Economics, Literature and Scepticism

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I am a PhD student in Economics. I am originally from South Africa and plan to return there after my PhD. I completed my M. Comm in Economics and my MA In Creative Writing (Poetry) at the University of Cape Town, where I worked as a lecturer before starting my PhD.

Saturday, January 30, 2010

Regarding Harford

Posted by Simon Halliday | Saturday, January 30, 2010 | Category: , , | 0 comments

redcross.jpg image by NitajkToday, in his column for the FT, Tim Harford describes some of the troubles with paying people to do things, they might have done through altruism anyway, the most famous example of which is Richard Titmuss's book about blood donation in the UK, with another example - the Haifa day care centre - brought to light in Freakonomics.  In these examples, paying people resulted in worse outcomes.  Though he doesn't annunciate it, Harford's talking about the crowding out hypothesis, i.e. that always motivating people with material outcomes crowds out social norms that might have supported other equilibria, some of which may be superior to the new equilibrium with material. He talks about this a bit, then goes on to describe new and contrary evidence that shows how paying people for blood donation has resulted in getting more blood and of at least the same quality as when blood was not paid for.  Harford goes on to describe where and how altruism 'fails' and why material incentives succeed., looking at the same topic last year, Sam Bowles published a paper about material incentives in social policy and gave several examples of crowding out occurring emprically, and he showed that researchers are trying to derive a complete theory to explain why this occurs - a theory that relies strongly on the ideas of other-regarding preferences and social norms.  Both other-regarding preferences and social norms may predict acts that look like altruism, but also they may predict acts that look quite spiteful or mean. For example, using a theory of 'inequity aversion' (1, 2) proposed by Erst Fehr and Klaus Schmidt, I may care about what happens to people, but only to the extent that I am positioned relative to them in income levels or levels of material payoffs.  Sometimes, I may want to increase their income to bring theirs closer to my level; sometimes I may want to decrease their income to bring it down to my level; sometimes I won't care at all.  The point about all of this is that the argument many economists have made that preferences are entirely self-regarding (or self-interested) and unaffected by social norms might be wrong.  We don't just care whether we get our dinners, we care about whether our children, friends, and others clear across the world are eating too. 

Anyway, the point describing all this theory is to express my indignation at Harford for pooh-poohing altruism without going into details about its backstory, about the kinds of things that manifest behaviour looking like altruism.  Now, I think that Harford communicates economic ideas fantastically, I read his column religiously because I enjoy his wit and insight, but I feel in this instance that he's done an injustice by sweeping under the carpet a mountain's worth of evidence so that he can maintain the claim that incentives (are all that) matter.  The Titmuss insight remains: introducing material incentives may also have unintended consequences

Thursday, January 28, 2010

What else shouldn't I say?

Posted by Simon Halliday | Thursday, January 28, 2010 | Category: | 2 comments'm reading Joseph M. Williams' Style: Toward Clarity and GraceI began it some time ago having borrowed it from the library, but I didn't finish it because I had to return it. I bought it recently to finish it at last. In the 'Concision' chapter, Williams describes the following scene:
Every teacher of freshman Shakespeare has seen papers that begin with a sentence on the order of "Shakespeare, who wrote Macbeth, wrote many other famous plays." Tell the student that he doesn't have to say that and he is likely to answer, "Why not? It's true, isn't it?" You say, "Well, yes, but you just don't have to say it.  It's obvious." Moment of thoughtful silence. "What else shouldn't I say?"
What a fantastic way to lead the reader to that question, "What else shouldn't I say?" That question is one of many I ask myself when writing. Have I written anything redundant? Have I used too much meta-discourse? Can I maybe cut something else out? Far too many Economists fail to realise that they write poorly; they would benefit from Williams' book (as I have benefited). I shall review the book soon enough.  Until then, remember, "What else shouldn't I say?"

SA Science Blogroll - Update

Posted by Simon Halliday | | Category: | 1 comments

Wednesday, January 27, 2010

Gender in the Press

Posted by Simon Halliday | Wednesday, January 27, 2010 | Category: , | 0 comments

I thought I'd give a couple of comments about recent stuff about gender in the popular and scientific presses. Nothing comprehensive, just a few tidbits.

