Club Troppo

Many years ago, Robert M. Pirsig’s hippy cult novel Zen and the Art of Motorcycle Maintenance was one of my favourites.  A few weeks ago I discovered he’d written a sequel in 1991 called Lila: An Inquiry into Morals.  I’ve been reading it as a break from seemingly interminable marking of student essays and exams (now mercifully finished).

Like many a 70s hippy (including me), Pirsig seems to have mellowed and discovered the virtues of market capitalism as he aged, framing it with his trademark notion of Zen “Quality”. 

I found several interesting things about the passage from Lila reproduced over the fold.  One is that Pirsig seems to be channeling Austrian theoreticians (especially Hayek and Popper) without overtly referencing them or seemingly even being aware of their existence.

The other interesting angle, and the main reason for this post, is that it encapsulates a lot of my own thinking about human social and economic organisation especially the role of entrepreneurialism and innovation.  The need to avoid stifling innovation as the primary engine of capitalism’s remarkable success was Hayek’s principal answer to those who argued for socialism or even a strong social democratic welfare state.  I attempted to provoke discussion on this topic in a previous post, but it ended up being sidetracked by a prolonged argument about the virtues or otherwise of the libertarian LDP’s election policies.   It seems to me that the more general issues that Pirsig raises are much more interesting.  In particular, if we accept the general thrust of his argument (as I do), what does that say about optimal forms of social, economic and political organisation (particularly when social and economic activity should be regulated and what form regulation should take)?  And optimal in what sense?

(Continued)

As a long time fan of Hegel, I remember thinking as I skimmed a book on him in a bookshop that Peter Singer would make an awful mess of him - as people like Bertrand Russell did from a similar tradition a couple of generations back. But though there were various bits of Singer’s book on Hegel that I didn’t quite like, I had to admit it was an admirable survey of the thinking of someone whose prose escapes many innocent readers (myself included - I couldn’t understand much of it at all until I went to a marvellous seminar that Richard Campbell gave on it at ANU.

Be that as it may, if you’re interested in Hegel and want to watch people in brown suits in a brown studio on a brown couch talk about him and Marx in ways that you can understand, then go no further than this post of five YouTube videos of Peter Singer talking with Brian Magee.

The following paragraph is an abstract of the paper “The Effect of Employer Access to Criminal History Data on the Labor Market Outcomes of Ex-Offenders and Non-Offenders” by Keith Finlay

Since 1997, states have begun to make criminal history records publicly available over the Internet. This paper exploits this previously unexamined variation to identify the effect of expanded employer access to criminal history data on the labor market outcomes of ex-offenders and non-offenders. Employers express a strong aversion to hiring ex-offenders, but there is likely asymmetric information about criminal records. Wider availability of criminal history records should adversely affect the labor market outcomes of ex-offenders. A model of statistical discrimination also predicts that non-offenders from groups with high rates of criminal offense should have improved labor market outcomes when criminal history records become more accessible. This paper tests these hypotheses with criminal and labor market histories from the 1997 cohort of the National Longitudinal Survey of Youth. I find evidence that labor market outcomes are worse for ex-offenders once state criminal history records become available over the Internet, and somewhat weaker evidence that outcomes are better for non-offenders from highly offending groups. Results for ex-offenders demonstrate the presence of imperfect information about criminal records by employers. The non-offender results are consistent with statistical discrimination by employers. Estimates may be confounded by a short sample period and ongoing human capital investments, but the research design provides a unique setting for testing theories of statistical discrimination.

Should we publish these records or not?

I put the above up immediately I saw the abstract. Now I’ve seen another abstract that is equally relevant to the issues of discrimination in the labour market - and who should suffer it. It’s closer to my heart, because I detect a ‘lemons’ effect at the bottom end of the market, something I’ve observed in my own behaviour as a hirer of labour.

