Untangling the Popular and the Democratic in Iran

I think Evan is very good to caution us not to take a cookie-cutter Western approach to Iran, at the same time that we unequivocally support the protesters there. This is essentially the conclusion that I've come to as well.

When we address the issue of how America and Americans should be involved, I think we need to pay very close attention to history. In the U.S., 1979 is remembered as a black year for democracy in Iran. In that year, a theocrat overthrew the existing government, which was credited with modernizing Iran. Americans were held hostage until Ronald Reagan - the strong-man of Western liberalism - ensured their safe passage home. Since 1979, Iran has been perceived as an enemy force in the region; threatening Israel, funding terrorism, and opposing secular democracy. This is all true...

...and yet at the same time it really isn't.

Khomeini was a theocrat, with all the autocratic pronouncements of the old caliphate, and none of it's assimilating Oriental spectacle. Nevertheless, the Iranian Revolution of 1979 was a thoroughly popular revolution. Khomeini did not empower the Iranian people, but he did liberate them from what was popularly perceived to be a Western client state. This is no reason to laud the changes that occurred in 1979, but it should help us to understand that the protests happening now are an outgrowth of the 1979 revolution, not a repudiation of that revolution.

As Andrew Sullivan has pointed out (and, I should note, the Daily Dish has been offering absolutely exceptional coverage of the protests) the leaders of this current movement are not the "next generation" of democratic outsiders, rather "the leading faces speaking out — Mousavi, Rafsanjani, Montazeri — are figures who were among Khomeini’s inner circle in 1979". I think, to put it very roughly, we may be witnessing the transition from a popular regime to a democratic government. This is not the fall of the Berlin Wall, in other words, so much as it is the fraudulent, bloody, and haphazard transition of a long revolution.

I think a lot of people, out of rightful outrage at Ahmadinejad and the spawn of the 1979 revolution, are too quick to assume that those elements need to be forcibly replaced or challenged by an outside force. In my mind this would take us out of the frying pan and into the fire. In 1953 the Central Intelligence Agency, on the order of President Eisenhower, replaced the duly elected prime minister Mohammad Mossadegh, and allowed the Shah to consolidate his power and banish all prospects of a constitutional monarchy, which Mossadegh had been trying to establish.

More forceful American intervention right now wouldn't introduce a new Shah. But that really doesn't matter. The point is, from 1953 to 1979 American and British intelligence ultimately decided who would rule the Iranian people out of a fear that popular government would privilege the communists. In many ways, 1979 replaced one autocracy for another; nevertheless, it replaced an imperial autocracy with a popular autocracy. For those concerned with the advance of liberal democracy, that's small consolation. For the Iranian people, I imagine that is a much greater and more positive shift than the American public generally supposes. And clearly, the seismic changes occurring now are positive from both the American and the Iranian perspective, and we should support them. But we need to remember that this long march to democracy started in 1979, not 2009, and that it is certainly not a reassertion of some imagined liberal orientation that reigned in the fifties, sixties, and seventies, only to be repressed by the dark Khomeinian cowl.

Postmodern Scientific Inquiry

The world of the policy analyst doesn't often coincide with the world of broad trends in intellectual history. As such, words that I know appear overwrought to Evan - such as "postmodern" - can be quite exciting for me when I get the chance to re-engage them. It brings me back to the halcyon days of studying sociology at William and Mary, when I was able to put down the math and the economics and dive into "theory". Recently I ran into postmodernism twice in the same day: first, at the Postmodern Conservative blog, and second, in an old book on postmodern literary criticism I discovered at my mother in law's house, which had belonged to my late grandfather in law, a University of Chicago classicist. The postmodern conservative (pomocon) blog was a new application of postmodernism, for me. The use of postmodernism in literary criticism is obviously an old (the oldest?) endeavor.

It raised a question for me - and perhaps other people have already engaged this - about what "postmodern science" would look like. Postmodern humanities, literary criticism, and philosophy are quite clearly delineated. Certain social sciences have strong "postmodern" trends; in sociology this paradigm is more often referred to as "poststructuralism". But the natural sciences are grounded in empiricism and positivism, and therefore seem to me to be far more closely tied to modernism. It has been suggested that the future will increasingly privilege science, but is there an inherent contradiction if the future also continues to displace modernism with some variant of postmodernism? Will science survive in a postmodern future, or will it have to change to survive?

I suppose from a relatively sophomoric perspective on intellectual history (i.e. - mine), postmodernism is most starkly characterized by three qualities: (1.) self-referentialism, (2.) deconstruction, and (3.) a residual "skepticism of modernism" category. Instead of concluding that science is doomed to irrelevance in a postmodern future (and clearly, the future may not be postmodern at all), I want to assume that it will survive and highlight some ways in which the natural sciences are already adapting to the three foundational qualities of postmodern inquiry.

