24 May 2012

Gambling Economists: Behind the Scenes

Bryan Caplan, Ron Paul 73 Comments

OK Bryan Caplan and I are running around in circles, so I’m asking for your help. Bryan said I could reproduce our email exchange:

==============
BOB WROTE:

http://consultingbyrpm.com/blog/2012/05/betting-bryan-on-ron-paul-vs.-ross-perot.html

BRYAN WROTE:
Sorry to aggravate you, Bob. Given that Perot ran 20 years ago, I’d think a decent metric of “lasting influence” would have to take that lag into account. And I don’t think that mere fandom counts as influence. Here’s roughly what I’d propose:

Right now there are roughly zero members of Congress that openly call themselves followers of Perot. Maybe a few, but none that I’ve ever heard of. I’ll take your 4:1 odds that in twenty years there are no more than 4 members of Congress (1% of the body) that openly call themselves followers of Paul.

BOB WROTE:
Well there are two problems with that for me. I’m not saying it’s dead in the water, just expressing my concerns:

(1) Where is the 1% coming from? Right now I think the actual answer is that precisely 0 people say they are “followers of Perot.” So if Ron Paul had just 1 person saying s/he were a follower of RP in 20 years, then wouldn’t I win? Why are you insisting Paul have 4 followers, when Perot has 0?

(2) This is a hard thing to measure objectively. E.g. suppose we were trying to assess whether Paul Ryan is a “follower of Rand.” We could both make a decent case, since there are obvious things saying he is (like handing out her book) but then recently I think he threw her under the bus when trying to appeal to Christians. Politicians aren’t going to want to sound like dupes so nobody is going to actually say, “I am a follower of Ron Paul.” What if someone says, “I think Ron Paul did the country a great service by raising the issue of Fed secrecy.” Do I win or you on that politician?

BRYAN WROTE:
> Well there are two problems with that for me. I’m not saying it’s
> dead in
> the water, just expressing my concerns:
>
> (1) Where is the 1% coming from? Right now I think the actual
> answer is
> that precisely 0 people say they are “followers of Perot.” So if
> Ron Paul
> had just 1 person saying s/he were a follower of RP in 20 years, then
> wouldn’t I win? Why are you insisting Paul have 4 followers, when
> Perot has
> 0?

Fair question. I’m just being lazy about doing a detailed search for Perot-influenced politicians. And I figure that 1% is approximately equal to 0% for practical purposes.

>
> (2) This is a hard thing to measure objectively. E.g. suppose we were
> trying to assess whether Paul Ryan is a “follower of Rand.” We
> could both
> make a decent case, since there are obvious things saying he is (like
> handing out her book) but then recently I think he threw her under
> the bus
> when trying to appeal to Christians. Politicians aren’t going to
> want to
> sound like dupes so nobody is going to actually say, “I am a
> follower of
> Ron Paul.” What if someone says, “I think Ron Paul did the country
> a great
> service by raising the issue of Fed secrecy.” Do I win or you on that
> politician?

Fair question. I’m happy to interpret influence broadly (I’d count Ryan as Rand-influenced, for example). But that’s still vague. The simplest route is just to agree on an arbitrator likely to be alive in 20 years. Brian Doherty is the obvious choice.

BOB WROTE:
I’m really not trying to be difficult, but if we make it something that is a judgment call, the wager isn’t definitive. I mean, suppose Doherty agrees that you won. That won’t make a lick of difference to Ron Paul fans; they will say Doherty is an idiot.

So I really think you and I should agree on some objective thing, and it’s up to Ron Paul’s fans to tell me in the beginning that I accepted a dumb bet if they think he will lose it. But if they all think it’s shooting fish in a barrel, and then Perot wins, that would be something.

The other thing is, I would hate to tell Brian Doherty, “By the way, in 20 years Bryan and I are going to ask you to review the biographies of every member of Congress and tell us which ones were influenced by Ron Paul.”

BRYAN WROTE:
How about something like “Within 20 (or even 10) years, the NYT, WSJ, or Washington Post will run two news articles explicitly about ‘elected politicians influenced by Ron Paul’”? It’s got to be plural – someone newsworthy in addition to Rand Paul. If this seems like a high bar, note the stories about Paul in the NYT over the last two years.

BOB WROTE:
Well again though, I’m just thinking that if I lose, the true fans will say, “It’s a conspiracy from the mainstream media.”

Can I reproduce our emails on my blog, and see if anybody comes up with a suggestion we both like?

73 Responses to “Gambling Economists: Behind the Scenes”

  1. Daniel Kuehn says:

    I’ll offer four-to-one odds that I won’t consider myself a follower of Ron Paul in twenty years.

    • Richie says:

      We should care because…?