  • Nature reports that men prefer women who are less powerful than other women (their headline was poorly written, else it could be interpreted as 'men prefer women who are less powerful than them' which could also be true, but wasn't strictly what the study was about). The converse is true for women.
  • Ronald Ehrenburg produced a short piece at Vox EU about his own research indicating that having women on boards of universities correlates with having more women on that university's faculty, and that the growth rate of female academics is substantially higher than at colleges or universities without similar female representation in leadership positions. The effects are larger for smaller colleges, possibly showing a greater effect for female leadership amongst colleges with smaller student populations.
  • The Sunday Times of London reported inaccurately on work by Dr. Sell of UC Santa Barbara. In the Times piece the journalist reports all kinds of codswollop about blondes being aggressive, entitled, and other rubbish. Dr. Sell took the Times to task, and is awaiting and apology. HT: Satoshi Kanazawa.
  • Science Daily reports on female elementary school teachers who fear mathematics themselves can pass on this fear, with consequent lack of success, to female students. This comes from what looks to be a fascinating year-long study of about 120 girls and boys.
  • Inside Higher Ed reports that the gender gap in US college enrollment has stopped growing. Oddly enough, this has been one where girls have dominated and policy-makers have been worrying about the boys. The evidence seems to suggest that males are becomging successful, while women are still performing well.
I plan to write up a few more pieces on recent research on gender to continue my ongoing series. Watch this space (eventually).

Tuesday, January 26, 2010

Books II

Posted by Simon Halliday | Tuesday, January 26, 2010 | Category: , , | 2 comments

Here's the fiction and memoir section of this books post series. See Part 1 here. Gosh, it feels never-ending. Since writing most of this I've already finished several other books. Oh well, the next books post will arrive in early February, I'm sure. In the interim, enjoy this one.

Fiction & Memoir
Jill Ker Conway - A Woman's Education: A Memoir
The third book in Conway's autobiographical series, I do not believe it is as strong as the preceding two books. In the first book, The Road From Coorain, she detailed her life as a curious child who goes on to attend a private high school and later university, where she directly confronts sexist sentiments about academia and history. In the second book, True North, she arrives in Harvard and finds solace in the friends she makes while attending graduate school, researching, meeting her husband, and becoming the first female vice-president of a Canadian university. A Woman's Education lacks both the love of landscape and sense of attachment in The Road From Coorain and the strong undercurrent of growing feminist passion and life of True North. Instead, in A Woman's Education, Conway seems set to defend her presidency at Smith from those who might undermine her legacy there, a laudable position to take, but not that great as the basis for a book.

Though she defends her position well, the book did not enchant me as did the mythic tale of The Road From Coorain and the feminist quest of the True North. Maybe I feel this way because of something lacking in me, the book felt, nevertheless, like a pallid, stodgy conclusion to the bright and meteoric trajectories of the first two books. I did find parts of it engaging and interesting. I felt educated by what Conway believes constitutes a woman's education, and the methods required to marshall its growth and sustenance. Conway informed me about what is required for university administration, and for the basic sustenace and promotion of professional academic living. Finally, Conway's resoluteness to stop, to end her professional administrative career impressed me greatly - she could have gone on, but she chose to return to writing, to academia, to history, the products of which we observe in The Road From Coorain, True North and A Woman's Education. Collectively they make a formidable legacy of a woman who evidently contributed so much of her life and passions to edify women.

Simon Armitage - The White Stuff
Having only read Armitage's poetry previously, much of which is dark though often witty, The White Stuff felt like a great departure from his poetry. Nevertheless, it's an amusing book in which he conjures a couple who play out British stereotypes, both between themselves and amidst their friends. Little twists in the tale provide even funnier results, and also expose the patterns of intimacy in marriage and parenting. From depicting a trip to Ikea (very funny) to discussing semen (the eponymous 'white stuff'), to exposing the travails of attempting and navigating historic adoption, and to charting the meaning of intimacy with your neighbours, Armitage's novel makes a diverting, decently-written and enjoyable trip into the heartland of Britain. Though it didn't change my world, I chortled, smiled and enjoyed it. It doesn't meet the strengths of Armitage's poetry, but it's still fun. So have a read if you want something comedic, but nothing near as serious, or occasionally depressing, as Armitage's poetry.

