I enjoyed this book - it is a delightful page-turner. I am also sympathetic to the main argument. The world is a messy, complicated place, and nice neat solutions, while seemingly satisfying, can have unintended consequences. But, perhaps fittingly, the book itself sometimes felt a bit messy, with only faint connections between the chapters and subjects. I recognised some of the serious ideas that lie behind many of the stories Hatford tells. But these ideas —upon inspection— are often distinct from each other. I haven’t quite decided whether pulling them together under the banner of “messy” is appropriate. Finally, I suspect that readers looking for advice on “how to succeed at life”, may be advised to look elsewhere.
Noah Smith: “Anti-empiricism is not humility”. And The Undercover Historian (Beatrice Cherrier): “How much do current debates owe to conflicting definitions of economics?”:
I’m thus left wondering to what extent current debates about the state of economics are nurtured by conflicting definitions of economics. Here’s my speculation: those economists who believe the shape of economics is good usually endorse the rational decision definition. Yet in the past decades, they have shifted toward a tool-box vision of their practices. They thus view interdisciplinarity as tool exchanges. Meanwhile, critics are pushing back toward a definition of economics that was in wide currency in the early XXth century, one concerned with understanding the economy as a system of production and distribution, one rooted in capitalist accumulation, technological change, etc. They believe economists should borrow from other scientists whatever models, concepts and theories will improve their understanding of how the economy works.
- Edward Tufte on “Displaying estimates +/- error, confidence bounds”.
Over the last three decades, most economists and central bankers have come to doubt the usefulness of money supply measures for conducting monetary policy, and have turned to macroeconomic models in which monetary aggregates have no role.
In a recent paper, using a specific, narrow monetary aggregate, M1, we study a dataset comprising 32 countries since the mid-19th century (Benati et al. 2016). The main finding of this large-scale investigation is that, contrary to conventional wisdom, in most cases statistical tests do identify with high confidence a long-run equilibrium relationship between either M1 velocity and a short-term interest rate, or M1, GDP, and a short rate – that is, a long-run money demand.
It was to be an intellectual paradise. What we got was…the blogosphere. Still a paradise of sorts! And free. But not a scientific paradise.
Sindre Sorhus: “Mac OS tips and tricks”
Dietrich Vollrath’s insightful discussion of the construction of capital output shares and the special role that owner-occupied housing plays in it:
The total amount of GDP getting paid to owners of homes is rising over time (Rognlie). But at the same time, the required rate of return on capital is falling (Barkai and BLS), which means that the profits on owner-occupied housing must be rising.
What do I mean by profits? Remember that these are economic profits, not accounting profits. Owners of homes are not seeing an increase in their cash flow. […]. Those economic profits are coming in the form of a higher imputed flow of GDP from my house over time. This implicit flow of value, a rent I’m charging myself, is getting cranked upwards over time, even if I don’t see it.
The implications of an increasing profit share coming from owner-occupied housing are a lot different from the implications of an increasing profit share coming from corporate market power or concentration.
Gladwell: This is the first book where you explore academia.
Lewis: It’s a weird place man. It’s really is odd. It reminded me a little bit of Hollywood, watching these movies get made. They spend three, four our five months making the movie and then eight months in award season, celebrating each other. They spend so much time celebrating each other, they don’t have time to make the movies. […]
In all arenas of ambition, the people are very status-conscious in them. This is true of Wall Street, this is true in Washington, but the way that people are so sensitive about their stature in their community - the only thing I’ve seen like it was in Hollywood. Academics spend a lot of time telling each other what geniuses they are. And at the dullest possible kind of events.
And the other thing that’s odd about them is that they write all these kind of papers that really aren’t meant to be read. They aren’t written to engage a reader. […] They’re written in a defensive crouch. They are written to survive their readers. […] I felt so sorry for academics by the end of the thing. (link)
The young are inundated with a barrage of information and facts so overwhelming that the world has come to seem an utter bedlam, which has them spinning in a frenzy, looking for what man has always looked for from the beginning of time, a way of life that has some meaning or sense. A way of life means a certain degree of order where things have some relationship and can be pieced together into a system that at least provides some clues to what life is about. […] This is what is behind the common cliché, “getting it all together” —despite the realization that all values and factors are relative, fluid, and changing, and that it will be possible to “get it all together” only relatively. The elements will shift and move together just like the changing pattern in a turning kaleidoscope.
