Thursday, July 10, 2014

The Third Edition of the Machinery of Freedom is Now Available

As a kindle on Amazon.

It is not currently available in hardcopy. I am interested in comments from people as to whether they would want it to be. The kindle is up at $2.99. If I self-publish a hardcopy with CreateSpace it would be substantially more than that, and if I go with a commercial publisher more still. 

I am also interested in comments by people who read it and spot mistakes. One of the advantages of an eBook is that it's easy to make minor changes.

Tuesday, July 08, 2014

What We Could Learn From Dan Kahan. And Perhaps Shouldn't

I have commented in earlier posts on Dan Kahan's research about why we believe what we do. The basic conclusion is that, in the case of beliefs linked to group identity, individuals choose what to believe not on the basis of the evidence but on the basis of what beliefs fit their group identity. For most of us, as Dan points out, that is rational behavior. My beliefs about evolution or global warming have  little effect on the world at large but could have a large effect on how well I get along with the people who matter to me.

There is no reason to assume that the pattern I have just described only applies to other people. One possible conclusion is that I ought to look for beliefs that it is very much in my interest to hold and think about how good my reasons are for holding them.

One of the first candidates that occurs to me is my belief that minimum wage laws have bad effects, that they make it harder for unskilled workers to get jobs. That is a belief widely held among economists, especially economists generally in favor of free markets. Academic economists are part of an academic world where most people are politically liberal, hence inclined to support minimum wage laws. That makes the fact that economists are inclined to oppose them an important marker for group identity. And I have evidence of the cost to an economist of rejecting it from an interview with David Card, coauthor of a widely cited study that failed to find the expected effect. By his account, getting what was, from the standpoint of his professional peers, the wrong answer cost him a lot of friends.

That is a reason to think that my view on the subject might be mistaken but I cannot think of any good arguments against it, so I will rapidly pass on from my possible false beliefs to other people's. Dan Kahan's, for example.

Dan is a professor at Yale law school. My guess is that if he pointed out that there is no good reason to expect the distribution of intellectual abilities to be the same for men as for women, hence no good reason to interpret unequal outcomes as evidence of discrimination, he would suffer significant social costs. If he made the same point in the context of racial differences, the costs would be more than merely significant. Perhaps he should think about those questions, examine the arguments and evidence, and revise his beliefs accordingly.

Or perhaps not. His explanation for what he observed, after all, was that it was the result of rational behavior. Believing things merely because the evidence supports them may sound like an admirable policy, but it could prove to be a very expensive one.

Why Improving Things Is Hard

Someone who studies the effects of different diets comes up with evidence that consuming more salt causes high blood pressure and associated medical risks and concludes that people should eat less of it. Another researcher repeats the study looking at mortality from all causes and finds that people who eat more than the average amount of salt are no more likely to die early than people who do not.

Arguably you not only should not be surprised at the result, you should expect it. We have, after all, been "as if designed" by evolution for reproductive success. Dying, whether from high blood pressure or some other cause, makes it difficult to either help rear your existing children or produce more. Our bodies have built into them a sophisticated chemical factory for converting what we eat into what our body requires; reducing the amount of salt absorbed and excreting the excess should not be beyond its capabilities. If the body instead  absorbs all the salt consumed, that suggests that the disadvantages of higher blood pressure are on average balanced by other advantages.

That is one example of a more general point, suggested by my rather vague memories of what I have read about the effects of salt consumption and a comment someone made on an earlier post. For another, and this time entirely imaginary, example of the same point, suppose you discover that increasing the size of your car's tires improves its gas mileage. Before concluding that bigger tires are a good idea, it would be prudent to look at other consequences of the change—because you will probably discover that some of them are negative.

The logic is the same as in my previous example, although this time the design is by engineers rather than by evolution. People who design automobiles would like them to use less gas. If bigger wheels achieved that objective and had no disadvantages, someone in the past century would have discovered the fact. The current size of wheels is not an accident. It is the best solution engineers could come up with to the problem of optimal design.

The argument does not apply to everything; there is no reason to assume that either the climate or the population of the earth is optimal. But it does apply to anything that has already been optimized for some purpose, whether by human design or some natural mechanism. Any change from the present design that produces a benefit probably also produces a cost. That is why it is not already in the design.

Of course, even if something has been optimized, it may have been optimized for a purpose other than yours. Evolution designs organisms, including me, to do the best possible job of passing their genes down to later generations. That is its objective but not mine. Birth control is one of the ways in which humans subvert the objectives of the genes in order to better achieve their own objectives. 

For another example, consider trade barriers such as tariffs. There are good economic arguments to show that we would be better off if we went to complete free trade. That seems puzzling—if we would be, why don't we?

The answer is provided by public choice theory, the branch of economics that deals with the workings of the political market. A tariff makes the inhabitants of the country that imposes it worse off but the politicians who pass the tariff better off, since it benefits a concentrated interest group at the cost of dispersed interest groups. More concentrated interest groups are better able to pay politicians to do things for them.Trade policy is optimized, but for the wrong objective.

Another exception to the general rule occurs where optimization is slow and constraints have recently changed. Through most of the history of our species it made sense to get fat if you could in order to increase your odds of surviving the next famine. Now that famines are vanishingly rare, the same hardwired tastes produce less optimal behavior. Similarly, if gas prices have recently gone up a lot, existing car designs may weight fuel efficiency less heavily than  they now should.

Improving things is not always impossible. But it is often harder than it seems.