of women as great warriors. You know, in all the movies and half the books (often without supernatural explanation) a 90 lb chick can beat 300 lb men. And women were always great fighters throughout the ages. And, and, and …
And yet, women are peaceful – peaceful, d*mn it. This is why “peaceful planet of women” is a trope on TV tropes. Not just a trope, but a dead horse one.
Attempts to square that circle have included the explanation that women are only violent because patriarchy. There needs be nothing else said because in this context, and with apologies to the ponies, Patriarchy Is Magic. Honorable mention on trying to square the circle must go to Law and Order‘s attempted episode on Gamer Gate where the game the woman designer had written was about Peaceful Amazon Warriors.
Sarah Hoyt, “Give Me My Smelling Salts, Ho! A Blast From The Past From April 2015”, According to Hoyt, 2020-01-22.
