Freedom, Justice, and Economics

Now according to prescient Easterbrook and White she’s just one game from the crown.

“You fight your superficiality, your shallowness, so as to try to come at people without unreal expectations, without an overload of bias or hope or arrogance, as untanklike as you can be, sans cannon and machine guns and steel plating half a foot thick; you come at them unmenacingly on your own ten toes instead of tearing up the turf with your caterpillar treads, take them on with an open mind, as equals, man to man, as we used to say, and yet you never fail to get them wrong. You might as well have the brain of a tank. You get them wrong before you meet them, while you’re anticipating meeting them; you get them wrong while you’re with them; and then you go home to tell somebody else about the meeting and you get them all wrong again….. The fact remains that getting people right is not what living is all about anyway. It’s getting them wrong that is living, getting them wrong and wrong and wrong and then, on careful reconsideration, getting them wrong again. That’s how we know we’re alive: we’re wrong. Maybe the best thing would be to forget being right or wrong about people and just go along for the ride. But if you can do that–well, lucky you.

Early in American Pastoral, Philip Roth’s stand-in Nathan Zuckerman reflects thus in the midst of recounting his dinner encounter with The Swede. I think Roth/Zuckerman are right that it’s common to undertake this kind of presumption about people, and common to feel all too alive as a result. No doubt people are free to presume like this….

But what’s most interesting to me are the last two sentences, the idea that (i) people might be better off not to presume like this, and (ii) we might have a choice about it (not to mention (iii) that getting people badly wrong might do them injustice). It would be no surprise to me if Roth himself can’t help his long flights of speculation, if upon seeing someone he immediately begins constructing a narrative about him or her, full of family, inner life, and childhood sources of persistent angst. Roth’s objective in doing so is presumably to entertain, either to entertain a present or future audience, or just to entertain himself. If I were to launch into such a flight of speculation about, say, a professional acquaintance, I could be detrimentally distracted from the substantive content of our interactions. It would be better for me to concentrate on the equilibrium we’re discussing than to imagine whether his parents made his favorite baked ziti often enough when he was a kid.

… So to react to Roth’s last sentence above, I guess I think many of us are “lucky”– but lucky in a deliberate way, lucky to be able to concentrate on what matters to us about other people, lucky to be able to concentrate on the substance and character they choose to put forth. And if “unlucky,” we have a choice about how to speculate, too. I most often choose to speculate sympathetically– and if wrong, sure, plenty content to be alive.

For three reasons I was struck by the ads preceding a showing of Indiana Jones and the Kingdom of the Crystal Skull at the George St Odeon in Oxford exactly one week ago. First, they began at exactly the time the show was listed to begin. I’m used to theaters that pitch to and entertain early arrivals, at least with a bit of movie trivia.

Second, the ads were abysmal. A week later I still feel the twisting in my stomach that I mostly had associated with Full House reruns. Most of the ads were bookended by an acknowledgment to some agency that had presumably bid for the right to the screen time and compiled the ads to show. If I were Odeon, I wouldn’t want to immiserate my consumers like that– I would want to keep control of the content.

Third, the ads went on for a full half hour despite (here’s the kicker) the fact that all tickets were for reserved seats. US theaters typically induce moviegoers to watch pre-movie ads by dangling the carrot of a better seat for the main feature. If you dare to try to arrive late and skip the ads, you may find yourself craning your neck from the front row. But next time I’ll know to buy my reserved seat ahead of time and confidently show up half an hour late.

All of this does provoke a question. I made the mistake of showing up on time because I don’t go to the movies all that often (though slightly more often than Professor Jones appears!). But how can this advertising structure persist?

• If typical moviegoers like the ads more than me, one would expect the ads to start before the film’s scheduled start time.
• Perhaps the ads are intended to be so bad as to cause people to wait in the lobby, where temptations of course abound. But then I don’t see why people with reserved seats would arrive on time.
• Or, more hopefully, perhaps the awful ads make the movies themselves seem better. Then with small costs for running the projector, the ads might begin only at the scheduled time, and people might come on time to watch them.

The third bullet is the only explanation that sticks for me so far– and it requires that British moviegoers prefer Indiana Jones preceded by half an hour of drivel to Indiana Jones alone.  Plausible?  Not impossible…

“Well, Native Americans were here before women.  [Women stare open-mouthed.]  No offense to women!”