Beyond Signaling and Human Capital: Education and the Revelation of Ability by Peter Arcidiacono, Patrick Bayer, Aurel Hizmo
In traditional signaling models, education provides a way for individuals to sort themselves by ability. Employers in turn use education to statistically discriminate, paying wages that reflect the average productivity of workers with the same given level of education. In this paper, we provide evidence that education (specifically, attending college) plays a much more direct role in revealing ability to the labor market. We use the NLSY79 to examine returns to ability early in careers; our results suggest that ability is observed nearly perfectly for college graduates but is revealed to the labor market much more gradually for high school graduates. As a result, from very beginning of the career, college graduates are paid in accordance with their own ability, while the wages of high school graduates are initially completely unrelated to their own ability. This view of ability revelation in the labor market has considerable power in explaining racial differences in wages, education, and the returns to ability. In particular, we find no racial differences in wages or returns to ability in the college labor market, but a 6-10 percent wage penalty for blacks (conditional on ability) in the high school market. These results are consistent with the notion that employers use race to statistically discriminate in the high school market but have no need to do so in the college market. That blacks face a wage penalty in the high school but not the college labor market also helps to explains why, conditional on ability, blacks are more likely to earn a college degree, a fact that has been documented in the literature but for which a full explanation has yet to emerge.

The super-rich aren’t super-smart says Ezra Klein. While it might be comforting to believe that that income differences represent differences in knowledge and skill, it’s just not true:

The massive gains in wealth in this country are apportioning to a small slice of rich people at the very top of the income distribution, not the broad mass of skilled, college-educated workers who hoped they were buying into the economic ruling class but, in fact, are just the new middle. We’ve built an economy where the riches go not to those with the most knowledge, but the most money.

Matt Yglesias isn’t convinced. He points to a 2007 report by Jared Bernstein and Larry Mishel which shows that college graduates still earn significantly more than those with only high school. There "was a huge run-up in the wage premium in the 1980s" writes Yglesias, and "that hasn’t declined at all." So in other words, differences in human capital still explain a great deal of the inequality in incomes.

Of course Yglesias admits that "it’s a mistake to monomaniacally focus on educational attainment as the only factor driving inequality" and the Bernstein and Mishel paper he links to makes that point clear. But he insists that the college wage premium endures partly because of "inadequate preparation for students from disadvantaged backgrounds and screwy priorities on the part of institutions of higher education".

In a follow up post Klein points out that income inequality kept increasing even when growth in the college wage premium stalled:

If inequality is a simple function of educational attainment, then the economy remains a relative meritocracy, and reversing the trend is a simple matter of sending more people to school (though, as Matt does point out, that’s easier said than done). If not, then it’s a function of any number of forces, ranging from globalization to tax rates to corporate culture, that speak to deeper inequities in our economy, and might require more direct government intervention.

Klein and Yglesias are largely arguing past each other. Klein focuses on spectacular increases in income at the very top of the distribution while Yglesias pays more attention to differences nearer the bottom. Klein doesn’t explain how reining in incomes at the top would help those with incomes at the bottom, and Yglesias doesn’t claim that the rich could become super-rich if only they got a better education (for an amusing take on the plight of the merely rich, watch this video).

(Continued)

Zen Koans — part question, part anecdotes — tend to follow a common form. A student asks a master a question; or several students argue something amongst themselves. Some sort of illogical conclusion is reached, at which point somebody is enlightened.

So far, so good. But even extremely advanced and obscurantist mysticism is subject to people taking the piss:

Three Zen students came out of a Dharma talk.

“What did you think of Roshi’s talk today?” one of them asked. “When he talked about true and false practice, I thought that was kind of dualistic, wasn’t it?”

“Ah,” said the second, “but your even saying that is dualistic itself, don’t you see?”

“Look who’s talking,” said the third. “I’m glad I’m not dualistic like you guys!”

From the rather hilarious Broken Koans collection.

