Human-ities · Philosophy · Social/Politics

Economics as a moral science

INGRID ROBEYNS: For a while I have been working on a paper on democracy, expert knowledge, and economics as a moral science. [The financial crisis plays a role in the motivation of the paper, but the arguments I’m advancing turn out to be only contingently related to the crisis]. One thing I argue is that, given its direct and indirect influence on policy making and for reasons of democratic accountability, economics should become much more aware of the values it (implicitly or explicitly) endorses. Those values are embedded in some of the basis concepts used but also in some of the assumptions in the theory-building.

The textbook example in the philosophy of economics literature to illustrate the insufficiently acknowledged value-ladenness of economics is the notion of Pareto efficiency, also known as ‘the Pareto criterion’. Yet time and time again (for me most recently two days ago at a seminar in Oxford) I encounter economists (scholars or students) who fail to see why endorsing Pareto efficiency is not value-neutral, or why there are good reasons why one would not endorse the Pareto-criterion. Here’s an example in print of a very influential economist: Gregory Mankiw.

In his infamous paper ‘Defending the One Percent’ Mankiw writes (p. 22):

“Discussion of inequality necessarily involves our social and political values, but if inequality also entails inefficiency, those normative judgements are more easily agreed upon. The Pareto-criterion is the clearest case: if we can make some people better off without making anyone worse off, who could possibly object?”

Continue at Out of the Crooked Timber HERE

Human-ities · Social/Politics

Radical Centrism: Uniting the Radical Left and the Radical Right

Pragmatic Centrism Is Crony Capitalism.

Neoliberal crony capitalism is driven by a grand coalition between the pragmatic centre-left and the pragmatic centre-right. Crony capitalist policies are always justified as the pragmatic solution. The range of policy options is narrowed down to a pragmatic compromise that maximises the rent that can be extracted by special interests. Instead of the government providing essential services such as healthcare and law and order, we get oligopolistic private healthcare and privatised prisons. Instead of a vibrant and competitive private sector with free entry and exit of firms we get heavily regulated and licensed industries, too-big-to-fail banks and corporate bailouts.

There’s no better example of this dynamic than the replacement of the public option in Obamacare by a ‘private option’. As Glenn Greenwald argues, “whatever one’s views on Obamacare were and are: the bill’s mandate that everyone purchase the products of the private health insurance industry, unaccompanied by any public alternative, was a huge gift to that industry.” Public support is garnered by presenting the private option as the pragmatic choice, the compromise option, the only option. To middle class families who fear losing their healthcare protection due to unemployment, the choice is framed as either the private option or nothing.

In a recent paper (h/t Chris Dillow), Pablo Torija asks the question ‘Do Politicians Serve the One Percent?’ and concludes that they do. This is not a surprising result but what is more interesting is his research on the difference between leftwing and rightwing governments which he summarises as follows: “In 2009 center-right parties maximized the happiness of the 100th-98th richest percentile and center-left parties the 100th-95th richest percentile. The situation has evolved from the seventies when politicians represented, approximately, the median voter”.

Excerpt from a text written by Ashwin at Macroeconomic Resilience. Continue HERE. Image via Wiki

Photographics · Social/Politics · Technology

The Fundamental Units: A Microscopic View of the World Economy

The lowest domination coin from each of the world’s currencies imaged by the Advanced Engineered Materials Group at the National Physical Laboratory, using an Alicona infinite focus 3D optical microscope. These are small low resolution versions from orginals containing over 400 million pixels.

“The economic system, which has raised to such notorious prominence in recent years because of its obvious impact on our lives, is a complex structure whose functioning is increasingly necessary to understand and, as much as possible, to predict or even control. In this sense, and in response to the dominance of macroeconomics in the discourse of the media, the artist chooses a microscopic view of the world economy. The Fundamental Units, a series that begins with the works produced by Horrach Moyà Gallery for this exhibition, is an exploration of the lowest denomination coins from the world’s currencies using an infinite focus 3D optical microscope at the National Physical Laboratory in Teddington (UK). The images obtained with the microscope have been combined to form an extremely detailed large scale reproduction of the least valuable coins from Australia, Chile, the Euro, Myanmar and the Kingdom of Swaziland. In these images the humble metal acquires a planetary dimension and is displayed as the atoms that shape the global economy”. – Pau Waelder, Curator