Self-referentialism

Postmodernism is often dismissed as "relativism" because of its insistence on the acknowledgement of self-referentialism: simply put, that our reality is often contextual. While this could clearly degenerate into a crass relativism, the value of a self-referential outlook is also obviously capable of illuminating individual biases. The application of self-referentialism to art and literary criticism is obvious; everyone enjoys these things differently. The application to the social sciences has also occurred smoothly (albeit somewhat later). Sociologists speak of the "social construction of reality" and the dependence of our interpretation of reality on the social environment in which we develop. While these versions of self-referentialism are clear, the existence of self-referentialism in the natural sciences may not be as evident. One development in physics that I've always found interesting is string theory, particularly M-theory, which predicts the existence of 11 dimensions of spacetime and the coexistence of multiple universes, each defined by the vibrations of sub-sub-atomic particles known as "strings". While TV shows treat multiple dimensions as paranormal, serious physicists understand that the existence of multi-dimensional spacetime opens the theoretical possibility of time travel, multiple dimensions, and parallel universes. The first link I provide is to a synopsis of the "Fringe" series on Fox, describe their foray into multidimensional reality in the season finale. It all sounds fantastic and fictional until you listen to the second link I provide to Dr. Michio Kaku of the City University of New York. His description of string theory is eerily similar to the fictional Dr. Walter Bishop, of "Fringe". As I understand it, string theory is definitive of physics today, in much the same way that evolution undergirds all of modern biology. String theory also forces us to acknowledge that our casual understanding of reality is inseparable from the fact that we are tied to four-dimensional spacetime and cannot conceive of other dimensions that define unknown worlds beyond our own. Sociologists can talk about how our social environment influences our understanding of reality, and art critics can talk about how an understanding of art is dependent on contexts, tastes, and personal experiences, but these sorts of self-referentialism pale in comparison to string theory's assertion that there are whole dimensions beyond the grasp of our minds.

Deconstruction

As I understand it, deconstructionism in postmodernism emerged with Heidegger's engagement of understandings of "being" prior to Plato, and is more famously associated with Derrida's method of textual criticism. Derrida's deconstructionism essentially sought to break out and understand a problem (or a text) in terms of it's constituent parts and foundational assumptions. These constituent parts are often inherently contradictory and may reveal an underlying instability or conflict in a superficially coherent text. Berger and Luckmann connect this method of understanding "knowledge" with the contextualism of self-referentialism by reversing Derrida's project and explaining how various social environments "construct" a fundamentally contingent reality that people experience as they develop. Deconstruction can therefore be understood as the skeptical unearthing of the contextual contingencies that were touched on, above.

Once again I feel that although on the surface the natural sciences seem adroitly tied to the superficially tangible "reality", they have actually been quite willing to deconstruct their understanding of phenomena. One example that stands out in my mind is Richard Dawkins's selfish gene theory, which has revolutionized "Darwinian" evolution by pointing out that reproduction by organisms is really a sideshow to the reproduction of genetic material that occurs considerably less visibly, not to mention less salaciously. The selfish gene fits Derrida's understanding of deconstructionism beautifully. Seeming contradictions such as intragenomic conflicts, "junk DNA", the sacrifices of a vast majority of a bee hive for the reproductive prospects of a single female, female cannibalism, etc. are all explained by gene-based rather than organism-based evolution. As far as we know, we can't take this process any further than the gene because genes are the most fundamental reproducing biological component.

I include a graphic of what is known as a Mandelbrot Set in this section as a teaser for further exploration of the relevance of complex adaptive systems for the practical application of deconstructionism in the natural (and social) sciences. Suffice it to say that complex adaptive systems research explores how the non-linear interaction of very, very simple processes can produce an "emergent" pattern that is not only surprisingly complex, but also surprisingly robust and ordered. Breaking down our complex reality into these (1.) non-linear interactions, and (2.) simple foundational processes certainly seems to me to be an endeavor of which Derrida would approve.

Skepticism of Modernism

I'm not entirely sure whether the renowned Kurt Godel would appreciate my inclusion of his visage in this section or not. Godel is famous for his "incompleteness theorem", which in a nutshell said that a finite set of axioms that are universally true cannot prove all theorems that are true, specifically theorems that incorporate more information than the set of axioms themselves. The incompleteness theorem has huge implications for both falsification in general (the foundational empirical paradigm of science under modernism), and also for "theories of everything" pursued by scientists like Hawking and Kaku (granted, they both know this of course!). The incompleteness theorem's relationship with falsification is probably best explored in the context of what's known as the "liar's paradox". I'll take the liberty of expanding on the basic liar's paradox to make it applicable to the problem of falsifiability, and hope that I don't jumble things too badly:

It is a trivial task to prove my evaluation of a random person on the street that "that man is a liar". We can investigate the congruence of the man's statements and reality and ascertain whether my statement about him was true, or false. The falsification criteria, presumably, is that if he has told no lies he is not a liar. Since he has certainly made only a finite number of statements over the course of his lifetime it is theoretically possible to catalogue and evaluate them and apply certain decision rules to determine whether my statement is true or false. This is an admittedly weird example of the every day task of science. But what if that man were to approach us and say "I am lying"? That statement cannot simultaneously be true and consistent with any of the decisions rules (axioms) that we have identified for the purpose of falsification. His statement can only be "true" if he is in fact lying. But if he is in fact lying, then it is not true that he is lying!

