Weird Strategy

Suppose you were one of those unfortunate souls with an absolutely bizarre first name, like my old friend Hrothflarr or Buttertenkin or B'drak'nar or what-have-ye. Let's also suppose you're in the job market trying to get work as an office assistant or dental hygienist. Let's further suppose that the people reviewing your resume and cover letter are otherwise inundated with pleas for their attention and they have limited resources for reviewing the material you send them. Let's make one more heroic assumption and say that there is a less than trivial chance that they will see your stupid, hard-to-pronounce, offensive, or trashy name and just pitch your otherwise quite informative personal information straight into the bin.

Now, you don't have to be a game theorist to understand that you have no control over the actions of other people. Sure, if you were inclined, you might lobby for regulations forcing HR personnel to stop discriminating on the basis of having a stupid name, but I think that even the notoriously economically ignorant Congress would smell something amiss with that kind of proposal (though, don't count them out just yet; they've surprised me in the past). Enforcement of this sort of regulation would be pretty close to unenforceable, not to mention preposterously costly and rather pointless. Point is, HR folks are people like the rest of us, and people do as people do, and names are a signal. Yes, they are an impressively noisy signal, and it would be cool to have Battleaxe V. Scarwound III working in Accounts Receivable, hiring that person might be a bit risky, all other things equal (the V stands for Victoria).

So what should you do with your idiotic name? For most of us, the answer seems obvious: get it legally changed. You can do this without telling your friends or relatives, thereby preserving the sense of kinship you have with all your other buddies named Grothnar the Vicious and Punky Brewstarr. It's like the mullet of appellations: business on the tax forms, party on the wedding invitations. It's a very low-cost strategy and it should have a wide range of returns (the quilt of conformity casts a wide shadow). I find it surprising that it's not a more common transaction. Looking for work is tough enough already; why burden yourself with the handicap of a buffoon's name?

Maybe the returns to identity are powerful enough to overcome incentives. I'm sure that any one of you could come up with a thumbnail mathematical model to illustrate the flow of value associated with changing or retaining your name under various conditions (minimum wage, labor regulations, transfer payments, etc). It might be the case that the parameters in this model are such that people are sufficiently compensated for holding their dumbass names.

There's a lot to think about here; the history of immigrants changing surnames upon arrival to the States strikes me as one particularly interesting historical example. There's also the matter of the near/far split between the distant reception of the name signal and the close retention of cultural or personal identity. I might have a whole line of thinking to do on this.

The Big Questions

What questions define Economics? To me, the most important problems that we have to tackle are: Why did the Industrial Revolution happen where it did, when it did, and why not elsewhere? and What caused the Great Depression? If Economics is the study of social behavior, especially in the marketplace, it would be hard to think of any event of comparable impact. These questions can be distilled to the more universally applicable "What are the causes of wealth?" and "What causes the economy to fall off the tracks?"

Macroeconomics has a lot to say about both of these, but its contributions to the first one seem unsatisfactory; the business cycle literature seems much more compelling than the growth literature. While the bumps that happen in modern economies is probably a much more poignant area of study right now, given the current state of the world, I find the first question much more interesting. Most of the non-class related economics reading has been about the Industrial Revolution, and why it happened.

I came into graduate school thinking that the change that enabled the IR was the growth of humanism - the belief of an individual that he or she can do something to improve his or her lot in life. Once that becomes the norm people are more willing to do little things differently; apply new technologies and methods to their work, come up with new ideas themselves, etc. The major inventions certainly helped, but as I mentioned last post a steam engine is useless if it is only a curiosity or a mental exercise on the part of its creator. I justified my belief by looking at how philosophy and theology had changed to some extent post-Aquinas. Obviously I can think of a hundred problems with this as the cause of the IR, one of which would be showing that a lot of people, rather than the select few clerisy thought this way; another would be showing that economic growth didn't encourage humanism rather than the other way around.

