Sunday, February 14, 2016

gravity waves!!!

I've got plenty more tedious thinking out loud to do on utilitarianism, but there are more important things going on right now. Gravitational waves!!

This. Is. So. Cool.* And what an awesome time in space science: first we went to Pluto, then found pretty striking evidence for Planet 9, then SpaceX friggin landed a rocket, and now we can listen to black holes colliding.

I can't even count how many talks on LIGO I heard at Caltech, and after arriving seriously excited about the project being located right there, got completely bored by it after about one semester, because the entire project up until now has frankly been engineering, not astronomy.** (I mean, you should read about the engineering, because it is a mind-boggling achievement: they detected a vibration the width of one thousandth of a proton!! Do you have any idea how tiny a proton is? An atom the size of a football stadium would have a nucleus (containing the protons) about the size of a pea, and a single human hair is about a million atoms thick. I can't believe someone thought "yeah we can do that" let alone did it.) So I kinda forgot about it, like I did New Horizons, and then bam, Einstein's prediction was confirmed on its 100th anniversary.

And now the real astronomy is coming back into play, and somehow we're now able to know things like that two black holes 1.3 billion light years away collided and 3 solar masses worth of material was converted into gravitational waves, briefly emitting more energy than the rest of the visible universe combined, and 1.3 billion years later we managed to detect spacetime smoothing itself back out as the black holes stopped spinning and combined into a single stable unit. That's ridiculous.