I personally haven't completely wrapped my mind around the implications of the incompleteness theorem, but I do know that it did irreparable damage to the strong claims of positivists like Russell to identifying complete systems of mathematical truth. While practical applications of the incompleteness theorem aren't presented here, it certainly raises doubts about the limits of falsification as a vehicle for scientific inquiry if indeed some theories cannot be falsified without revealing the axioms utilized for falsification to be inconsistent themselves. Falsification has already been challenged by Thomas Kuhn, and we may find that a postmodern science will have shed it's Popperian pretensions for a more Kuhnian outlook. As a statistician of sorts myself, I don't say this lightly, and I also don't think we'll totally abandon falsification - but the shortcomings may stand out in sharper relief. As a final note on the problems of modernity-as-a-system-of-positivist-falsification, I'd note that George Soros in finance (and certainly others in other fields) more explicitly connects the practice of self-referencing with the inherent incompleteness of any axioms used to explain a system that incorporates oneself. Indeed, the implications of Godel are probably going to be much broader in the social sciences (where the scientist is part and parcel of the object of analysis) than in the natural sciences. As Keynes has said: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else." But natural scientists can still be more circumspect about the validity of their methods of falsification, particularly when the theorem being falsified involves multidimensional space that our axioms may not be able to grapple with (Obviously it's trivial for our math to grapple with multidimensional space - students learn how to do that in middle school! But in the natural sciences, axioms of falsification involve broader empirical techniques than mathematics alone, and it is these that may not be up to the task).

Concluding Thoughts

Even over the course of writing this post I've become more optimistic, not only about the fact that the lessons of postmodernism are not lost on natural scientists, but that the future will provide an intriguing and fruitful synthesis of modern scientific foundations and postmodern deconstructions of those foundations. Indeed, many of the greatest discoveries of the past century have already embraced this synthesis.

A Happy Birthday Note

Facts and other stubborn things wishes to extend a warm Happy Birthday to the renowned economist, statesman, philosopher, and public intellectual John Maynard Keynes. It is probably safe to say the Keynes is second only to Adam Smith in his impact on the discipline, and even Adam Smith's contributions are better classified as synthesis of previous work and popularization, relative to the truly novel insights of Keynes.

I think Keynes would have appreciated the mission of Facts and other stubborn things. Keynes is both celebrated and derided for being a very speculative thinker. He would tinker with ideas even if he wasn't exactly sure where he fell on an issue. He felt free to muse - sometimes quite comically -about issues without cowering at the thought that some people might target and try to discredit him for those musings.

But we know that Keynes would have appreciated the work we do here, and we heartily agree with the old Cambridge don that:

"Words ought to be a little wild, for they are the assault of
thoughts on the unthinking".

-J.M. Keynes 15 July 1933

Good news and bad news on the state of the news

Evan's critique of the consolidation of print media is both prescient and pedestrian - and I should say I don't intend that evaluation to be insulting to him at all. Indeed, I think the fact that it is both prescient and pedestrian is a positive sign. People are broadly aware of the problem, and there is a real grassroots constituency that is making exactly these points.



Actually, what I found most surprising about Evan's post was that it was decidedly more negative than the usual narrative you hear, and it is precisely this relatively negative outlook that I want to address. The more common storyline, I believe, is that local media and print media is dying at the same time that TV news is being dumbed down and sub-divided into ideological camps. Polarization in and of itself doesn't have to be bad, but the polarization we are seeing now seems to be contributing more heat than light to the debate. Keith Olbermann and Sean Hannity may personally be genuine in what they are reporting, but the market-segmenting arrangement between MSNBC and Fox itself is more akin to a cable-news Molotov-Ribbentrop Pact, dividing the market in half, than it is to a meaningful debate between two differing perspectives). In the no-man's land that's left in the middle (I suppose this would be Warsaw if I were to continue the World War II analogy), we have CNN that increasingly descends into flashy gimmicks that avoid the ideological confrontations of Fox and MSNBC - and CNN (and other middle of the road sources) end up avoiding real reporting in the process.

A Cable News Molotov-Ribbentrop Pact

That's the downside of the "usual narrative".

The upside is "Web 2.0"; the democratization of media as a result of Youtube, blogs, and even Wikipedia. The story goes that while the print media is failing to adapt, and cable news is failing to deliver, the blogosphere is creating a network of private citizen-reporters prepared to keep the elites (both in positions of power and in the media itself) honest.

I see two problems with this "good news/bad news" story, which may help to buttress Evan's concerns. First, many blogs themselves rely on re-posting, re-analyzing, or simply aggregating the work done by the "mainstream media". Obviously this serves an important chastizing function, but it is unclear what the blogosphere would look like without the New York Times, The Washington Post, The Wall Street Journal, Fox, MSNBC, and CNN. Could they pick up the slack and create new news? The beauty of blogs is that anybody can create one, absorb information, and reorganize their own thoughts. We do this all the time. But that isn't necessarily conducive to uncovering new stories.

My second concern centers on what blogs don't allow us to do. What bloggers can't do (at least out of their blogging revenue - if they even have that) is buy a plane ticket to Mexico City to investigate swine flu, and then stop by Atlanta on the way back to the office to consult with the CDC about what all this really means. This is the work of real reporters - the very reporters that are being laid off or re-branded by newspapers and cable TV shows. Some of this investigating can be done through sites like Youtube. Indeed, in many cases the mainstream media is now using videos posted by private citizens as material for their own shows (the George Allen "macaca" incident, linked above, comes to mind here). But as a general rule, bloggers don't have the access that traditional reporters do, and they also don't have the same reporting standards. This isn't to say that there aren't objective and rigorous bloggers - but there isn't the same obligation to double-check sources and edit material. By the time some blog stories get debunked, the story itself is so thoroughly embedded that often it can't be dislodged (i.e. - that Obama is a Muslim).