Text and Image via The Fundamental Units

Digital Media · Social/Politics · Technology · Videos

Bitcoin Explained: A short video looking at ‘Bitcoin’, a decentralized digital currency

Bitcoin is a decentralized digital currency based on an open-source, peer-to-peer internet protocol. It was introduced in 2009 by a pseudonymous developer, Satoshi Nakamoto. Bitcoins can be exchanged through a computer or smartphone locally or internationally without an intermediate financial institution. In trade, one bitcoin is subdivided into 100 million smaller units called satoshis, defined by eight decimal places.

Bitcoin is not managed like typical currencies: it has no central bank or central organization. Instead, it relies on an Internet-based peer-to-peer network. The money supply is automated and given to servers or “bitcoin miners” that confirm bitcoin transactions as they add them to a decentralized and archived transaction log approximately every 10 minutes.

Text via Bitcoin Wiki

Human-ities · Social/Politics

The History of Debt

Throughout its 5000 year history, debt has always involved institutions – whether Mesopotamian sacred kingship, Mosaic jubilees, Sharia or Canon Law – that place controls on debt’s potentially catastrophic social consequences. It is only in the current era, writes anthropologist David Graeber, that we have begun to see the creation of the first effective planetary administrative system largely in order to protect the interests of creditors.

What follows is a fragment of a much larger project of research on debt and debt money in human history. The first and overwhelming conclusion of this project is that in studying economic history, we tend to systematically ignore the role of violence, the absolutely central role of war and slavery in creating and shaping the basic institutions of what we now call “the economy”. What’s more, origins matter. The violence may be invisible, but it remains inscribed in the very logic of our economic common sense, in the apparently self-evident nature of institutions that simply would never and could never exist outside of the monopoly of violence – but also, the systematic threat of violence – maintained by the contemporary state.

Excerpt from an article written by David Graeber at EuroZine. Continue HERE

Earthly/Geo/Astro · Social/Politics · Theory

Can Territorial Morphology Determine Economic Success and Political Viability?

Do Norwegians feel curiously at home in Chile, and vice versa? Do South Africans have a strange affinity with Italians? And Filipinos with Maldivians? They should, at least if they’re map nerds: each lives in a country with a territorial morphology that closely resembles the other’s.

Although they’re on opposite sides of the globe Chile and Norway are each other’s type, morphologically speaking: elongated to the extreme.

From east to west, Chile on average is just 150 miles (240 km) wide, which is the distance from London to Manchester, or New York to Baltimore. But from north to south, it measures 2,700 miles (4,300 km), which takes you from London to Tehran; or New York to Los Angeles. This makes Chile the world’s most stretched-out country – 18 times longer than it is narrow.

The Five Types of Territorial Morphology sounds like a fun parlour game, at least in cartophile circles (is Portugal compact or elongated? Is or isn’t Somalia prorupt? Does New Zealand qualify as fragmented?) But there is a serious, geopolitical concern behind this attempt at classification. For a country’s shape has a profound impact on its economic success, and even its political viability.

Excerpts from an article written by Frank Jacobs. Continue HERE

Human-ities · Philosophy

Wittgenstein’s Master: Frank Ramsey, the genius who died at 26

Frank Ramsey was 26 years old when he died after an operation at Guy’s Hospital in January 1930. In his short life, he had made lasting contributions to mathematics, economics and philosophy, and to the thinking of a number of his contemporaries, including Ludwig Wittgenstein.

When I taught at St Anne’s, Oxford during the 1980s, I was introduced by my colleague Gabriele Taylor to Ramsey’s sister, Margaret Paul, by then retired from teaching economics at Lady Margaret Hall college. As with anyone with some knowledge of the fields of enquiry Ramsey influenced, I was immediately recruited into helping with her research into his life and thought, though in a minor capacity; she had a formidable array of other helpers besides, from eminent philosophers like Taylor and PF Strawson onwards.

Frank Ramsey was 18 when Margaret was born, so her own memories of him were those of a little girl. A large part of her motivation in writing about him was to get to know him. In this quest she was equally tireless and scrupulous. Most aspects of his work require advanced technical competence, but she was determined to understand them; an afternoon at her house talking about him could be as gruelling as it was educative.