My primary source this year (as I'm sure no one will be surprised to learn) has been Deirdre McCloskey. I loved The Bourgeois Virtues (even though, I admit, she was long winded), though this seems like it lays some foundation rather than looking at the cause of economic growth. Her next book in the series, Bourgeois Dignity: Why Economics Can't Explain the Modern World, explicitly looks at and criticizes some current explanations, including Gregory Clark's work and Douglass North's. Her next-next book The Bourgeois Revaluation: How Innovation Became Virtuous is available in rough parts on her main page.

Right now I'm going through Douglass North's "The Rise of the Western World." We'll see what he convinces me of.

Art and Science

I went to the Smithsonian Museum of American History the other week to enjoy the spoils of imperialism. Wandering through one of the random exhibits on something like "what do we use coal for?!" I ran across a display that featured an imagined conversation between two chemists; the gist of it was them arguing over what they should do as chemists - one was talking about how he wanted to be able to use what they had discovered in order to make things people can use; the other responded 'we just need to learn more stuff, who cares how it can be used. That's the art of chemistry, we're scientists!' Or something like that.

I think this dichotomy between 'art' and 'science' is important. Science for the sake of science is important, yes, but economically insignificant. If we're wanting to explain the Industrial Revolution we can't look at science as the spur of it; we have to look at the 'art' of the sciences. The steam engine was invented in something like the 2nd century B.C., and several times again over the next couple hundred years. It wasn't for a long time before anything like it was used productively. It's not like they didn't have coal in the ancient times. I would wager that science was much more advanced in the past than we commonly credit it, but that for some reason there was a disconnect between science and its application.

It also led me to think about the distinction between the science of Economics and the art of Economics. I feel like advising policy or action based on Economic science is tricky, since unintended consequences are more probable and have more drastic effects.

It will be something I will be thinking about the next couple days, instead of the Macro test...

XIII

The 13th Amendment to the US Constitution is short and sweet:

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.
Section 2. Congress shall have power to enforce this article by appropriate legislation.

Now, there are a few ways to interpret this guy. The most obvious is that human beings may not be considered chattel: trucked, bartered nor traded. The other bit, the involuntary servitude, this is a bit harder to pin down just as easily. Involuntary service is performed under duress or threat; it is service performed when trade would not be conducted voluntarily otherwise. One might easily make the case that mandating the purchase of services is involuntary servitude, being that one side of the transaction is involuntary. You might think of this as slavery on its head: where the master is forced by fiat to accept the service of others.

If Congress passed a law mandating that every citizen purchase ten gallons of Boudreaux's Butt-Paste every year, would it be reasonable to cry foul by the 13th Amendment? It would be involuntary service to Blairex Laboratories, Inc. on the part of every citizen of the US.

On the other side of these purported rights, let's imagine I was a window washer and the City of Alexandria decided that clean windows were a natural right. They then passed Clean Window legislation and insisted that anyone who didn't patronize my services would be subject to fines and/or imprisonment. What then, if I were the only window washer in town, would occur if I decided to pursue my dream of shucking oysters in Oregon. I would then be violating the natural rights of my former customers and would be subject to terrible penalties. I would be an immoral monster. Anyone who didn't step up and wash windows would be just as guilty. Indeed, in a world that claims we have the natural right to the labor of others must necessarily be one in which everyone becomes a supplier of that service. I will work on a mathematical model to prove this. My point is that mandating access to labor necessarily implies involuntary servitude.

Maybe I'll just swap my windows out for plywood.

Fear and Loathing in the Land of Milk and Honey

Anonymous, impersonal market transactions make us wealthy. These transactions are predicated on high trust. The "stranger danger" phenomenon as well as the assertion that all men are potential rapists are low trust activities and beliefs.

Empirical question: how well does per capita wealth correlate with non-market mistrust of strangers?

