I just got back from a panel discussion on US Macroeconomic Policy. Charles Evans, President of the Federal Reserve Bank of Chicago, was one of the panelists and he mentioned in his talk his own personal targets for inflation and unemployment (two of the Fed’s main outcome variables). Specifically, Evans defined “price stability” as inflation running at 2%, and “full employment” as “around 5% unemployment”. Does anyone else think it’s kind of funny that we live in a world where prices increasing at 2% a year can be defined as “price stability”, and 5% unemployment can be defined as full employment? It just struck me as a wee bit 1984 (especially fun is the way that “structural changes” are often argued to change the “natural rate of unemployment” when variables don’t move the way they should, but the whole thing really).

[Reader Beware - This post has nothing to do with sociology, economics or politics, and is also a bit silly.]
Dear Translator of The Collected Fictions of Jorge Luis Borges,

I nearly bought your collection, which contains complete translations of Borges’ most important and best written works of fiction. Unfortunately, for you, before making my purchase, I examined your version of The Garden of the Forking Paths and was shocked, shocked!, to see its unfaithful deviations from the Yates translation in Labyrinths.

Let’s compare for a moment the last sentence, which I conveniently memorized in two languages (for just such an occasion):

(Spanish) “No sabe (nadie puede saber) mi innumerable contrición y cansancio.”

(Yates’ translation) “He does not know (no one can know) my innumerable contrition and weariness.”

A word for word translation, made possible by the relatively uncomplicated (albeit somewhat anomalous for Spanish) grammar and heavy use of Latinate words – like much of Borges’ writing.

Now, the Collected Fictions version:
(Hurley’s translation) “He does not know (no one can know) my endless contrition, and my weariness.”

At first glance, little has changed – an extra possessive pronoun was added, and a comma, which alters the pacing of the translation and suggest that the contrition, but not the weariness, was endless. Here we have an interpretation I disagree with, but one that is not baseless.

But wait, endless? Where did endless enter into this? Borges did not use that word or its synonyms – e.g. sin fin, interminable, sempiterno, eterno, etc. Borges used the word innumerable – without number. Why is this significant? The Garden of the Forking Paths is a story about time, and about the numberless forking roads we might take – “the various futures”. Various, without number, but not exhaustive. “Innumerable” evokes this entire train of thought, so essential to the “essay” half of this classic “cuento-ensayo” of Borges.

Endless evokes entirely the wrong notion of time – a temporality that is flat and pre-determined, the temporality of Newton, not of Heisenberg. Borges’ deity (the Librarian of Paradise) does not simply play dice with the world, but rather busts out of a copy of Risk with half a dozen worlds at once!

And so, dear translator, I must ask – why make this change? Are you, perhaps, attempting to subtly undermine the work of Yu Tsun’s illustrious ancestor, Ts’ui Pen, and of Borges himself? Hmm?

Respectfully, and wearily,
Dan

From Marcuse’s One-Dimensional Man, where he argues that we must invent new definitions of the old liberties (economic, political, and intellectual):

[Economic] freedom would mean freedom from the economy – from being controlled by economic forces and relationships; freedom from the daily struggle for existence, from earning a living. Political freedom would mean liberation of the individual from a politics over which they have no effective control. Similarly, intellectual freedom would mean the restoration of individual thought now absorbed by mass communication and indoctrination, abolition of “public opinion” together with its makers. The unrealistic sound of these propositions is indicative, not of their utopian character, but of the strength of the forces which prevent their realization. The most effective and enduring form of warfare against liberation is the implanting of material and intellectual needs that perpetuate obsolete forms of the struggle for existence. (p. 4)

I particularly like the idea, connected I think to the century and a half old question about what Marx thought communism would look like, of economic freedom as “freedom from the economy”. It also ties nicely into Polanyi’s arguments about the historical construction of scarcity and the rational man motivated by hunger and gain.

