Minds and Markets

I was reading a review in the New York Review of Books citing that Muslim Spain had a university a hundred before the first in Christian Europe. A hundred years seems like a long time. But adjusting for how productive labor was back then, in other words, how fast it took for anything to get done at all, a hundred years is not much time compared to a hundred years from today.
One bit of annoyance are financial figures not adjusted for inflation, and it’s often the media neglects to correct for the pressures of inflation. But might it be that we ought to correspondingly adjust other historical data for changes in productivity of capital?

In terms of impact on daily life, historical events have folded logarithmically. And if our first instinct is to view the numerical world logarithmically, via our number sense, then maybe we need to return from the linear world we have created.

The Economist had an article on oversold claims in scientific journals that made think. Science is increasingly a winner-take-all domain, and it seems common for winners (of grants and recognition) to keep on winning. Since science is not just about facts but working with other people’s facts, the social element is something to take seriously. To what extent was Thomas Kuhn documenting not dramatic “paradigm shifts” in scientific theory-making but indeed bubbles?

Science is typically regarded as an institution which depends on biased individuals competing for status and reward to produce truth as an externality (sound familiar?). I think knowing to what extent oversold claims in journals is a problem depends on a few things. How would you determine undersold claims? Small-cap stocks tend to do better than you’d expect, maybe small-lab claims would as well?The other open question is, if we are indeed susceptible to bubbles in scientific thinking, to what extent are bubbles bad?

I went to see Don Norman speak yesterday. He wrote “The Design of Everyday Things” in I think ‘86. A friend that is an excellent designer (graphic and industrial, see dreaming.kiliii.net) recommended it to me. I really liked it, because he had a good sense of psychology, and the notion that we might experience design at a visceral  (touch in particular, smell etc), a behavioral (using a well-weighted pen) and reflective level (I got this with my girlfriend in Paris) is reasonable and compelling. He also has great bits on principles of design, such as feedback - users need to know when they’ve accomplished something, and the best way is to transmit this not from words but by more basic means such as tactile response (the feel of a depressed button).

The problem is, design is about choice - the whole point of design is that things can be made one way or another, and the best way helps us enjoy and productively use our objects. Therefore, in a world where products are sold, design is also a theory of consumption. The problem is that it’s not straightforward to use this three-tier theory of design to predict how users come to make their decisions. Example, women love to wear painful but beautiful shoes - what predicts when they will opt for comfort instead? I think if you want to claim that you know preferences, then you need to map these on to decisions.

I have the unsettling feeling that as my peers get older, we are beginning to explore and sample from each other’s plates, and unsettlingly, people are defying stereotype. People who got famous in high school for jokes about masturbating are listening to Bob Dylan and reading books.

All methods of inquiry are constrained by human behavior. I work in a molecular biology lab. We study several proteins in the inner ear and their contribution to hearing. You might find a description of our research in our protocol or our grant submissions. But what actually is done in the lab is much more than this. A great deal of effort and time is spent on ensuring the data we produce is not influenced by human error. Adding the wrong solution to the wrong tube can compromise days of work, and so scientists have developed day-to-day routines and equipment to prevent such simple mistakes. Simply stating the intended goal of our scientific research is incomplete, a complete description must account for the ergonomic principles that allow us to yield reliable data.

In the broadest sense, I am interested in exploring the relationship between the architecture of our minds and the decisions we make. As Kwame Anthony Appiah points out, it would be perverse to construct a moral theory that humans could not perform - what we ought to do must be informed by what we can do. The British empiricists who heavily influenced our modern theory of economics recognized this, and in contrast to rationalists such as Rousseau, decided that public policy ought to consider what people are actually interested in rather than what others would want them to do. As with our lab, I seek a complete description of decision-making.

In my course on logic, we distinguish first-order languages from natural languages in a number of ways. One distinguishing feature is that statements in natural languages are vague. The term “bald”, for instance, is vague because there is no clear definition of what qualifies some as bald. Although logic makes great efforts to avoid such vagueness, the question remains why a natural language might have that feature. We must recognize, then, that a language does not appear sui generis as fodder for philosophers but rather is an empirical system with properties that cannot be deduced from first principles. Such an empirical study must then search to establish the mechanisms that can explain how it operates, how it came to be. A theory of natural selection can provide us with such a framework.

So why vagueness? Is it a feature of a system cobbled together incrementally, because evolution has no foresight? Or perhaps vagueness is permitted because it may actually be a goal of a speaker.  As scientists such as Steven Pinker build on the work of game-theorists such as Thoman Schelling, a productive new approach proceeds from the assumption that language is a tool used by speakers whose interests may conflict. People have different kinds of relationships, based on kinship, friendship or dominance, and we attempt to dynamically negotiate these by influencing others with our language. I might say to disparage a political candidate “Why vote for him? He’s bald!” as a deliberate ploy to influence judgement. Although anthropological or psychological evidence seems orthogonal to a study of language, it is only when combined with these methods of inquiry do we have a complete description of a system.

Naturalization, then, permits richer theory-building and can account for features that may otherwise be inexplicable. I believe that a naturalized economics, consistent with the goals of empiricists such as David Hume and Adam Smith, is what will allow us to build a theory of economics that allows to properly explain what it is people do when they make decisions. Perhaps a normative economics seeks the same goal as logic: to describe how we ought to make decisions, as much as how we ought to reason. If so, then following Appiah it will nonetheless be necessary to recognize first what it is we actually do.