"If everyone had enough, it would be of no moral consequence whether some had more than others", says Harry Frankfurt. Skepticlawyer agrees. In a recent post on ‘progressive fusionism’ she suggests combining Frankfurt’s ‘doctrine of sufficiency’ with Amartya Sen’s capabilities approach. But what does ‘enough’ mean?

Libertarians have long struggled against the crudest form of egalitarianism — the demand that everyone’s income should be the same. This was the egalitarian ideal that animated Edward Bellamy’s 19th century utopian novel Looking Backwards. Bellamy dreamed of a society which was both meritocratic and egalitarian — a society where all workers were motivated to do their best and all were paid the same (with no rewards for inherited ability).

Hayek spotted a fatal flaw in Bellamy’s vision — without a price mechanism there would be no way to coordinate economic activity. And with a price mechanism there would be no way to maintain equality of income (or reward in proportion to talent and effort ).

While number-crunching sociologists and economists still focus on gini coefficients, egalitarian philosophers who follow John Rawls embrace positions which are immune to Hayek’s criticism. Rawls’ influential version of egalitarianism allows inequality as long as the social arrangements that produce it improve the prospects of the least advantaged. This is why some libertarians think that it might be possible to combine Rawls’ philosophy with Hayek’s economics. This is the ‘progressive fusionism’ skepticlawyer refers to in her post.

(Continued)

I have about three draft posts, all unfinished on a particular theme which I have touched on once before here. The general theme is the growing viability of doing well by doing good. One of the posts was called Googlenomics and referred to the massive amount of <jargon>consumer surplus</jargon> produced by business models like Google where massive value is created and the firm goes about trying to privatise a very small fraction of it.

I was also going to mention a typically interesting and provocative post by Steve Randy Waldman where talks about ‘character’ and capitalism and ends up with this proposal

T.S. Eliot once wrote, “It is impossible to design a system so perfect that no one needs to be good.” Perhaps the art is to come up with a system, however imperfect, under which being good is the best way to succeed.

That’s a worthwhile thing to think about too.

There are lots of things to be said here. But the purpose for my finally breaking into the published post mode is to announce the fact that Paul Graham has had a good go at this issue and, like me concludes that doing well by doing good is a business model whose time may have come. He doesn’t say so in so many words, and his focus is on start ups. And one of the things he doesn’t seem to say (though I read his piece quickly) is that all this is made possible by the scalability that the net gives things - the way in which it reduces to near zero cost the rolling out of some service or provision of information to hundreds of millions of users (and billions when they get access to the net). Edited highlights are below the fold.

(Continued)

“Is equality passé” by Bowles and Gintis is a terrific essay which I thoroughly recommend to all who’ve not read it. It’s a much stronger foundation for what has often been the flailing around of the ‘third way’ than some of the more widely acknowledged high priests like the turgid Anthony Giddens.

But it’s the beginning or at least a progress report from a very interesting research project. Since it’s dated 1995 there’s a lot more where that came from. I’m reading a book edited by Bowles and Gintis in 2005 titled promisingly from my point of view Moral Sentiments and Material Interests. Adam Smith’s sociology from his ‘Theory of Moral Sentiments’ is working its way back into relevance again after all these years. TMS was pretty much a curiosity as recently as the 1980s and has enjoyed rising acclaim and perceived relevance ever since. We have even found the neurological microfoundations of those moral sentiments that Smith anatomised so well in his Theory of Moral Sentiments. A big call I know - but follow the link and see what you think.

And expect another post from me on strong reciprocity and regulation - a link I should have made when Lateral Economics was writing “Regulating for innovation” (pdf).

I’ve just been asked by the Department of PM&C to nominate someone to go to the 202o Summit. Who should I nominate - and why?

This post will be moderated strictly. Suggestions should be serious and I hope you’ll provide good reasons. Of course there will be people who want to express an opinion about the Summit itself, and for that reason I’m creating an accompanying post inviting discussion on that topic. But in this thread, please concentrate on the proposed subject. And links to other blog discussions of the subject (good nominees, not whether it’s a good idea or not) would be most welcome also.