Thomas Schelling’s voice resembles that of Ronald Reagan.

Jeffrey Goldberg’s thoughtful Op-Ed in today’s Times, as part of a collection of pieces relating to the 60th anniversary of Israel’s independence, resonates. Like my earlier post it highlights the differences among Jews, and it takes the important further step of explaining how and why those differences can lead to practical difficulties in policy-making.

On the specific question of what to do about the settlements, I had once considered the notion that Israel could simply choose to abandon them militarily: choose a new boundary of control, and pull back to that line. After establishment of a Palestinian state in the West Bank, Jews choosing to remain in settlements there could be subject to the laws in force there, and hold all the attendant rights and responsibilities. Relocation support could be offered, to facilitate settlers’ removal to Israel, ensuring that ideologues would predominate among the remaining settlers.

And those remaining would feel even more like they were manning sparse outposts in a threatened land. Moreover, especially lacking support from the Israeli military, direct conflicts with Palestinians would be likely. Some of the remaining settlers would make a tenuous peace; others would test the law-enforcement powers of the new Palestine; and some would be outmatched in outright battle.

I had once considered the “just pull out” option for four reasons. First, it’s obvious that creating a territorially viable Palestine requires either the elimination (and hence the relocation of the settlers to Israel) or absorption (as considered) of many existing settlements. Second, many settlers would not want to leave, for practical and ideological reasons (like the ones who were distraught about departing Gaza at the time of Israel’s pullout). Third, it is important for states, to mature, to have minorities whose rights must be protected.

Fourth is the scary one. I presume that the Palestinians, like any newly independent people, will feel more thrill about their independence if it comes with what they can call a victory.  Armed clashes with recalcitrant settlers– which would be bloody and awful– would presumably result in Palestinian victories that would be satisfying for them.

My now clear opinion– against the military abandonment of settlements, and of settlers who choose not to accept the relocation support– mostly stems from greater fear about Reason #4.  Israel would not be able to stick to a commitment to abandon settlers; settlers would not submit to the authority of a Palestinian state; and many of the 268,000 settlers would fight ferociously, and be heavily armed.  In short, the resulting war between the settlers and the Palestinians over the West Bank would be a disaster.

… so I return to the familiar practical questions, which are implicit in pieces like Goldberg’s:  how can consensus build to dismantle settlements, how can large settlements be incorporated into reasonable boundaries, how can two functioning, peaceful states emerge?

I was impressed to discover today that a decade-old paper by Richard Blundell and Steve Bond, “Initial conditions and moment restrictions in dynamic panel data models,” has 1503 cites on Google Scholar. The paper discusses the validity of panel data estimation approaches using particular selections of GMM identification restrictions. Techniques validated by the paper have become ubiquitous for their generality.

Saltwater empiricists in the US, however, tend to expect clean experimental variation. And freshwater empiricists in the US also generally pursue a different approach, relying on identifying restrictions that come from models with more structure. The Blundell-Bond paper and the related literature suggest a generically valid approach conditional on certain lags and lagged changes of error terms and dependent variables being uncorrelated.  I am led to the question: which real-world settings reliably satisfy the required conditions?

Every now and then someone picks a fight with me about the epistemology of science. As a former physicist and current economist, I might be particularly touchy on this topic. But I’ve found myself comfortable with a simple position that efficiently resolves most debate.

Often at issue is that many scientists demand that we are searching for capital-T-Truth. Logic and mathematics are indeed about truth– or at least conditional truth– in the sense that very specific rules tell us what conclusions can be drawn from what premises. To the extent theorists (in physics or economics, say) just do math, that research is also about Truth. However, if the premises– the assumptions of the model– are wrong, that Truth may have no bearing on reality.