What I'd like to emphasize is that neither of these burdens should be insurmountable. Bloggers can and already have started creating new content. You don't have to fly to Mexico City or Atlanta these days, because there are local bloggers in those locations that can be networked with. The CDC can be reached by email, as can the Mexican government. Pictures and videos to highlight the blog post are a Google search (and Photoshop session) away. As for standards, I think the question of how much reporting standards really help is an open one. They may prevent certain news from reaching us that we would have wanted to hear. The National Enquirer - a notoriously low standard publication - actually gets the story right a lot of the time, and is therefore able to break news long before the "mainstream media" feels comfortable reporting it. They proved that this past campaign season, when they were first to break the (quite accurate) story of John Edwards's affair with a staffer. Even if problems do occur, debunking things is practically an American past-time. We love doing it, and even if many people take the original story hook, line, and sinker, we practically can guarantee that it won't go unchallenged.

I think cautious optimism is the way to approach the restructuring of the news industry. Evan's concerns are completely valid, but I think it's important to recognize that what we are seeing is what Joseph Schumpeter called "creative destruction". Old industries are collapsing precisely because they are being made obsolete by new industries. My guess is the blogosphere will pick up the slack and we will be fine, and in fact we'll probably see the reemergence of many traditional news organizations in this new medium (as we have already seen with The Atlantic, whose website is more of a blogging network than it is an online magazine). The question is - what kind of sneaky stuff will those in power be able to slip by with while the blogosphere is still learning the ropes? If recent history is any indication, I'm happy to say that I think the answer is "not much".

Reform and Recovery - A Word of Caution from Keynes

From John Maynard Keynes's Open Letter to President Roosevelt

"You are engaged on a double task, Recovery and Reform;--recovery from the slump and the passage of those business and social reforms which are long overdue. For the first, speed and quick results are essential. The second may be urgent too; but haste will be injurious, and wisdom of long-range purpose is more necessary than immediate achievement. It will be through raising high the prestige of your administration by success in short-range Recovery, that you will have the driving force to accomplish long-range Reform. On the other hand, even wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action, before you have had time to put other motives in their place. It may over-task your bureaucratic machine, which the traditional individualism of the United States and the old "spoils system" have left none too strong. And it will confuse the thought and aim of yourself and your administration by giving you too much to think about all at once."

Health Reform and the Reconciliation Process

Washington was buzzing Friday with news that health care reform would likely be pushed through the Senate this Fall during the reconciliation process, making it immune to the risk of filibuster. Normally, the famously "collegial" Senate has sensibilities that are far too delicate to countenance interrupting a given Senator when he or she is speaking. To close debate on a bill, 60 out of 100 Senators must vote for cloture. The end result of this procedural rule is that any given bill actually needs 60 votes to pass, not 51, so long as some Senator cares enough to filibuster it*. Filibustering is good insofar as it requires Senators to produce a more bipartisan bill. However, it opens the possibility that the minority will be able to dictate to the majority in a variety of occasions. The House does not have this rule.

However, budget bills can be submitted as "reconciliation bills", which cannot be filibustered. A reconciliation budget will specify certain legislative committees that need to bring certain pieces of legislation into alignment with the budget bill. So for example, this year's budget bill may say "we will spend X amount of money on health care", and specify that the committee that deals with health care bring the law in line with the spending requirements. These changes in health care law will then be passed without the risk of filibuster as well. This means that health care reform may be passed this year with 51 votes (which the Democrats easily have), rather than 60 (which they can't count on). It may come as a surprise to most Americans that this is even a major piece of news - isn't the majority always supposed to rule? Yes... except in the United States Senate.

Republicans are predictably suggesting that this is heavy handed and inappropriate. Why is this response predictable? Because it's exactly how the Democrats responded when the Republicans used the reconciliation process to push through the Bush tax cuts.... and most of Clinton's budgets... and most of Reagan's budgets. The false outrage over the reconciliation process is old hat in Washington. I personally have no problem with the Democrats using the reconciliation process - I wouldn't mind seeing filibusters eliminated from the Senate entirely. They have some moderating benefits, but they are inherently undemocratic. Republicans shouldn't be ashamed for using them to pass tax cuts under Bush, and they shouldn't be outraged that Democrats are using them now. But let's get past all this... why do I start by quoting a note of caution that Keynes offered to Roosevelt in the 1930s?

Reform and Recovery

The reconciliation process essentially guarantees that we will see some sort of health care reform this year. It may be a monumental overhaul, or it may be a first step towards a monumental overhaul. Right now we don't know. Health care reform is desperately needed in this country, no matter what side of the aisle you're on. We pay far more for the care we receive than any other country, and tens of millions of Americans don't have any health insurance. Higher costs and lower coverage are an explosive combination. These rising health care costs are also a burden on U.S. businesses who provide most of the coverage in the U.S.. Whatever the failings of the health care systems of our peer nations, they have been more successful at keeping costs down, which means that their businesses can operate that much more efficiently than ours can. Health care reform is unambiguously an imperative right now.

But another imperative is recovery from the current recession. Despite the upbeat talk of President Obama and Fed Chair Bernanke recently, most analysts think that we have not bottomed out yet, and when we do the recovery will be drawn out, rather than rapid. The ubiquitous Depression analogies aren't made to scare people, but they are made for a reason - this downturn will end up being substantial, and like the Depression there is no real prospect that the recovery will be swift. Those who write off double digit unemployment are fooling themselves. The "real economy" hasn't even bottomed out yet, and unemployment won't stop rising until well after the "real economy" has reached it's trough and started climbing again for at least a couple quarters.