      • Daniel Kuehn says:

        We should care because that light-hearted comment is clearly a strategy for ferreting out humorless stick in the muds.

        I found one! I found one!

        Yes Richie. If anyone legitimately cared about the wager I would be a little weirded out. Thanks for bringing the issue to the fore.

        • Richie says:

          I’m not a Ron Paul follower, FYI. I admire his consistency, yes.

          And quit trying to pass off the comment as being “light-hearted”. That was your passive-aggressive way of saying how much you despise Ron Paul.

          • Daniel Kuehn says:

            Wrong – I’m never passive aggressive about Ron Paul. I’m active aggressive. Although “despise” might be a little strong.

            • Major_Freedom says:

              I’m never passive aggressive about Ron Paul. I’m active aggressive.

              Wrong – That first comment you made was definitely passive aggressive.

              • Daniel Kuehn says:

                This whole line of argument is funny to me. How is coming out and bluntly saying I don’t think I’m going to support Ron Paul “passive aggressive” in any sense of the word???

                The whole point was that I’ve never been subtle or indirect about the guy!

              • Major_Freedom says:

                This whole line of argument is funny to me. How is coming out and bluntly saying I don’t think I’m going to support Ron Paul “passive aggressive” in any sense of the word???

                It’s precisely because your first comment was not blatantly and explicitly aggressive that MADE it passive aggressive.

                You’re too funny. You’re even passive aggressive about your passive aggressiveness.

                Is there a word for that, anyone?

              • Joseph Fetz says:

                DK?

              • Joseph Fetz says:

                hint: pronounce it as a single word.

              • Daniel Kuehn says:

                OK MF now you’re reminding me of this guy:

                http://www.youtube.com/watch?v=UBztjzDr0fM&feature=related

              • Major_Freedom says:

                OK MF now you’re reminding me of this guy:

                Cool, more passive aggressiveness, haha

              • Daniel Kuehn says:

                OK, I really don’t think you understand what that means.

              • Major_Freedom says:

                Hahaha, this plethora of layers of passive aggressiveness just keeps building up.

                Keep this up, and you’ll implode.

          • Ken B says:

            It was clearly light hearted because DK was obviously trying a little arbitrage on the odds here. He’s looking for suckers who think the chances he will be a Ron Paul follower is as high as 4:1 against.

            Since these odds are logically identical to the odds Krugman will be a Ron Paul follower this is highway robbery.
            :)

    • Bob Murphy says:

      What odds do you give on Ru Paul?

    • rayray says:

      That’s the most depressing prediction I’ve ever seen anyone make about their future.

  2. joeftansey says:

    Who cares if Ron Paul fans aren’t satisfied with the conclusion of the wager? They can’t lose anything gracefully.

    • Bob Murphy says:

      Because I want to see if we (I’m in the set “fans of Ron Paul”) are actually out of touch with reality. That’s partly why Bryan and I both like wagers: It forces us to clarify our views and then submit them to the test.

      So I want something where I will say, “Jeez, I was actually wrong about Ron Paul’s lasting influence” if I end up losing. I don’t want to say, “Well, I was still right, but I didn’t structure the bet properly.”

      • joeftansey says:

        If I were in your position this defect would be acceptable. It is legitimately difficult to forecast the metrics of Ron Paul’s legacy. Even if you “lose” there’s a good chance Bryan would freely admit he was wrong if you can make a good argument that Ron Paul’s influence is still felt.

        But you’d be out $400.

  3. Ken B says:

    @Bryan: You had me at ‘aggravate you Bob’.

  4. Ken B says:

    I suggest counting Ron Paul and Ross Perot jokes, especially dismissive ones, on whatever the 2032 equivalent of The Daily Show and Colbert Report are. The man with the greater legacy will be the more derided by the nomenklatura; I still hear Reagan-what-a-bozo jokes.

    • Bob Murphy says:

      Ken B. is inching up on my grand strategy. I will be the equivalent of Jon Stewart 10 years from now, and will talk about Ron Paul’s legacy in order to collect from Bryan.

      • Major_Freedom says:

        I AM..THE NEWS – Emperor Murphistine.

  5. Corey says:

    How’s this: if the Federal Reserve is still a private banking cartel, not audited by Congress, and still has a dual mandate in 2022, Bryan wins.

  6. Garrett says:

    Does Rand Paul count? I imagine that now matter how long he stays in the Senate and/or other public offices, he will always list his dad as a political influence. If you, Bob, are able to convince Bryan that only one openly Paul-influenced politician would allow you to win, I think Rand would provide an easy victory for you.

  7. Jeremy H. says:

    How about: Who has the longer NY Times obit?

  8. rayray says:

    You should make the bet in specie, not in Federal Reserve notes. The payoff will be like the Scooby Doo episode, where they dug up a treasure chest and it was full of Confederate money.