That is Saul Alinsky in “Rules for Radicals” from 1971.
I just found the cool R package R.matlab which lets you easily transfer data saved in a Matlab
struct to an R dataframe.
First run in Matlab:
And then in R (see here):
[Machine learning] emphasizes approximating non-linear conditional-mean functions in highly-flexible non-parametric fashion. That turns out to be doubly unnecessary in econometric [time series]: There’s just not much conditional-mean non-linearity to worry about, and when there occasionally is, it’s typically of a highly-specialized nature best approximated in highly-specialized (tightly-parametric) fashion.
John Myles White, “What is an Interaction Effect?”:
The absence of interactions has nothing to do with linearity: it’s driven instead by a form of additivity.
After working with git, Dropbox stresses me out.
“This Book Left Me in Tears”, by Bill Gates
In Matlab, use an exclamation mark
! to pass commands to the terminal. Use
!pwd to check your working directory or
!ls to check which files are in the current folder. I came across this first here.
My favorite is
!open . (on a mac) and
!explorer . (on a PC) which opens the current folder location.
Saul Alinsky was a commuting organizer and wrote the book “Rules for Radicals: A Pragmatic Primer for Realistic Radicals”, which I came across at this good short post.
The Prince was written by Machiavelli for the Haves on how to hold power. Rules for Radicals is written for the Have-Nots on how to take it away.
And he aims high:
Remember we are talking about revolution, not revelation; you can miss the target by shooting too high as well as too low.
A “revolution” for him means turning over existing power structures. He stresses that it’s not the same as promoting communism:
Today revolution has become synonymous with communism while capitalism is synonymous with status quo. […] We have permitted a suicidal situation to unfold wherein revolution and communism have become one. These pages are committed to splitting this political atom, separating this exclusive identification of communism with revolution.
And he thinks political change won’t come without a conflict:
All of life is partisan. There is no dispassionate objectivity. […] This raises the question: what, if any, is my ideology? What kind of ideology, if any, can an organizer have who is working in and for a free society? The prerequisite for an ideology is possession of a basic truth.
(See also Jan-Werner Müller’s criticism of meritocratic technocracy.)
However, finding one’s ideology isn’t easy:
An organizer working in and for an open society is in an ideological dilemma. To begin with, he does not have a fixed truth—truth to him is relative and changing; everything to him is relative and changing. […] In the end he has one conviction—a belief that if people have the power to act, in the long run they will, most of the time, reach the right decisions. The alternative to this would be rule by the elite— either a dictatorship or some form of a political aristocracy.
It is the schizophrenia of a free society that we outwardly espouse faith in the people but inwardly have strong doubts whether the people can be trusted.
He argues against passive pessimism, withdrawing from and accepting the world as it is and makes an optimistic case that change is possible. He then offers much advice on how to get it done.
I liked this bit:
It is a world not of angels but of angles, where men speak of moral principles but act on power principles; a world where we are always moral and our enemies always immoral; a world where “reconciliation” means that when one side gets the power and the other side gets reconciled to it, then we have reconciliation; […].
And he stresses that despite all revolutionary rhetoric, one should realize that:
I can attack my government, try to organize to change it. That’s more than I can do in Moscow, Peking, or Havana. […] Let’s keep some perspective.
And he talks a lot about the lower middle class:
If we fail to communicate with them, if we don’t encourage them to form alliances with us, they will move to the right. Maybe they will anyway, but let’s not let it happen by default.
Alinsky argues that words like “power” or “self-interest” should not be watered down, but used just like that. It’s interesting to hear Barack Obama speak and use just these words very deliberately. (And, incidentally, Alinsky was also the subject of Hillary Clinton’s undergraduate thesis.)
The role of a community organizer as the author describes it, sounds like that of a management consultant. He’s an outsider who enters a local community and wins their trust. He questions existing power structures, the ways of rationalizing how things are and the ways things are run. And he can be blamed if things don’t work out.
He stresses the need for a realistic assessment of the situation:
As an organizer I start from where the world is, as it is, not as I would like it to be.
Most of us view the world not as it is but as we would like it to be.
