Murphy to Be Interviewed By Judge Napolitano
This Wednesday at about 1:30pm EST I’m doing a phone interview with Judge Napolitano on my recent article about the fate of the USD. (I am leaving right after for a business road trip so that’s why I’m phoning it in, as they say.) I don’t know if it will be live; I don’t have a TV so I have no idea when his show is actually on FOX.
UPDATE: Tom Woods reminds me that Judge Napolitano’s show is broadcast on the Internet. I was thinking of seeing him host Glenn Beck’s show and got confused.
Paul Samuelson, RIP
[UPDATE below.]
I should probably say something in light of the death of Paul Samuelson. Here’s a link to some Samuelson quotes (by and about), and here’s Mario Rizzo kicking a dead guy.
Others can list the numerous contributions Samuelson made to just about every field in mathematical economics; his output was really incredible. In just about every major topic, one of the early “seminal” papers was a Samuelson article.
Not only was Samuelson a workhorse, he was also a clever writer and could be a real wise*ss. For example, when arguing with people who kept insisting that a certain strategy was optimal in the face of uncertainty (it’s not), Samuelson grew so exasperated that he published a paper [.pdf] that ended like this:
No doubt some will say: ‘I’m not sure of my taste for risk. I lack a rule to act on. So I grasp at one that at least ends doubt: better to act to make the odds big that I win than to be left in doubt?’ Not so. There is more than one rule to end doubt. Why pick on one odd one? Why not try to come a bit more close to that which is not clear but which you ought to try to make more clear?
No need to say more. I’ve made my point. And, save for the last word, have done so in prose of but one syllable.
Two of my prized possessions are the referee reports for my publications (here and here) in the Journal of the History of Economic Thought. (If you’re curious to see the type of paper I’m talking about, the appendix of my dissertation [.pdf] gives you a flavor of the analysis in both JHET papers.) On both papers Samuelson disclosed his identity, and he wrote tons of comments all over the them, in pen.
The first paper he basically signed off on, though he had some reservations. The second paper though–which the title announced was a critique of Samuelson–his report said something like (paraphrasing), “The author has selected just four of my many papers on these topics; he has somehow managed to neglect my paper with Solow [1956] which gives the general framework and can handle each of these special cases which so fascinates the author. Yet let a dueler choose his weapon, and die by it: I recommend publication to be followed by a comment from me, explaining the errors even within the narrow scope he had burrowed for himself.”
I should emphasize the above is probably only 50% related to what Samuelson wrote; I haven’t read the report in years. But it was something like that, and it was simply hilarious. It was the cockiest referee report you could imagine; the idea that Paul Samuelson needed to make sure the editor of JHET realized this punk kid from Hillsdale College was an idiot.
I know how narcissistic this sounds, but when I saw that report I really really hoped Samuelson would write his response before he died. Well too late. The editor of the paper told me Samuelson hadn’t written a reply after a few months, and then when my paper actually came out, I mailed a hard copy to Samuelson’s secretary, hoping to goad him into firing off a reply. Ah well. Note that I’m not saying he chickened out, but I’d like to think he decided, “Argh, this kid’s mistakes are so subtle that it would take too long to straighten them out. Let me rip Hayek’s legacy instead.”
Now the reason Samuelson was called on to referee my first paper (dealing with Bohm-Bawerk’s critique of the “naive productivity theory of interest” and the Solow growth model) is that he was probably one of the three people on the planet who really could have refereed it. There are a lot of people who know Bohm-Bawerk’s work, and there are a lot of people who understand neoclassical models where the real interest rate equals the partial derivative of the production function with respect to K, but there aren’t too many people who are expert enough in both to be able to tell if I’m a genius or an idiot. (The verdict is still out, btw.) Samuelson was one of those people.
In fact, Samuelson’s reswitching paper has a beautiful numerical illustration of the Austrian approach to capital. Obviously Samuelson thinks he’s blowing up Menger and Bohm-Bawerk with the paper, but if you really take the time to understand his model, it’s really cool. I don’t know how the heck he came up with such nice round numbers for the example; it’s beautiful.