    • rayray says:

      “Otherwise”. I’m missing “otherwise” from that post.

      • Ken B says:

        As Bob pointed out to me once, on this blog Confederate money might actually be preferred by most.

  9. Joseph Fetz says:

    Ah, yes. A fake wager that will be forgotten in less than a year.

    • Major_Freedom says:

      Not with the internet.

      I still see people talking about the fact that Sean Hannity has not been water boarded yet, after promising to do it to “prove” it’s not torture, and that was 2009.

  10. Tom Woods says:

    Too bad influence has to be measured in terms of congressmen. How about downloads of books hardly anyone even touched until 2007? Ideas are what matter, right?

    • Dan says:

      No kidding. Hopefully Ron Paul influences kids to stay away from that garbage dump called DC.

    • Major_Freedom says:

      This man gets it.

    • MamMoTh says:

      I bet Harry Potter’s legacy will dwarf Ron Paul’s. Any takers on this one?

      • Richard Moss says:

        Only if you agree to accept an IOU if you win, not cash.

        • MamMoTh says:

          I accept government bonds at market price of course

          • Major_Freedom says:

            So you must love losing in real terms then.

      • Major_Freedom says:

        Who is this Ron Paul person you’re all talking about?

        • MamMoTh says:

          He’s a character in some book for children

          • Major_Freedom says:

            Which book? My nephew loves children’s books.

            • MamMoTh says:

              It’s one where Ron Paul battles against the evil Krug-Man, and kills him with his golden sword in the end.

              Nice fiction for kids under 80.

            • Richie says:

              Do they do battle over sectoral balances?

  11. Patrick McEwen says:

    Why not use members of Congress who self identify as libertarians? Even Rand Paul doesn’t currently self-identify as a libertarian. If Ron Paul has a lasting influence that grows during the next 20 years, it would make sense that members of Congress start to self-identify as libertarians.

    Such a standard is also objective. You can find documented examples of members of Congress calling themselves libertarian while they campaign, just like most Republican members of Congress currently campaign as conservatives.

    • Bob Murphy says:

      Because Bryan would probably say, “Go Gary Johnson! You the man! All hail the Cato Institute!”

      (I’m not choosing sides, just pointing out the problem with Patrick’s idea.)

  12. Scott says:

    Use social media. Agree on a social media site you think will be around long enough, or some metric like “the most visited social media website” in the relevant year, and search that site for mentions of either man in an agreed-upon date range. It could be an absolute date some time in the future, or relative, say a two-week period surrounding the five-year anniversary of each man’s death.

    • Richard Moss says:

      Actually, what about google hits? (And I am not trying to be condescending or supercilious).

      Just tried it. “Ron Paul” yielded 64.4M, “Ross Perot” 1.89M.

      • Scott says:

        Google hits measure any website that mentions the string, which might go back as far as the internet itself. Social media would measure how many people are currently talking about a person, instead of how many have ever talked about them.

        Plus, there are lots of websites now that talk about Paul dismissively or disparagingly (or both). If you wait until, say, five years after his death, everyone talking about him will be people on whom he had a true lasting impact, which is what the bet is trying to measure.

  13. gienon says:

    If Obama ever says “money supply” in public, Bob wins immediately.

  14. Robert Fellner says:

    It’s hard to take this seriously. It’s not even a close comparison.

    Look at the #s in Campaign For Liberty, Young Americans for Liberty, the crowds he draws when speaking, book sales, quoted by rival candidates as being the person who opened their eyes to the FED etc etc.

    Look at what his 2012 Presidential Campaign is actually doing – creating a political apparatus to install and elect Ron Paul candidates throughout the country.

    Thomas Massie was just elected to Congress because Ron Paul gave him his blessing. I and all other RP supporters are getting emails about a new “Ron Pa(l” Congressman to vote for, who will be elected, because of RP.

    The Clark County Republican Party (which makes up 70% of Nevada) is now totally run, top from bottom, by Ron Paul guys. We even use “In Liberty” Ron Paul’s signature line, on all CCRP official business.

    The new Nevada State Party just elected 3 Ron Paul guys to run things.

    The Iowa State Chairman is a RP guy, the Alaska Republican Party is now Ron Paul run.

    This is a joke of a bet. It’s unsurprising your friend is calling for absurd terms. It’s something that is going to be difficult to objectively nail down and demonstrate its proof to someone who clearly is so out of touch with reality.

    If there were a way to do it, say commissioning a poll of Americans in 5 years and asking them who had more of an impact on them Ron Paul or Ross Perot, or looking at book sales #, or Google hits, or whatever, I’d back up the money truck on this bet.