My own idea would be to try to think of someone who has some good concrete ideas about specific things we should do in the world of government policy - and so lower down the list would come

• people who’s analysis and views about our current circumstances might be very astute, but who might not (necessarily) be expected to produce particularly outstanding suggestions for policy. By way of illustration - and illustrious illustration at that, I’d put Inga Clendinnen in this category even if I might be quite wrong - that is that in addition to being an extraordinarily acute observer of our world she’d be good at suggesting good policy changes.
• people who are pretty interesting and capable of coming up with worthwhile ideas but who already have plenty of exposure to put those ideas.

If you want to nominate anyone right now - including yourself - just go to this website where you can do so (unaccountably the most efficient form of data transfer they’ve got is the email of a Microsoft Word document. Perhaps the option of a feedback form might have saved them some time arranging the data at the back end.)

To your right is an historic picture. A picture of the occasion on which Lincoln gave what he thought was his best speech. The Second Inaugural. There he is reading from his notes. In surfing around the subject when I posted my piece on Obama’s rhetoric - Obama described Lincoln, as “a tall, gangly, self-made Springfield lawyer” who “tells us that there is power in words” and “tells us there is power in conviction” - I came upon this piece about the Second Inaugural. It’s sadly lacking in its subject’s concision, but it’s full of interesting tidbits nevertheless.

Along with Gettysburg the Second Inaugural is one of the great speeches of the ages. Of all the great orators it seems Lincoln was one of the most original: One of the most modern. His speeches did not just rouse the spirits of those in his audience. In fact they often didn’t rouse their spirits but undermined their certitudes and invited reflection. Of all the great speechifiers (that I know of) he is by far the most downbeat. And his two great speeches are deliberately, provocative, indeed subversive in several ways.

They are extraordinarily short. But where the odd Churchill speech was short to make a point - “blood sweat and tears” was a quick few casual remarks to the House on taking office - Lincoln’s brevity is also making another point - about the inadequacy of words. Gettysburg is 272 words long when he had plenty of time and plenty to say. And the points he was making were far from simple - they were complex and profound. But the brevity - and the provocation of such brevity - is part of the point - invariably a negative point about what really can be said or done - something that then finds itself expressed and repeated in the words. “People will little note, nor long remember” “we cannot consecrate, we cannot hallow this ground”.

Lincoln’s second inaugural wouldn’t quite fill the space John Hewson gets each week in the Fin. It was 703 words long. And he had lots to say. At a time when the whole world wanted to know the gories about the war, how things were going - whether ‘the surge’ was working - Lincoln distanced his audience, beginning in a peculiarly distant voice. And though it’s a short speech, as in the Gettysburg Address, Lincoln actually makes his points in a surprisingly prolix way.

At this second appearing to take the oath of the Presidential office there is less occasion for an extended address than there was at the first. Then a statement somewhat in detail of a course to be pursued seemed fitting and proper. Now, at the expiration of four years, during which public declarations have been constantly called forth on every point and phase of the great contest which still absorbs the attention and engrosses the energies of the nation, little that is new could be presented. The progress of our arms, upon which all else chiefly depends, is as well known to the public as to myself, and it is, I trust, reasonably satisfactory and encouraging to all.

Then, the first zinger.