Kazuo Ishiguro - A Pale View of Hills
A Pale View of Hills is the first book by Ishiguro that I've read, having intended to read him for quite some time [I've also subsequently read most of Never Let Me Go, which I went on to leave in South Africa having about 80pages left! AHHH!]. The book deals reverently with the life of a Japanese woman and her child as they live in post-Hiroshima Japan. Ishiguo intersperses the story with a contemporary interaction between a mother and daughter in the UK, and you spend part of the book trying to work out the specific connection between that narrative strand and the strand in Japan. Ishiguro writes quite sparsely - both his dialogue and his descriptive prose are tightly written, not too Hemingwayesque, but still the words are knitted tightly together and the plot - as much of it as there is - felt well-devised. I don't want to go into detail about the plot, suffice to say that it requires you to pay attention from start to finish to the clues that Ishiguro places here and there as to the exact tale he wishes to construct. I would strongly recommend this book to most people, though at first his style may take getting used to for some readers.

Raymond Carver - Fires: Essays, Poems, Stories
Because this contains essays it could also be 'non-fiction' but let's put it here nevertheless because the majority of the work in the book is either poetry or short stories. I have some of Carver's other collections What we talk about when we talk about love, Elephant and Cathedral and these two collections defined and altered my understanding of what constitutes a short story. An unsurprising revelelation considering the effect that critics believe Carver's writing has had on subsequent writers.

Anyway, this short collection brings together a diverse set of works, some of which appear in the collections I already own, others, the essays particularly, that I had not seen before. I appreciated the essays particularly as they revealed a side of Carver's writing that I had not encountered before, a part of him that shows his appreciation for his family and his mentor, John Gardner. Such appreciation obviously cannot be, and is not, displayed in his prose and poetry, but seeing an honest personal evaluation of his writing and to those he owes his debts was fantastic. I found his discussion of influences particularly apt - he differentiates between those writers, musicians and other artists whose work appeals to us and whose work and thinking we try to incorporate into our own, from the actual physical and emotional influences that affect us more than anything else, in Carver's case an early marriage and children when he was a teenager. Please read the essay; my summary does not do his ideas justice. If you have not encountered Carver before, either his prose, poetry or essays, then this is a good place to start to begin a relationship with a great writer.

Lionel Shriver - We Need to Talk About Kevin
Structured as series of letters to her husband, the narrator tells us the tale that leads to her son committing a Columbine-style killing at his high school. Don't worry, you know this from the outset as it's mentioned on the blurb and in numerous reviews. The interesting part of the story is the way in which the Shriver tells the story and in how the narrator weaves together a story about her son's eventual violence with a love/marriage story about her relationship with her husband and that relationship's vicissitudes.

The book also centres around the nature v. nurture debate, and, specifically the extent to which 'evil' is in-born, or is developed, activated, or cultivated. It also made me think extensively about the effects of peers and parents on a child who is intelligent, often intransigent, and decidedly self-reliant and self-determining. It's quite possible that there's remarkably little you can do as a parent, except control the peers to which your child is exposed, but that in itself becomes a battleground - what right do parents have to exert such control? I think that evil, the extent to which it develops, matures or coheres in acts in the people who commit those acts fascinates Shriver. Shriver seems to take the position of an adjudicator trying to play out scenes that will test people and to use her characters to plat out her own potential responses (if you choose to read into it, forgive me the vice). In Kevin, it seems as though Shriver asks what a mother would do, could do and should do in a situation where her child ends up committing mass murder. What does society expect of the mother? Do her child's action imply that she parented poorly? To what extent do her child's actions mirror her own vanities and insecurities, or at least perform to them? Shriver deals with all of these gracefully, and in a way that most people should access and reflect upon easily. Reading the book after my wife, Amy, had read it inspired many conversations about having children (we remain unresolved), what having children implies about the responsibilities of parenthood to both the child and to society at large, and all kinds of other keep-you-up-at-night stuff. Amy and I also spent substantial time discussing the feminist implications of the book - Shriver discussing the woman's body during pregnancy and motherhood, or her feelings about sex, intimacy and parenting and the acceptance of birthing a violent child. All fascinating, and all of which recommend the book, but also which make it doubly disturbing for those who are considering becoming parents, or are the parents of obdurate children.