For all applied work– work that uses real-world data, sometimes to test various theories– my satisfying criterion is whether we’ve come up with a way to make reliable predictions.  Mixing hydrogen and oxygen gives you water and a bundle of energy:  that’s a reliable prediction.  The next solar eclipse will occur on August 1, 2008.  If a central bank prints a huge amount of money and pours it into an economy, inflation will result.
I care little about whether these are everlasting Truths.  (Sometimes predictions are possible because we’ve observed the same phenomenon repeatedly and reliably: under ordinary circumstances, putting a pot of water on a hot enough fire will cause the water to boil.  Sometimes predictions are possible because we have an encompassing underlying theory:  gravity assists can be used to send probes like Cassini to their destinations.  I guess I would say that to me those underlying theories represent something like Truth.)  Mostly, I just appreciate that science and scientists have learned enough to make these and other predictions about the world with very high levels of confidence.

As the horror caused by Cyclone Nargis comes into sharper focus, I realized I had the nagging feeling that this storm was largely ignored by the press even as the enormity of its threat grew apparent. To assess the press’s attention, at 9:09pm GMT on Tuesday, May 6, I conducted this Google News search, using the Advanced news search tool, for all mentions of the pair of words “Myanmar” and “cyclone” over the past month.

Credit goes to the Hindu Business Line for the first journalistic mention of the cyclone, the only news story on April 27 to fit my search criteria. Bangladesh’s The Daily Star was the only publication to report on Nargis on April 28. Five hits match from April 29, of which two are irrelevant to Nargis. The three relevant hits came from the two sources already on the story and the Howrah News Service.

On April 30 the AFP, Thaindian.com, and Hindu Business Line had stories. Only six stories were published on May 1. My Google News search turned up 17 hits, finally including major Western sources like IHT and AP, on May 2. However, those stories blandly describe power outages and cancellations of plane flights in Yangon.

Little surprise, you might say: This New York Times graphic charts the time path of the storm along the Myanmar coast, and shows that the eye of the storm was not set to pass Yangon until 6:30am on May 3.

On August 27, 2005, 249 stories in the Google News archive came up in a search for Hurricane Katrina, which made landfall in the early morning hours of August 29. On Saturday the 27th, the CNN Live Saturday transcript reads in part, “We begin with a nerve-racking wait along the central gulf coast. Just a couple of days from now a monster of a storm is expected to pound the region. Right now, hurricane Katrina is swirling in the warm gulf water as a Category 3 and it’s getting better[sic] and stronger.”

Yangon’s population of 6 million dwarfs New Orleans’; a disproportionate share of Myanmar’s population of 60 million live near the shore, in the Irrawady Delta, directly in Nargis’ path; Nargis was a Category 4 storm while Katrina (at the time of landfall) had weakened to Category 3; poorer construction standards meant scant protection for already much-embattled residents of Myanmar.

I do not mean to minimize the tragedy of Hurricane Katrina, but rather to highlight most of the press’ blindness to the impending catastrophe of Cyclone Nargis. For the Burmese, cut off by a repressive regime, an outside clamor might have led to additional, live-saving precautions.

(Data, continued:   May 3, 40 hits; May 4, 140 hits; the most recent four hours, >1000 hits.)

Grudgingly, I acknowledge being impressed with this 1972 Richard Adams tale of a troupe of rabbits. Looking past the floppy chapter-opening epigrams, the nibbles of contrived rabbit language, and the diminutive hop from rabbitdom to transcendent themes, three pieces gave me particular delight.

Adams imitates Tolkien and endows his rabbits with a full mythology, with deity, villains, and heroes. Storytelling thrives among his rabbits, who never tire of good re-tellings of favorite myths. Not only are the myths themselves brilliant, reinforcing faith in rabbits’ canny drive to survive, the myths balance and propel the troupe’s adventures.

Second, Ibn Fattouma-like, we encounter rabbit warrens with a variety of political structures. The Threara presides over a somewhat chaotic warren; Cowslip fosters arts, intellectualism, and detachment; General Woundwort runs a fascist warren; and of course Hazel is an enlightened leader.

Third, Hazel is an enlightened leader. From the book’s opening he instantaneously sizes people (er… rabbits) up, and decides what he can and can’t count on them for. The skill to consciously assemble a team-of-all-comers in this way– and maintain peace and cooperation among all– is rare and valuable. Adams’ craft shines bright in sharing what he gives to Hazel.

Between Wind in the Willows and Lord of the Flies, for children and adults, Watership Down certainly does transcend rabbitdom (though it need not have in order to be great).