[This post was written by UCSD Sociology Graduate Student Jeff Lundy. Previously, Jeff posted here about Why Everyone Younger Than You Is Spoiled, drawing on his insights into the problems of amateur accounting for inflation and cultural and technological change. Today's post is about the current debate on healthcare and the role of expertise and skepticism in public debates. For a related point, check out this recent Daily Show clip on the media's disastrous role in the current healthcare debate.]

The Paradox of American Skepticism
The current healthcare debate is, without a doubt, a source of ire for many liberals. The White House finally has a savvy, liberal President. Democrats finally have a strong, filibuster-proof majority in Congress. The need for healthcare reform is pressing and has been for quite some time. Before the election, many Americans seemed extremely interested in the plans of candidate Obama. And yet, with all forces seemingly faced in the right direction, the irritating question remains: why is there so much trouble in making this healthcare reform happen?

I have to admit I was surprised by the depth of resistance that emerged against reforming our health system. Protesters were taking to the streets and town halls before there was even a definitive plan to rail against. (On a side note, isn’t it weird to think of conservative protesters? It seems like an oxymoron. I guess we live in strange times). Clearly, selling healthcare reform is much harder than I (and probably many other liberals) had previously thought; and this is a very irritating fact.

Now, there are one-million things I could say about the healthcare debate. I’ve read CBO reports, CDC reports, not-for-profit non-partisan reports, etc. However, this resistance to healthcare so surprised me that it got me thinking about something deeper than the debate about healthcare and the battle between liberals and conservatives. I thought to myself: why is it that Americans would resist changing a system that is so patently bad? Furthermore, why are so many Americans immediately apprehensive about changing the system? And what’s more: if they are so apprehensive about changing the system, why don’t these same Americans do any kind of research to figure out the facts on the matter?

These final thoughts brought me to a paradox about the American public. On the one hand, a large number of Americans are extremely skeptical of government policies, when one considers “skepticism” in the conventional sense – i.e. automatically mistrusting any plan that is proposed. On the other hand, however, Americans also seem extremely un-skeptical when one considers skepticism in the “scientific” sense – i.e. demanding empiricism and well-reasoned thought be applied to any proposition.

That I think this is a paradox probably has to do with me being an ivory-tower academic. And yet, I know that for myself (and many of my friends), my first impulse is to do research whenever I hear some heated debate that I don’t know much about. I take this to extremes sometimes (I recently did a semi-extensive literature search on college football); but yet, the impulse is fundamental. I need to know the facts on the matter. However, I don’t sense this impulse is fundamental for most of my fellow citizens.

And this leads me to a great concern. My impulse to research facts has led me to recognize that almost everyone talking about an important issue is grossly wrong. Even your common “experts” and “pundits” generally seem to know only about 50% of the facts about any pressing matter. The healthcare debate is no exception.

For instance, I’ve heard from liberals that the current state of healthcare could be fixed by removing company profits. However, the best estimates of company profits reveal that they are likely ~1% of the total GDP spent on healthcare. This estimation process is really complicated, and there are lots of counterarguments that could be raised, but the main point remains: profits are nowhere near the main source of our problem (at least in a straightforward sense). The same troubled reasoning goes for the conservatives’ favorite argument about “tort reform.” If we enacted these “reforms,” we would only reduce our health expenditures by at most 2%. And you only get that number if you take the most grossly unrealistic estimate of the impact of tort reform (i.e. if we strip consumers of every right to good treatment they currently enjoy). Numbers can be backed up with CBO reports, if you want to double-check.

The real source of the growth in healthcare spending is not one of these easy, naïve answers. It probably has a lot to do with the current state of medicine, which is centered on complicated treatments, instead of preventions or cures. The problem is multiplied by our society’s increasing insistence that everyone live as long as they can, while being given the absolute best treatment (a noble goal – but one which I think most people haven’t truly thought through to its fullest consequences).

However, I digress. The point of this post is not to disseminate the best thoughts on the healthcare debate; the more fundamental question I hope to ask is: why don’t most people realize how far off they are from understanding the sum total of this problem? Why don’t people know how much they don’t know (and how much “science” as a whole doesn’t know) about healthcare, and other important topics? How can we get more people to do some research whenever they feel the impulse to be angry about something?