Many people see the problem as steering deftly between the Scylla of a broken health care system and the Charybdis of a once (more likely twice) in a lifetime economic downturn. I think this understanding of the situation is incorrect. Health care is obviously a problem in this country - but is it a problem that throws millions out of work in a matter of months? Is it a problem that destroys a third of a family's savings? Is it a problem that will grow exponentially worse if it is allowed to fester for another year or two or three? No. If we are still at the bottom of this hole in 2011 or 2012, history will remember this as the Second Great Depression, and the future prospects of capitalism will truly be in jeopardy. If we maintain the current health care system through 2011 or 2012, how will history remember us? Perhaps as lazy. Perhaps that we missed an opportunity. Perhaps even that we are uncaring and primitive. It will probably look at us the same way that we look back to the sluggish adoption of Social Security and unemployment insurance in this country; unnecessarily slow, but since the change was inevitable, the delay is ultimately just remembered as an artifact of history. We have had somewhere around 40 to 50 million uninsured for years. It is a burden and it is a crisis, but that crisis clearly lacks the immediacy or urgency of the economic crisis.

We did elect Obama for a double task: reform and recovery. But his mandate for reform and recovery doesn't mean that both need to be done within ten months of taking office.

What is to be done?

I, like the vast majority of Americans, am suspicious of what's called a "single payer", public health insurance system. Thankfully, Barack Obama and the United States Congress also seem to be wary of such a course. We know that the market is too efficient to completely abandon. But there are problems that public policy can help to address. While Americans shouldn't be required to purchase government health care, we can think about making some sort of subsidized public insurance available to the 50 million people who are uninsured. The externalities of public health may justify mandating health insurance coverage, either from a public or private source - much like many states already do with car insurance. We can think about eliminating the tax privileges currently afforded to employer provided health benefits, which encourage sub-optimal over-consumption of health care and hide the true costs of care. We can imagine the benefits of a system of electronic health records, and we can conceive a potential role for government in jump-starting this process. There is a lot we can potentially do, but there are no silver bullets. I think this suggests that we act, but also that we discuss and deliberate. The "experts" have discussed our options for years - at least since the aborted attempt at health care reform spearheaded by the current Secretary of State in 1993. But our elected representatives have not had a real debate on the finer points of health reform, probably since that debate on the Clinton plan fifteen years ago.

If we don't act immediately to address the economic crisis, we could easily slip into a cycle of deflation, rising debt burdens, rising unemployment, and further deflation. A moment of hesitation could make this recession much worse. Can we say the same for health reform? Of course not? A moment's hesitation - even a year's hesitation, or two year's hesitation will probably find us about where we are today: with a health care system that could be vastly improved on a number of measures, but that generally keeps Americans healthy. What would a rush to reform health care risk? It risks leaving us with an equally poorly conceived system that we're likely to be stuck with for years or even decades to come.

I will note, this is not meant to suggest that there is no risk associated with rushing a program of economic recovery. Hindsight will certainly show us that there were major problems with TARP, TALF, ARRA, and every other "rescue" that's been rolled out since the summer of 2008. We will pay a price for these problems. But I would argue that these problems are far outweighed by the problems that would have emerged if we had waited longer to do something. I think the risks are flipped when it comes to reforms in general, and health care reforms in particular. Prudence and careful consideration will pay off. Obama should not rush into this (nor should he rush into education reform, finance regulatory reform, etc. etc.).

*The Washington buzz of Tuesday, the 28th (which absolutely swamps the events of last Friday in overal buzziness) largely negates the buzz on reconciliation of Friday, the 24th. Republican Senator Arlen Specter announced that he is changing his affiliation to Democratic, virtually assuring that by the Fall (when Al Franken will in all likelihood be seated), the Democrats will have a filibuster-proof majority anyway.

Four Reasons Why the Torturers Must Be Prosecuted

I agree completely with Evan that the torturing of prisoners that went on during the Bush administration was unambiguously criminal, and that the Justice Department needs to charge somebody with these acts, even if the burden of proof may represent a steep uphill battle. The torture of a few al Qaeda operatives is important because it violates U.S. and international law, but it's not important for that reason alone. I'm confident that the law is violated all the time - sometimes flagrantly, sometimes accidentally - and not all of these infractions merit public indignation over whether the Justice Department decides to prosecute. So why this time?

- First, because this crime is uniquely heinous. As Christopher Hitchens has said, "It used to be in the press you remember people would say that it simulates the feeling of drowning. You've read that I'm sure. In fact it doesn't simulate it at all in fact you are being drowned." There is a reason that both the Republican and the Democratic candidate for president this Fall came out strongly against torture, and it had less to do with McCain's war experience than it did with the fundamental incongruity of torture with modern society.

- Second, because this is not just a legal violation - it as a constitutional violation as well. While some of the Bill of Rights protections of criminals arguably do not apply to prisoners of war, and those who are tried by military tribunals, the injunction against cruel and unusual punishments has no such distinction. The numerous protections guaranteed by the fifth amendment are qualified by a very vital loophole that the Bush administration has ably exploited: "No person shall be held to answer for any capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation." The eighth amendment, for what should be obvious reasons, includes no such qualification: "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted."

