Gary Marcus, author of Kluge(amzn/b&n/abe/pwll) (a book I recommend), has an opinion piece in the Wall Street Journal that makes an important point: evolution does not produce rational, perfect, finely-tuned beings. It makes organisms that are good enough. Keep this in mind when looking at anything biological (like, say, an appendix), and it’s also true in economics, as Marcus points out — assuming that human beings will tend to make rational choices will lead to being fooled much of the time.
Pharyngula
Evolution, development, and random biological ejaculations from a godless liberal
Not perfect?! Does that mean we’re unintelligently designed?
This clown is a prime example.
Don’t forget to listen to The Carnival of the Animals, by Saint-Saens, for Darwin commemorations! It even has the one section titled “Fossils.”
You mean religious morons? Evolution had nothing to do with their reason. That was untuned by themselves and evolution has borne the brunt of that mistake.
That is obviously true. Why then, do we assume “government” makes rational choices?
What, for example, is spending and borrowiung when the basic problem is spending and borrowing? Rational???
Hardly.
Rev.BigDumbChimp @ 2
I like to think the only example.
I’m just impressed that Marcus spelled ‘kluge’ correctly.
Social animals are especially likely to sacrifice reason for consensus. It’s a benefits trade-off.
Scott from Oregon @ 5.
fastest Libertarian thread hi-jack evah!
You, sir, are a loon!
“evolution does not produce rational, perfect, finely-tuned beings”
I use this observation very often to argue why science education is important. Scientific, even rational, thought is not an ability we’re born with; we need to be trained to do it, and it is a relatively ‘unnatural’ process.
A statement which I often make is related to this observation: “If you’re trying to understand what person XXX was thinking when they made decision YYY, you’ve already made one assumption too many.”
That’s simply the Dilbert principle in action. Scott Adams may suffer from an overdose of woo, but he is dead-on with his assessment that even intelligent people do stupid things. Any policy based on perfect rationalism is doomed to failure.
Human nature FTW!
Speak for yourself. It’s entirely natural to some few individuals. Whereas the majority of others apparently have to be educated into recognising it even exists as an occasional possibility, let alone as something which ought to be habitually employed.
WTF Scott. Can you not make every fucking thread you appear in about your fucking libertarian wet dreams?
It’s fucking BOOOOOOORING
I’m not sure I get the point of the article other than an observation. Everyone knows we can expect booms and busts. Its just that busts this large may not be necessary. Is he talking choices of the recent past being non-optimal or choices of the present being non-optimal? Both?
I remember seeing some show (I can’t remember which) on Discovery or the like that stated that “optimal” or perfectly adapted to ones environment isn’t neccessarily a good thing. They gave the example of Homo Something, which was perfectly adapted to the climate and ecology at the time, but was unable to adapt to any changes in that environment, and thus went extinct.
Is this still thought to be the case?
Yes I said fucking three time.
I don’t fucking care.
Here’s what a surgeon (who happens to be me) said about the appendix and evolution.
I would make a small argument against the “you are not optimal” claim.
Specifically, in the very noisy environment that we live in, being good enough may very well be optimal. Over-optimization to a specific environment is a bad thing when the environment is likely to change. Optimizations likely to have a small fitness benefit, such as a slightly better spine, have taken a back seat to optimizations that matter, such as a slightly better brain.
The distance between our current state and an ‘optimal’ one are not indicative of our suboptimal nature, but rather are indicative of how poorly we define optimality.
I agree completely with Marcus about the misinterpretation of “Survival of the Fittest”. I’ve been using the phrase “Survival of the Barely Adequete” for years now when explaining why evolution doesn’t result in perfection.
Libertarians, if you want to post about economics and politics, please do so over at Walton’s blog. You are not welcome here on those topics, as we are tired of them.
Why does he misspell “kludge”? “Kluge” is German for ‘clever’. I don’t think that’s what he means.
intelligent design is to biology what __________ is to economics.
Rational Expectations is a big part of the Chicago school of economics who claim government intervention is ultimately impossible because rational actors will see any intervention as expected and will respond/have already responded in a way that will cancel out the intervention. The flip side being if the opposite of the expected intervention is carried out it will be ass-backwards policy to begin with (like raising Fed rates during a recession.)
Economist Bryan Caplan challenges the assertion that actors make rational decisions in his book “The Myth of the Rational Voter” (highly recommended.)
But assuming irrationality in economic actors is actually very very far from consensus.
Matt @ No. 21, the answer is either:
1. “What **economics** is to economics”; or, better yet,
2. “What **the invisible hand** is to economics.”
Adam Smith’s “invisible hand” is clearly a byproduct of Enlightenment Deism and the “clockwork universe” with the Deist Creator who winds up the clock then lets it run on its own. That clock-winding hand is now invisible but is the ultimate cause, per Deism.
Of course, the rationality, and even more, the optimism, of Deism, has been shattered by the French Revolution, two World Wars, nuclear weapons, the Holocaust, etc.
Why alleged liberals (like Just.Another.Politican. now in the White House) still sign off on “the market” is ridiculous.
Predictably Irrational by Dan Ariely is another good look at how we think.
We think we are rational, but when the bus is headed towards your kid, your reason for jumping out to save her is not “I must protect my genetic material.”
Aaron:
Heinlein boiled that down to, “Specialization is for insects,” didn’t he?
The answer to non-optimality is that the designer may not have needed or wished for optimality.
You know, that’s why it left it all to non-telic evolution.
Is there any other reasonable cause for things to be non-optimal in precisely the manner expected from unintelligent evolution?
Glen D
http://tinyurl.com/6mb592
@Glen Davidson: Well, hypothetically, a dickhead of deity that wants to fuck with and confuse us. I’m always surprised by how many fundies actually believe in that.
I shouldve phrased it thus: belief in intelligent design is to biology what belief in _________ is to economics.
@Matt Heath:
Or that all the faults in the universe exist so that we can rise above them and show how good and holy we are. That’s the entire lesson from the book of Job.