With high hope for the future, no prediction in regard to it is ventured. (Continued)

Only marginally related to the post, but a great image just the same - from turtblu on Flickr

Readers with prodigious memories may recall a post I wrote a couple of years ago about the work of psychologist Jonathan Haidt on the cognitive basis for human morality.  Haidt has developed a model he calls “social intuitionism”.  Here’s my amateur summary from the 2006 post:

Haidt and Bjorklund [Haidt's then co-author] are decisively in the intuitionist camp, though  basing  their arguments very much on empirical research in cognitive psychology (including their own research).   Their theory certainly seems (at least to this non-expert)  solidly grounded in current cognitive science research.   They claim that human moral behaviour emanates from a set of moral intuitions that are hard-wired into the brain and therefore identifiable across all human cultures, albeit that their precise shape is strongly influenced and moulded by social and cultural factors during a child’s development.   They also argue that the initial moral flash of intuition that precedes every individual moral “decision” may be modified by social factors at the time.   However, that social influence is anything but a process of intellectual reasoning in the vast majority of cases.   The process is  little more than the outworking of our desire to fit our moral decision-making into a consensus of the community or peer group of which we  see ourselves  as part: the morality of the herd.

The vast majority of what passes for moral “reasoning” is in reality no more than post hoc justification of decisions actually already reached on an intuitive basis, a conclusion that doesn’t look promising for idealistic political theories like  Habermas’s  concepts of “communicative rationality” and “deliberative democracy”.   That won’t come as  a  huge  surprise to  readers of political blogs, a domain where (like political discourse generally)  bloggers and commenters mostly just  shout past each other (however civilly)  from entrenched, predetermined positions.

(Continued)

Coming out in March 2008

I’ve just finished reading American Fascists, in which the famous American war correspondent Chris Hedges presents a deeply unpleasant portrait of the Christian Right. Much of the story will be unsurprising to readers who’ve been paying attention to the phenomenon: what distinguishes Hedges’ book is its explicit characterisation of the movement as fascist. Drawing on the writings of Hannah Arendt, Fritz Stern and various other philosophers and sociologists, he establishes a theoretical model of fascism and proceeds to show the ‘Christian dominionist’ program corresponds to it, point by point.

If you’re on his side, Hedges’ critique is very satisfying. In fact the vehemence of his invective is reminiscent of Hitchens, Dawkins and other anti-religious polemicists attracting attention at the moment. But whereas those authors are atheists, Hedges is in fact a Christian, and indeed his main motivation is outrage at the hijacking of Christianity by the dominionists, and their total distortion, as he sees it, of the belief system he grew up with — one which stresses reflection, respect, tolerance, peace and so on. These considerations led me to wonder to what extent Hedges has engaged with the atheists, and whether he would have sought an alliance with them against a common foe, or whether he would have given priority to defending religion itself against the atheist assault, and insisting on the difference between good and bad Christianity.

It’s the latter, it seems. A quick google turns up several articles and video debates, where Hedges is found accusing the atheists of not only mistaking the mutated Christianity for the real thing, but also of overlooking the indispensable role monotheism has played in the emergence of individualism, altruism, modern ethics, and the open society.

But now it seems Hedges has tired of having to defend his religion, and gone on the rampage against the atheists, in a new book entitled I Don’t Believe in Atheists. According to the Amazon blurb, the book argues that

The new atheists, led by Richard Dawkins, Christopher Hitchens and Sam Harris, do not make moral arguments about religion. Rather, they have created a new form of fundamentalism that attempts to permeate society with ideas about our own moral superiority and the omnipotence of human reason… (Continued)

A while back, I came upon Beth Noveck who is doing some interesting things in trying to bring the techniques and possibilities of Web 2.0 to government. For instance in addition to theorising at American law journal article length about ways of moving governments into the Web 2.0 era, she’s involved in an excellent endeavour to bring Web 2.0 resources to patent administration.

She runs the Cairns Blog. Why is it called this? She explains thus:

In the Sedona, Arizona Red Rocks, the dry, dusty, red, rocky terrain can be confusingly similar. I hiked up a mesa, forgetting to pay attention to where I ascended and my position relative to the horizon. An encounter with a wild coyote further distracted me from noticing the trail. Luckily, in the Western states, unlike what I’ve seen on East Coast trails, hikers make CAIRNS, or markers, to indicate the best path. By following these manmade stone mounds I found my way.