- Third, and quite simply, the Bush administration has to be held accountable for something with respect to the prosecution of the war on terror and the Iraq War. History will judge the American people to be as complicit with the Bush as the American people were found to be with Jackson's Trail of Tears or FDR's internment camps if they do nothing to right this wrong. The specific points of the Patriot Act, the War on Terror, the Iraq War, the Plame Affair, extraditions, Guantanamo Bay, Abu Gharib, etc. can certainly be debated by reasonable people, and several of these cases have already been tried. Not all critiques may end up being legitimate critiques (I've agreed with the administration on a few of these concerns. For example, I'm a strong supporter of a vigorous War on Terror, and I don't think there's anything wrong with having a prison at Guantanamo, so long as the proceedings there are legal). This third point is therefore not meant to be a thoughtless, blanket indictment of the Bush administration. Instead, it is a recognition that life in America and abroad was radically different between September 11th, 2001, and January 20th, 2009. Some of it was handled quite well, and some of it was handled not as well. But we cannot abandon an evaluation of these years in an effort to "move forward". We can't move forward with confidence without knowing where we may have misstepped in the path. Obama's justification for failing to prosecute for these crimes is completely wrong-headed. If we don't grapple with what was done we have no road map with which we can move forward.

- Fourth, and by far the most important, we must prosecute as a defense against fascist tendencies. I have been enormously critical of news outlets that apply labels like "fascist" or "socialist" to President Obama. That kind of hyperbole is incredibly destructive. So why do I use this word now? It is because I'm concerned about letting the mindset of fascism take root in this country. Allow me to explain my distinction: it is my opinion that the Iraq War was aggressive and unprovoked - that we should have focused our energies on the War on Terror, which we actually had cause to prosecute. Despite my strong disagreement with Bush on the Iraq war, I don't think the war had any tendency towards fascism at all. Bush made a case to the people. He made a case to the international community. He had allies. He got the approval of Congress. A reasonable person could say that he didn't intentionally and recklessly abandon international law. In other words, the Iraq War may have been ill-advised, inappropriate, and perhaps even illegal: but it was done in broad daylight, it was not executed by personal fiat, and it was prosecuted in line with the Constitution. It was therefore not fascist. The same is true of the stimulus package and the TARP program. I'm infuriated when these things are called "fascist", not just because I agree with their necessity, but also because the critics ignore the clear consistency of the method of passing the stimulus package and the TARP with the liberal political tradition and democratic principles. No such consistency exists for these acts of torture, and while they may not be fascist themselves, they represent "fascist tendencies". Fascism is about method, not policy. A "benevolent dictator" could implement the same programs that any presidential administration in history has enacted, but they would still be fascist if they did so by will of the president, rather than by the will of the people, through the Constitutional apparatuses designed and assented to by the people. Likewise, democracies are capable of a great deal of misery, but poor or even ruthless decisions on the part of democracies are not "fascist" so long as they are implemented by a government limited by well defined constraints on it's power and the will of the people. I think this distinction is important to make, because we have flirted with fascism on more than a few occasions in our country's history. The bedrock fascist position is best stated by Nixon, probably the closest we have come to a president with a truly fascist mindset: "When the president does it, that means that it is not illegal." Nixon probably hurt his policital adversaries more than anyone else - his crime ultimately didn't result in much more of substance than a broad-based loss of innocence - but this man's very mindset was a fascist mindset. He was, and I think he will be remembered as, a fascist who held an official position in a democratic Republic for a number of years in the late twentieth century. Was Bush a fascist in this mold? Was Cheney? Prosecuting torturers won't answer that question, and we may never know. We probably won't have the benefit of a Frost interview for those men, like we had with Nixon. But the tortures reek of something terrible, in the same way that Watergate did. And even if the torture could be explained away in various ways (just like Watergate could have itself been explained away as quite insignificant), the entire endeavor is indicative of "fascist tendencies" in the Bush White House - a tendency to place the president above the law, rather than under it. We need that tendency to be scrutinized in the light of day. And perhaps I have it all wrong and the torturers will be found not guilty, and this whole post was all a big mistake - but I think the preponderance of evidence for enough people suggests that we need to shore up the value and strength of the law in America. We're likely to have very trying times ahead - we don't want a charismatic president like Obama to enter trying times without a firm message from the American people that fascist tendencies are not acceptable, regardless of the objective desirability of the program that the fascist is offering.

Smith's Theory of Moral Sentiments

This year is the 250th anniversary of the publication of Adam Smith's "Theory of Moral Sentiments" - the work of moral philosophy that in many ways served as a precursor to his "Wealth of Nations". Econtalk.org is marking the occasion with an audio series on the book, the first installment of which was recently released.

I, like many, am far less familiar with Moral Sentiments than I am with Wealth of Nations. And also, like many, my understanding of Wealth of Nations is largely restricted to the popular cookie-cutter interpretation of that work. To summarize: the pursuit of self-interest is actually beneficial to society, and restrictions on the pursuit of self-interest often have unintended negative consequences. The foundational "human motivation" in Wealth of Nations and most subsequent works of economics is this self-interested pursuit of "utility" or "profit". The few exceptions, including institutionalists like Thorstein Veblen, or heterodox thinkers like John Kenneth Galbraith (I'm thinking of the Galbraith of The Affluent Society primarily, rather than the Galbraith of The New Industrial State) seem to prove the rule.

