Summertime in England

Thanks to the people at Freedom Week, I'm going to Cambridge! I might stay for the month of July and travel around a bit. Now I just need a smaller camera:

Indeed, solitary travelers conjured up an entirely different reaction than a group of Americans, who were perceived as camera-wielding, Bush-supporting boors. “Universally idiotic; large Hawaiian shirts; large cameras; stupid questions,” says Ian Clifford, a software developer from Nottingham, ticking off the stereotypical qualities of a group of average American tourists. And, says Clifford, these are the more cultured members of U.S. society: “Only 10 percent of Americans have passports. What on earth have you left behind?”

Adam Smith is smiling on Two Buck Chuck

"And the source of the wealth of nations is the division of labor", as Fred Franzia has happily discovered:

It’s been five years since the first of these amazingly cheap chardonnays and cut-price cabernets started rolling off the line, released by maverick vintner Fred Franzia under the formal label of Charles Shaw wines.

Three hundred million bottles later, Two Buck Chuck is still selling, and Franzia is still preaching his message of wine for the masses.

“We’re not out to gouge people,” says Franzia. “What I would like to see is every consumer be able to afford to have wine on the table every day and not feel insecure about it.”

Last year, Two Buck Chuck — available only in the Trader Joe’s grocery chain and priced at $1.99 in California, hence its nickname — accounted for at least 8 percent of California wine sold in-state, said Jon Fredrikson, who tracks wine shipments through his Woodland-based company, Fredrikson, Gomberg & Associates. National market share figures are not available.

...

Making wine is expensive from the ground up, but Franzia owns a lot of ground — 40,000 acres is the common estimate. He won’t say. His Ceres-based Bronco Wine Co. also owns the crushing and bottling plants and has its own distribution company.
Until now, another company has supplied the bottles. But Franzia’s latest idea is to fix that by building a glass container plant near his Napa Valley bottling facility in a business park near the Napa County Airport.

When we were rational

Stuart Armstrong at OvercomingBias has a good post on my new favorite topic:

In the real world, we could always hope that the march of science could replace superstitious explanations with truer ones. But the truth is already out there in these virtual worlds, and is ignored. If these games are the shape of things to come, it might well be that the zenith of rationality is already in the past.

Here's an exerpt from my recent paper "Overcoming Selfishness: Religion and the Alternatives":

Self-deception and belief go hand in hand. It is likely that self-deception evolved as a means to create and maintain belief, because as I have argued, belief works. In his 2002 Nobel lecture, Vernon Smith discusses some of his experiments involving the trust game. He finds that reciprocity is behind cooperation, not altruism or other-regarding utility. In other words, we achieve cooperation by deluding ourselves about our own altruism.
Immediately preceding the “invisible hand” statement, Adam Smith remarks on how wealth is created through the self-deception of the wealthy:

We are then charmed with the beauty of that accommodation which reigns in the palaces and oeconomy of the great; and admire how everything is adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires. If we consider the real satisfaction which all these things are capable of affording, by itself and separated from the beauty of that arrangement which is fitted to promote it, it will always appear in the highest degree contemptible and trifling. But we rarely view it in this abstract and philosophical light. We naturally confound it in our imagination with the order, the regular and harmonious movement of the system, the machine or oeconomy by means of which it is produced. The pleasures of wealth and greatness, when considered in the complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.
And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. (TMS, IV.1.9-10)

But Adam Smith generally sees self-deception as an irrational and unsocial weakness that should be corrected:

He is a bold surgeon, they say, whose hand does not tremble when he performs an operation upon his own person; and he is often equally bold who does not hesitate to pull off the mysterious veil of self-delusion, which covers from his view the deformities of his own conduct. Rather than see our own behavior under so disagreeable an aspect, we too often, foolishly and weakly, endeavor to exasperate anew those unjust passions which had formerly misled us; we endeavor by artifice to awaken our old hatreds, and irritate afresh our almost forgotten resentments: we even exert ourselves for this miserable purpose, and thus persevere in injustice, merely because we once were unjust, and because we are ashamed and afraid to see that we were so. (TMS, III.4.4)