Reminds me of that proof that this universe is the best of all possible.
Boring? I’d say woeful, myself.
As with human nature, as with the markets. There are those (lusers) who try to act rationally and those who see that as a system to be gamed. It only works if they keep pushing the dogma and the lusers keep lapping it up.
Oops! I may have broken the first rule of market fight club.
Ahh.. Kluge…
Toss in the last three books by a certain Mr. Pinker, R. Wisemans “Quirkology” and David J Lindens “The Accidental Mind” and hey, presto, you’ve got an easy to understand explanation of a heap of spychological, evolutionary and other really interresting stuff.
Great artickle too. Got to love a rational, although klugey, mind :)
“It only works if they keep pushing the dogma and the lusers keep lapping it up.”
I’ve heard it said that the market behaves like tinkerbell. If we clap our hands and believe, it’ll be fine.
Also, I second the quoter of Heinlein.
Adaptability is optimal. There are some species so far down their evolutionary niche it’d take a planetary catastrophe to get out of it. And thanks to evolution, some of them would.
Heinlein also had a method to deal with the banking crisis that’d make sfo drown in his own froth.
“Why are we subject to irrational beliefs, inaccurate memories, even war? We can thank evolution” – Marcus
Then isn’t condemning people for having irrational beliefs sort of like shaking your fist at the sky for not being blue enough?
I’ve never gotten around to reading Heinlein, but I’m sure many others have made my point better than I just did.
I do cognitive science work, so my motivation in entering the discussion was that rationality has gained ground in recent years in explaining behavior. Historically, our understanding of the mind was that it was a mess, full of systems that were good enough and just worked. More recent work in the last decade or two suggest that some systems do appear to behave rationally, i.e. in a Bayesian information sense, but they are not optimizing what you might naively assume they would.
You might make an analogous argument for economics, in that people do behave rationally, but they are not the simple (stupid) little systems that economists model them as.
Matt @28: My comment about “the invisible hand” still stands.
“What **the invisible hand** is to economics.”
Adam Smith’s “invisible hand” is clearly a byproduct of Enlightenment Deism and the “clockwork universe” with the Deist Creator who winds up the clock then lets it run on its own. That clock-winding hand is now invisible but is the ultimate cause, per Deism.
Of course, the rationality, and even more, the optimism, of Deism, has been shattered by the French Revolution, two World Wars, nuclear weapons, the Holocaust, etc.
Why alleged liberals (like Just.Another.Politican. now in the White House) still sign off on “the market” is ridiculous.
I’m not quite sure why Marcus acknowledges that “survival of the fittest” is not a Darwinian phrase or concept, and then goes on to write an entire article defending its use in that context.
Economics is a belief.
SocraticGadfly,
“Why alleged liberals (like Just.Another.Politican. now in the White House) still sign off on “the market” is ridiculous.”
Profound, can you be more specific than “ridiculous”? Are you proposing setting prices by fiat, and supply by 5 year plans. That has been tried, and demand still responded to even these prices, although part of the “price” became time spent in queues. Markets are an emergent phenomenon of human civilation, and far predate Adam Smith, although they may not predate agriculture.
#13: The point of the article is that people don’t always act rationally, either for their own best interests or for the best interests of society and their offspring.
I know. This would seem to be obvious. But unfortunately, a guiding principle in economics for some time has been that people DO always act rationally and optimally, and that, in a free market, everyone will behave in the smartest way possible. The point of the article (well, one of them) is that this is a patently stupid guiding principle, and one that is at least partly responsible for the current economic mess.
And another voice for the book “Kluge.” One of the best arguments around for evolution and against intelligent design. And a fun read.
From Marcus’s article:
It gets even worse when we consider that many if not most people have insufficient information to rationally assess costs and benefits. We’re bombarded with misinformation or useless information. (If you’re buying a car, should the available colors be a major consideration about the make and model you should choose?)
RMB @14: It’s not so much about being “optimally adapted” to a given environment. It seems you’re thinking about ecological specialists vs. generalists. For example: Koalas eat nothing but Eucalyptus leaves, thus, they are highly specialized. If for some reason Eucalyptus trees became scarce or disappeared entirely, Koalas would have to adapt to eating different foods, or they would follow the Eucalyptus to extinction. Generalists that eat a wide variety of foods, however, are more likely to survive through changes in their environment. Being “fit” in the short run, though, isn’t dependent on being either a specialist or a generalist. Fitness only acts in the present, and cannot design organisms to be generalists so that they are better prepared to deal with environmental changes. Koalas evolved in an environment with lots of Eucalyptus, so the fact that they eat nothing else is currently a “fit” trait.
Arrow Quivershaft @18: I think “survival of the fittest” is still an appropriate concept. You just have to remember that “fittest” is referring to the best of all current options, not some sort of idealized “optimum”.
Tis Himself,
“It gets even worse when we consider that many if not most people have insufficient information to rationally assess costs and benefits.”
But at least information costs are factored into economic theory. Even the “rational” assumption doesn’t damage economic theory too much, since models of decision making agents are usually encapsulate the rational with unknown subjective values.
Pharynguloids have in a number of posts been discussing the need for an anti-ayn rand. Heinlein’s posthumously published For Us, The Living (written in late 30s and ‘lost’) may be as direct a response as there’ll be.
That is exactly the sort of god the bible describes. You shouldn’t be surprised when those with the most literalist interpretations of the bible believe in that sort of god.
“What **the invisible hand** is to economics.”
I agree with you about the silly complete faith of conservatives and libertarians that all good things and only good things come from market economics, but if if you think that’s what Smith meant, or that he was saying the invisible hand winds up or controls or steers the market in any way, or that it has anything whatsoever to do with a Deist mindset, then you understand it even less than a mouthfoaming wingnut.
All Smith said was that individuals acting completely in their own self interest can collectively cause emergent beneficial consequences for society that nobody planned or forsaw at all so it would appear to an outside observer as if some “invisible hand” had guided society to the result. The only problem with the idea is that too many people ignore the fact that the emergent consequences can just as easily be harmful. The invisible hand brought us global warming and bank collapses too.