There are many reasons to believe that any model of society based exclusively or even primarily on the motive of utility maximization is likely to imperfectly represent (and perhaps more substantially, imperfectly predict) reality. It should be self-evident (and I don't appreciate the casual use of that hallowed phrase) that we are motivated in our own lives by other things than self-interest. In many cases, when economists confront this reality, they explain it away by suggesting that alternative motivations aren't directly relevant to the marketplace. Yes, altruism, jealousy, etc. may motivate much of human activity - but greed and self-interest exercise such primacy in market decisions and any model determining production and allocation can safely disregard other motivations.

Adam Smith used his "Theory of Moral Sentiments" to outline the major facets of human motivation beyond self-interest, and for that reason it should serve as a motivator for economists who cling to utility or profit maximization models. This is not to say that self-interest should be marginalized. It will always be central to economics. But I would like to see (I would like to design myself) models that explicitly model the optimization of some combination of relative wealth and absolute wealth. We know people "keep up with the Jones's" - why do we pretend that relative wealth is irrelevant in our models?

Often we look back to Adam Smith, accept the foundational insights into the market that he introduced, and then proceed to qualify the Smithian worldview with various externalities and market failures that economists have come up with since the 18th century. The Wealth of Nations earns it's place of honor on our bookshelves (I have three copies myself, my favorite of which is about 125 years old and looks quite handsome, safely nestled on it's shelf, four feet above the floor), but it is rarely cracked open for actual guidance. I've never read Moral Sentiments, but I think it holds the possibility of exploding the profit-maximizing myth of modern economics. If economics is really going to be a science of human decision making, it should more explicitly encompass the full range of human motivations.

Globalization and the "One World Currency"

I want to apologize in advance for the brevity of my thoughts this week.

First, I want to remark on something Evan said. Often we challenge or butress each other's arguments, but when I read: "if globalization is present and increasing at the pace it currently exhibits" I just had to chuckle a little. If only! I understand Evan's point, of course. The broad trajectory is one of globalization and integration, and hopefully it will continue that way. But this is not the situation right now. International trade is imploding, racking up unemployment figures in export-oriented economies like China not in intervals of hundreds of thousands (as in the U.S.) but in millions.


Another thing that may or may not be on the table at the G-20 meeting is this nebulous prospect of a "one world currency". I want to caution people on exactly what is being proposed here. They're not going to throw national currencies out the window; nobody is talking about that. They're discussing the prospect of replacing the dollar as the world reserve currency. Right now, the Chinese central bank and other central banks hold a large amount of dollars because most world trade is conducted in dollars. It's easier for trade to be denominated in a single currency (like the dollar) than many currencies - and to support trade, central banks must hold that reserves of that currency so that importers and exporters can finance their transactions. This is where we get the term "reserve currency". The problem is, the global supply of dollars is governed by the Federal Reserve Board, in Washington D.C.. The Federal Reserve's charter dedicates it to the task of price stability, presumably in the United States.

However, the Fed's activities also influence the value of the dollar reserves held by central banks all over the world. The result is a fundamental conflict of interest. The Fed is often left with a tradeoff between global macroeconomic stability and national macroeconomic stability. Right now, the U.S. economy is under the pressure of a great deal of debt. The Fed (theoretically) has an incentive to increase the money supply and induce inflation to lower the burden of those debts. However, that would also dilute the value of China's massive dollar reserves, and impoverish the Chinese central bank at a stroke of Ben Bernanke's pen. This is why China is pushing for a new international monetary system, and this is why that monetary system is aimed at decoupling central bank reserves from the dollar.

I still don't know what I think about this. Barry Eichengreen has long advocated not a new reserve currency, but a "basket" of multiple reserve currencies. This seems sensible to me, because it would promote stability and not make the same mistake of putting price stability in the hands of a single decision maker.

To bring this full circle, I think any discussion of reforming the international monetary system is a great step forward towards erecting what Evan calls a "deeper pluralism". Sometimes economic policymaking eschews these more fundamental philosophical concerns - but it doesn't have to. Replacing the dollar as the world's reserve currency with a currency basket governed by multiple central banks, or a new IMF currency governed by a committee that is representative of all major powers introduces a great deal of pluralism into the global economy. In Europe, we've already seen how monetary coordination and the "deep pluralism" of the European central bank (which has to balance the needs of Eastern Europe, Western Europe, the Mediterranean, Scandanavia, and the Balkans) has led to greater political integration, cooperation, and peace.

A lot of people fear the world of monetary policymaking and banking. It's mysterious and shadowy. Those concerns may or may not hold water. I think the nature of both conspiracy theories and prophecies is that we don't really know until we know (you know?). I try to be a little more trusting of the situation in general, and optimistic about the direction we're heading. Money is just a neat human invention that has made our lives easier. I don't know too much about monetary economics or monetary policy, but I think the dialogue that's going on now is a great step forward towards a global polity that incorporates the very best from both "cosmopolitan" and "communitarian" visions for the future.

Risky Behavior and Morals

I spent the better part of the last three days in the Washington Plaza Hotel at a conference held by IZA, a German labor economics group, on the "economics of risky behavior".

