The ‘war on drugs’ is the obvious example that sprang to mind and has already been mentioned. It has cropped up a number of times without objection.
I suspect that one of the reasons theism has ‘special status’ is that it requires little domain specific knowledge to recognize its irrationality. Basic scientific and historical knowledge and experience of the world are enough to throw up serious doubts for anyone who starts down the path of rationality. Other examples that spring to mind require a little more specialist knowledge.
An example: there is some overlap between the ‘economist blogger’ community and the OB readership. Economics bloggers have on occasion discussed the fact that there are certain uncontroversial truths accepted within economics that are not uncontroversial amongst non-economists. Examples are the benefits of free trade over protectionism, the ineffectiveness of price controls, the general efficiency benefits of markets and the net benefits of relatively open immigration policies. I had to learn a bit about economics and be presented with the results of studies to be fully persuaded by some of these arguments—unlike atheism it was not obvious to me from my direct experience that they were true. Perhaps someone more rational than myself could have deduced these truths from first principles and direct observation but as a general rule I would not assume that someone who had not a passing familiarity with economics would have found these truths to be self evident.
Another, and perhaps more troubling, reason is that I suspect a certain amount of self-censorship is at work in order not to risk fragmenting the community with examples that while less controversial in the general population might be more controversial within the self-selecting subset of Less Wrong readers. The Larry Summers affair might be an example of the kind of belief that might be self-censored in a burgeoning rationalist community, despite the noticeable lack of representation of a certain demographic within that community.
One problem with economists is this lazy tendency to describe economic solutions as “efficient” or having “benefits” without describing the goals with respect to which they are efficient, or who and what they benefit.
Also, most of the standard derivations of the benefits of market solutions have multiple flaws:
They assume a level of competition among producers and consumers which doesn’t arise in practice
They assume a level of rational decision making among actors which doesn’t arise in practice
They assume that the rules of the game (laws, taxes, spending decisions, standards, property rights including IPR etc) are neutral and so put everyone on a level playing field from the start. They don’t.
The consequences of this are quite well known. Strong countries demand “free trade” from weak countries (and get it) while maintaining barriers to trade for their own products (agriculture, weapons etc.) which—very mysteriously—never go away. Corporations preach the wonders of competition, while carefully managing (or reducing) competition in their own sectors through mergers, IPR, brand protection, standards, licensing and a whole host of other tricks. (Regulators, even formal competition authorities, often help them). Financial institutions demand de-regulation (which they get) but then grow too big to fail, and subsequently demand bailouts when they make collosal mistakes threatening the whole system (and they get those too). Then they put all the blame on governments for over-spending, and demand huge spending cuts to maintain national credit ratings (and amazingly that happens as well). Economists acknowledge that externalities (like pollution, global warming impacts from fossil fuels) should be priced in (via taxes or tradeable quotas), but then that never happens (taxes are too unpopular, or the price is deliberately kept too low by giving out excessive quotas). And so on.
They assume that the rules of the game (laws, taxes, spending decisions, standards, property rights including IPR etc) are neutral and so put everyone on a level playing field from the start. They don’t.
Oh dear. I said that “most of the standard derivations of the benefits of market solutions” make these assumptions; not that most economists make these assumptions. Please read what I wrote.
Clearly working economists don’t all make these assumptions, or the critiques you link to wouldn’t exist (and neither would my post). Indeed Nobel prizes in economics have been won by disproving central assumptions of classical economic theory.
My point remains: you cannot demonstrate benefit from “free market” systems as they actually exist by the classical economic arguments. There is no general principle that an imperfect, rigged or politicised market must ipso facto be more efficient, or bring greater benefit, than a non-market solution, particularly if you don’t define “efficiency” or “benefit” carefully in the first place.
Oh dear. I said that “most of the standard derivations of the benefits of market solutions” make these assumptions; not that most economists make these assumptions. Please read what I wrote.
Clearly working economists don’t all make these assumptions, or the critiques you link to wouldn’t exist (and neither would my post). Indeed Nobel prizes in economics have been won by disproving central assumptions of classical economic theory.
Sorry for having misread your comment.
My point remains: you cannot demonstrate benefit from “free market” systems as they actually exist by the classical economic arguments. There is no general principle that an imperfect, rigged or politicised market must ipso facto be more efficient, or bring greater benefit, than a non-market solution, particularly if you don’t define “efficiency” or “benefit” carefully in the first place.
Agreed; (actually existing) markets cannot be shown to be necessarily efficient using realistic assumptions (nor can “public policy”). On the other hand, the empirical record of capitalism being more efficient (with respect to common measures of welfare such as income, life-expectancy, education, etc...) than the known alternatives seems quite strong.