  15. Elliott says:

    how about if it walks like a duck talks like a duck then it is a duck

    pick 4 — 5 — or however many specific positions on specific issues that when “simultaneously” held make Ron Paul unique — clearly define them (not hard)

    then look at rhetoric or record your choice and see what — if any — candidates match up

    side note: when I think back to Rand’s congressional testimony — well — simply put — Paul Ryan– while the rhetoric may conveniently/occasionally be there — the substance is not

  16. Desolation Jones says:

    Aren’t you going to owe Caplan $500 in 6 months with that inflation bet?

    • Bob Murphy says:

      No, I am probably going to owe David R. Henderson $500.

      • Daniel Hewitt says:

        Murphy running a deficit will allow the non-Murphy sector of the economy to save. So thanks for contributing to the recovery Bob.

      • joeftansey says:

        If you lost a significant number of bets, would you chalk it up to your inability to structure good bets? Or would you admit some defect in your economic/political thought?

        • Bob Murphy says:

          I would say God works in mysterious ways. (That was just for you, Joe.)

          • Ken B says:

            I was tempted to make this response for you Bob! (Which of us is more dismayed to be thinking like the other?)

          • joeftansey says:

            So the second one.

            I think you’re very likely to win your bet with Bryan if it’s structured correctly. I haven’t been keeping track of your other bets, but it would be cool to have a tally.

  17. Bob Murphy says:

    Well, Bryan was right about one thing. In a part of our email exchange I didn’t reproduce, I had asked him to post this stuff on EconLog and he said he wasn’t opposed to it, but thought crowd-sourcing wouldn’t help. He was right.

    (BTW I appreciate the 2 or 3 legitimate suggestions some of you made, it’s just that Bryan says he doesn’t want to measure mere fandom.)

    • Ken B says:

      Which 2 or 3 are those Bob?

    • miket23 says:

      “it’s just that Bryan says he doesn’t want to measure mere fandom.”

      Hmm… so, in addition to the struggle of identifying the best quantitative metric of who’s more influential, now there’s the added wrinkle of somehow qualitatively measuring what constitutes “fandom.” This isn’t getting easier.

    • Doc Merlin says:

      4 people in 20 years?
      I’d take that bet.
      I’ve been to the state convention and seen all the young people motivated by Ron Paul, in 20 years, many of them will have political office.

  18. Theodore Lopez says:

    I’d suggest coming up with some kind of proxy statistic. Tim Grosseclose recently came out with a book and website about media bias where he uses a variable called “political quotient” (I’m sure you both are familiar with it) where he assigns a number representing a politicians ideological leaning based on the citations found in their public speeches and press releases. I.e. politicians who issue press releases citing CATO and Heritage are more likely to be conservative and the more they cite these outlets the more conservative they are and have higher scores. I would recommend a similar methodology where by you compared the citation habits of politicians with those of Ron Paul and agreed on a certain threshold number above which you would call a politician a “Paulite”. The methodology is a bit tenuous, I grant you, and you might want to break it down a bit, for instance, creating separate scores for separate policy issues and then aggregating them in to a final score and there are a number of problems to it (The Pretense of Knowledge seems to be echoing in my mind) but it’s as good as any other methodology I would suppose short of administering a detailed questionnaire to Paul and then again, 20 years later to every member of Congress and compare the scores which, seems impractical.

  19. david stinson says:

    Why is the number of politicians who can be identified as being influenced considered a valid measure of legacy, particularly by two libertarians at least one of whom is an anarchist? It seems like a rather timid hurdle. On the assumption that the state embraces liberty only when it is forced to by the climate of public opinion or the practical impediments of doing otherwise, and that the sincerity of claims by politicians regarding their devotion to liberty (or principles of any kind for that matter) cannot generally be taken at face value, it seems an even odder way to measure the legacy.

    It may also be, for example, that Ron Paul’s name, like Rand’s now, will be a bit of a dirty word in polite circles and that people will be reluctant to admit being influenced even though policy might well be.

    Why not bet on something policy-related? Something related to the Fed seems like the obvious choice. It wouldn’t have to be an outcome necessarily, it could be a measure of an issue’s continued public profile.

  20. Jason B says:

    If the bet has to be with regards to future Congresspersons, then why not just have the defining metric being the number of members, say over a 20 years span, intellectually committed to Austrian ideas? That is essentially what Paul has done, made the Austrian school relevent in political discourse in Washington.

  21. John T. Kennedy says:

    For reference, here’s a bet Bob and I made in 2001. We also failed to come up with objective metrics so no money was wagered but after 5 years Bob had to admit he’d been wildly over-optimistic. I think he’s being wildly over-optimistic again.

    http://web.archive.org/web/20071008132107/http://www.no-treason.com/archives/2007/03/25/three-million-american-anarcho-capitalists/

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