Africangenesis,
Information costs and benefits are part of economics. But the costs are often ignored and the benefits overrated. Let’s take a real life example (I know, libertarians don’t like real life examples, but play along just this once).
Microsoft Windows XP is not the optimal operating system. It’s bloated, it’s buggy, it’s a memory hog, it has many security issues. However, it’s got a 90% market share and is the industry standard for a PC OS. The main reason is inertia. Previous editions of Windows were “industry standards” back to the original Windows 1.0 released in 1985. That’s because Bill Gates talked IBM into making Windows the front end of the PC-DOS system.
If you talk to most computer techies, they’ll give you examples of why Windows is not a good system and why (Linux, Apple, whatever) are much better OSs. Doesn’t make a difference. Windows is in place and there’s nothing anybody can apparently do to change that.
SeanH,
The “invisible hand” didn’t produce the Government Sponsored Enterprises, it just gave us the consequences of their independence from market discipline. The Republicans sought to regulate or privatise them. They saw the risks. The pyramid of leverage that made the economy an unstable house of cards was a consquence of the way the government chose to create its fiat money.
AG, time to go to Walton’s blog. Keep in mind PZ’s warnings.
Tis’Himself,
I agree that windows requires some special treatment to explain, it is a “standard” that is proprietarily owned. Standards do have compensating benefits, such as having a familiar interface that you don’t have to relearn, broad industry support, and more features such as extensive plug and play configuration. Perhaps the costs of switching can be incorporated as a high transaction cost. Linux is approaching the functionality that can capture more of the market and Apple probably always could have if they had been willing to lower prices. The market chose vhs over beta and a cartel has chosen blue ray over hdvd. People do value familiarity in a way that can be irrational, simple brand loyalty can be an example. But economic theory has and is evolving, much like evolutionary theory to incorporate these complexities.
Seriously, PZ – can you just create one new thread every day just on economics that’ll keep the Libertarians away from the rest of us? Hundreds of posts a day on the alleged superiority of their blah blah wacky utopian cult in threads completely unrelated to money, government, economics or fantasy worlds is just getting tedious.
ditto Wowbagger. Their pony only does the one lame trick.
Nerd of Redhead’OM#50,
Buzz off. Economic theory is as mainstream as it gets, and market explanations are supported by centrist republicans and democrats.
Wowbagger,
Are you being facetious? In case you didn’t notice this is an economics thread, read the article.
Scott de B @20: Actually he didn’t misspell kluge.
I quote from the Jargon File:
Not tedious,but extremely annoying.
Wowbagger @52:
Or, even better – ask the Libertarian cultists move to Somalia then report back on how well that Libertarian utopia is working out. Until then they can keep quiet about how well it would work if only everyone would do exactly as they need them to do. Which sort of puts them into the realm of Christianity with its 30,000+ varieties. How many Libertarians are there, anyway? They’ll need that many variations on their theme. Barring a move to Somalia they can all move to the Republic of Minerva. If they have a little spare time they could oh, I don’t know, try going out on a date, if they can get one to last more than 10 seconds after they open their mouths.
Frankly, I’m confused as to how they reproduce. Is it by budding? Spores?
WRMartin,
Somalia is a left anarchism haven, and remember we aren’t going to discuss the L word here.
This is an economics/evolution thread, do you have any knowledge in this area or are you just emoting?
Only a Libertarian could look at Somalia and describe it as a “left anarchist haven”. Keep it up, africangenesis, the more you say the more we see you for what you are.
I thought Somalia was a Libertarian training ground. Free Markets baby!
One of the popular “sophisticated” arguments for the existence of God (I think Plantinga uses it) is one that is supposed to attack a godless evolution (I suppose it could work with theistic evolution.) This argument says that, if naturalistic evolution were true — and this is where we got the ability to reason — then there really is no reason to believe that our cognitive faculties are reliable instruments of attaining objective truths about the world. They’d only have to be good enough for survival, and who knows where that could lead us?
“Naturalistic evolution cannot adequately account for why our cognitive faculties give us truth (e.g. as opposed to mere consistency), and this lends support to a type of a teleological or design argument for theism based on the reliability of our cognitive falculties.”
And yet, as Marcus and others point out, evolution not only grants that we are not perfect little truth machines, but explains why we are not perfect little truth machines. We do not get “objective truths about the world.” We get subjective ones — and sometimes they’re wrong.
Facilis uses this argument, by the way. Part of the way to dismantle it is to do so scientifically, and use our understanding of evolution.
It’s both funny and creepy to watch Walton and Africangenocide pretend that being able to recite chapter and verse of Sound Libertarian Doctrine(TM) is somehow equivalent to understanding economics.
“Somalia is a left anarchism haven, and remember we aren’t going to discuss the L word here.”
Libertarianism IS anarchism. It’s just in disguise.
Somalia has unregulated markets, easy accessibility to weapons up to and including heavy machine guns and RPGs, lots of drugs, and no government. How can anyone say it’s not the libertarian paradise?
This is why I made my comment about how libertarians don’t like real world examples. Governments disappear in Somalia and instead of the paradise on Earth that the libertarians swear will happen, there’s a nasty, brutal oligarchy run by robber barons and war lords. Libertarian Utopia.
Africangenesis:
What the bloody hell are you smoking?
Maybe your left is different from my left.
And no, I’m not emoting. Hoping to hear some good news from you after you arrive in Somalia, mostly.
Tis Himself,
Why are you so keen to disown Somalia? Is it an example of why anarchism won’t work? Is there a country in the world that doesn’t have unregulated markets? The black markets for drugs are everywhere. Even left anarchism will have markets unless they have something nefarious planned.
On second thought, I think Singapore does not have an unregulated market. Hmmm.
“Is there a country in the world that doesn’t have unregulated markets?”
Every developed nation on Earth. Thanks for coming out.
WR Martin#66,
“And no, I’m not emoting. Hoping to hear some good news from you after you arrive in Somalia, mostly.”