Excerpt from an article written by Margaret Paul. Continue HERE

Human-ities · Social/Politics

Are we witnessing the decline and fall of men?

Ignore the hyperbolic title. Hanna Rosin’s The End of Men and the Rise of Women is filled with worthwhile insights and raises serious questions about the meaning and implications of shifting gender roles. Rosin, an editor at the Atlantic and founder of Slate’s ‘DoubleX’, has emerged as one of only a handful of American writers who has understood the centrality of so-called ‘women’s issues’ to American culture.

Her thesis goes something like this: our society is in the midst of a whole host of social and economic changes that women are benefiting from more than men, and perhaps at the expense of men. It’s a compelling idea, not least because it seems to confirm what many people have observed in the course of their own experiences.

It is not simply that men have lost their jobs, or even that those jobs are gone for good, or that it is mainly women doing the jobs that are now being created. It is more a sense of creeping demoralisation and ambivalence about the future that is as much in evidence in Charles Murray’s discussion of the decline of marriage, in his book Coming Apart, as it is in ‘The Myth of Work/Life Balance’ debate that appeared in the Atlantic last summer.

Excerpt from an article written by Nancy McDermott ar SP!KED. Continue HERE

Human-ities · Performativity · Social/Politics

Stocks Perform Better if Women Are on Company Boards

Companies with women on their boards performed better in challenging markets than those with all-male boards in a study suggesting that mixing genders may temper risky investment moves and increase return on equity.

Shares of companies with a market capitalization of more than $10 billion and with women board members outperformed comparable businesses with all-male boards by 26 percent worldwide over a period of six years, according to a report by the Credit Suisse Research Institute, created in 2008 to analyze trends expected to affect global markets.

Excerpt from an article written by Heather Perlberg, Bloomberg. Continue HERE

Human-ities · Social/Politics

Six Policies Economists Love (And Politicians Hate)

An NPR show presenting the common-sense, no-nonsense Planet Money economic plan — backed by economists of all stripes, but probably toxic to any candidate that might endorse it.

Read/Hear it HERE

Human-ities · Social/Politics · Theory

The disadvantage of smarts

What, if any, evolutionary advantage does intelligence give us?

Actually, less intelligent people are better at doing most things. In the ancestral environment general intelligence was helpful only for solving a handful of evolutionarily novel problems.

Suggested reading: “The Bell Curve: Intelligence and Class Structure in American Life” by Herrnstein, Richard J. and Charles Murray (1994)

You mean our ancestors did not really have to reason?

Evolution equipped humans with solutions for a whole range of problems of survival and reproduction. All they had to do was to behave in the ways in which evolution had designed them to behave—eat food that tastes good, have sex with the most attractive mates. However, for a few evolutionarily novel problems, evolution equipped us with general intelligence so that our ancestors could reason in order to solve them. These evolutionarily novel problems were few and far between. Basically, dealing with any type of major natural disaster that is very infrequent in occurrence would require general intelligence.

Suggested reading: “Evolutionary Psychology and Intelligence Research” by Satoshi Kanazawa, in American Psychologist; 65: 279-289 (2010)

Excerpt of an interview with Satoshi Kanazawa on intelligence. Continue HERE

SATOSHI KANAZAWA is Reader in Management at the London School of Economics and Political Science, and Honorary Research Fellow in the Department of Psychology at Birkbeck College, University of London. He has written over 80 articles across the fields of psychology, sociology, political science, economics, anthropology and biology. One such was his widely reported article “Why Liberals and Atheists Are More Intelligent” (2010). His latest book is called “The Intelligence Paradox: Why the Intelligent Choice Isn’t Always the Smart One” (2012).

Human-ities · Social/Politics · Theory

Why China Won’t Rule

Is China poised to become the world’s next superpower? This question is increasingly asked as China’s economic growth surges ahead at more than 8% a year, while the developed world remains mired in recession or near-recession. China is already the world’s second largest economy, and will be the largest in 2017. And its military spending is racing ahead of its GDP growth.