I think Smith, and most economists who have followed him, have failed to recognize the ecological value of individually irrational self-deception, i.e. its role in facilitating beliefs which benefit the group.
Robert Trivers (2006), the evolutionary sociobiologist, claims that self-deception evolved as a way to better deceive others. But he recognizes there must be a positive side as well, referring to what McCloskey (2006) and myself would call Hope: “Life is intrinsically future oriented and mental operations that keep a positive future orientation at the forefront result in better future outcomes (though perhaps not as good as those projected). The existence of the placebo effect is another example of this principle (though it requires the cooperation of another person ostensibly dispensing medicine). It would be very valuable to integrate our understanding of this kind of positive self-deception into the larger framework of self-deceptions we have been describing.”
Again, the positive side to self-deception is that it facilitates trust. Why else would it survive the selection process, and why would it continue to be so attractive? Despite the Enlightenment, we are drawn more than ever to myth-makers, inspirational speakers, emotional politicians, and thoughtless celebrities, not scientists and skeptics. Libertarians and economists know this from experience.

Addendum: Michael Prescott shows us the superstitions of a skeptic, Susan Blackmore. (Hat tip to commenter M.C.)

Summer gear

Looks like I have two options: to snitch or not to snitch. Blake, if you see this before Bonnaroo, I'm gonna need a Narc shirt.

Seaside, Florida

This is where I was last month for my friend Brannon's bachelor party. It's halfway along the panhandle of Florida, aka the redneck riviera, and it's probably the best beach in America. The girls there are not into libertarian philosophy, economics, or politics.

It is done

3 exams and a huge paper, that's what I've been up to the last month. I feel pretty good about the paper. It's sort of an exegesis of Adam Smith on religion, morality, selfishness, and self-deception. Maybe I'll use it as my job paper. You know, at Starbuck's.

That's my next task, I suppose, finding a job. I've been taking a wait and see approach. Hence, I have only two things scheduled for the summer:
1) IHS Social Change Workshop in Charlottesville, VA; June 23-29.
2) Bonnaroo, Manchester, TN; June 14-17. I'll be studying the economics of grilled cheese.

I'll probably also check in with the family, which means stopping in all the places that Guns n' Roses did on their last tour:
Huntsville, AL
Lewisburg, TN
Lexington, KY
Hendersonville, NC
Los Angeles, CA

Media conspires to avoid work

Seems they all forgot about the other "deadliest act of mass murder in a school in U.S. history":

The Bath School disaster is the name given to not one but three bombings in Bath Township, Michigan, USA, on May 18, 1927, which killed 45 people and injured 58. Most of the victims were children in second to sixth grades attending the Bath Consolidated School. Their deaths constitute the deadliest act of mass murder in a school in U.S. history. The perpetrator was school board member Andrew Kehoe, who was upset by a property tax that had been levied to fund the construction of the school building.

Kehoe used a detonator to ignite dynamite and hundreds of pounds of pyrotol which he had secretly planted inside the school over the course of many months.

Hat tip to Dad.

Roboticists and economists

What's with the maleness?

Wired News: A number of people in your book don't sleep, don't bathe. Is there something about robotics that appeals to this personality type, or does the work itself take over?

Lee Gutkind: You can't just do this for eight or 16 hours and walk away. Even debugging a program will take a whole day. So I think it takes a patient but obsessive personality. Don't forget also, it's a very male-oriented culture. There's not a lot of joking, not a lot of flirting, because there's no one to joke and flirt with. You're flirting with your robot is what you're doing.

All I've got is rationality.

The superstition economy, or how self-deception makes the world go 'round

That might just be the title of my dissertation. Tyler brings up self-deception, just as I'm working out my paper on the role of belief, often delusional belief, in securing trust. Here's the abstract:

Belief constitutes hope, and hope is essential to all entrepreneurial activity, as it enables trust. The critical belief is belief in selflessness, within yourself and others, which is self-deceptive in as much as we are naturally selfish. So it is costly to produce, maintain, and signal a credible commitment to this belief, which religion provides via sacrifice and stigma. Numerous secular institutions compete along the same dimension, and are characterized by belief, sacrifice, and stigma. Namely, government, health care, education, romantic love, and others have to some degree become substitutes for religion. However, they require more sacrifice than religion, due to the problem of monitoring, and in particular, more costly self-deception. Better information improves monitoring, and reduces self-deception. In a world of improving information, this may explain the rise of secularism. However, so long as information is less than perfect, religion will remain, as the existence of God cannot be disproved.