I will try to bring some with me, where will you be staying?
Somalia, where they murder 13 year old rape victims in the name of god, is not an L word paradise. That is the most ignorant and uninformed thing I’ve heard in a long time. To call it anything other than a terrorist paradise is wrong. The Islamists are the only ones who like what is going on in that territory. None of you are living in the real world. Put that flame to the straw man, why don’t you.
Wrong, it’s the Libertarian Paradise! There’s no government. That’s what all libertarians tell us is the only thing keeping Man from achieving Heaven on Earth. Or are you telling us that all those Libertarians are just talking out of their asses?
I’m not an anarchist. I’m a moderate liberal. I’m actually a fan of capitalism.
As several of us keep saying, Somalia is Libertopia! There’s no government to regulate markets. No “men with guns” to keep people from smoking dope and being as heavily armed as they want.
Or are you trying to say that perhaps the misnamed “anarcho-capitalist libertarianism” is really a crock of shit when exposed to the light of day?
Tis Himself, You are speaking of anarchism again. The nirvana that comes when the state fades away. But is the modern human “optimal” enough for that heaven on earth. Or will anarchists have to complete his “evolution” in a blood bath. You still haven’t discussed whether anarchism requires the “blank slate”. Perhaps modern humans would be a little closer to the blank slate if they were more rational. But would a rational human choose anarchy?
Interesting…
The very notion that humans don’t consistently make rational choices applied to government is suddenly “libertarian”???
WTF?
Is it that non-humans run government in the minds of many of y’all?
My premise has nothing to do with “libertarianism”.
“”There are no consistently rational humans, therefore there are no consistently rational humans in government, therefore giving government too much power to fuck up is an irrational option.””
GW Bush should have taught all of y’all that.
But I guess y’all are too busy fighting those damn libertarians to examine your own logic…
So you admit that libertarians aren’t rational. It’s the first step to recovery.
Tis Himself,
Humans can be rational and still become more rational. But if left anarchists can not convince the rationals, will they have to kill them? Will there be a blood bath?
We think we are rational, but when the bus is headed towards your kid, your reason for jumping out to save her is not “I must protect my genetic material.”
Then what is it? In fact, the reason that we jump out is that evolution built us in such a way as to have behavioral mechanisms and processes that lead us to favor the propagation of our genes (which may be located in our close kin, not just ourselves). We ourselves don’t have “reasons” in such emergencies — that cognitive module isn’t activated.
As for “rational”, what is that? The rationality of behavior can be judged by its effectiveness in achieving a goal, but goals themselves are neither rational nor irrational.
WTF? We’re not discussing left-anarchy. We’re discussing the libertarian paradise called Somalia. That’s where there’s no government to:
* stop libertarians from having all the guns they want and all the different types of guns they want, like libertarians claim they want;
* stop libertarians from using drugs, like libertarians claim they want;
* stop libertarians from making their own money, like libertarians claim they want;
* stop libertarians from having whatever medical procedures and remedies possible; like libertarians claim they want;
* etc., etc., etc.
Somalia is the libertarian paradise. Just because it’s a nasty, might-makes-right, perpetual turf-battle between rival gangs and warlords is no reason for libertarians not to accept it as their own.
Even anarchists like social structures. Libertarians are the ones claiming that social structures are evil and must be done away with. Haven’t you read Hayek’s Road to Serfdom?
Why then, do we assume “government” makes rational choices?
We don’t.
What, for example, is spending and borrowiung when the basic problem is spending and borrowing?
It is incoherent babbling.
“”There are no consistently rational humans, therefore there are no consistently rational humans in government, therefore giving government too much power to fuck up is an irrational option.””
Or perhaps giving government too little power to prevent irrational humans from fucking us up is an irrational option.
Sticking a lot of “therefore’s” into an argument doesn’t make it valid.
But I guess y’all are too busy fighting those damn libertarians to examine your own logic…
It’s your logic, I just examined it, and it’s faulty.
How literalistic are you? The problem with Spock was that he really had no basic emotional valuations from which to begin his rational thoughts.
Of course we’re not completely rational, we try to be rational within a good many factors which give us cause to use rationality to intelligently effect our paths toward instincts, goals, desires, and loves.
We don’t tell our loves that we are “rationally committed” to them or any such thing, because that’s a meaningless statement. We say that we love them, and at best, we do.
Only if rationality and love were incompatible (sure, at times they probably can be, but usually are not) would we be wrong to say that we are rational–if we generally are. Many of us understand that to be rational implies that we logically work from non-rational desires to ends that are not rationally derived, only rationally configured.
Glen D
http://tinyurl.com/6mb592
Just to be contrary, I’ll comment on the original post instead of the ongoing economic rambling:
This all sounds oddly familiar, coming from a compSci/informatics education.
There’s a number of optimization algorithms. You’d typically use one when there’s a large number of possible variations over something, no way to calculate the optimal solution in practical time, and you have a function that can be used to judge how fit (as it is indeed called) a given variation is.
The simplest algorithms are “greedy”: Try changing something, and if that led to a higher fitness value, keep that change. Repeat until fitness stays constant.
This has one problem, though – and it’s excellently put in the linked article:
And of course, few problems are Fuji-like, even in informatics. The general way to combat this problem is to add some form of (more or less) random noise, so there’s a chance of randomly leaving that local optimum and ending up on the slopes to a better one. It shouldn’t be a surprise that this can be referred to as mutations. :)
I don’t really have a point, I just like how well biological concepts work for describing this. (Genetic algorithms take this a few steps further. They’re great fun.)
“”Or perhaps giving government too little power to prevent irrational humans from fucking us up is an irrational option.
Sticking a lot of “therefore’s” into an argument doesn’t make it valid.
But I guess y’all are too busy fighting those damn libertarians to examine your own logic…
It’s your logic, I just examined it, and it’s faulty.””
Actually, neither are faulty. But at least I can see that.
Glen Davidson @ #82:
>The problem with Spock was that he really had no basic emotional valuations from which to begin his rational thoughts.