The New Yorker article is pretty good if you don't want to watch the press conference. Or just read the paper.

~~~

*I used to be highly averse to acquiring information through videos and would never link to one, but with the new ability to increase the speed with two clicks in youtube, I relent, especially in this case because the press conference with the actual scientists is a much better source of information than journalists. It's definitely worth watching.

**Engineering is cool too, but I'm not interested in it automatically, only when excited knowledgeable people (i.e. Matt) tell me about it.

Wednesday, February 10, 2016

picking on Scott some more

Or at least using him as an example, with only the friendliest intentions, I swear :)

Scott Sumner is both a libertarian and a utilitarian (rounding to the nearest word, in both cases). As far as I can tell, I have very similar views on both topics. But I'm also a behavioral economist, which is a field Scott is skeptical of. But I think that part of the reason libertarians are frequently skeptical of utilitarianism is related to the reason why libertarians are frequently skeptical of behavioral economics. So, my hope is that if someone can reconcile the former pair, as Scott and I have, I can convince them to also reconcile the latter.

This is certainly only part of the story, but utilitarianism is viewed skeptically by many libertarians for two reasons.

First of all, it's frequently used an an excuse for redistribution and other types of government meddling. Honestly I think it's a little odd that any one school of thought is mad about utilitarianism being used as a justification for another particular school of thought, since utilitarianism can be used to argue for a pretty wide range of schools of thought, since the argument over what provides the most aggregate utility does not exactly have a straightforward answer, and since it's natural for anyone with a particularly high utility from X to believe that X is overly important for everyone else's utility as well, leading to plenty of disagreement automatically. But, maybe because of the historical accident that Bentham invented utilitarianism in order to justify redistribution, they've become tightly associated.

Second of all, moral libertarians place liberty on a pedestal above all else, regardless of consequences. That is, they want liberty even when people on aggregate don't want it. This is utterly bizarre to me. I'm quite sure that the reasoning went in backwards order:

  1. Want liberty. 
  2. Invent coherent philosophy justifying the supremacy of liberty by assuming the supremacy of liberty as the first principle.
  3. Conclude that liberty is supreme, even when not wanted. 
  4. WTF? Oh well, double down.

instead of (the pragmatic libertarian approach)

  1. Want utility. (By definition).
  2. Conclude that this is best extended to all of society by aggregating individual utility.
  3. Conclude that liberty is a critical component of the best society, since liberty is so important to utility, both individually and especially in equilibrium societal outcomes.
  4. Want liberty.
You can argue about points 2 and 3 but you really can't start with anything but number 1. That's the definition of utility!

This finally brings me to the punchline; sorry for the delay. The only way to be uncomfortable with step 1 is if you can't imagine the many ways in which nonmaterial things contribute to utility. For some reason, aggregating everything you could want into a single concept seems to be really distasteful and difficult for many people. Perhaps this is another historical accident: the word "utility" is usually used by economists who, for the sake of tractable models, are using a proxy for utility (usually money). So people say, but money isn't all that matters! What about love! And the economist should say "well yes, of course, but I'm talking about shoe stores, so I really don't think that's going to substantially make a difference to my analysis in this context" but more likely than that there are no non-economists in the audience and so no one asks the question and so over the years the economists forget that money was only a proxy for happiness in the first place. Or they don't forget, but they don't have a reason to point it out because all the other economists who are listening already know this, but then non-economists read economic papers and don't realize that the caveat is implicit.

But even more than not being able to think of creative sources of utility, I think the more fundamental problem people have with the concept of utility is with the notion you might try to measure it. These things feel very beyond quantification, and so how can you possibly summarize all of them in a single number when you can't even assign one number to each attribute, much less add them together. I acknowledge this is very hard. But we don't really do it, we barely even try, so it doesn't really matter. These arguments are always qualitative as soon as they move beyond basic monetary cost-benefit analysis. We can't even incorporate the statistical value of a life without a great deal of confusion and counterintuition, let alone love and fulfillment and ego and excitement and anxiety and spirituality and all the rest of the uncountable facets of human experience. And as long as we're dealing with grand qualitative concepts, is it really so hard to imagine that there are indeed tradeoffs between different priceless things? 

Consider religion. On the one hand we have the joy and inner peace and sense of community and cultural continuity that comes with religion, and on the other hand we have the conflict and human lives that come from religion. Do you think it's worth it? I don't know. I know that if religion meant permanent world war, I would definitely vote for no religion. And I know that if there was only one world religion and no resulting conflict or death and this particular religion didn't get in the way of science and the only downside was the discomfort of the minority who inevitably feel a little excluded because they just don't have the gene for that spiritual stuff, myself included, I'd vote for religion. So there are tradeoffs. I have no idea where the line is, but I know there is one.

Or imagine Sophie's choice (which I haven't seen [is it a movie?] so if I have it wrong just go with it.) One's children are priceless and it seems impossible to choose one over the other. But if I had five kids and had the choice between killing one or killing the other four, that's an easier choice. Again, lines may seem impossible to draw, but that doesn't mean they don't exist.

This a great SMBC that is relevant. Yes, do come to the dark side :)

Ok so the point: libertarians shouldn't be hostile towards utilitarianism because liberty provides enormous utility and so the two principles are compatible. And if you can accept that liberty is an input into utility, why can't you accept that behavioral economics, as the branch of economics that mostly explores non-standard sources of utility, is, if anything, a friend to libertarianism? There perhaps has not yet been much work on the inherent value of having choice (although I think I recall an experiment or two that touch on this), but when we get there, it will be behavioral economists studying it.




Well that was much longer than I intended.

Sunday, February 7, 2016

things are interesting

Replace "Sunday" with "obscenely early on Monday" and this xkcd strip, one of my favorites, fits me perfectly:*


Almost everything is interesting when you learn enough about it and/or when hearing about it from someone passionate about it. The silly hipsters who are too cool to admit to enjoying anything unironically are missing out on a great deal of unadulterated joy.

*Except I no longer don't know much about football, because I spent a lot of time listening to someone who was super excited and knowledgeable about football.

Wednesday, February 3, 2016

Scott Sumner on behavioral economics

Scott, who I generally love, has had two posts recently allegedly criticizing behavioral economics. But he's actually criticizing a small subset of behavioral economics, and on that subset, to the extent that he's right, he shouldn't be.

In a nutshell, he's saying that the problem with behavioral economics is that its practitioners are too quick to judge actions as irrational. He provides various examples that one might attribute to irrationality that are actually easily rationalized. But they are easily rationalized using concepts from behavioral economics! He uses social preferences to rationalize Christmas giving, anticipatory utility or something closely related to rationalize buying lottery tickets, any number of possible behavioral economic sources of utility to rationalize voting, and loss aversion to rationalize buying warranties on small purchases. Far from building my career on the idea that most people are stupid, I'm building my career on the idea that people are much less stupid than the average classical economist might think.

He even explains why himself: "This kind of thinking led Deirdre McCloskey to turn away from "maximizing utility" models of behavior. I see her point. But I don't see utility as the problem, but rather a lack of imagination as to all the subtle ways that people can derive utility." I completely agree. And a vast majority of behavioral economics is exactly in the business of imagining the subtle ways that people can derive utility and adapting classical models to incorporate them.

This definitely isn't a refutation or overhaul of classical microeconomic models**. It's a set of tweaks to deal with of situations in which those models can't handle the reality of utility. You don't need to tweak the standard model if people are discovered who really love drinking sour milk: that's a weird preference and seems pretty mistaken to me, but classical utility functions don't care what your preferences over regular goods are. De gustibus non est disuputandem. You do, however, need to tweak the theory to account for social preferences, because social preferences interact in ways that classical preferences aren't equipped to represent. Same thing for loss aversion, anticipation, ambiguity, ego, social image, guilt, etc etc etc etc.

I'm going to go out on a limb and hypothesize that the reason Scott seems to be fixating on a particular subset of behavioral economics (the part that catalogues the systematic ways in which people make mistakes*) and getting irate at the implications a particular subset of behavioral economists often prematurely jump to (that they therefore need help making better decisions), and unfortunately accusing the rest of the field of practices that I wholly agree are ill-advised, is that he is libertarian. There's quite a bit of animosity towards behavioral economics from libertarians, of exactly the type Scott is stating, due to their aversion towards meddling in people's choices. They worry that if behavioral economists are busy showing how people need help making decisions, someone will use this as justification for government meddling. I, as a basically-libertarian behavioral economist, share these concerns and it drives me nuts when I see my colleagues jump to these conclusions prematurely (that's a whole other argument).*** But the correct response is to appeal to better behavioral economics, which luckily is most of behavioral economics. It's the solution, not the problem.

~~~

*I am intentionally saying "make mistakes" here, as I really hate how the term "irrational" is thrown around when "mistake" is what is meant. Of course people make mistakes, even systematic mistakes. The fact that they correct (most of) them when they're pointed out means they're still perfectly rational.

**Contrary to popular belief among non-professionals, but certainly not among behavioral economists.

***It also worries me extremely how immediately students jump to "to help policy makers" as a justification for any economic study. Usually to the absence of any other justification. Sure that makes sense for public finance and monetary policy and such, but shouldn't be anywhere near the top of the list for most behavioral economic studies. (It often is, but I maintain it shouldn't be. That's that whole other argument I was mentioning.)