The question is reasonable enough if we don’t give it an American twist. To the American mind, there can be only one superpower, so China’s rise will automatically be at the expense of the United States. Indeed, for many in the US, China represents an existential challenge.

This is way over the top. In fact, the existence of a single superpower is highly abnormal, and was brought about only by the unexpected collapse of the Soviet Union in 1991. The normal situation is one of coexistence, sometimes peaceful sometimes warlike, between several great powers.

Excerpt of an article written by Robert Skidelsky, at Project Syndicate. Continue HERE. Image above by Rodrigo Corral.

Earthly/Geo/Astro · Human-ities · Social/Politics

What Makes Countries Rich or Poor? by Jared Diamond

The fence that divides the city of Nogales is part of a natural experiment in organizing human societies. North of the fence lies the American city of Nogales, Arizona; south of it lies the Mexican city of Nogales, Sonora. On the American side, average income and life expectancy are higher, crime and corruption are lower, health and roads are better, and elections are more democratic. Yet the geographic environment is identical on both sides of the fence, and the ethnic makeup of the human population is similar. The reasons for those differences between the two Nogaleses are the differences between the current political and economic institutions of the US and Mexico.

This example, which introduces Why Nations Fail by Daron Acemoglu and James Robinson, illustrates on a small scale the book’s subject.* Power, prosperity, and poverty vary greatly around the world. Norway, the world’s richest country, is 496 times richer than Burundi, the world’s poorest country (average per capita incomes $84,290 and $170 respectively, according to the World Bank). Why? That’s a central question of economics.

Excerpt of an article written by Jared Diamond, NYBooks. Continue HERE

Imahe above: Women in Darfur returning from Kutum market to the Fata Borno camp for internally displaced persons under the protection of African Union soldiers, January 2007; photograph by Gary Knight from Questions Without Answers: The World in Pictures by the Photographers of VII. The book has just been published by Phaidon.

Human-ities · Science · Social/Politics · Theory

Religious People Are Less Compassionate Than Atheists

A series of three new studies indicates that less religious people, agnostics and atheists are more likely to be generous to those in need while driven by compassion than highly religious individuals. The works call into question widespread assumptions about the link between religion and compassion.

Researchers from the University of California in Berkeley (UCB) found that people in the latter category are less likely to be driven by compassion when they are generous. Social scientists at the university say that compassion is unrelated to generosity in this group.

On the other hand, people in the first category are very likely to give to the poor, or help others out simply because they are compassionate. In other words, their actions come from a genuine interest for helping others out, not because their religion calls for this behavior.

Details of the three studies appear in the latest online issue of the esteemed journal Social Psychological and Personality Science. The researchers say that acts of generosity and charity may not be driven by feelings of empathy and compassion, as some studies had suggested.

“Overall, we find that for less religious people, the strength of their emotional connection to another person is critical to whether they will help that person or not,” UCB social psychologist Robb Willer says. He was a coauthor of the new paper.

“The more religious, on the other hand, may ground their generosity less in emotion, and more in other factors such as doctrine, a communal identity, or reputational concerns,” the expert goes on to say.

For the purpose of this investigation, compassion was defined as the emotion that individuals feel when they see others suffering, an emotion based on which they act to help the latter, regardless of personal cost or risk, and without expecting rewards. Religious people expect a reward in the afterlife.

This is one of the main critiques associated with the stance organized religion takes on helping others. Believers are encouraged to be generous with those in need by being told that this will help them after death.

Atheists, agnostics and less-religious people help others due to a genuine sense of compassion, without expecting the get into the good graces of God for their effort. They are also not guided by a moral obligation instilled in them by religious leaders, churches and doctrines, but rather by their impulses.

The study results can be interpreted as providing additional evidence that morality, good conduct, compassion and generosity, among other behaviors, do not stem from religion, as many religious and spiritual leaders would have people believe. Rather, they stem from our human nature.

An article written by Tudor Vieru at Softpedia

Highly religious people are less motivated by compassion than are non-believers

Animalia · Bio · Book-Text-Read-Zines · Human-ities · Social/Politics

A Cooperative Species: Human Reciprocity and Its Evolution.