To be very precise and pedantic, the problem with Spock as described is that if you take him at his word, his ideal is to have no emotional valuations from which to begin his rational thoughts.
The reality is that Spock, like all people who claim to espouse a philosophy, what he states to be his ideal is nothing like the ideal itself.
Actually, neither are faulty. But at least I can see that.
I just showed that it’s faulty — your conclusion is arbitrary and ad loc, not a matter of logical necessity; your use of “therefore” is invalid. Apparently you’re completely blind to that. You’ve now shown (again) how extensively faulty your cognitive processes are.
The reality is that Spock, like all people who claim to espouse a philosophy, what he states to be his ideal is nothing like the ideal itself.
The reality is that Spock isn’t a person, he’s a fictional character — a construction that reflects misunderstandings about logic and emotion.
I was listening to an interview with Jonah Lehrer, editor at large for “Seed” magazine; who has a new book out “how we decide”
I am not pushing the book just citing sources.
well from his survey research it turns out that we can not and do not make decisions with out the use of emotions people who for some reason have no emotions will suffer from indecision.
seems to me that we fail to acknowledge just how much emotion does play in deciding. It is no where more clear than in the areas of politics and economics.
Great theories are formulated that are touted as rational and the true way things work and will lead to some great age that are bent by emotional attachments and resentments. Clouded by self serving interpretation of facts and history which fail when tried but are of course never really tried which is of course denial. I could go on and really get boring and name the said theories but I think I wont just now.
I think some times I should
change my name to Marvin
As far as I can tell, his “left” is slightly to the right of center.
I have to say, I agree and I disagree. I think we are optimal, but optimal and perfect are not the same thing. Optimisation is about balance, and sometimes imperfection is necessary to achieve optimisation.
As an analogy, I once saw a modeller demonstrating pathfinding in ants. Ants have a very good way of following the trail lead down by other ants in order to find their way to and from the nest. This tendency is not perfect – sometimes ants will stray. However, the interesting thing from a modellers point of view is that if you make an ant which can perfectly find it’s way, new paths are never found and the system in fact becomes completely inefficient. In order for ants to behave optimally, there is actually a requirement that they also be imperfect.
And lets not forget that without imperfections and deviations there can be no evolution. If you stop thinking of a species as a static group but as a constantly changing mass, having a certain degree of mutability is also a form of optimisation.
@Confused: The definitions of “optimal” and “perfect” you seem to be using don’t stand up to much scrutiny. Saying an ant would be perfect if it followed a particular tendency of it’s behaviour consistently. But that was totally arbitrary choice. I suspect it wouldn’t be possible to come up with a really useful defintion of “perfect” in this sort of setting.
“Optimal” does have a useful definition here. Something like “no hypothetical creature could out-perform us in our niche”. And that is obviously untrue for the reasons Marcus discusses.
Matt #28:
First in social science, nothing is ever as well documented as evolution, so noone, no matter how crazy, is as crazy as intelligent design.
However the best analogy is “belief in intelligent design in biology is belief in the utility maximization in economics”. Very few economist actually believe this, however rational actors are often assumed because it makes modelling easy. The core of the concept is however very weak, not because it is empirically untrue, but because (as with the supposed intelligent designer) it is non-falsifiable and can “explain” any set of facts.
The statement “actors always maximize their utility” sounds like it makes a strong falsifiable statement, but the problem arises that utility is not defined. Since “utility” is unobservable directly it can only be discerned from action, but any set of actions, no matter how crazy, can be said to maximize something.
If I cut off my hands because I state that I think that ants are crawling in them, this may be utility maximazition. I might have a preference for painting pictures with bloody stumps or, since preference are by nature subjective, I might be said to minimize the harm the imaginary ants are doing to my hands.
If you want a simpler one “belief in Intelligent design is to biology, what belief in the wonders of the gold standart is in economics”.
Note to the liberatarians: You can still make the case that markets are the best way to organize human society without assuming rational actors. Hayek and decentralized knowledge and so forth.
‘Tis Himself> “As several of us keep saying, Somalia is Libertopia!”
So then what the hell is wrong with those “several of you”? Somalia and libertarianism don’t even belong in the same sentence, unless you’re doing a contrast. You are shooting at the wrong damn target. You must be one of those immoral, baby-eating atheists. Oh wait, that’s a mistaken belief that the fundies have about atheists. Much like, apparently, your mistaken belief about libertarians. You keep ranting about libertarians wanting “no government”. That’s not true. There is a role for good government and it has to do with protecting the rights of individual citizens. That is not happening in Somalia, ergo Somalia is not some sort of libertarian paradise. Your arguments fail. Big time. If libertarians actually believed what you claim for them, I wouldn’t blame you for being so bombastic but since you’ve created that proverbial straw man, your arguments are hollow (but loud and annoying). I still can’t figure out why a bunch of the liberals here are so down on libertarians. A libertarian government would protect your right to be as liberal as you want to be. Something a Republican government would not allow, witness the direction of the last 8 years.
Basically though, it appears as if some here confused libertarianism with anarchy and it’s been all down hill since then. Personally I’d rather post about biology and atheism but after having my politics inaccurately trashed thread after thread I have to take a stab at righting things.
Tomas#92,
“You can still make the case that markets are the best way to organize human society without assuming rational actors. Hayek and decentralized knowledge and so forth.”
Yes, I already had up above:
“Even the “rational” assumption doesn’t damage economic theory too much, since models of decision making agents are usually encapsulate the rational with unknown subjective values.”
and elsewhere, when discussing local satisficing of individual actors vs central planning.
Die Anyway,
I’m just repeating what the looneytarians keep telling us. “Gummint is ebil!!!1@!!eleventy-one!!1! We gots ta get rid o’gummint ’cause it be coersive. Men with guns will grab all our money and give it to the undeservin’ (that’s anyone but US!)”