The Cairn represents democracy in action. Unknown climbers take the time to stop and mark trails Using the tools of stones and twigs. They create these monuments for the members of the community of hikers. Even though they do not know who will follow in their footsteps, they feel themselves to be part of something, enough to go to this extra effort. New hikers come along and add to the Cairn, collaborating to solve the problem of finding the right path. These rocks are the shared object through which the community of hikers maintains its dialogue. Eventually, Cairns become art as well as monuments. I have chosen the Cairn as a metaphor for the future of e-democracy, the subject matter of this blog.

Anyway, having corresponded with her briefly about the Lateral Economics view of regulation - that is the need for ‘bottom up’ responsiveness as well as ‘top down’ disciplines on over regulation and bad regulation - I came upon her effusing about Obama’s policies on technology, innovation and open government.  I was intrigued. . . . (Continued)

A while back I posted a brief endorsement of a Guy Rundle piece, which brought forth a reference to another essay by Rundle. I disagree - sometimes to the point of strong irritation with some of the things he says, especially in the last half of the piece, but I recommend it to all comers nevertheless.  What Rundle has to say is very interesting, as are the three books his review essay is about.

Here’s a nice passage:

Gray’s extended and devastating assault on the latest and possibly last stage of political religion in the current cycle: the virtual quadripartite symmetry of al-Qa’da’s “Islamo-Jacobinism”, American Christian fundamentalism, the transmogrified Trotskyism of neo-conservatism, and the smooth and lethal market evangelising of neo-liberalism.

They meet in the 9/11 years, in “my god is bigger than your god”; in 23-year-old interns running the Baghdad stock exchange; in Mark Steyn’s belief that Iraq would look like the American midwest in the space of 18 months; in the serial foolishness of Francis Fukuyama, a Saturday morning cartoon Hegel; in the immense suffering caused by the doctrinaire imposition of the Washington consensus; even in, especially in, the neo-atheists, such as Richard Dawkins or Christopher Hitchens, whose idea of a post-religious humanity is so shot through with monotheistic categories that it becomes a carrier of all the conceptions it seeks to oppose.

A nice mixture of on the money hits and unreasonable assertions - but I guess readers would disagree about what fits in what category.  The essay is fun to read in any event. And I’m afraid I couldn’t work out what this sentence meant.

To suggest that it would never be possible to separate religious from transformational processes and that Gray’s work might be a part of that process is, in the last analysis, an argument from precedent.

But it’s well worth a read.

What a wonderful guy. Might we all have such quiet modesty, magnanimity and achievement written on our face when we’re getting on a little.

Heartfelt congratulations to David Bussau on his long overdue recognition - he has just been made Senior Australian of the Year. He is a remarkable fellow who was a builder in 1974 when cyclone Tracey blew down Darwin. He decided to help out and hightailed it up there with his team to help rebuild the place. That led him a little further north to help out in Indonesia where he was one of the pioneers of micro-credit. Muhammad Yunus has got a lot of the credit for his own pioneering of micro-credit - including a Nobel Prize - but it’s not clear from a quick read of the Wikipedia entry on microfinance that he ‘outranks’ our own man in the pioneering of micro-credit stakes.

Anyway, again according to Wikipedia Opportunity International which Bussau co-founded “now serves over one million clients annually and expects to be serving 2 million by 2010, and 12 million by 2015.”

Kind of surprising that he didn’t crack the big one of Australian of the Year rather than the lesser Senior Australian of the year. Even more surprising that he’s got an AM for his services, about as low a ranking honour as you can get - lower at least than an AO or an AC. Perhaps I should have said ‘unfortunate’ rather than ’surprising’. I guess he might have climbed a bit further up the ladder if he’d bankrolled winning the America’s Cup and ripped a few billion off his fellow citizens in the process.

(The guy doesn’t even have a stub on Wikipedia for goodness’ sake!)

Anyway Mr Bussau, I for one am in awe of your achievement and it’s wonderful it’s received a little more recognition.