He promotes a flexible, messy approach and for embracing uncertainty, but one’s language should be firm:
A leader may struggle toward a decision and weigh the merits and demerits of a situation which is 52 per cent positive and 48 per cent negative, but once the decision is reached he must assume that his cause is 100 per cent positive and the opposition 100 per cent negative.
Alinsky writes that much of this is just reacting to external events. Only in hindsight do people assign deep reasons for why one has acted in a way:
The lesson here is that a major job of the organizer is to instantly develop the rationale for actions which have taken place by accident or impulsive anger.
The danger is that people don’t like being told that they’ve been wrong. If you now tell people to do things different, then they must have done things the wrong way before. So the organizer will seem aloof and people think he considers them dumb. And he emphasizes that you have stay within people’s experience to communicate with them:
People only understand things in terms of their experience, which means that you must get within their experience. […] I know that I have communicated with the other party when his eyes light up and he responds, “I know exactly what you mean. I had something just like that happen to me once. Let me tell you about it!”
This argument is flipped around when he talks about how to treat one’s enemies, which should be “frozen and personalized” and be made uncomfortable by going out of their experience. This reminded me of Tim Harford’s treatment of how Donald Trump hijacked his opponents OODA loop.
To avert a clash with the community, an organizer should start gently, with easy wins which he calls “cinch fights”. And – seemingly straight from Dale Carnegie – then let people figure out the important stuff themselves, so that they feel like they came up with it.
However, it’s hard to keep up the momentum:
Among the reasons is the simple fact that human beings can sustain an interest in a particular subject only over a limited period of time.
From the moment the tactician engages in conflict, his enemy is time. This should be kept in mind when one is considering boycotts.
He writes that one of the best things that can happen to a revolutionary is to be put in prison for a short while. It makes the organizer a martyr and focuses the movement. And Alinsky, who spend short sentences in jail himself, thinks that it’s a good place to get work done. The guards are dull and it strips away any distractions. But if you stay too long, new problems will arise and you will get out of touch. He suggests one to three months.
Overall, I recommend the book. It’s well written and compact. And it’s not as controversial as its title would have you believe. In fact,
The use of the adjective “controversial” to qualify the word “issue” is a meaningless redundancy. There can be no such thing as a “non-controversial” issue. When there is agreement there is no issue; issues only arise when there is disagreement or controversy.
If you’re in Bonn, you should go to the Bundeskunsthalle’s “A Brief History of Humankind”. This is the corresponding exhibition to “Sapiens: A Brief History of Humankind” by Yuval Noah Harari, a book about which I’ve heard good things.
It exhibits artefacts such as 1.4 million year old human tools, a Gutenberg Bible and Einstein’s manuscript of E = mc² (looking a bit like handwritten Latex), all next to contemporary art. What I liked most was a little room filled with ancient figurines of gods from many civilizations.
It only runs until March 26.
Interesting perspective on preferring structural (“generative”) over reduced-form (“discriminative”) models:
The mindset for many in the “data science” scene, especially in finance, is “how can I use machine learning tools to discover structure in my data?” I’d caution against this approach, advocating instead a mindset of “what structure might give rise to the data that I observe?”
And related to this by Scott Alexander on automation and artificial intelligence:
One theme that kept coming up was that most modern machine learning algorithms aren’t “transparent” – they can’t give reasons for their choices, and it’s difficult for humans to read them off of the connection weights that form their “brains”. This becomes especially awkward if you’re using the AI for something important. Imagine a future inmate asking why he was denied parole, and the answer being “nobody knows and it’s impossible to find out even in principle”.
By the end, the war had cost the lives of at least 5.2 million German servicemen—nearly three in every ten men mobilized—and more than 2.4 million German civilians. Total mortality approached 10 percent of Germany’s prewar population. To a remarkable extent, these casualties were inflicted in the final year of the war. More German soldiers lost their lives in the last twelve months of fighting than in the whole of the rest of the war.
Given this extreme malleability of the R runtime it is a legitimate question: “why R hasn’t fractured into a million incompatible domain specific languages and died?”
From Timothy Taylor’s recommendations in the new issue of the JEP, “Seven Facts on Noncognitive Skills from Education to the Labor Market”.
My Grandma died when I was young, but in later years my Grandad told me that her parents, my great-grandparents, had gone to Canada and had promised to call for their daughters when they were settled. They never did.
afinetheorem (Kevin Bryan) breaks 7 years of “economic research only”