Daniel Little — The place for thick theories of the actor in philosophy

The neoclassical foundational assumption of rational maximization and Buchanan's rational choice theory are "thin" theories of the actor. As a result the models created on the basis of such assumptions are simplifications. The questions is whether they are oversimplifications. That depends on the case. Such assumptions may apply generally in certain simple cases but not to all. Moreover, the assumption of methodological individualism on which microfoundations depends is similarly limited. These assumptions don't scale owing to social embeddedness and historical, cultural and institutional influence. Attempting to scale them beyond their limits results in the the fallacy of composition, that is, incorrectly assuming that a whole is the sum of its parts when the relationship of the parts supervenes.

Understanding Society
The place for thick theories of the actor in philosophy
Daniel Little | Chancellor of the University of Michigan-Dearborn, Professor of Philosophy at UM-Dearborn and Professor of Sociology at UM-Ann Arbor

Lars P. Syll — On Econs and Humans

Fun.

Lars P. Syll's Blog
On Econs and Humans
Lars P. Syll | Professor, Malmo University

Umar Haque — Americans Are Dying For Healthcare

Yet there’s a logic — however absurd — to it. It’s a case of income maximization gone extreme. Repealing healthcare will maximize incomes for healthcare providers, Congressmen, lobbyists, pharmaceutical companies. And repealing healthcare will maximize incomes for households, by lowering taxes. Never mind that it shrinks life expectancy, which is to say: never mind the long-term benefits of such investments — in this paradigm, all that matters is income, right now.

Thus, the overarching paradigmatic goal — increasing GDP , which is the underlying and understated assumption of all the above — will be accomplished. GDP doesn’t care if you don’t have healthcare — in fact, the more you pay for healthcare, the higher GDP rises. If we all break each other’s legs, GDP rises, because now we have to pay for healthcare — and if there’s only one doctor in town, who charges us a fortune, so much the better, because we’ll have to pay more. (And if you want to get political, of course we can trace slavery and segregation back to the idea of maximizing income at the expense of life, too).

If all that sounds bananas, that’s because it is. It’s all a tiny case study in just how broken the old paradigm of human organization is, which suggests the sole purpose of all life on the planet is maximizing the income we can wring out of it this nanosecond. Now let’s ask: what happens when a society obeys that paradigm in every sphere of life?
Well, you get the thoroughly weird and tragic situation America’s in today: its economics appear to be grossly fine— but its eudaimonics are dismal, declining, and failing. By “eudaimonics”, I mean whether lives are flourishing or not.

The is the problem with equating value with price and measuring utility (satisfaction) based on prices as an reliable indicator of preferences.

This is amplified by assuming macro to be scaled up micro and viewing macro in terms of aggregates rather than in terms of systems and networks.

The result is economics as fantasy intellectually, and, worse, the result is a horror show in actuality.

If there’s a recipe for how not to create eudaimonia, this old, busted paradigm — maximize income at the expense of life itself — is it.

Like I keep saying, capitalism is about putting ownership first and socialism is about putting society, you know, all the people, first. Capitalism is naturally suited to oligarchy of the plutocratic sort. Socialism in naturally fitted to democracy as government of the people, by the people, and for the people.

It's matter of getting priorities straight. Letting economic liberalism dictate social and political liberalism is a fool's errand.

Incidentally, viewing "capitalism versus socialism" as being black and white falls into the fallacy of the excluded middle. There are many forms of capitalism and socialism along the range between the extremes. However, much of the discussion assumes an excluded middle. This is unsound reasoning, usually for persuasion rather than being based on inquiry using methods of creative and critical thinking.

Designing Eudaimonia —The Art of Creating Better Lives

Americans Are Dying For Healthcare

Umar Haque

Olivia Goldhill — A philosopher who studies life changes says our biggest decisions can never be rational

At some point, everyone reaches a crossroads in life: Do you decide to take that job and move to a new country, or stay put? Should you become a parent, or continue your life unencumbered by the needs of children?

Instinctively, we try to make these decisions by projecting ourselves into the future, trying to imagine which choice will make us happier. Perhaps we seek counsel or weigh up evidence. We might write out a pro/con list. What we are doing, ultimately, is trying to figure out whether or not we will be better off working for a new boss and living in Morocco, say, or raising three beautiful children.

