1. Gene Callahan challenges people who say that Darwin argued that the variation driving evolution was "by chance". I think he's basically right, but it's worth reading a couple more pages of the section that Origin of Species he cites for context. What Darwin is really talking about is probability, not necessarily direction. Probability is just another way of talking about our profound ignorance of the underlying determinants of the universe. It's especially amazing to read this and realize how immature genetics was at the time that Darwin wrote this.
2. Mark Thoma points us to Frans de Waal on evolution and morality. Stickman has shared the work of de Waal on here before, most recently his appearance in...
3. ...this video - a discussion by Richard Dawkins of the implications of evolution for social organization.
Monday, February 21, 2011
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The people who explained probability best to me have been computer programmers.
ReplyDeleteWhat they told me was that it's impossible to predict data swaps, because they change faster than we can observe them. But you can't assign a probability to them, because each data swap is a deterministic event caused by another data swap and not a random one. To assign it a probability would merely help you work with an assumption in absence of information. But eventually, a tiny margin of error compounds over and over, until it becomes very big.
The implication of this was best explained by Benoit Mandelbrot, who said that nobody can fully understand or predict anything and yet we trust our lives to central bankers.
Nassim Nicholas Taleb further took ahead this basic idea, and bluntly said that even though he disliked materialism and inequality, the free market was the only choice after we consider the reality of uncertainty. It's not what we should or should not do, but what we can or can not do.
Explain what you think he means regarding central bankers. Do we expect central bankers to fully understand or fully predict things?
ReplyDeleteI think people are too quick to separate what Knight and Keynes said about uncertainty, as if they're in opposition to each other. Keynes said essentially what Knight said at several points, so its clear they're not strictly in opposition. Keynes added that although the entrepreneurial function is to bet on this uncertainty, we can still expect certain macroeconomic phenomena from the uncertainty - namely, liquidity preference and economic activity below full employment. I think noting that a central bank may be well placed to address that problem is very different from suggesting that entrepreneurial activity is not the best placed to allocate scarce resources under conditions of uncertainty. Again, this is the difference between economic planning and macroeconomic management (http://factsandotherstubbornthings.blogspot.com/2011/01/planning-vs-management.html). The people who claim to really be the true opponents of planning rarely seem to understand this, which is why I have my doubts about whether they even really understand the fundamental problem with central planning. Or, perhaps they do and - with their shiny new hammer in hand - everything looks like a nail to them.
"What Darwin is really talking about is probability, not necessarily direction."
ReplyDeleteI quite agree, Daniel! Philosophe A, my target, implied Darwin's theory *ruled out* a telos for life. I was just pointing out that is wrong, not making a positive argument *for* a telos.
I am not fully sure what Mandelbrot meant, since I only remember the statement out of context. But Mandelbrot was a mathematician, not an economist, so he probably was not qualified anyway.
ReplyDeleteWhile nobody expects central banks to decide every single allocation of capital by every single bank, macroeconomics has itself been described by macroeconomists as a practice under which we climb one mountain...and we later find a higher mountain that could have been climbed.
Between 1979 to 1982, Paul Volcker experimented with Friedman's monetarism as closely as it could possibly be implemented. It was very quickly abandoned, because it seemed that an inflation problem was replaced by a recession problem. In that brief time, so many jobs may have been lost, so many factories shut down, and so many businesses bankrupted because of one single experiment with the money supply.
"Between 1979 to 1982, Paul Volcker experimented with Friedman's monetarism as closely as it could possibly be implemented. It was very quickly abandoned, because it seemed that an inflation problem was replaced by a recession problem. In that brief time, so many jobs may have been lost, so many factories shut down, and so many businesses bankrupted because of one single experiment with the money supply."
ReplyDeleteThis is not the standard narrative of what happened, which is that Volcker did what he had to to tame inflation, and it worked, but caused a recession as part of the cure. Do you have a source for your narrative?
Check out the Darwin and Franklin/Jefferson comments: http://www.vinniev.com/if-facebook-existed-years-ago
ReplyDeleteWell, somebody in a blog had linked to an interesting piece called Aftermath of the Monetarist Clash, written by A. J. Schwartz, and she wrote:
ReplyDelete"The Fed missed its monetary growth target more often than it hit it. Monetary growth fluctuated over a wide range. The volatility of quarter-to-quarter rates of monetary growth during the three-year period was three times as high as earlier (Friedman, 1984). Two recessions punctuated the three-year period: January 1980– July 1980 (produced by Carter administration credit controls); and July 1981–November 1982 (produced by the new Volcker procedures)."
Supposedly, it is simply impossible or unfeasible to try to set and reach monetary growth targets in the first place? Which is perhaps why Volcker Fed kept missing it and which is why it caused so much business uncertainty, I guess.
All in all, my simpler point was that central bankers are charged with complicated decisions that could have irreparable consequences for our lives, and if they go wrong, the consequences are borne by other people, not them. Mandelbrot, looking at the chaos theory, came to the same conclusion.
I tend to have Gene's view of Volcker (and this is also essentially how I portrayed Strong in 1920-21 in my article as well), but I see what Prateek is getting at. Monetarism narrowly defined as money stock targeting probably did die after a short, fateful experiment under Volcker. Friedman and the monetarists may have seen that as a disappointment, but I think the discipline more broadly was not as invested in that particular facet of the episode - most of the discipline thought "he did what he had to do to take care of inflation".
ReplyDelete