Last point: Samuelson bluffed a lot, or at the very least, he was really sloppy. He would “casually” drop allusions to mathematical theorems or things from physics that weren’t quite right. My two favorite examples:
(1) In one paper he was lauding some earlier thinker, and said something like, “His contributions were countably finite.” I don’t know what the heck that is supposed to mean. If a set is infinite then it can be either countable or uncountable; e.g. the real numbers in the interval (0, 1) are uncountable, whereas the positive integers 0, 1, 2, … are infinite but countable. So I think Samuelson was trying to make a geek math joke and just botched it.
(2) In another paper (I think it was a different paper) Samuelson started off with a completely unnecessary tangent recapitulating the proof that there are an infinite number of primes. Problem was, his proof was wrong! I was in grad school reading the paper, and showed it to the Turkish guy next to me. “That’s not a proof, right?” He laughed and agreed with me. I wonder if the journal editor realized it and didn’t want to challenge the prima donna, or if he didn’t even notice.
UPDATE: In the comments Taylor confirmed my claim that Samuelson bluffed in mathematics: He can’t even count! Look more closely at the excerpt from above, regarding the allegedly monosyllabic journal article.
That makes me wonder how many polysyllabic words are actually in that thing. But I’m not checking, as the editor(s) didn’t either.
Did Krugman Get the Inflation Go-Code at the G30 Meetings?
All year, Paul Krugman has been pooh-poohing the ability of the Federal Reserve to do anything to get us out of recession. Because we’re in a “liquidity trap,” monetary policy is either ineffective or politically impossible, and the only cure is massive deficit spending. Krugman has been so vocal on this point–even though it violates Krugman’s own published analyses–that Scott Sumner wrote Krugman an open letter asking him to explain the contradiction.
So it was with great surprise that I read this Krugman NYT column in which he does (almost) a complete 180–he says that Obama doesn’t have the support to push through the required deficits, and so it’s up to Bernanke to save the day through buying $2 trillion in assets.
The turnaround was incredible; Sumner patted himself on the back for being vindicated. (Really, check out Sumner’s post to see just how blatantly Krugman’s recent column violates what he’s been saying all year.)
So this intrigued me. I figured that Krugman sees the inflation coming just as I do, and so he wants to get on the right side of things–it would be really embarrassing if we got double-digit inflation when Krugman’s last “call” was that the Fed is pushing on a string in times like these. As for the timing, I thought it very coincidental that Krugman changed his call 6 days before the first BLS report will come out showing year/year CPI inflation. Since (to my knowledge) I am the only person harping on this point, I actually entertained the notion that Krugman checks my blog as sort of a recon operation behind enemy lines.
Yet as I was reading Wall-E to my son tonight, the obvious answer hit me: Krugman’s pro-inflation column was the first one he could have written (unless they allow him really tight submission deadlines) after the “G30” meetings! Here’s Krugman blowing off the meetings as incredibly boring, but the WSJ blog’s description is a bit more sinister:
If you want to encourage the kind of conspiracy theories that have prospered in the wake of last year’s financial crisis — those that describe a secret cabal of elites running the world — try doing the following:
1. Have a group of 30 high-powered economists, government officials and bankers meet under the auspices of an international group that shares ideas on how to run the global financial architecture.
2. Make sure the group’s name can be reduced to a “G” and a number. (In mimicking the G7 or the G20, this keeps outsiders guessing: Are these guys from the government, or the private sector? Is there a difference?)3. Have your Board of Trustees led by an influential former Federal Reserve chairman who’s now working as a senior advisor to the president of the United States.
4. Name the former vice chairman of bailout behemoth AIG as the group’s Chairman and CEO. (Also, if you want to reach the Zionist conspiracy theorists, it helps that he and another prominent member of the Group have very close ties to Israel.)
5. Ensure that membership includes the likes of these: A former Treasury Secretary and president of Harvard who also now works as a top presidential economic advisor; an outspoken liberal economist-cum New York Times columnist; Citigroup’s senior vice chairman; and top representatives of the world’s four most important central banks.