This is fundamentally impossible, though, says philosopher L.A. Paul at the University of North Carolina at Chapel Hill, a pioneer in the philosophical study of transformative experiences. Certain life choices are so significant that they change who we are. Before undertaking those choices, we are unable to evaluate them from the perspective and values of our future, changed selves. In other words, your present self cannot know whether your future self will enjoy being a parent or not....

Having established the epistemological significance of transformative life choices, there still remains the question of how, exactly, we should make such decisions. Paul is still figuring this out. So far, her best proposal is that, while you can’t know which choice you’ll prefer, you can at least decide whether you want to experience a transformation.

Perennial wisdom suggests the principle, It is always reasonable to go beyond reason to love. The transformational power of love is the strongest force in human life.

From a systems perspective, this transformation involves emergence, and emergence involves uncertainty.

Quartz
A philosopher who studies life changes says our biggest decisions can never be rational
Olivia Goldhill

Bill Mitchell — Falling enrolments in mainstream economics programs is a desirable outcome

If you have had the misfortune to study economics formally at university then you will recall sitting through endless and tedious lectures where the instructor asserted some superior knowledge about psychology and human behaviour. If you had combined the economics study with studies in psychology and sociology, you would have soon realised that what was being taught in your economics course was total nonsense. There was an article in the Fairfax press recently (August 6, 2017) – Crisis in high school economics a threat to national wellbeing – ruing the declining enrolments in secondary school economics programs. The point is that these courses are typically more damaging than useful and the contention of the journalist that we are reducing the quality of the economic debate as a result of less people studying economics is problematic. The typical economics program is simple indoctrination into a set of neoliberal principles that allow poor policy to continue despite it delivering disastrous outcomes. There is a crying need for more economic and financial literacy, but that requires an entirely different approach to be adopted rather than jamming more kids into the existing courses and having them come out dangerously brain dead....

Bill Mitchell – billy blog
Falling enrolments in mainstream economics programs is a desirable outcome
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Chris Dillow — Choice in economics

Are rational choice theory and utility maximization unwarranted assumptions in that they contradict evidence?

Stumbling and Mumbling
Choice in economics
Chris Dillow | Investors Chronicle

Philip Pilkington — To What Extent Is Economics an Ideology and to What Extent Is It a Useful Theory?

Short lead in to forthcoming book.

Naked Capitalism
To What Extent Is Economics an Ideology and to What Extent Is It a Useful Theory?

Philip Pilkington
Crossposted at PPs blog, Fixing the Economists

Geoffrey Hodgson — Imagine Economics as an Evolutionary Science

Veblen took the view that humans were driven by habit. Habits are guided by both inherited propensities – called instincts – and existing institutions. A habit is a learned capacity to act or think in a particular way. Instead of beliefs being prime movers, they too are based on habits.

As the pragmatist philosopher John Dewey argued eloquently in his 1922 book Human Nature and Conduct, deliberate choices occur when our habitual propensities clash and we are forced to make a decision between them. Generally, habit drives reason and choice, rather than the other way round.

This way of putting instinct first, habit second, and reason third is consistent with our understanding of human evolution. The instinct-habit-reason ordering is consistent with the sequence in which these emerged long ago in the evolution of our species. It is also consistent with the way in which they develop in each human individual, from infanthood to adulthood.

This evolutionary perspective on human agency is very different from the mind-first, or beliefs-first, perspectives that still dominate economics and much of social science.…

As George Lakoff frequently points out, mind-first is so 18th century.

Evonomics
Imagine Economics as an Evolutionary Science

Geoffrey M. Hodgson is research professor at Hertfordshire Business School, University of Hertfordshire, England

Geoffrey Hodgson — Economic Rationality Explains Everything and Nothing

But note that utility maximization is not a tautology. Tautologies are true by assumption or definition. Utility maximization is not a tautology because it is potentially false. But empirically it is unfalsifiable.

Ludwig Wittgenstein would call this masquerading as descriptive proposition a "nonsense statement." It looks like a descriptive statement but it can be interpreted to mean anything it is taken to mean. It's similar to curve-fitting or seeing faces in clouds. Its use is in "handwaving."