This is an honest question. I honestly don’t understand this situation; but if we could figure out why this is happening I believe we’d open up the possibility for some major changes. For instance, I believe that most of the healthcare debate would be solved if everyone just understood the best facts we have on the matter.

I imagine some of this lack of inquisitiveness comes from people mis-estimating the amount of information needed to form a strong opinion. Maybe some of this lack of curiosity is caused by our education system focusing on facts and less on processing information. There are certainly many contributing factors.

I don’t think that the answer to why people aren’t more “scientifically” skeptical is that they are too stupid. People far less informed than current-day Americans have been tough-minded and inquisitive when facing challenges. I also don’t think it’s simply that people don’t have time to think through matters, or that they don’t have the necessary skills to evaluate the complex information needed to have a strong opinion. These may be reasons for why people are lacking in a strong opinion, but they can’t explain why so many people hold bad opinions.

So now I end this post with an appeal to anyone who finds him- or herself reading it: Fill me in. Let me know every idea you have on this subject. Set an ivory-tower intellectual straight and put his feet on the ground. Tell me your thoughts on why people can be so angry, misinformed, and also undesirous of better information, all at the same time.

I’m sure everyone who reads this blog has already seen the announcement of the 2009 Nobel Prize in Economics, but just in case: Oliver Williamson and Elinor Ostrom were awarded the prize this morning. Elinor Ostrom is the first woman to be awarded the prize and, notably to me, is a political scientist. The Nobel Prize Committee’s write-up of their contributions is here, and is part of what I’m basing my comments on.

Williamson was awarded the nod for his work on transaction costs and the boundary of the firm. Specifically, Williamson asked questions like, when does it make sense for a firm to own its suppliers? This is sometimes known as the “make or buy” decision – should a firm make a given part, or contract it out. Drawing on the groundbreaking but often ignored work of Ronald Coase (who noted that using the market had certain costs associated with it, and thus was not always more efficient than a long-term contract), Williamson coined and promoted some useful notions like asset specificity (the degree to which each party makes investments whose value is much greater if the relationship continues than if it doesn’t) to help analyze such situations in what is often called the “Markets vs. Hierarchies” approach. That is, Williamson, like Coase, asks and answers the question, if markets are so efficient, why have corporations at all? Williamson answers that hierarchical relationships (as opposed to markets) make sense when bargaining or search costs are high, and assets require specific investments (i.e. relationships matters).

My own encounter with Williamson came primarily during my socialization into the subfield of economic sociology. The seminal paper in our field is Granovetter (1985) Economic Action and Social Structure: The Problem of Embeddedness. Granovetter argues, drawing loosely on Karl Polanyi, that all economic action is embedded in social structures, and that approaches like that of Williamson miss how the market isn’t quite as market-y as you might think, and hierarchies aren’t so efficiently hierarchical. Granovetter argues for a more nuanced approach to understanding the immediate social structures surrounding economic action – often glossed as networks in later works. So, one result of today’s Nobel announcement is that we can now say that economics has caught up to what sociology was moving past 24 years ago!

Not having been forced to read it for my prelims, I’m less familiar with Elinor Ostrom’s work, but am pretty excited that her work is getting more prominent. Ostrom analyzed empirical situations in which the tragedy of the commons was not so tragic – that is, where common resources were protected by governance mechanisms that emerged without being imposed from above by some sort of state-like actor. One key finding of her work that drew my attention was that these governance mechanisms often worked best when they were enforced by those who were using the resource, and not by some impartial, external agent, even though that meant that the monitoring costs were born unequally. Here’s how the Nobel Committee glossed it, while listing off design principles learned from her research:

For instance, Ostrom proposes that (iv) monitoring and sanctioning should be carried out either by the users themselves or by someone who is accountable
to the users. This principle not only challenges conventional notions whereby enforcement should be left to impartial outsiders, but also raises a host of questions as to exactly why individuals are willing to undertake costly monitoring and sanctioning. The costs are usually private, but the benefits are distributed across the entire group, so a selfish materialist might hesitate to engage in monitoring and sanctioning unless the costs are low or there are direct benefits from sanctioning. Ostrom (1990, pp. 94–98) documents instances of low costs as well as extrinsic rewards for punishing. However, from Ostrom, Walker and Gardner (1992) onwards, she came to reject the idea that punishment is always carried out for extrinsic benefit; intrinsic reciprocity motives also play an important role.