6. Hold two days of closed-door meetings at the New York Fed, scene of many a desperate deal to rescue the financial sector in 2008, conveniently located a few blocks from Goldman Sachs.
7. Do not publicize a list of attendees and leave everyone guessing about the agenda.
These were the circumstances surrounding Friday’s start to the 62nd plenary meetings of the Group of 30, whose formal name is “The Consultative Group on International Economic and Monetary Affairs, Inc.”
So to summarize: All year Krugman has been saying that the Fed is impotent, and only fiscal policy (i.e. huge deficits) can save the day. Starting on December 4, Krugman meets with a mixture of government and private financial elites. Six days later (seven in the print edition), in his NYT column Krugman calls for Bernanke to start buying $2 trillion in financial assets as a way to stimulate the economy. Very interesting.
Of course, not to throw cold water on the great conspiracy theory, but I should mention that after Paul Samuelson’s death, Krugman is back to explaining matter-of-factly that the Fed can’t do anything in a liquidity trap. Either way, his bases are covered. Whatever occurs, Krugman called it.
Like Taking Money From a Bryan
Bryan Caplan bet me $100 that we wouldn’t see 10% CPI inflation in any 12-month period over the next five years. What Bryan doesn’t realize is that I would have paid $100 just for him to link to my article on the dollar. Heh heh, all too easy.
An Unfair Coincidence
Do you think Jesus’ relatives would double-up and give him one present for both Christmas and his birthday?
"But how do you explain Japan’s deflation?"
Those of us who have been warning of impending (and large) price inflation have thus far been kept at bay by the apparent counterexample of Japan. It’s what Scott Sumner brings up to me when we really go at it (that and the bond market), and it’s how Paul Krugman dealt an apparent death blow to Alan Meltzer back in May.
At the time, I didn’t know how to process it, because I hadn’t really done much research on Japan. But in doing the research for my Depression book, I knew that Krugman’s discussion of the “lessons of the 1930s” was often the exact opposite of what I ended up believing after looking at the data myself, so I remained skeptical.
In response to Arthur Laffer’s WSJ op ed, Krugman attacked with this chart showing (apparently) that in Japan the monetary base also shot up like a rocket. So again, the idea is that Japan is a counterexample to all of the deficit hawks’ warnings.
But wait a second. Look closely at that chart. Japan’s monetary base went up by about 90% from 1997 to 2005. That’s a growth rate of about 8.4% per year. In contrast, under Bernanke the monetary base almost tripled in a little more than a single year.
So it’s still true that Japan provides an interesting case study; I admit I would not have thought those charts–especially the M1 chart–could be right. However, it’s misleading to say, “Japan had a big growth in the monetary base, just like we have now, and their currency didn’t tank.”
Of course, the other main difference is that we are currently experiencing price inflation. Absent another major terrorist attack or a financial panic, I don’t see why the demand for USD would rise, meaning I don’t see how its purchasing power can remain stable if those excess reserves begin leaving the banks, as I expect they eventually will.
I Feel a Thrill Go Up My Leg When I Listen to Jim Manzi
For some time now Jim Manzi has been my favorite blogger on climate change issues. Up till now I have never watched more than about 30 seconds of “Bloggingheads” because it was never instantly gratifying. Yet I just spent a good half hour listening to various clips of Jim Manzi’s discussion with Grist’s David Roberts. If you want a good start, try it at 35:50 or so and listen to Manzi try to frame the issues to see if Roberts agrees that mitigation strategies will have opportunity costs.
(If you don’t get the post title, try this.)
Steve Landsburg’s Case Against God
By Robert P. Murphy
University of Rochester economist Steve Landsburg is one of my favorite writers of popular articles and books. I often disagree strongly with him–indeed I use his “more sex is safer sex” thesis as a primary illustration of mainstream economic self-parody–but even when he’s wrong, he’s brilliantly wrong. It is with some disappointment, then, that I have to report his case against God is uncharacteristically weak.