Is there reason to suspect that people compartmentalize trust? In Robin Hanson's (and Katya Grace's) worldview, people use near and far processing modes to analyze situations. Market transactions are conducted in near mode, where we can better judge the specifics of the situation and judge trustworthiness on individual merits. Non-market situations are a different kettle of fish altogether. When we contemplate letting our kids out of the house, it's much easier (perhaps even necessary) to employ far reasoning, glossing over the grainy reality and substituting cognitive heuristics for rational judgement.

This near-far split might help explain why anxious mothers won't spend an extra hundred bucks for a better car seat (or an extra few thousand for a safer mode of transportation), but are comfortable with the idea of never letting the kids outside without a caretaker. Decisions inside an automobile are near, immediate, while the outside world is an artificial mental construct, capable of being populated by far-mode demons.

Ramblings on a Snow Day

When I was younger, particularly around the high school era, I was deterred from thinking about entering academics because I had it in my head that we had already pushed the boundaries of knowledge. History was all settled, Psychology, Communication, Economics, the Natural Sciences, pretty much everything except very advanced physical science was all known, and the limit wasn't unknown things to be discovered or rethought but making sure that you digested what other people had already written. Part of that impression is from the way that school is taught up through High School, where uncertainty and interpretation take a back seat to memorization, a legacy I'm sure in some way left in place from positivism in science, even in classes like English. Part of it might have been the general feeling of the 90's and early 00's, embodied in Fukuyama's pronouncement of The End of History after the Cold War ended, with a corrolary in the economy with The Great Moderation.

Well, The End of History didn't last very long, High School ended, and the Great Moderation wasn't so great. Of course, not enough college professors (that I had at least, especially early on) let students in on how dysfunctional Academia really is. We all knew that Keynesian economics didn't work anymore, we all knew WWII ended the Great Depression, we all knew bla bla bla. Maybe it was a little less cut and dry in Ethics, but pretty much everyone agreed that Ethics all just boiled down to taste. And De Gustibus non est Disputandum.

One of the most fascinating things to me since I've become more acquanted with academia is academia itself. The relationship within and between disciplines is just fascinating. I know I've written about overspecialization in academia before, but I continue to be fascinated. Economics and Sociology are pretty much the exact same subject, namely that of human behaviour and human interation. I am probably not stretching if I assume that a first year graduate student in Economics is getting a very different education than a first year Sociology student, the methodology between the two subjects is so different. The same with subjects like Anthropology, Psychology, and Political Science. They're all studying human behaviour from a different lens, and it would make sense for them all to work relatively close together.

I've had a perverse craving to draw some sort of diagram of the sciences , somehow showing the relationship between the human sciences/humanities, social sciences, and the natural sciences. I have since come to the conclusion that I need three dimensions, which makes me sad, because I want to create order.

I have been listening to old Econtalks, and listened to the 03/23/09 podcast with Nassim Taleb. Near the end he goes on a diatribe against theoretical searches for knowledge. He believes that Universities have, on whole, done more harm than good in the search for knowledge.

Alright, enough rambling. I'm going to use another snow day and reread Michael Polanyi's "The Republic of Science," it's good stuff!

Wanna trade?

Today, I find myself how many human lives I would be willing to sacrifice to reduce carbon emissions. No matter how I approach the issue, the number keeps coming back to roughly zero. Both readers of this blog likely understand that emissions controls reduce industrial activity, whether through forcing firms to use expensive scrubbers that they might not be able to otherwise afford or through paying for credits (or via fines, levies, fees, sanctions or whatever else you might think of). From there, it doesn't take much imagination to see how people with relatively few opportunities are hurt when those opportunities are taken away. Sure, they will adapt; people are hella good at adapting when the situation changes, but adaptation is costly, and when the stakes are starving children who need bed nets, removing the ability to work, even if it is what we imagine to be meager work, is utterly abominable.

It's quite a wonder that anyone could accuse proponents of freedom to be out of touch with reality. I suspect there are some folks who never had to confront the guy whose kid has to starve when there's an operational, if a bit sooty, factory just o'er the hill and 'cross the dale. What, a hungry child isn't real enough? Sheesh.