The last part is especially key to me – people working inside the governance mechanism, people who were benefiting from the common resource, actively enforced the rule of the system for “intrinsic reciprocity motives”. A far cry from the selfish homo economicus of Mancur Olson! I wonder to what extent Ostrom’s location outside of the field of economics itself made such a move tenable – Williamson, for example, draws extensively on bounded rationality models, but never questions self-interest as the sole motivation of economic action. Ostrom, on the other hand, goes with the data which shows how under some circumstances, individuals act to maintain economically efficient institutions even though they costs they pay to do so are not shared. In other words, where people believe in the institution and act on those beliefs.

I’m looking forward to reading more about their work in the coming days, and I’m especially interested to see how the mainstream of economics reacts. Also, I wonder if Granovetter would have anything interesting to add about his old straw man taking home the gold.

Reading this short post from NPR’s Planet Money blog, Recession Gives Planet (Brief) Break On Climate Change, makes me wonder if a hundred years from now, economic and climate historians might argue about whether the financial crisis of the late 2000s saved the planet by delaying the emission of enough GHGs to make possible the transition to new technologies, new standards, etc. It would make a fun (social) science fiction story, if nothing else. Of course, this assumes we manage to take our brief reprieve from the ceaseless in increase in CO2 emissions and do something useful with it. I wonder how that’s going.

I just finished reading a chapter by Andy Abbott on Causal Devolution (link is to the article version), or how ‘causalism’ (the contemporary ANOVA version of causation) mucked up sociology in the second half of the 20th century. The piece is well-written and easy to follow, like most Abbott, and makes several compelling cases (such as the need to re-value descriptive work, a case he makes elsewhere also). Near the end of the piece, though, I think Abbott makes a misstep.

Throughout the piece, Abbott references the fuzzy boundary between causal analysis and explanation, arguing that many early accounts spoke of the first but meant what we would now call the second. Abbott thinks explanation (like description) is great, and indeed sociology ought to be doing a whole lot more of both so that people will pay attention to us and we’ll have useful things to say. Specifically, Abbott thinks our explanations should be consistent and interesting:

The main desiderata of explanation are consistency and interest. First, even though disciplines grow in fits and starts – pushing out here, surrendering there – our knowledge becomes great only when it has internal consistency. Our theories, our explanations, our methods, and our research programs should resonate with and support one another. In addition to this consistency, our knowledge of society should meet a second standard: it should produce… a comprehensive, interesting, and compelling account of social life. [Abbott 2001, p. 121]

Here’s the problem: interesting accounts are ones that are inconsistent with what we already know. Murray Davis, in a fabulous and fun piece from way back when titled “That’s Interesting: Towards a Phenomenology of Sociology and a Sociology of Phenomenology” (1971), argues that theories or arguments are interesting to us only when they violate our assumptions about the world. This piece is used as a method’s article here at Michigan, where we are taught that in order to get anyone to care about your research you have to frame it as somehow upsetting what they think they know about the world. The literature review, for example, serves to set up the precise bit of conventional wisdom (conventional to the discipline) that you are going to show to be incomplete or misleading. Good enough as practical advice, I suppose, though I read Davis’s article a bit more critically. Specifically, I think our systematic, institutionalized, rewarded bias towards the interesting (as opposed to, say, the thorough) makes Abbott’s idea of a consistent and interesting disciplinary take on the world impossible. If the system explains things consistently, it will cease to be interesting (at least to us); if it continually generates interesting explanations, how could it be consistent?

So, nice try Andy, but I think we can’t have this cake and eat it too, at least without first having a lot of disciplinary soul-searching about just what we should find “interesting”.