Before proceeding to my critique, I should say that overall Landsburg’s new book, The Big Questions, is well worth the purchase price. (Although in my case, as a blogger who would likely review it, Landsburg arranged for me to get a complimentary copy. But hey, the book is definitely worth more than I paid for it!) In particular, Landsburg wrote one of the most succinct defenses of free trade that I’ve ever seen, and he also does a great job explaining the seminal contributions of Robert Lucas and his critique of old-fashioned macroeconometrics. If you are a fan of Landsburg’s previous books, there is still much to enjoy in his latest.
Yet as I said, if you are a theist and were expecting to be shaken to your core, I think you will be disappointed. Onward to Landsburg’s case against God.
Why Does the Universe Exist?
Before tackling Landsburg’s specific critique of theism, we need to first explain his own explanation for why we exist. To get things going, Landsburg first establishes that the “natural numbers (i.e. the counting numbers 0, 1, 2, and so forth)” are real things, not arbitrary social conventions: “You and I know the natural numbers are real. Not only are they real, they are necessary. By their very nature, they could not fail to exist” (p. 7).
Landsburg then generalizes to mathematical truths as a whole:
And likewise for other mathematical structures, of varying degrees of complexity….The natural numbers together with the laws of arithmetic form a mathematical structure of profound complexity. The human genome, with its combinatorial structure of A’s, C’s, G’s, and T’s, can be described entirely in the language of arithmetic, so the very least, arithmetic is as complex as human life, and therefore as complex as your brain and the pattern of your consciousness. (pp. 7-8)
Already I think Landsburg is in serious trouble, but let’s hold off criticism and let him make his case. In the interest of brevity I can’t reproduce his whole argument, but here’s the punchline:
The Universe itself, in other words, is a mathematical pattern, containing your consciousness and mine as subpatterns. The Universe exists because it can; a logically possible Universe is a mathematical object, and mathematical objects exist by necessity. (p. 14)
So we see that Landsburg thinks he has disposed of the need for God, by offering an alternative explanation for the most eternal of questions. Yet I think Landsburg’s “proof” suffers from the exact problem that he fingers in Saint Anselm’s famous “ontological argument” for the existence of God. I’ll reproduce Landsburg’s handling of this matter, and then circle back to show why Landsburg’s own explanation is similarly flawed:
Anselm defines God as “the greatest thing imaginable.” Now, existence is really really great, so if God didn’t exist, he couldn’t be the greatest thing imaginable, now could he? Therefore, by definition God exists! Case closed!
…
Regardless of what Anselm chooses to “define,” there can instead be something very great, and then something even greater, and then something greater than that, ad infinitum—just as there are numbers, and then larger numbers, and then numbers that are larger still, ad infinitum. Anselm starts by assuming that there is a greatest thing imaginable. Start with an unjustified assumption and you’re sure to reach an unjustified conclusion. (pp. 34-35)
I think that Landsburg’s own explanation, while at first seeming quite profound, is just as question-begging as Anselm’s. Landsburg has replaced the traditional questions, “Why should we have consciousness? Why is the universe constructed this way, just-so in order to sustain our lives and allow us to ponder our existence?” with the question, “Why should mathematical structures exist, in such deep complexity?”
Landsburg spends most of his time going from the fact that purely abstract mathematical structures exist, to the conclusion that therefore we sentient beings exist and perceive “solid” objects around us. Now that leap may itself be invalid as well—I’m actually sympathetic to Landsburg’s arguments, which I’m not reproducing here—but my point is, Landsburg never really explains why these mathematical objects exist in such complexity so as to “give rise” to the traditionally complex subpatterns that every other philosopher seeks to explain.
For example, how do we know that mathematical patterns “really” exist? Maybe Euclid’s proofs just seem a priori true to us, because of the way our brains are hardwired. Perhaps other sentient beings could possess a “different logic” from ours. That strikes me as impossible, I grant you, but wouldn’t it seem impossible if what I am saying were true? Here’s what Landsburg has to say about the ultimate foundation of his whole worldview:
I am confident that mathematics exists for the same reason I am confident my hopes and dreams exist: I experience it directly. I believe my dining-room table exists because I can feel it with my hands. I believe numbers, the laws of arithmetic, and (for that matter) the ideal triangles of Euclidean geometry exist because I can “feel” them with my thoughts. (p. 6)
And so we’ve moved in a circle (assuming circles exist…). Landsburg explains the existence of everything we “know” in day-to-day life by pinning it on the ultimate existence of mathematical objects. And these exist because we directly experience them. As to why these mathematical truths have the form they do, Landsburg offers no other explanation except they have to have that form. How do we know? By thinking about them, in other words by “feeling” them with our thoughts.