The book fascinated me because I don't feel as though Shriver tried to write literary fiction, as some authors try so hard to do, instead she wrote about a topic that fascinated her in a way that some could interpret as literary (while others profoundly object). Nevertheless, the book's achieves success both because it resonates with many as parents and because it marks a moment in feminism where a woman grapples with many of the problems that still plague heterosexual couples in contemporary society. For me, the book failed because of Shriver's characterisation of the husband, Franklin, who often appeared utterly stupid and occasionally bland. Shriver did not convince me that her main character, Eva, would actually feel attracted to, or at least remain attracted to, Franklin. Maybe I have failed to imagine something here, or maybe I've got too Gen-Y a notion of relationships, but it didn't work for me and was the one place where I felt the book could be strengthened. Other than that, go and read it, spend time speaking about it, be disturbed by it.

Lionel Shriver - Double Fault
Where We Need to Talk About Kevin was intriguing and terrifying, Double Fault was pettier and less grave, though the main characters were equally flawed. It felt like a practice novel to me, a lead-up for an author who would eventually write We Need to Talk About Kevin. To a large extent some of the dynamics are similar - a love story realized, yet which begins to unwind from the internal and external pressures that press in on it. Whereas Kevin is a tale of horror eventually realised, Double Fault seems more like a jerky sliding, combined with the occasional sticky place of potential renewal. If anything, I would recommend the book as part of a method study to understand the path that an author takes to writing. Every novel is a learning experience, and the writing of this novel must have lent some sense of the research and some sense of the damaging aspects of love and self-love that also populate Kevin. Consequently, I would only recommend the novel to two groups of people: 1) those passionate about novels with tennis as a backdrop, 2) those interested in what Lionel Shriver was doing before she wrote Kevin. Otherwise, I don't think I'd bother.

E.M. Forster - Where Angels Fear to Tread
I struggled to get into the novel, unsure of where Forster was trying to take me: was it a novel about an Englishwoman in Italy, or a novel about her oddly controlling English family, or a novel about cultural clashes of some kind? Notwithstanding my initial uncertainty, I continued to read, eventually understanding that the novel is 'about' the development of two initially peripheral characters Miss Jones and Mr Herriton.

So, on to what I thought of the novel. The novel is short, so the initial confusion was brief and not too worrisome. My advice to potential readers, get past the first two chapters and enjoy the unfurling of the subsequent drama, the clash of bigotries and people, the strange inadequacies and idiosyncracies of the characters' perceptions of what constitutes and informs the good, and more. That said, I was nowhere near as satisfied with Angels as I was with other Forster novels, e.g., Maurice, parts of Angels fell flat, Forster's imagined San Gimignano (Monteriano) was arbitrary and he may as well have used the actual city itself. Also, if you've lived in Italy for any amount of time (which I have), then the gross simplifications of and the perpetuation of stereotrypes about its people, its form of patriarchy, and its culture are worryingly bigoted. I understand and acknowledget that Forster created the comparison to contrast vividly the dark shades of a passionate Latin culture with the white sterility of early twentieth century British culture. But, it seems to me that Forster creates a false dichotomy - I am not convinced that a 'civilized' culture necessarily lacks passion, nor that a passionate culture necessarily lacks civility, maybe I've read too much Coleridge and Keats and think that even within 19th and 20th century Britain there must have been underlying passions, veiled sexual tension, and the screams of love and joy beneath the rudiments of 'civilization'. I'd recommend reading the book nevertheless, because it won't take much time and it serves as a comparison to some of Forster's stronger work.