Why do humans, uniquely among animals, cooperate in large numbers to advance projects for the common good? Contrary to the conventional wisdom in biology and economics, this generous and civic-minded behavior is widespread and cannot be explained simply by far-sighted self-interest or a desire to help close genealogical kin.

In A Cooperative Species, Samuel Bowles and Herbert Gintis–pioneers in the new experimental and evolutionary science of human behavior–show that the central issue is not why selfish people act generously, but instead how genetic and cultural evolution has produced a species in which substantial numbers make sacrifices to uphold ethical norms and to help even total strangers.

The authors describe how, for thousands of generations, cooperation with fellow group members has been essential to survival. Groups that created institutions to protect the civic-minded from exploitation by the selfish flourished and prevailed in conflicts with less cooperative groups. Key to this process was the evolution of social emotions such as shame and guilt, and our capacity to internalize social norms so that acting ethically became a personal goal rather than simply a prudent way to avoid punishment.

Using experimental, archaeological, genetic, and ethnographic data to calibrate models of the co-evolution of genes and culture as well as prehistoric warfare and other forms of group competition, A Cooperative Species provides a compelling and novel account of how humans came to be moral and cooperative.

Samuel Bowles heads the Behavioral Sciences Program at the Santa Fe Institute and teaches economics at the University of Siena. Herbert Gintis holds faculty positions at the Santa Fe Institute, Central European University, and the University of Siena. The authors’ recent research has appeared in Science, Nature, American Economic Review, Journal of Theoretical Biology, Behavioral and Brain Sciences, and Current Anthropology.

A Cooperative Species: Human Reciprocity and Its Evolution. By Samuel Bowles & Herbert Gintis. Princeton University Press 2011. ISBN: 0691151253; 9780691151250

Text via IdeoBook

Human-ities · Public Space · Social/Politics · Theory

Economics and the Brain: How People Really Make Decisions in Turbulent Times

In a 2008 paper on neuroeconomics, Stanford economist George Loewenstein said: “Whereas psychologists tend to view humans as fallible and sometime even self-destructive, economists tend to view people as efficient maximisers of self-interest who make mistakes only when imperfectly informed about the consequences of their actions.”

This view of humans as completely rational – and the market as eminently efficient – is relatively recent. In 1922, in the Journal of Political Economy, Rexford G. Tugwell, said (to paraphrase) that a mind evolved to function best in “the exhilarations and the fatigues of the hunt, the primitive warfare and in the precarious life of nomadism”, had been strangely and quickly transported into a different milieu, without much time to modify the equipment of the old life.

The field of economics has since rejected this more pragmatic (and I would argue, realistic) view of human behavior, in favor of the simpler and neater “rational choice” perspective, which viewed the power of reflection as the only force driving human behavior.

But to paraphrase sociologist Zygmunt Bauman, our currently held views of what is reasonable, sensible and good sense tend to take shape in response to the realities “out there” as seen through the prism of human practice – what humans currently do, know how to do, are trained, groomed and inclined to do.

We compare ourselves to people we know, and come into contact with – either through social groups, or lately, with the advent of mass and, even fragmented media, people we think are like us.

Excerpt of an article written by Paul Harrison, The Conversation. Continue HERE

Book-Text-Read-Zines · Philosophy · Social/Politics · Theory

Gay, dismal, Greek(,) politics

And the social science — not a “gay science,” but a rueful –which finds the secret of this universe in “supply and demand,” and reduces the duty of human governors to that of letting men alone, is also wonderful. Not a “gay science,” I should say, like some we have heard of; no, a dreary, desolate and, indeed, quite abject and distressing one; what we might call, by way of eminence, the dismal science.” Thomas Carlyle.

“Economics is a serious subject” Joan Robinson.

“And ‘when laughter and gaiety are found, thinking is good for nothing’- that is the prejudice of this serious beast against all ‘gay science’” Friedrich Nietzsche.

“The less education a man has, or in other words, the less he knows of the specific connection of the objects to which he directs his observations, the greater is his tendency to launch out into all sorts of empty possibilities. An instance of this habit in the political sphere is seen in the pot-house politician.” (G.W. F. Hegel, Encyclopedia of the Philosophical Sciences)

Read Briefing by Nick Skiadopoulos HERE

Human-ities · Social/Politics · Technology

What occupations people had in a Medieval City?