When it comes down to it, I think Landsburg has done nothing truly deeper than to say, “Why do trees exist? Just look our your window, man! They do exist, that’s why.”
A Note on Complexity
I am by no means an expert on information theory, but I want to mention that some people also do not agree with Landsburg’s argument that arithmetic is more complex than human life. (I am grateful to Silas Barta for discussions on this topic.) In particular, it’s not true that one can “represent” all of human life—and especially human consciousness!—by a sequence of four nucleic acids (in DNA). It reminds me of a critique I read of Michael Crichton’s Jurassic Park. In the movie (and presumably the novel, which I haven’t read), the scientists are able to grow a bunch of living dinosaurs from DNA they find preserved in a mosquito that had bitten a dinosaur millions of years in the past. But that alone wouldn’t be enough, because the dinosaur would have to develop inside its mother before being laid as an egg.
The same is true with humans. Contrary to science fiction plots, you couldn’t clone an adult replica of someone just from a blood sample. Someone’s DNA wouldn’t contain the history of that person’s environment as he grew up, and it wouldn’t contain the memories of his experiences and so forth. If lab technicians could provide an adequate simulation of the person’s mother’s womb, then at best they could reproduce an identical twin as a newborn infant. But in order to literally reproduce an exact replica of an adult human being, the scientists would need to reproduce (in principle) the entire universe in which the person grew up. And this all assumes that the philosophy of functionalism is true! If it turns out that people have immortal souls, for example, then the scientists still wouldn’t have truly reproduced the “person,” just at best his physical body.
Before leaving the point, let me share Silas Barta’s analogy to show (part of) the problem with Landsburg’s procedure: Landsburg is saying that if X can produce Y, then X is necessarily more complex than Y. But bricks and mortar can produce a house, and not many people would say they are more complex than the house. If you try to point out the “flaws” in this analogy, just realize that they apply with equal validity to Landsburg’s assertion that arithmetic (using just A’s, C’s, G’s, and T’s) can describe all of human life.
I Predict Landsburg Didn’t Really Try to Understand Theists
Although I think Landsburg’s argument about the existence of the universe is ultimately a non sequitur, at least it’s a serious argument and something that theologians should grapple with. I personally think the existence of mathematics is one of the most beautiful flourishes of God’s creation. Mathematical laws cannot be overridden, even by the most despotic of earthly rulers, because we simply perceive logical relations in the way we do; that’s how our minds work. (Landsburg would say, I believe, that this is so because our minds could not conceivably work differently, whereas I would say our minds work like this because God wanted us to live in an orderly, logical universe and so chose to design it this way.) Another neat thing about mathematics is that it shows the practicality of pure thinking. Pragmatists can deride poets for wasting their time daydreaming, but nobody doubts the usefulness of geometry textbooks.