Here’s an example of a libertarian explaining about the terrors of government:
I wasn’t aware that there was any “permanent form of government”. However, we could make a pretty good case that voters in the US have always known that they could vote themselves benefits from the Public Treasury. Indeed, it’s been done pretty often. Yet we’ve lasted 200+ years.
It’s because we’re sane, rational, and have an understanding of both politics and economics. Unlike looneytarians.
One problem with discussing looneytarians fantasies and delusions is that there’s many types of looneytarianism. This diversity of looneytarian viewpoints can make it quite difficult to have a coherent discussion with these wackos, because an argument that is valid for or against one type of looneytarianism may not apply to other types. Non-looneytarians like me may feel that we have rebutted some looneytarian point, but some other flavor looneytarian may feel that his “one true libertarianism” doesn’t have that flaw.
So you don’t accept Somalia as being the looneytarian utopia. So fucking what? You looneytarians whine about the big, bad government. Somalia is a place without a big, bad government. That means that it’s the prime proving ground for your anti-government pipe dreams. We see how well your dreams work in reality by looking at Somalia. If you don’t like looking at reality, that’s your problem, not mine.
the answer to my analogy, to Tomas and others, is of course, Command economy or Communism or economics by design. Socialism works here to a lesser degree.
Evolutionists accept spontaneous order in biology, why not economics?
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” — F. Hayek
Ya heard.
Yes, but “evolutionists” also accept modern medicine and other “interventions” into the natural process. Evolution does not produce optimal designs, and evolution itself can come at a huge cost for the individual participants. Ditto unrestrained capitalism.
There are many varieties of libertarianism, from natural-law libertarianism (the least crazy) to anarcho-capitalism (the most), and some varieties avoid some of the criticisms below. But many are still subject to most of them. Since because 95% of the libertarianism one encounters at cocktail parties, on editorial pages, and on the internet is a kind of commonplace “street” libertarianism, I decline to allow libertarians the sophistical trick of using a vulgar libertarianism to agitate for what they want by defending a refined version of their doctrine when challenged philosophically. We’ve seen Marxists pull that before.
This is no surprise, as libertarianism is basically the Marxism of the Right. If Marxism is the delusion that one can run society purely on collectivism, then libertarianism is the mirror-image delusion that one can run it purely on individualism. Society in fact requires both individualism and collectivism to function. Like Marxism, libertarianism offers the fraudulent intellectual security of a complete a priori account of the political good without the effort of empirical investigation. Like Marxism, it aspires, overtly or covertly, to reduce social life to economics. And like Marxism, it has its historical myths and a genius for making its followers feel like an elect unbound by the moral rules of their society.
The most fundamental problem with libertarianism is very simple: freedom, though a good thing, is simply not the only good thing in life. Simple physical security, which even a prisoner can possess, is not freedom, but one cannot live without it. Prosperity is connected to freedom, in that it makes us free to consume, but it is not the same thing, in that one can be rich but as unfree as a Victorian tycoon’s wife. A family is in fact one of the least free things imaginable, as the emotional satisfactions of it derive from relations that we are either born into without choice or, once they are chosen, entail obligations that we cannot walk away from with ease or justice. But security, prosperity, and family are in fact the bulk of happiness for most real people and the principal issues that concern governments.
Libertarians try to get around this fact that freedom is not the only good thing by trying to reduce all other goods to it through the concept of choice, claiming that everything that is good is so because we choose to partake of it. Therefore freedom, by giving us choice, supposedly embraces all other goods. But this violates common sense by denying that anything is good by nature, independently of whether we choose it. Nourishing foods are good for us by nature, not because we choose to eat them. Taken to its logical conclusion, the reduction of the good to the freely chosen means there are no inherently good or bad choices at all, but that a man who chose to spend his life watching television has lived as worthy a life as a Lincoln or Darwin.
Furthermore, the reduction of all goods to individual choices presupposes that all goods are individual. But some, like national security, clean air, or a healthy culture, are inherently collective. It may be possible to privatize some, but only some, and the efforts can be comically inefficient. Do you really want to trace every pollutant in the air back to the factory that emitted it and sue?
Libertarians rightly concede that one’s freedom must end at the point at which it starts to impinge upon another person’s, but they radically underestimate how easily this happens. So even if the libertarian principle of “an it harm none, do as thou wilt,” is true, it does not license the behavior libertarians claim. Consider pornography: libertarians say it should be permitted because if someone doesn’t like it, he can choose not to view it. But what he can’t do is choose not to live in a culture that has been vulgarized by it.
Empirically, most people don’t actually want absolute freedom, which is why democracies don’t elect libertarian governments. Irony of ironies, people don’t choose absolute freedom. But this refutes libertarianism by its own premise, as libertarianism defines the good as the freely chosen, yet people do not choose it. Paradoxically, people exercise their freedom not to be libertarians.
The political corollary of this is that since no electorate will support libertarianism, a libertarian government could never be achieved democratically but would have to be imposed by some kind of authoritarian state, which rather puts the lie to libertarians’ claim that under any other philosophy, busybodies who claim to know what’s best for other people impose their values on the rest of us. Libertarianism itself is based on the conviction that it is the one true political philosophy and all others are false. It entails imposing a certain kind of society, with all its attendant pluses and minuses, which the inhabitants thereof will not be free to opt out of except by leaving.
Tulse,
Compare and contrast unrestrained capitalism with unrestrained government. We’ve seen the latter, few are even proposing the former. We have seen what wealth and surplus can sustain, research and development, the arts, environmental concern, high levels of medical and other benefits.
Unrestrained government seems more apt to spontaneously occur, while restraints on capitalism must be removed.
Only a libertarian would think that these are the only options.
Damn, AG, thanks for proving that I know more about looneytarianism than you do. Tell me, you ever heard of anarcho-capitalists? The thought of unrestrained capitalism makes anarcho-capitalists cream in their jeans.
I never thought I’d say this but after perusing all the threads today, Totalitarian Communism seems appealing…
I’m sure it will pass.