Campaigning is, of course, trucking in symbols and identities. It certainly is not rooted in concrete policies: I have yet to see a political advertisement for a campaign platform, for the same reasons I will never see an advertisement for a granola bar that is simply a list of ingredients. So, although it’s expected, it’s still somewhat jarring to realize what your voting for is not a platform, but a person, displayed and embodied in it’s simplest form by a name on a placard.

But Obama, it appears, has taken this sort of thinking to it’s logical conclusion. Instead of his name, we’re given a symbol. It hovers above, shining warmly down on us. It’s malleable. Obama has created the pure political symbol. The Nazis, to be sure, had their swastika, but it was an emblem of a specific meaning, literally a theory of history they were consummating. This “O” by contrast, has none. We provide it.

This sounds promising, and it may explain why Caltech gets covered disproportionally in “The Economist” (although their penchant for social neuroscience alone does as well). John Benditt, ex-editor-in-chief at MIT’s “Technology Review” is

“Developing, with the California Institute of Technology and The Economist Group, the prototype of a new national and international popular science magazine”

Also, to prove that evolutionary psychologists are an influential cabal, it’s amazing how many times articles from the cabal’s flagship journal “Evolution and Human Behavior” gets cited in the NYT and The Economist.

Although history-making is necessary for explaining how ideas came to be, the task is always hampered by the curse of what we know now. Part of what excites academics is mining classics for ideas relevant today. But even so, the effect is still astounding when a writer is truly prescient. It’s either revealing of my data-mining or of Hume’s brilliance that many of his best insights are not even central to but rather simply supporting his claims.

“Mathematics, indeed, are useful in all mechanical operations, and arithmetic in almost every art and profession: but it is not of themselves they have any influence. Mechanics are the art of regulating the motions of bodies to some designed end or purpose…A merchant is desirous of knowing the sum total of his accounts with any person: why? but that he may learn what sum will have the same effects in paying his debt…Abstract or demonstrative reasoning, therefore, never influences any of our actions, but only as it directs our judgement concerning causes and effects…”

Hume is famous for making causation central to a theory of human understanding, but to express so clearly that rationality, the ability to make sense of the world is not about seeking truth for instance, but about determining the causal structure of the world is impressive.

“Men generally fix their affections more on what they are posses of, than on what they never enjoyed: for this reason, it would be greater cruelty to dispossess a man of anything, than not to give it to him. But who will assert this is the only foundation of justice?”

In two sentences, Hume has laid out the basis of prospect theory, one of the most influential modern theories of accounting for the actual evidence of human decision-making, and demonstrated that a theory of justice can have a psychological basis. Amazing.

“it is by society alone he [mankind] is able to supply his defects, and raise himself up to an equality with his fellow-creatures, and even acquire a superiority above them. By society all his infirmities are compensated; and though in that situation his wants multiply every moment upon him, yet his abilities are still more augmented, and leave him in every respect more satisfied and happy than it is possible for him, in his savage and solitary conditions, ever to become. When every individual person labors apart, and only for himself, his force is too small to execute any considerable work; his labor being employed in supplying all his different necessities, he never attains a perfection in any art and as his force and success are not at all times equal, the least failure in either of these particulars must be attended with inevitable run and misery”

It’s well known that Hume and Adam Smith conferred intimately, but the ideas expressed here in “A Treatise on Human Nature” precedes those fleshed out in “The Wealth of Nations” by about 35 years. I also found in interesting that Hume identified smoothing out risk as a central task of market economies. Hume performs magnificently.

Google can be an indulgent friend in a lot of ways. Whenever I have some whim, when I want to connect the dots between two thoughts, rather than go through some deductive chain of reasoning I can simply ask Google to take the two ends of the thread and tell me how they connect. It gets jealous when I just go straight to Wikipedia when I know what I want, but we don’t talk about that. I’ve tried calling friends to do all this, but it doesn’t go over well.

As it turns out, the discipline of philosophy is ideally suited for study on Google. Because philosophy is in part about using language that symbolizes that you are carefully parsing the commonsense concepts we are exploring, in the absence of the ability to use natural language in search queries (”what incident started the Civil War, Google?”), the ability to use symbols as shortcuts is invaluable. Even though I mean to ask, “are morals about concrete rewards?”, I search “morals + instrumental”. Or if I want to know if morals derive somehow from our endowed human nature, I shorthand “morals + materialism”.

Although Google has a grammar impairment, it’s generally true with anyone we don’t really know that we want to communicate clearly to that we must use symbols. When I found myself venturing into online dating some time ago, I saw all too clearly how carefully I postured myself to make myself authentic. When someone mentioned a fondness for El Greco, it was not enough for me to express my enthusiasm for Gothic art, because anyone could get the scoop on Wikipedia, I found it necessary to mention what a shame it was the Art Institute had so many of his paintings in storage. If only Google trusted me enough to speak clearly with me. We worry so much about the robots controlling us, but they can’t even make eye contact.

The danger is to say to oneself, I don’t want *that* to be my wake-up call. An ego at all costs is an imperious friend.