Monday, August 13, 2012

Assault of thoughts - 8/13/2012

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

- It turns out Harry Byrd, leader of the Byrd machine in Virginia for many years, wasn't just backwards on civil rights. David Henderson shares that he was backwards on economics as well. Interestingly enough a lot of the examples given (the Wagner Act, the TVA, increasing government employment substantially in the early 1960s, when the economy was in pretty good shape) aren't really centrally Keynesian (TVA could be considered Keynesian, but the objection was over the social damage in that case), but he also wasn't too happy with Kennedy's tax cuts or departure from the dedication to balanced budgets.

- Ryan Murphy discusses Steven Pinker on essentialism here. I think I would make a bad philosopher, for one thing because I always have to look up exactly what "nominalists" argue. To me, essentialism and nominalism both sound extremist and entirely unhelpful. Are there "universals" or "essential essences"? Well of course it depends on what you mean by that. Different things have things in common and it's worth noting that they have those things in common. I'm not sure that makes me an essentialist. That just means I'm pretty much at Sesame Street level ("one of these things is not like the other, one of these things does not belong..."). At the same time these are just organizing categories even if they're very consistent organizing categories. So maybe I'm a nominalist? But since I keep having to google "nominalist" I don't know about that. I'm just always amazed anyone is any of these. And this is part of my frustration with philosophy. The average person knows there are comonalities and maybe those commonalities are really fundamental to a thing's identity. But I don't think the average person would go as far as the essentialist or nominalist claims, and I think the average person would be right in that. Cornel West once wrote about "the American evasion of philosophy", and when I read posts like this I feel very much in that tradition of evasion myself. I get the impression Ryan is on much the same wavelength, although he might not feel so evasive about the philosophy. He does not sound impressed with either position. Ryan also talks about how philosophical and methodological nominalism are correlated with political positions. I really don't follow him on this at all. I think it says more about what Ryan thinks of the left than it says about anything inherent in the left.

- Gene has some interesting thoughts on Peirce, types of signs, and IQ tests here. I'm more familiar with critiques of standardized tests like SATs and the PIAT which are reported to show that Americans aren't as sharp as foreigners. The complaint I usually hear is either different emphases of education in the U.S. (creative thinking and problem solving vs. rote memorization) or cultural differences (SAT verbal questions are written with a middle class life experience bias). So this more fundamental difference on IQ tests is a new thought for me.

- Jonathan has thoughts on one of the most important chapters of the General Theory, chapter 12 on long-term expectations. The first paragraph is very important to digest, because it's very different from the way people usually think about investment. Investment is determined by the interest rate, which is a limiting factor, and the marginal efficiency of capital. If the marginal efficiency of capital for an extra dollar of investment is lower than the interest rate it makes no sense to borrow to invest, but it also makes no sense to put cash you have into an investment; you should put it at interest instead. If the MEC is higher than the rate of interest, you borrow to invest more. That's the equilibrating mechanism. Supply of and demand for capital goods (what we normally think of as determining the quantity of investment and the interest rate) is all tied up in the marginal efficiency of capital calculations. The interest rate in this case is determined by liquidity preference. So although you've still got to functions set equal to determine the level of investment, it's a very different approach from what a lot of people are used to. Now I've spend a whole paragraph talking about his first paragraph! The rest of course speaks to the MEC, which is where investors' assessment of future returns enteres the calculations.


  1. I'm not too familiar with American history, so I can't give too much of a comment on Byrd. But even then, it's another sign that Keynesian economics wasn't accepted by everyone, even in the so-called "Golden Age".

    Somehow Daniel Kuehn, I have the feeling that you would have at least enjoyed Philosophy 101, if you had a good professor and had taken the subject. I enjoyed Philosophy 101, but didn't do the essays properly.

    Regarding Callahan's post on C.S. also illustrates the innumeracy of a lot of people, regardless of test design and regardless of where they come from. Mathematical literacy wasn't as important in evolutionary terms as other kinds of survival skills.

    Regarding Jonathan's notes on Chapter 12...did you read the comments section? Dr. Michael Emmett Brady would agree with many people that Chapter 12 is the spiritual part of Keynes's magnum opus, the technical part of Keynes's magnum opus would be Book V (Chapter 19, Appendix to Chapter 19, Chapter 20, and Chapter 21).

    Regarding the marginal efficiency of capital...I've heard that some heterodox Post Keynesians have criticised Keynes for using the M.E.C. concept. Dr. Brady has responded to this criticism by indicating that Keynes considered both cases in Chapters 11 and 12 of his magnum opus.

    Finally Daniel, as I've let you know before in an e-mail, Dr. Michael Emmett Brady's paper on George Boole and Keynes's interval estimate approach to probability has been accepted for publication at Italy's History of Economic Ideas, and it shall be known as "Boole, Keynes, and the Interval Approach to Probability". Will you read the paper once it's out, and would you cite it in the future?

    1. Not to sound rude, but why do you (at this rate) just spam Dr. Brady's works? You're asking him to cite his papers in the future. Shouldn't he decide that without someone requesting it of him?

      From Mr. Kuehn to Jonathan Catalan's blog and maybe even more you leave comments that amount to nothing more than "have you read Dr. Brady's paper on X,Y,Z. All I can see are unoriginal thoughts from you that amount to nothing more than you should read x,y,z on Dr. Brady. No matter what post comes up. Is that all you have to contribute? Why don't you yourself elaborate on Dr. Brady's theories in your own words? Why don't you offer your own thoughts?

      Is Brady the only economist that offers valid thoughts in your opinion?

      Where are your own thoughts on this? I've seen the guest posts but that's it. Almost every comment I've ever seen you made has been about Dr. Brady. Not even Internet austrians focus their attention on just one single economist's works.

      I don't know if you realize this, but you've hardly been persuasive in your attempts to make more people take Brady seriously.

      Sorry, just venting. It's boring see every single discussion that brings up Keynes be taken over by you linking Brady.

  2. That isn't really just me talking. Against essentialism, that is Popper, a moderate classical liberal. Against leftist academic nonsense, that's Pinker (more The Blank Slate than How the Mind works), a centrist.

  3. The Byrd thing is informative to the Obama/Keynes post a few days back.

    While LBJ outmaneuvered Byrd on civil rights, he did it by compromising on the tax deal first. This was smart because it made the filibuster relatively toothless. Back then, a filibuster held up all other legislation. So lukewarm but pro civil rights Senators were more likely to cave on cloture if its holding up something they deem more important than ending apartheid. (Best to read that deadpan).

    So, on civil rights, LBJ only had to defeat a minority faction within his own party. Between northern dems and republicans, the pro-civil rights side had a huge majority over White Supremacists on the other end...of which there were 22 solid ones in the Senate.

    Obama never had such favorable numbers on his side. Which brings us along to economics. Southern Dems are known as conservatives. But in reality they only wanted to conserve Jim Crow. In other words, on matters of economics, Liberal Republicans (Case, Keating, Javits) were to the right of most White Supremacists.

    Harry Byrd did not represent the zeitgeist among Southern Dem Senators. For every Byrd/Thurmond there was a Gore/Fulbright. Most ended up as moderates who leaned left. But even without them, LBJ had a majority over republicans. Had all of them decided to oppose the war on poverty, he would've been in trouble. But they didn't. At most, only half of them gave some resistance and the filibuster was not really used for non-civil rights issues.

    Obama, in contrast, especially after '10, is working with a much more difficult hand.

  4. Having a different position, in some context or another, than David Henderson does not imply one is "backwards on economics".


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