Terry Goodkind - Phantom
Somewhat entertaining fantasy, with not so veiled libertarianism/objectivism thrown in, consider the following choice quotation, "For the delusion of the common welfare, in the form of lofty slogans and vacuous notions that incite the feckless rabble into nothing more than a mindless lust for the unearned, everything good and noble will be sacrificed, deadening civilized men into little more than an organized mob of looters." (117-118). But they also contend that man's 'inherent wickedness' is part of this belief, which is an oddly non-communist belief, but rather a belief of many conservatives of the Bernard Mandeville persuasion. Oh well...

Apart from the preachiness of Richard, of which there was more than in any of the previous Sword of Truth novels, the story progressed well I just think that he could have cut most of the bad philosophy and just written the book. Instead of 'showing' he was 'telling' - if you really want me to believe in Objectivism (a tough sell indeed) then show me why it is better, don't tell me by having your characters suddenly starting to ram bad monologues down my throat. Ayn Rand tried that and it did not work, except for some crazy, zombie-like minority of people who really don't have a sufficient understanding of moral philosophy to know why objectivism falls flat. Noting which, Goodkind, on his website, argues that philosophy is at the centre of how people live - yes indeed it is. But again, if people live consistent with a philosophy, then witnesses will see their actions and believe there is something good about those actions, and maybe try to replicate them. But, when people become self-righteous, pissy and rantish, that's when people go 'Sorry? Once you were cool, oh well...' Terry Goodkind, once back in the days of Wizard's First Rule, you were cool. No longer. Even with your millions and the television rights of your book series sold [Don't even get me started on the heinousness of the television series.]

Terry Goodkind - Confessor
Worse than Phantom. More preaching, less showing, bad overuse of Deus ex machina 'How did you appear here right now exactly when I needed you? It must be um... your need to be FREE!' Um no. Bad writing. I don't want to spoil the hilariously bad plot for you, I'd rather recommend you don't read it. Oh wait, I do want to spoil one thing.

[Spoiler Alert]

Goodkind pulls a blatant 'I'm going to continue this series using parallel earths and by introducing the planet Earth in the future' I found out after reading Confessor that Goodkind did almost exactly like that with his next book 'Law of Nines' in which the main character Alex Rahl (yes, really) finds out about another planet, exactly like his, but with magic and stuff. Um... Come on Goodkind, enough with the plagiarism already - we had decent versions of this from Terry Brooks, Guy Gavriel Kay, and many others. So let's find a quote from you, Terry Goodkind, about the immorality of stealing another's property, ahh there we go, "Instead of creating something worthwhile, they want to steal what others have created." Hmm... sounds familiar?

Thursday, January 21, 2010

Happiness at the FT

Posted by Simon Halliday | Thursday, January 21, 2010 | Category: , | 0 comments

Julian Baggini reviews a few recent books on Happiness Research at the Financial Times.  I think that most laypeople interested in the subject would benefit from reading the article, particularly how it uses the reviews together to debunk several odd claims that people make when dealing with the happiness or subjective well-being literature.  However, Baggini does not call out the author of one of the books, Carol Graham, on her claim that increasing wealth does not correlate (or maybe even result in) higher happiness.  In economics, many researchers have shown that higher income correlates with higher happiness or subjective well-being is demonstrated several times over (though some argue not). One of the problems seems to be that some researchers don't observe the happiness-income relationship because they fail to control for other potential correlates with happiness: work hours, time with friends, participatory social time qua social capital, and others., we know that, in general, a person's relative income level correlates more strongly with their level of happiness much more strongly than their absolute income level. So even if money makes you happier, being wealthier than others makes you even happier.  Think about it in the following way. consider two people Al and Bob.  If both Al and Bob get a pay increase, they both end up happier.  But, if Bob's pay increase is greater than Al's then Bob is even happier than Al is because his income is relatively higher (other things equal).  One of the other things to consider though is what economist call 'non-linearities' in happiness, i.e. if Al and Bob were both leaving beneath the poverty line and we unemployed, getting them both income that takes them above the poverty line makes them both substantially happier than a similar increase would at higher levels of income.  To simplify it a lot, happiness may be increasing in income, but at a decreasing rate, or it may even plateau.  Ideological debates enter here with people emphasising inequality vs. growth consistent with their philosophical preferences.