The invisible hand rational utility maximization model of an economy is a very nice elegant bit of mathematics. It can be stated in various forms. Typically it consists of consumers whose goal is to maximize their utilities and producers whose goal is to maximize their profits. One proves, under mildly reasonable assumptions, that not only can all these goals be simultaneously met, the result is “efficient”, in that no potential improvements are left over.
The problem comes from the many who overinterpret the model. The basic model is not dynamic, it does not have increasing returns to scale, it does not consider monopoly and oligopoly, markets do not always clear. Those who pass off laissez-faire as mathematically proven are, quite simply, con artists. But those who think these models are rotten to the core are also badly mistaken. They really do account for many important features of our economies today.
Friedman pointed out long ago, correctly I believe, that the details here are frequently irrelevant. Of course it’s absolutely impossible for producers to actually do the stupendous calculations implicit in maximizing their profits, let alone measure or even identify the relevant inputs the calculations would need. What would happen, though, is that companies that correctly identified what consumers want, even if mostly by luck, would flourish, and the others would die. And the relevant prices and quantities end up just where the rational model predicts. And how on earth can one say a consumer’s utility is wrong? They buy what they like, and you can retroactively identify the maximization problems they solved.
Indeed, one can find paeans to the death of Homo economicus, something that has been announced regularly since at least the 30s. The latest round comes from the behavioralists. But while their work is interesting, it’s not clear how much it really matters. Refined real-world experiments reveal, for example, that the real story seems to be that experts behave close to rational, and it’s the newbies who act wildly irrational.
Any minimally talented economist can write down a dozen or more things wrong with existing models. The challenge is to find some way to say something, amenable to analysis, that gives something better, or at least new. Almost all postwar research since has identified refinements to what the standard models predict, not revolutions. About the only exception has been the “rational expectations” revolution (implying government monetary policy is ultimately toothless) and its later “unrevolution” (hahaha, you almost fooled us).
But ignore all this, I’m just annoyed at the cluelessness I’ve been seeing here.
What economists do quite frequently is show just how far the repercussions of rational self-interest can be. Mob behavior is often insane, but over and over again, it turns out that each member of the mob is indeed acting in his own best interest. People are often forced to play a society-wide prisoner’s dilemma game, and mass defection is sometimes the only intelligent thing to do. The invisible hand, so often successful, can turn quite deadly and strangle its owner.
See, for example, Sunstein and Thaler Nudge, where they present numerous examples of how the free market isn’t quite right, and they recommend minimalist government intervention that encourages a not-quite-free market to get closer to doing the right thing, as opposed to the obvious stomping in and artificially trying to make everything right.
A drink or two may help. Maybe I should call home and have the Redhead start chilling an AB.
William e Emba,
“About the only exception has been the “rational expectations” revolution (implying government monetary policy is ultimately toothless) and its later “unrevolution” (hahaha, you almost fooled us).”
It is pretty toothless, when they have to convince the banks to lend into a recession and consumers worrying about layoffs to borrow. It has been likened to pushing on a string. Did you see my proposal for “printing” money on this thread:
http://scienceblogs.com/pharyngula/2009/02/i_marvel_every_time_at_a_presi.php
Regarding the ‘Spock’ comments above (and perhaps betraying part of my misspent youth), the character ‘Spock’ (and ‘Vulcans’ in general) from the old Star Trek series did not lack emotions. Rather (according to the backstory of the series), ‘Vulcan’ emotions were extremely violent, which led to their desire to control their emotions and filter their actions using logic.
Just in case it hasn’t been mentioned: recall that the ‘Spock’ character was half human.
Half human? With those pointy ears and green blood, that walking computer wasn’t even a quartewr “human.”
Why won’t libertarians accept the verdict of the marketplace of ideas? It has already rejected their simplistic ideology of resource allocation by neglect.
“rational utility maximization model”
That’s the fallacy.
Modern Economics’ fundamental assumption is the so-called “rational actor”. I think we’re beginning to discover the limitations of that assumption.
I wonder how long until questioning that assumption starts to take hold. I think I’ve seen a couple of references to “the myth of the rational actor” here or there, but I’m not enough of an economist to know if that phrase actually represents a current school of thought.
I like to say that if you draw an analogy with Physics, Economics is somewhere between Faraday and Maxwell. Perhaps questioning the rational actor assumption is a step towards the late 1800s.
maybe because the collateral damage of this form of social darwinism is unacceptable to us? great that you think only those who are financially liquid and healthy should be able to weather social and personal crises, but we have something called compassion and prefer not to let people die for the sake of the Holy Market
Jadehawk,
Rejecting evidence of spontaneous order in multiple civilizations because it reminds you of “social darwinism” is hiding your head in the sand. It is a spurious link anyway, because the phenomenon is about prices reflecting supply and demand. Do you reject the occurance of hurricanes and earthquakes too because they don’t have “compassion”?
@ william e emba
“One proves, under mildly reasonable assumptions, that not only can all these goals be simultaneously met, the result is “efficient”, in that no potential improvements are left over.”
Not to nitpick, but “no potential improvement” is not quite right. Pareto optimality is defined as “no potential improvement without making someone worse off”. There could in principle be tons of net utility enchancing interventions to be done, even without assuming any market failure. For instance if there is a declining marginal utility of income across induviduals, there could, in principle, be great net utility gain from redistribution of income.
Only if you assume ordinal utility rather than cardinal utility can one say that one cannot know if net utility can be increased. But then economist has to be very careful about what they can say anything about.
This is an important point, when economists say something is efficient, they actually mean “no individual can be made better off without making someone else worse off” this is not at all the same as something being optimal in the “this is the best of all possible worlds” sense.
“And how on earth can one say a consumer’s utility is wrong? They buy what they like, and you can retroactively identify the maximization problems they solved.”
And here is the problem: this is a totally unfalsifiable statement. Since any set of behavior can, retroactively, be called a maximizing. That you can claim that they are maximizing doesnt make it so.
This doesnt mean that the statement is true, people might not solve any maximazation problems at all, in fact it is, as far as I understand, unlikely that any such process can go on in the human brain. But there is no way to prove this.