This is the case logically with most statements involving causality and purpose, as well as "the principle of sufficient reason." It generally involves turning a "how" question into a "why" question.

Science is a general account of how things stand. Philosophy is an attempt to explain why. This is a problem because there is usually no single explanation what accounts for why in most anything interesting.

For example, natural selection explains how evolution works in terms of observables. Intelligent design is an attempt to explain why it works in terms of unobservables. Confusing or conflating these involves a category error.

Cognitive science is showing that humans operate on the basis of a multitude of cognitive biases acquired in the course of development, such as "envisioning omniscient supernatural agents, magical causation, imminent justice, and promiscuous teleology." While these are often associated with superstition, Kant's analysis of the categories suggests that they are features of the way humans are "programmed" to think and reason. As a consequence distinguishing science from superstition is not always a simple matter. Conventional economics is rife with this kind of thinking.

"Philosophy is a battle against the bewitchment of our intelligence by means of our language.” — Ludwig Wittgenstein, Philosophical Investigations §109

Evonomics
Economic Rationality Explains Everything and Nothing

Geoffrey Hodgson | research professor at Hertfordshire Business School, University of Hertfordshire, England

See also

Robert Solow: I think that Professors Lucas and Sargent really seem to be serious in what they say, and in turn they have a proposal for constructive research that I find hard to talk about sympathetically. They call it equilibrium business cycle theory, and they say very firmly that it is based on two terribly important postulates — optimizing behavior and perpetual market clearing. When you read closely, they seem to regard the postulate of optimizing behavior as self-evident and the postulate of market-clearing behavior as essentially meaningless. I think they are too optimistic, since the one that they think is self-evident I regard as meaningless and the one that they think is meaningless, I regard as false. The assumption that everyone optimizes implies only weak and uninteresting consistency conditions on their behavior. Anything useful has to come from knowing what they optimize, and what constraints they perceive. Lucas and Sargent’s casual assumptions have no special claim to attention …

Lars P. Syll’s Blog
Solow kicking Lucas & Sargent in the pants
Lars P. Syll | Professor, Malmo University

UPDATE:

Jason Smith jumps in.

 But that is the point -- the theory of utility is that utility is a number (or ordering), so finding that it is not a number is falsifying the theory.

A Wittgensteinian would say that if a number is assumed and there is no number, then the statement is not false but nonsensical. A key term is meaningless given the assumptions.

Information Transfer Economics
Marvelous demonstration that this blog post is too narrow to containJason Smith

Cameron K. Murray — Explaining everything explains nothing: Economics

Sure, humans often make calculated decisions, but the more I learn about the nexus between individual behaviour and how we behave in groups, the more I see very little value in rational-individualist views of economic systems that see all behaviour arising from God-given personal tastes. Without acknowledging the necessity of group-coordination mechanisms intrinsic in our behaviour, we are missing the main story.

Fresh Economic Thinking
Explaining everything explains nothing: Economics
Cameron K. Murray

Morris Berman — The Parable of the Frogs

What does it take to produce large-scale social change? Most historians, if you catch them in an honest moment, will admit that the popular levers of social change, such as education or legislation, are bogus; they don’t really amount to very much. What does make a difference–and then only potentially–is massive systemic breakdown, such as occurred in the United States in the fall of 2008.

Counterpunch
The Parable of the Frogs
Morris Berman
(h/t Kevin Fathi via email)

Chris Dillow — The Costs Of Hierarchy

Experimental evidence shows that hierarchical organization is more inefficient than generally realized.

Ernst Fehr and colleagues got subjects to play an authority-delegation game, in which subjects were divided into principals and agents, and then asked to work on selecting projects with varying payoffs. They made two important discoveries.

First, subordinates put in less effort than you'd expect rational income maximizers to; depending on the treatment, up to half put in no effort at all, even though this was almost never the income-maximizing option....

Secondly, Fehr and colleagues say:
We find a strong behavioral bias among principals to retain authority against their pecuniary interests and often to the disadvantage of both the principal and the agent.

Stumbling and Mumbling
The Costs Of Hierarchy
Chris Dillow | Investors Chronicle

These findings are actually surprising to some "experts"?