So although I think the existence of mathematics per se can’t bear the explanatory weight that Landsburg puts on it, I at least understand his fascination with the approach. Unfortunately, there are other sections of the book where Landsburg’s hostility to theism struck me as downright silly. Here are a few excerpts and my reactions:
Now, to a true religious believer, the conviction rate [after committing a crime] is 100 percent. God sees all, knows all, and punishes all. Based on everything we know about deterrence, true believers should almost never commit crimes. But I have not been able to uncover a shred of evidence that those who profess belief are any more law-abiding than their atheist neighbors….[H]ere we have a testable implication of the hypothesis that religious beliefs are sincere, and I look forward to seeing that test conducted. (p. 58)
This argument might hold for some religious doctrines, but not for Christianity. Christians believe that Christ died for their sins and that they are therefore forgiven. You don’t “get into heaven” by being a good enough person to pass some threshold. Once you accept Jesus as your Lord and savior, you are saved. (This is one of the reasons Christopher Hitchens finds Christianity repugnant, because it allegedly relieves individuals of responsibility for their actions.) Let’s get back to Landsburg’s testable hypotheses:
Many religions promise not just punishment for the wicked, but a glorious afterlife for the righteous, and if believers are sincere, this, too, should affect their behavior. Surely people who expect to survive their own deaths should be less reluctant to die, and should therefore invest fewer resources in self-preservation. Do those who call themselves religious spend less on health care than the rest of us? Do they buy fewer smoke alarms? Are they more likely to jaywalk? Less likely to flinch when a foul ball is hit in the direction of their foreheads? I’m guessing not, and if my guess is right, it becomes almost impossible to imagine that their “belief” in an afterlife could be sincere. (p. 59)
Again, I don’t think we should waste time collecting the data, because I am not convinced that Landsburg has in fact teased out a true implication of religious belief. Christians, at least, are also supposed to view their bodies as temples to the Lord; doing reckless things would be sinful for that reason alone. To see the point a bit differently, does Landsburg think believing Christians ought to go on murder sprees (at least among other believers), in order to send as many brothers and sisters to be with Jesus as quickly as possible?
Christians do not enjoy the suffering of this world, and they do indeed look forward to the day when they can be reunited with their Creator. But in the meantime, we have a job to do, namely to spread the good news to as many others as we can, in the short time we have on this earth.
I’ve saved my favorite for last:
Religious believers, then, should, by and large, be students of—well, of what, exactly? Religion is first and foremost a physical theory—a theory of how the Universe was formed, what keeps it going, how it will end, and what sort of stuff (souls? angels?) inhabits it. I predict, then, that true religious believers should have a passionate interest in fundamental physics—even if only to figure out what’s wrong with the mainstream theories. But I also predict that the bookshelves of the average churchgoer are no more likely than anyone else’s to contain a good survey of, say, quantum chromodynamics. I conclude that the average churchgoer is not a believer. [Emphasis in original.] (p. 62)
Landsburg has gone entirely astray here. He is fascinated by physical theories, and so that’s why he thinks that’s what religion is “first and foremost.” If you asked the average believer, “What is the Bible all about?” I doubt many would say, “It’s about the origin of the universe.” Of course it does explain the origin of the universe, but that’s, well, just the first two chapters. The heart of the book, of course, is the personal relationship between God and His children.
Let me offer Landsburg some rival “predictions” that are think are much fairer to the theory that some people really are sincere in their religious beliefs. It would be easy to say things like, “They go to church more than professed atheists,” or, “They have more books about God on their shelves than atheists,” but Landsburg could dismiss that as a recreational activity.
Okay, what about this: I predict self-professed Christians donate more money than self-professed atheists. For sure, I predict they give more to churches, but I will go beyond the obvious and so they also give more to charities, if we include tithing in the total. This is a classic example of putting one’s money where one’s mouth is, so Landsburg should appreciate it. (To be really safe—and protect my prediction from people who really are just paying lip service—I could flip it around and say, “People who donate high fractions of their income are more likely to say they believe in God.”)
For another example, I predict that self-professed Christians are much more likely than atheists to travel to foreign countries—often at great personal risk—to help build churches and spread the gospel. Some things of this nature can be dismissed as vacations paid for by other people’s donations, so Landsburg can restrict it however he wants. For example, “mission trips” to countries where other missionaries have been imprisoned or murdered within the last x years. Assuming it turns out that more professed believers engage in this behavior than people who say it’s all nonsense, isn’t the most obvious explanation that they actually believe in it? Why else would someone risk his freedom or even life to spread beliefs he doesn’t actually believe? Landsburg is a clever guy and will surely come up with theories, but I think the most obvious one is staring us in the face: many people actually believe.
Conclusion
Steve Landsburg’s new book is very provocative and covers an audacious range of topics. Yet on the issue of the existence of God, I found his arguments to be below his usual excellence.
Robert P. Murphy holds a Ph.D. in economics from New York University. He is the author of The Politically Incorrect Guide to the Great Depression and the New Deal (Regnery, 2009), and is the editor of the blog Free Advice.
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