Now Friedmans 1953 article is, as I recall it, rather weak. The selection argument about firms begs the question what mechanism ensures that profit maximizing companies prosper. It has not, to my knowledge, been shown a profit maximizing firm will do better than firms with other strategies, if such other companies exist. Furthermore, if this is the basis for the assumption of profit maximization and this argument is so strong, why isnt the focus on studying this selection mechanism?
The best and clearest attack on Friedmans is written as a critism of the critism, but is actually also quite fatal to Friedmans arguments for a positive economics. It is Lawrance Bolands 1982 article “On the futility of criticizing the neoclassical maximization hypothesis” http://www.sfu.ca/~boland/maximization.PDF. He also has later works.
There’s one too many periods in the above URL. Try
http://www.sfu.ca/~boland/maximization.PDF
Oh, and isn’t it the case that if I have _everything_ and nobody else has _anything_, and I like it that way, the situation is Pareto optimal, inasmuch as no change can be made without making me less happy? Market efficiency isn’t all it’s cracked up to be.
“Market efficiency isn’t all it’s cracked up to be.”
Well hopefully it is seen in perspective. How do you end up with everything and everybody else having nothing in a market system unless that was the original state, because you would necessarily have to have exchanged something with others to get everything, and they would have that something unless it was a short term consumable. It would seem you would have a much better chance of getting everything if you are the coercive central planner than a noncoercive market participant.
Tomas’ point is actually more interesting but also problematic: “For instance if there is a declining marginal utility of income across induviduals, there could, in principle, be great net utility gain from redistribution of income.”
There are issues of whose utility is being maximized, what is the cost of the redistribution and over what time horizon. A maximization of utility over a short time horizon, might result in the eating of the seed corn and the destruction of any incentive to defer current consumption for investment in the future. Whose values determine the balance between these short and long term time horizons?
Central planning can be even more difficult to analyze as the central planners values aldo tend to become irrefutable metaphysics, but questioning of them can end up being banned anyway. At least in the market system the individual’s values and decisions play a role.
Shorter africangenesis: the problems with markets aren’t problems because look over there communists! It’s fun pushing those buttons and making the puppet dance.
SAWells,
The actual point is that inequality is one of the benefits of the market, if that inequality is the rewarding of wealth creation, and if that wealth is the means to more wealth creation at longer time horizons. Most other systems similarly rely on unequal distribution of wealth for wealth creation, if they are concerned about longer time horizons at all. The difference is that control of the wealth is concentrated in the central planner, and the benefits of voluntary response to incentive are not as well exploited. So many of the alleged “problems with markets” are actually benefits, and practical utilitarian arguments can be made for markets, not just ab initio ones.
The market just brought us a bunch of guys who took huge bonuses and achieved massive wealth destruction, and africangenesis hasn’t noticed. Funny. Prod the button, activate the libertarian.
Stephen Wells,
You are a liar and provably so, not mere snark. I’ve commented on the crisis and the wealth destruction several times on pharyngula. One is even linked to above in a response to Tomas.
I must apologize to Stephen Wells. Any proof that he was knowingly stating a falsehood, would require being a being able to prove he actually read the postings in question. He may actually have believed his statement to be true without taking proper care. Apologies.
We don’t assume that. Instead, if governments make irrational choices, we can fire them.
What is it about American right-wingers that they don’t understand they’re (supposedly) living in a democracy?!?
Yes, definitely. If I ever buy a car, it will be bright fucking yellow so that pedestrians see me even if I fail to see them. All the tens of millions of owners of asphalt-colored cars should be whipped in public and/or tried for recklessly endangering their fellow humans or suchlike.
However, it is apparently true that the free market only works optimally if all actors have perfect knowledge of all relevant information, which is never the case.
Africangenesis, I don’t think anyone here advocates central planning of the economy. All we want is some regulation, by laws arrived at by democratic means, of what a company is allowed to do.
It’s not a fallacy. It’s a model. It describes a rather astonishingly broad range of human activities of the modern world.
It’s been questioned, sometimes quite sharply, for most of the 20th century.
“What is it about American right-wingers that they don’t understand they’re (supposedly) living in a democracy.”
Why understand something that is incorrect. The United States is a republic where the government is supposed to be so limited by law that people should be able to live their lives without having to waste time monitoring the choices of the leaders. Right wingers don’t want a “democracy” where politicians rule by the latest poll. They want a republic where the statesmen rule by principles applied with integrity.
Seldom are market failures due to lack of relevant information, they are more likely due to instabilities introduced by government. In the most recent case Government Sponsored Enterprises, money creation through credit and stimulation of the economy through low interest rates, that pushed investors to seek higher real returns in riskier and riskier assets. An economy based upon debt rather than equity is inherently less stable.
I’d like to make it clear that I had previously read africangenesis’ comments, including the silly idea about $2000 per person instead of actual investment, and am aware that he has noticed there is a problem. I had assumed that he was bright enough to understand why his singing the praises of market inequality as a reward for wealth creation, in the face of massive rewards for wealth destruction, might make him seem rather oblivious, and that he was capable of interpreting snark. I apologise for these assumptions.
Stephen Wells,
I was singing the praises of market inequality while proposing the most egalitarian of solutions.
“including the silly idea about $2000 per person instead of actual investment, and”
I usually think in terms of starting out with $4000 per person, or $1.2 trillion distributed over 300 million people. Contrary to your point, one criticism of stimulating the economy by distributing the money to the people is that the SAVE (i.e. invest) too much of it, often by continuing the deleveraging (paying off debt). It isn’t the investment that is counter productive, the deleveraging is likely putting the money into a black hole as far as stimulation is concerned, even worse when the stimulation is financed by debt. Fortunately with the monetary solution that I proposed, this deleveraging is easily solved by distributing even more money, soon we get actual investment. Its egalitarian measures also assure that the poor part of the population that is more likely to consume rather than save gets money too. The other salutory effect of creating money this way rather than through credit expansion, is that interest rates and returns on investments can be left high enough to incentivise further savings and investment.