Shawn Vincent: What did people do in the Middle Ages? If you meet a random person on the street, what is his likely occupation? Or did people work at all? Were the Middle Ages some Communist utopia, where everybody laid around all day and things were magically produced by fairies?

Of course not. They didn’t have electronics engineers and computer programmers, but they did have coopers, bakers, blacksmiths, and many other jobs that made their society go around. If you do a little research, there were tons of medieval occupations. Luckily, I’ve done it for you, so you don’t have to!

In the following list, I have made a link to the online version of Webster’s Dictionary, so you can find out what things are. In some cases, the definition is also included locally. I am slowly making local definitions for all these occupations, for your convenience.

See list HERE

Human-ities · Social/Politics

On the Invention of Money – Notes on Sex, Adventure, Monomaniacal Sociopathy and the True Function of Economics

David Graeber: Let me begin by filling in some background on the current state of scholarly debate on this question, explain my own position, and show what an actual debate might have been like. First, the history:

1) Adam Smith first proposed in ‘The Wealth of Nations’ that as soon as a division of labor appeared in human society, some specializing in hunting, for instance, others making arrowheads, people would begin swapping goods with one another (6 arrowheads for a beaver pelt, for instance.) This habit, though, would logically lead to a problem economists have since dubbed the ‘double coincidence of wants’ problem—for exchange to be possible, both sides have to have something the other is willing to accept in trade. This was assumed to eventually lead to the people stockpiling items deemed likely to be generally desirable, which would thus become ever more desirable for that reason, and eventually, become money. Barter thus gave birth to money, and money, eventually, to credit.

2) 19th century economists such as Stanley Jevons and Carl Menger [1] kept the basic framework of Smith’s argument, but developed hypothetical models of just how money might emerge from such a situation. All assumed that in all communities without money, economic life could only have taken the form of barter. Menger even spoke of members of such communities “taking their goods to market”—presuming marketplaces where a wide variety of products were available but they were simply swapped directly, in whatever way people felt advantageous.

3) Anthropologists gradually fanned out into the world and began directly observing how economies where money was not used (or anyway, not used for everyday transactions) actually worked. What they discovered was an at first bewildering variety of arrangements, ranging from competitive gift-giving to communal stockpiling to places where economic relations centered on neighbors trying to guess each other’s dreams. What they never found was any place, anywhere, where economic relations between members of community took the form economists predicted: “I’ll give you twenty chickens for that cow.” Hence in the definitive anthropological work on the subject, Cambridge anthropology professor Caroline Humphrey concludes, “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.”

Written by David Graeber from his book Debt: The First 5,000 Years. Continue the read at Naked Capitalism.

Human-ities · Social/Politics

Why Economic Growth Totally Is Imperative

Wouldn’t it make more sense to worry about the long-term sustainability and durability of global growth? Wouldn’t it make more sense to worry whether conflict or global warming might produce a catastrophe that derails society for centuries or more?

There is a certain absurdity to the obsession with maximizing long-term average income growth in perpetuity, to the neglect of other risks and considerations. Consider a simple thought experiment. Imagine that per capita national income (or some broader measure of welfare) is set to rise by 1% per year over the next couple of centuries. This is roughly the trend per capita growth rate in the advanced world in recent years. With annual income growth of 1%, a generation born 70 years from now will enjoy roughly double today’s average income. Over two centuries, income will grow eight-fold.

Now suppose that we lived in a much faster-growing economy, with per capita income rising at 2% annually. In that case, per capita income would double after only 35 years, and an eight-fold increase would take only a century.

Finally, ask yourself how much you really care if it takes 100, 200, or even 1,000 years for welfare to increase eight-fold. Wouldn’t it make more sense to worry about the long-term sustainability and durability of global growth? Wouldn’t it make more sense to worry whether conflict or global warming might produce a catastrophe that derails society for centuries or more?

Even if one thinks narrowly about one’s own descendants, presumably one hopes that they will be thriving in, and making a positive contribution to, their future society. Assuming that they are significantly better off than one’s own generation, how important is their absolute level of income?

An column by Will Wilkinson on Big Think. Continue HERE
[Image: arindambanerjee /]