I checked out Peter Leeson’s paper “Two cheers for capitalism?”. It’s potentially interesting, and at least based on some real-world data (good). Unfortunately it reads more like a polemic than a piece of serious science (bad).
There is not a null hypothesis,control group, p-value, or confidence interval to be found anywhere in the paper. No Bayesian statistics either. Nor are there any formal references, just a list “for further reading” (a lot of them being self-references). Initially I found it hard to believe that this got through peer review, but it appears that Society accepted it http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1438364
Now it’s not a bad idea to use comparative method, and there are some interesting possible conclusions from the data. But I would expect a more robust analysis than Leeson gives. In particular to explore a causal relationship you need to look at confounding factors, and the 5 countries which became “less” capitalistic by his measure (Myanmar, Rwanda, Ukraine, Venezuela, and Zimbabwe) had a heck of a lot of confounding factors. You certainly can’t pin their problems purely on the loss of a point or two of “economic freedom”. And in any case a sample size of 5 is likely too small to conclude anything.
Leeson should really have compared the countries which became more capitalist against the countries which stayed roughly the same on his scale (an obvious control group). My prediction is that both groups grew in average welfare (by his indicators) over the period in question. So we have to check whether the difference in welfare growth was significant between the groups against the null hypothesis that it wasn’t. Leeson doesn’t do that comparison though… I wonder why not?
Also, eyeballing Leeson’s static cross-section graphs on page 17 suggests some fairly good welfare correlations up to 7 points of capitalism on his scale (at least in 1995), but beyond that it’s pretty much a random scatter plot. The rich countries all have (it appears) at least 6 points (mixed economy?), so I can’t see a great case that they benefit from becoming “more” capitalistic. Further, the correlation between capitalist score and democratic score looks very weak (again almost a random scatter plot). This is probably because purer forms of capitalism are not actually very popular. So, I don’t see a strong reason here for more than the customary two cheers after all.
On the lower end of the scale, poor countries probably can benefit from an injection of capitalism (a reason for at least one of the two cheers). But then Marx would have found that unsurprising, as would Lenin (see http://en.wikipedia.org/wiki/New_Economic_Policy) and the modern Chinese communist party. Remember that socialism was always supposed to happen after capitalism had built up a huge stock of wealth, and hit a point of diminishing returns in terms of human welfare (then collapsed under its own contradictions). That’s all out of fashion these days of course. (And, disclaimer, I’m neither a Marxist nor a socialist.)
The ‘war on drugs’ is the obvious example that sprang to mind and has already been mentioned. It has cropped up a number of times without objection.
I suspect that one of the reasons theism has ‘special status’ is that it requires little domain specific knowledge to recognize its irrationality. Basic scientific and historical knowledge and experience of the world are enough to throw up serious doubts for anyone who starts down the path of rationality. Other examples that spring to mind require a little more specialist knowledge.
An example: there is some overlap between the ‘economist blogger’ community and the OB readership. Economics bloggers have on occasion discussed the fact that there are certain uncontroversial truths accepted within economics that are not uncontroversial amongst non-economists. Examples are the benefits of free trade over protectionism, the ineffectiveness of price controls, the general efficiency benefits of markets and the net benefits of relatively open immigration policies. I had to learn a bit about economics and be presented with the results of studies to be fully persuaded by some of these arguments—unlike atheism it was not obvious to me from my direct experience that they were true. Perhaps someone more rational than myself could have deduced these truths from first principles and direct observation but as a general rule I would not assume that someone who had not a passing familiarity with economics would have found these truths to be self evident.
Another, and perhaps more troubling, reason is that I suspect a certain amount of self-censorship is at work in order not to risk fragmenting the community with examples that while less controversial in the general population might be more controversial within the self-selecting subset of Less Wrong readers. The Larry Summers affair might be an example of the kind of belief that might be self-censored in a burgeoning rationalist community, despite the noticeable lack of representation of a certain demographic within that community.
Underrepresentation is not lack of representation.
True, and I did mean underrepresentation, I know there is not a complete lack of representation. Thanks for pointing out the distinction.
One problem with economists is this lazy tendency to describe economic solutions as “efficient” or having “benefits” without describing the goals with respect to which they are efficient, or who and what they benefit.
Also, most of the standard derivations of the benefits of market solutions have multiple flaws:
They assume a level of competition among producers and consumers which doesn’t arise in practice
They assume a level of rational decision making among actors which doesn’t arise in practice
They assume that the rules of the game (laws, taxes, spending decisions, standards, property rights including IPR etc) are neutral and so put everyone on a level playing field from the start. They don’t.