Remember folks, I'm trying to maintain methodological atheism here.

This one goes to eleven

Keith Richards continues to defy categories, and all theories of human behavior:

"The strangest thing I've tried to snort? My father. I snorted my father," Richards was quoted as saying by British music magazine NME. "He was cremated and I couldn't resist grinding him up with a little bit of blow. My dad wouldn't have cared," he said. "... It went down pretty well, and I'm still alive."

War, hmm, what is it good for?

I was at the Iraq War protest today, not because I'm civic minded, but because a professor paid me to hand out surveys. I'm not sure the questionaire will capture the eccentric nature of this crowd, so here's my unscientific analysis:

30% nice old '60s era hippies.
30% eerily silent but angry middle aged types.
30% Ewoks.
10% mentally deranged.

I gotta tell you, it didn't help firm up my anti-war sentiment. In the language of Adam Smith, there was no fellow-feeling there. Also, hardly any blacks. The one black guy I randomly selected marked himself down as white.

Conspicuous consumption or conspicuous saving?

Tyler writes about how Veblen has come back into vogue. Veblen saw status-seeking as essentially inefficient. (And he thought engineers could somehow fix this? The arrogance of his generation continues to astound me.) I think status-seeking is always about accumulation of that which is scarce, be it SUVs, Chinese art, or economic knowledge. It's never been fashionable to accumulate air. Status-seeking increases demand for that which is scarce, and so induces production, which mitigates the effects of scarcity, i.e. high prices.

Veblen found the "conspicuous consumption" of the Gilded Age repulsive. I guess the flourishes of Victorian architecture offended his Scandinavian sensibilities. But think of how this period stands out amongst the blandness which preceded it. How much of colonial architecture is really striking? Monticello, you say. I say it's an out of proportion rip-off. As is Mount Vernon. There are a few notable ante-bellum mansions in the South, and New Orleans is exceptional. That's where the money was. But my sense is the North was really lacking in this department, e.g. the row houses of Philadelphia are today the only boring thing about that town. The Gilded Age came along to fix all that, and status-seeking was the mechanism.

That we're able to still enjoy Victorian architecture means this wasn't really conspicuous consumption, it was more like conspicuous saving. I think this is typically the case with status goods, because much of what we produce is durable. Even when we blow a bunch of money on an SUV, which looses 20% of its value when driven off the lot and then quickly becomes a pile of rust, it serves to advance technology. When we splurge on an expensive meal, it spurs the invention of recipes. When we get PhDs in literature or, dare I say, economics, where probably most dissertations are only ever read by the dissertation committee, still some of them will change the world.

In short, I suppose knowledge of Veblen has become too scarce, and so status-seekers have become his exponents. Thank God the engineers haven't prevented it.

Stillness

So, this is the longest I've gone without posting. I sort of gave it up for Lent, or at least the obsessive-compulsive urge to post everyday. Now you'll just get extremely lengthy posts whenever I feel like it. At least during Lent. The change of format is the result of a rather exceptional experience I had this past weekend at All Saint's Sisters of the Poor, an Anglican convent in Catonsville, Maryland. For those who don't know me well, this is not my typical weekend activity. But Sammy recommended it to a group of us at church, and I'm very glad he did. I'll try to relate it to you, just the interesting parts, hopefully.

Sister Catherine Grace told us to focus on stillness, which I suppose is to be expected at a convent. She recommended we wander around the property and observe nature. Something about the place was so serene and absolutely quiet (the picture doesn't convey it). She told us how she gave up all her possessions and joined the convent 45 years ago. She talked about the different kinds of people who have come through. It was a home for disabled children, and a hospice center, and now a retreat. She talked about the three strangers who came to die there, each prejudiced against the other, and how they became inseparable friends, and died within 4 hours of each other.

