Discourse, Economists and Aditya Chakrabortty

2012-01-31T09:43:24+00:00

I just read an interesting article by Aditya Chakrabortty [0] in which he chooses to blame economists as a group for attempting to legitimise executive pay. It's primarily of interest due to the author's decision, conscious or otherwise, to ignore any kind of basis in reality or apply reasonable judgement when criticising a group of people for ignoring any kind of basis in reality and lack of applicable judgement.

He throws his accusations around incredibly easily. One of them, and this is an oft-repeated classic myth is here referenced in the phrase, "the same discipline that spoke all that nonsense about markets always being efficient." The nature of free market efficiency is an incredibly interesting issue that has been the subject of much debate over the years. In the popular press this is characterised by people who are either claiming that markets are efficient or that they never are. As usual in the case of two diametrically opposed viewpoints neither are subtle enough to convey even a whimsy of truth. A whimsy is a measure of truth that I just invented, its definition is as follows: any statement by Sarah Palin contains exactly one whimsy of truth. That's how much the discourse has been distorted.

One of the most interesting areas of economic research in this regard is Joseph Stiglitz's work on asymmetric information, in which he proves that "whenever markets are incomplete and/or information is imperfect (which are true in virtually all economies), even competitive market allocation is not constrained Pareto efficient." [1] In other words, the situations where free markets are genuinely efficient rarely happen in real life.

Regardless there exists not only some vague argument that somewhat disagrees with Chakrabortty's claims but an actual mathematical proof stating inefficiency exists in cases which the author's claim are incredibly common. The assumptions of the model have developed enough consensus in order for it to be the subject of the 2001 Nobel Prize in economics[2]. He's wrong about the economic facts, and he's wrong about where he claims academic economic consensus lies. He is also "economics leader writer for the Guardian" [3] - a sad state of affairs.

Instead of looking at the work of world leading economists and evaluating whether their publications support his false claims Chakrabortty instead cites the film Inside Job and a list of 'most downloaded academic papers'. Not citations, not readership, nothing related to the common occurrence of economists writing for popular newspapers or magazines but paper downloads.

He claims that "toeing the mainstream economic line" brings you financial rewards. Ignoring several books by Stiglitz that sold well, his well paid position at the World Bank, and on President Clinton's Economic Advisory council, numerous speaking engagements and consulting work. It's not like Stiglitz is the only economist with opinions that falsify Chakrabortty's claims about needing "mainstream economics" in order to get work. Take for example New Keynesian Economist Paul Krugman's position at the New York Times. Even Alan Greenspan - the most famous free marketeer of our era - in a famous speech in the late 1990s described the market overvaluation of the dot com bubble to be an "Irrational exuberance" [4] That was five years before that bubble burst.

In fact its hard to even think of an economist who is in a position of power and influence because of their economic reputation. Diatribes about how amazingly efficient the free market is in recent months have been near monopolised by wannabe Republican Presidential nominees.

Chakrabortty also claims that economists failed to spot the financial crisis. This is another bizarre claim that gets thrown around repeatedly despite the wealth of scholarly articles pointing out the problems inherent in the banking system. He chooses to ignore the consistent warnings from the writing of both Stiglitz and Krugman. No mention of the 2nd edition of 'Irrational Exuberance' written by Yale Professor Robert Schiller in 2005 in which he describes how the house market bubble could lead to, "a decline in consumer and business confidence, and another, possibly worldwide, recession." The Economist magazine claimed that "The worldwide rise in house prices is the biggest bubble in history," in an article two years before the crash. [5]

Of course me writing this blog post is entirely irrelevant, it's nearly impossibly unlikely that the author in question will read it. Even if he does, his history of ignoring fact in the face of angry polemic will make it impossible for him to agree with its conclusions. Even if he chose to think about it, he could easily provide an easily accessible ad-hominem attack to dismiss me. I'm a fat guy, who likes pro-wrestling and used to have a mullet talking about economics on his blog that nobody except his friends read. My opinion on the subject is about as politically relevant as a Polish Jew's opinion on human rights in the early 1940s.

In that case why write? Well that's partially because I like to lay out and structure my thoughts properly and writing forces you to do that. It's also partially because I feel that as a population we're done a genuine disservice by editorials such as this. People who are in a position of influence and yet who choose to produce poorly researched and intellectually bankrupt articles such as Chakrabortty's. It's not as though he's limited by working at a Tabloid newspaper - The Guardian doesn't need to compact its economics editorials down in order to make space for semi-nude pictures of well endowed women. Despite this he chooses a hit piece on economists. The only way around this mentality is to work out where the truth lies yourself and try to identify both the good points and the flaws in arguments around political issues without the easy crutch of relying on a newspaper to explain things.

Chakrabortty's twitter bio [6] claims "I am gainfully employed by a newspaper. Future generations will not be able to say that." On that issue I can't but hope that he is correct.

[0] http://www.guardian.co.uk/business/2012/jan/30/excessive-pay-not-bankers-acad...

[1] http://www2.gsb.columbia.edu/faculty/jstiglitz/download/papers/1986_Externali...

[2] http://www.nobelprize.org/nobel_prizes/economics/laureates/2001/press.html

[3] http://www.guardian.co.uk/profile/adityachakrabortty

[4] http://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm

[5] http://www.economist.com/node/4079027?story_id=4079027

[6] https://twitter.com/#!/chakrabortty

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The more things change, the more they stay the same

2012-01-29T15:32:00+00:00

Chael Sonnen - UFC on FOX 2, 2012

Superstar Billy Graham, WWWF, 1975

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There should be more than one way to do it in Python

2012-01-23T20:08:39+00:00

Python has a philosophy of ‘There should be one– and preferably only one –obvious way to do it’ (http://www.python.org/dev/peps/pep-0020/) rather then Perl’s ‘There’s more than one way to do it’ (Programming Perl Third Edition, Larry Wall et al.). This is great, in theory – it leads to greater consistency between disparate programs and makes it easier for individual programmers to pick up someone else’s code.

The problem comes where the obvious way is not, for whatever reason, the practical way. For example, the obvious way to test if a string begins with another string is to use "string1".startswith("string2"). This is, however, significantly less performant than doing "string1"[7:] == "string2" which means when doing a large number of these tests you have to use this form, despite it not being the obvious method.

Unless you are familiar with Python’s sequence slicing syntax (http://docs.python.org/library/stdtypes.html#typesseq) I do not find "string1"[7:] to be obvious (even though I would expect most programmers to be able to hazard a, probably correct, guess to what it does), which means I would precede that line with a # Check if string1 starts with "string2". When I feel the need to comment on a specific line of code it is usually because I do not think what it is doing is sufficiently obvious, which means it violates Python’s ‘There should be one– and preferably only one –obvious way to do it’.

Planet Compsoc

Discourse, Economists and Aditya Chakrabortty

The more things change, the more they stay the same

There should be more than one way to do it in Python