Notwithstanding this economic/political blip (or the failure to nod to the other side of the camp), I agree with several of the points that Baggini made.  His main conclusion - that we must not confound ourselves by emphasizing happiness only and dropping truth and liberty from our considerations of success - warrants further support and investigation and is a research program I am happy that many researchers will continue to investigate. 

Wednesday, January 20, 2010

Eskom and Price Elasticity

Posted by Simon Halliday | Wednesday, January 20, 2010 | Category: , , | 0 comments just read an article in the M&G, 'Cosatu: Tax the wealthy to fund Eskom price hike'.   I shan't discuss the main point of the article, i.e. the proposal by COSATU to tax the wealthy to pay for Eskom's ineptness, sorry, I mean plans for future growth and improvements in infrastructure.  What I thought I'd comment on instead is price elasticity.  The M&G tells us that Eskom plans to increase prices by 35% each year for three years.  A back of the envelope calculation tells us that prices will therefore be about 246% of what they are now (1.35x1.35x1.35=2.46).  That by itself is a bit ungenerous, so let's deflate it a bit for inflation assuming that inflation sits at about 6% for each of the next 3 years (around about the high end of the inflation target).  Therefore, we have a price increase of about 205%-207% (again back of the envelope).  Now, with 'normal inflation' (which I'll assume here is 6% for SA), for prices to double would require about 11 or 12 years, less if inflation was less than that.  So Eskom are proposing prices Now (or in these three years) that people would otherwise face in over a decade (with the benefits of over a decade's growth).  That's quite a hefty weight to bear for anyone, let alone the poor or the rich. What will they people do in response? the response, Eksom must be assuming something about the elasticity of demand for electricity, i.e. the responsiveness of consumers to changes in the price of electricity.   Also, when prices go up people often consume less, because of both income effects and substitution effects.  Because of income effects people have less money overall to pay for stuff when the price of a good goes up (remember all prices are relative not absolute), and therefore they should consume less elecricity if the price of electricity increases.  Also, when the price of elecricity increases people will substitute away from elecricity to consume other good that may perform similar functions, e.g. gas, paraffin, candles, solar panels, cold showers (though that may be for other reasons).  The price elasticity, or consumer responsiveness, effects the extent of these two effect - the income and substitution effects - a good that has elastic demand is normally thought of as a luxury and as prices increase people consume much less of it or stop consuming it, whereas for a good that has inelastic deand people feel that is a necessity and they continue to consume it, though consuming slightly less of it depending on their responsiveness.  Eskom, to pay off whatever they need to improve their infrastructure must be assuming that South Africans' demand for electricity is phenomenally inelastic and that there are very few substitutes, while demand itself may increase (because of economic growth, population growth, or other factors -- see government document for 2008 here). I also don't know, and what I could not find out from the government report linked to above, was a separation of household, commercial, military, and other uses of electricity in South Africa.  That is, to what extent will an increase in tariffs affect households and business differently? Moreover, if an increase in electricity costs happens to crowd out commerce, that is with an increase in electricity costs fewer international businesses elect to open in South Africa but choose instead to open in places where electricity is cheaper or the extent to which business that currently operate in South Africa choose to shut down, to what extent must household bear the brunt of the crowding out? Will households, poor and rich, bear the price increases? Will they bear the increases willingly? Moreover, assuming some class (or income-based) differences in the ownership of capital, if a rich person is taxed both as a household consumer and as an owner of capital, might they not choose to leave the economy entirely, therefore increasing capital flight and the emigration of the taxable wealthy classes? Now, I'm depicting a bit of a nightmare scenario, but I would like to see more intelligent analysis of this topic in our country's newspapers, and, while I favour pro-poor tariffing to improve electricity infrastructure, I also favour in-depth and high quality analysis rather than simple and verging-on-contentless exegeses quoting 'roleplayers' saying 'People will take to the streets.'  It doesn't help educate our populace and it doesn't help us find a better outcome or a workable solution.

Aside: on the COSATU comment, the goverment document I referred to above does say the following, "In order not to adversely affect poor households, the tariff will have to be pro-poor and discourage wasteful consumption." (Intervention to Address Electricity Shortages, 2008, 3)