The guest house was full of interesting literature. I read some of the newsletters, tucked away in a bin labeled "Christian vices." These jumped out at me:
1) curiosity
2) self-expectation
3) pride
To the extent curiosity is self-serving, it is a sin. If it interferes with one's relationship with God, it is a sin. The same goes for self-expectation and pride. Clearly, these are virtues to most people, especially academics. So are the sisters just a bunch of fringe nuts? No, I think they are living consistently with an essential element of Christianity, which is the death of self. The ultimate story of selflessness is, of course, the life of Jesus.

I'm a believer, so this has meaning for me. It effects my incentives. And I'm pretty sure I'm not the only one. This is why I think economists should pay attention to religion. That's what I've been doing this week, while trying to keep the curiosity, self-expectation, and pride from consuming me. Are you sensing the cognitive dissonance? Larry Iannaccone says the scientific study of religion demands methodological atheism. F. Scott Fitzgerald said the mark of genius is the ability to hold simultaneously two conflicting ideas. Maybe that's why so many geniuses kill themselves. They run into their other persona and it scares the shit out of them. I don't think very many of us are geniuses, certainly not me, and I think even geniuses can't fully separate their sensibilities from their rational thoughts. Economists pretend to be objective, probably largely to signal intelligence, but it generally just results in deception and bias (see Dan Klein for more on this). However, I think figuring out the degree and the context in which people can become objective is important for economists, as that is the domain in which our models work best, and beyond which, we need to augment the theory.

Addendum: Here's what G. K. Chesterton said about it:

The ordinary man has always been sane because the ordinary man has always been a mystic. He has permitted the twilight. He has always had one foot in earth and other in fairyland. He has always left himself free to doubt his gods; but (unlike the agnostic of to-day) free also to believe in them. He has always cared more for truth than for consistency. If he saw two truths that seemed to contradict each other, he would take the two truths and the contradiction along with them. His spiritual sight is stereoscopic, like his physical sight: he sees two different pictures at once and yet sees all the better for that.

What is it with LaRouche?

Today as I surfaced from the Foggy Bottom metro, I heard angels singing. And they were wearing sandwich boards that read "Global warming? Global Fraud." There were about 5 of them. And there were 3 or 4 others handing out Lyndon LaRouche literature, and people were taking it. Maybe it's just a DC thing, but I run in to these people fairly often. They're generally young, in their 20s, and look a little bit hippy but not over the top. I've spoken to a few, and they seem non-crazy. The literature, on the other hand, is quite crazy. LaRouche's big idea is to build an international rail network. He idolizes FDR. From today's handout, in an article titled "How FDR Reversed the 1933 Banking Crisis," there's this quote by FDR:

The New Deal was fundamentally intended as a modern expression of ideals set forthe one hundred and fifty years ago in the Preamble of the Constitution of the United States - 'a more perfect union, justice, domestic tranquility, the common defense, the general welfare and the blessings of liberty to ourselves and our posterity.' But we were not to be content with merely hoping for these ideals. We were to use the instrumentalities and powers of Government actively to fight for them.

All I can figure is that the severity of the Depression made FDR and his generation blind to the ideas which inspired the Founders, i.e. natural rights to life, liberty, and property. The Founders intended to strictly limit government, because they recognized that coercion is the primary means of government, and so it is antithetical to liberty. These eternal truths were swept aside by the wake of the Depression, and now we're stuck with an endless parade of charlatans and well-meaning dreamers. I just wish the dreamers would get themselves a real dream.

Congratulations to Al Gore

For all those like me, who missed the Oscar's, but not really, here is the highlight: Al Gore's acceptance speech. And, courtesy of the Drudge Report, we get a peek at the Gore mansion:

Gore’s mansion, [20-room, eight-bathroom] located in the posh Belle Meade area of Nashville, consumes more electricity every month than the average American household uses in an entire year, according to the Nashville Electric Service.

Thanks to Dave Thompson for the pointer.

Addendum: More choice words from Joanna. Smarm-scapade? And I vote for couch surfing as the social movement most worthy of Hollywood's praise. Wouldn't it be great to surf on Leo Dicrapio's couch?