The consequences of this are quite well known. Strong countries demand “free trade” from weak countries (and get it) while maintaining barriers to trade for their own products (agriculture, weapons etc.) which—very mysteriously—never go away. Corporations preach the wonders of competition, while carefully managing (or reducing) competition in their own sectors through mergers, IPR, brand protection, standards, licensing and a whole host of other tricks. (Regulators, even formal competition authorities, often help them). Financial institutions demand de-regulation (which they get) but then grow too big to fail, and subsequently demand bailouts when they make collosal mistakes threatening the whole system (and they get those too). Then they put all the blame on governments for over-spending, and demand huge spending cuts to maintain national credit ratings (and amazingly that happens as well). Economists acknowledge that externalities (like pollution, global warming impacts from fossil fuels) should be priced in (via taxes or tradeable quotas), but then that never happens (taxes are too unpopular, or the price is deliberately kept too low by giving out excessive quotas). And so on.
That was great. Why was it downvoted?
Yeah, except when they don’t.
Yeah, except when they don’t.
Yeah, except when they don’t.
Oh dear. I said that “most of the standard derivations of the benefits of market solutions” make these assumptions; not that most economists make these assumptions. Please read what I wrote.
Clearly working economists don’t all make these assumptions, or the critiques you link to wouldn’t exist (and neither would my post). Indeed Nobel prizes in economics have been won by disproving central assumptions of classical economic theory.
My point remains: you cannot demonstrate benefit from “free market” systems as they actually exist by the classical economic arguments. There is no general principle that an imperfect, rigged or politicised market must ipso facto be more efficient, or bring greater benefit, than a non-market solution, particularly if you don’t define “efficiency” or “benefit” carefully in the first place.
Sorry for having misread your comment.
Agreed; (actually existing) markets cannot be shown to be necessarily efficient using realistic assumptions (nor can “public policy”). On the other hand, the empirical record of capitalism being more efficient (with respect to common measures of welfare such as income, life-expectancy, education, etc...) than the known alternatives seems quite strong.
I checked out Peter Leeson’s paper “Two cheers for capitalism?”. It’s potentially interesting, and at least based on some real-world data (good). Unfortunately it reads more like a polemic than a piece of serious science (bad).
There is not a null hypothesis,control group, p-value, or confidence interval to be found anywhere in the paper. No Bayesian statistics either. Nor are there any formal references, just a list “for further reading” (a lot of them being self-references). Initially I found it hard to believe that this got through peer review, but it appears that Society accepted it http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1438364
Now it’s not a bad idea to use comparative method, and there are some interesting possible conclusions from the data. But I would expect a more robust analysis than Leeson gives. In particular to explore a causal relationship you need to look at confounding factors, and the 5 countries which became “less” capitalistic by his measure (Myanmar, Rwanda, Ukraine, Venezuela, and Zimbabwe) had a heck of a lot of confounding factors. You certainly can’t pin their problems purely on the loss of a point or two of “economic freedom”. And in any case a sample size of 5 is likely too small to conclude anything.
Leeson should really have compared the countries which became more capitalist against the countries which stayed roughly the same on his scale (an obvious control group). My prediction is that both groups grew in average welfare (by his indicators) over the period in question. So we have to check whether the difference in welfare growth was significant between the groups against the null hypothesis that it wasn’t. Leeson doesn’t do that comparison though… I wonder why not?
Also, eyeballing Leeson’s static cross-section graphs on page 17 suggests some fairly good welfare correlations up to 7 points of capitalism on his scale (at least in 1995), but beyond that it’s pretty much a random scatter plot. The rich countries all have (it appears) at least 6 points (mixed economy?), so I can’t see a great case that they benefit from becoming “more” capitalistic. Further, the correlation between capitalist score and democratic score looks very weak (again almost a random scatter plot). This is probably because purer forms of capitalism are not actually very popular. So, I don’t see a strong reason here for more than the customary two cheers after all.
On the lower end of the scale, poor countries probably can benefit from an injection of capitalism (a reason for at least one of the two cheers). But then Marx would have found that unsurprising, as would Lenin (see http://en.wikipedia.org/wiki/New_Economic_Policy) and the modern Chinese communist party. Remember that socialism was always supposed to happen after capitalism had built up a huge stock of wealth, and hit a point of diminishing returns in terms of human welfare (then collapsed under its own contradictions). That’s all out of fashion these days of course. (And, disclaimer, I’m neither a Marxist nor a socialist.)