The National Bureau of Economic Research held a similarly themed conference a couple years back. Broadly speaking, the conclusion of the NBER conference was "risk is rational". "Rational addiction models" were popular and common. People engaged in risky behaviors as a part of an explicit decision to maximize lifetime utility. It's not that crazy of a story - certainly we weigh the costs and benefits of some risks and choose a risky course of action. So I don't mean to belittle the NBER conclusions.

To a large extent, though, the IZA came to this conclusion too - but with more nuance and qualification. Empirical work on some risk behavior concluded that it was irrational some of the time. I also don't think this should be hard to accept for most economists, much less most people in general.

But one thing that occasionally came up that is talked about more often in other circles was the role of social norms and morals in risky behavior. The IZA conference covered lots of material, including infidelity, prostitution, murder, binge drinking, drug use, etc. etc. An outsider may have been surprised by the extent to which the group discussed these behaviors in very clinical, value-neutral terms. We talked about crack markets and sex markets as if they were markets for sandwiches or shoes. But occasionally, somebody brought up the constraining influence of morals.

I think economists could explore morals more thoroughly. Usually, economists think about maximizing something like utility or profit based on some decision set available to an actor. Morality could simply be understood as an institutional restriction on the available decision set, or perhaps excessively punitive costs associated certain decisions.

Another important question about the "optimality" of morals is to start to consider where morals come from. Let's assume for the moment that there are two types of morals: (1.) transcendent morals that universally restrict decision sets, and (2.) institutional rules that were created to minimize the costs and externalities of certain decisions. I include type 1 morals so that we don't have to argue about the most divisive and really the most important morals out there. By type 2 morals, I'm thinking about everything from the Jewish restrictions on pork to keep the Hebrews strong and healthy in the desert, to the myth of the evils of marijuana that was concocted in the 1930s. Insofar as type 1 morals are universally applicable and important, we're not especially concerned about any sub-optimality associated with them. If it is always excessively costly to the individual and society to murder, then the moral prohibition on murder that acts as a restriction on the decision set is always going to be optimal.

But what about those residual, type 2 morals that are inherited from the trade offs faced by bygone generations? These types of morals in all likelihood are forcing current generations into sub-optimal decisions.

My question is - if a sub-set of morals and norms really are just leftovers that distort the decision making process today, how do we deal with them? Are ethicists policing this at all? Is there a process for reevaluation? I think people naturally reevaluate morals in their own lives, but that process can be slow (not necessarily a bad thing).

I think it's nice to qualify the NBER assumption that risky behaviors are perfectly rational. Norms and morals do exist for humans, so they should exist in the science of human action. But the broader point of NBER rings true as well. We have rational faculties to weigh risky decisions. Morals inform those faculties. But if morals distort those faculties unnecessarily, what is to be done?

Production vs. Prosperity

I want to explore a little bit of Evan's query:

"Do those who provide goods and services contribute to useful cultivation, or do they perpetuate a practice of commoditization, either of ideas, tools, or resources?"

It's a reasonable question. Many have opined that the GDP statistics we collect are a poor measure of the true "wealth" of society precisely because this summation of values doesn't necessarily correspond to the creation of actual value in society. A homeless shelter may purchase paper plates and spaghetti from the store, and those purchases will show up in GDP statistics - but the couple of bucks that they contribute to GDP will far underestimate the "value" of that purchase to society when the spaghetti is served with a friendly face, an open ear, and a safe atmosphere.

But as Christopher Hitchens has recently pointed out: "There’s also the not-inconsiderable question of capitalism’s ability to decide, if not on the value of a commodity, at least on some sort of price for the damn thing." We need not assume that GDP encompasses all value to admit that there is value to the idea of GDP (and the products that it measures).

If we set up a straw man of modern production as some monstrous, commoditizing, corrosive influence then of course we will be able to vanquish that straw man and banish it to oblivion. But that would be a hollow victory, because that straw man doesn't really represent the "modern economy" as an idea.

Something like GDP is useful if we are realistic about what exactly it is: Gross (i.e. - after subtracting off imports) Domestic (a fundamentally political concept) Product (those things which are produced for sale in a particular jurisdiction). "Production" is a much more humble thing than "culture" or "happiness" or "value". Production includes the plows and tractors that make cultivation possible, as well as the proverbial pick up truck, farm windowsill, and apple pie (perhaps the apples are home-grown, but the flour is most likely ground somewhere else and the baking tin is almost certainly made elsewhere). This is what GDP is - production that is brought forth in the context of a market. And a market is nothing if not a social collective, and therefore absolutely relevant to "culture".

But Berry and Evan have a point that is illustrated in my example of the spaghetti and paper plates used in a homeless shelter. These contribute to GDP, but they only contribute prices - i.e., market values - and not social values. A great deal of social value is produced that is totally omitted from the GDP statistic.

Charles Murray (a real conservative's conservative) used the occasion of his March 11th Irving Kristol Lecture to speak on how a civilization's happiness is grounded in it's cultural institutions, rather than in cold economic calculations alone. On the other side of the aisle the Nobel prize winner responsible for attacking the Clinton administration from it's left flank, Joseph Stiglitz, has been tasked along with Amartya Sen by French President Sarkozy with exploring new ways of measuring growth to capture social happiness.

I think Berry's point is not lost even on those who deal with the modern, competitive market every day. The task is to:

1. Understand how markets both complement and conflict with culture and value, and
2. To be more realistic about exactly what GDP is and what markets can accomplish in the first place, and not penalize them for failing to accomplish something that it was never their task to accomplish.