A short story by Herbert Simon

Posted on August 13, 2020 by Nicholas Gruen

Models of My LifeI’ve been dipping into Herbert Simon’s autobiography, Models of my life. He’s from an interesting time in the intellectual history of economics and the social sciences. The major contributions of his professional life began in the 1950s and, though he was part of the mainstream, he was highly critical of that mainstream. Being in search himself of the means for scientifically formalising economic subject matter himself, I think he was far more reflective in its pursuit than many of the neoclassicals whose approach was very formulaic.

He is pretty scathing about neoclassical economics, but from an unusual angle. He’s a very rigorous thinker. You won’t find me using the word ‘rigorous’ often because of its ambiguity. Most people use the word to mean ‘with lots of maths’, whereas I use the word to mean “being careful in proceeding from the premise to the conclusion of an argument”. In Simon’s case it’s both, which distinguishes him from a lot of his neoclassical colleagues.

In any event, the major preoccupation of his professional life was decision making. That led him into economics, the psychology of decision making (and precisely in how one might build a ‘science’ of such a thing), and he then ventured into computing and artificial intelligence in the mid-1950s. This immensely enriched his thought. I’m realising how much he anticipates embodied cognition as it emerged in the late 1970s and has matured into its own field since a landmark paper by Clark and Chalmers in 1998. I’m writing a little more about that which I hope will appear here soon.

In any event, Simon’s best-known contribution to economists is his idea of ‘bounded rationality’ – of the necessity to make decisions with less knowledge and understanding than one would like. The book contains Simon’s only short story which I reproduce below. It riffs on one of Simon’s obsessions which was the labyrinth as metaphor for decision making in life. It won’t surprise anyone to know that he was most intrigued by Jorge Luis Borges writing on the same theme and the book also contains a transcript of their discussing their shared interest in the labyrinth as metaphor. Anyway, below the fold is a transcription of Simon’s short story. It’s quite intriguing. Continue reading →

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A review of “The Ballad of Songbirds and Snakes”, the prequel to “The Hunger Games”.

Posted on August 13, 2020 by Paul Frijters

[spoiler alert!]

As a fan of the “Hunger Games”, a dystopian trilogy where teenagers are thrown into gladiatorial games to fight till the last survivor in a world that is a blend of ancient Rome and modern America, I eagerly awaited its prequel “The Ballad of Songbirds and Snakes”. Its another intricately constructed book by Suzanne Collins, displaying her impressive tool-kit of story-telling tricks, taking elements of different fantasy writers over the last 100 years.

Let me first discuss some of the tricks she uses and then what I think of the messages she uses them for.

One trick in “the Ballad” is that the names of the characters are full of meaning and cultural references. The main character is a young Coriolanus Snow, who was to become the ruthless ruler of the Rome-like ‘Capitol’ in the “Hunger Games”, combining the name of a brutal Roman emperor (Coriolanus) with the name for purity (Snow). The main group of ‘good people’, a gypsy-like entertainment group called the Coveys, are all given names that combine a song and a colour, such as Barb Azure or Lucy Grey. The songs they are named after have a story that fits them, and their colour has a function too (Lucy Grey is somewhat in between good and evil, ie grey). As with the Hunger Games, there are Heavensbees and Plutarchs, somewhat performing the roles of heaven’s bees and very rich people. There are also Highbottoms and Sickles, being precisely that for comic effect.

Another standard trick of the trade is that we get to read the internal voice of the main character as he internally comments on what others say and do, drawing us into his confidence. There are also catchy emotional songs, stunning visual scenes (like a seductress buried in snakes), clever spur-of-the moment decisions, and gorgeous costumes. It already reads like the script of another movie. Continue reading →

Posted in Art and Architecture, Cultural Critique, Democracy, Films and TV, Geeky Musings, History, Literature, Media, Social Policy, Society | 3 Comments

How can the Covid-policies be countered with the help of Big Money?

Posted on August 7, 2020 by Paul Frijters

Suppose you agree with me that containment and elimination strategies pursued regarding Covid-19 do far more harm than good. Suppose you also believe that having an open economy and a vibrant close-contact social life is vital for the long-run health of the country. You want to know how to convince the general public who currently support extended lock downs and social distancing measures. And you have quite a bit of money to spend on the issue.

Where you can help is to put the hurt of the victims of the repression strategies on the table. The population needs to be shown the human costs of the policies so as to get them emotionally involved with the victims they have made. It is easy to ignore the pain one causes if one doesnt see it. It is harder to pretend one is nobly saving lives if confronted with the emotions of the victims made along the way.

I think a professional campaign costing tens of millions of dollars and lasting for months is the way to go. That requires big money to get involved and professionally organise the campaign, primarily via television ads. Obvious sources of that big money are the industries decimated by the lock down policies, such as the tourism and hospitality industries.

There are several victim groups that one would think make strongly emotive cases against the lock downs and social distancing measures.

I imagine a woman who missed her last chance at starting a family because of the cancellation of IVF treatments due to corona being able to make a powerful example of the human costs of the “safety” mantra.

I imagine some institutionalised locked-away elderly demented woman continuously asking when she is going to see her family again making a powerful case against lock downs and social distancing.

I imagine a few children from disadvantaged backgrounds rioting in a home whilst the mother cant cope with them, as compared to children going to school, making a powerful visual image of the costs of school closures.

I imagine tearful Australians abroad or in other states prevented from seeing each other being good ammunition against quarantines.

I imagine small businesses whose livelihoods has been destroyed making a strong case against the notion the economy is not about lives.

I imagine family members whose elderly relatives passed away from cancer or some other non-corona disease, but whom they were not allowed to see in their dying days because of the fear, making a strong visual against the inhumanity of the apartheid system that has now emerged.

Etc.

 

A professional effort is needed to track down the right examples, make high-quality videos, get a good narrator or quick sound-bites, place the ads in front of the right audience, have a clear message throughout the campaign, etc. A bombardment of emotive examples of the human cost of lock downs and the collapsing economy seem a good way to me to try and wean the population off the idea that they are protecting lives via support for lock downs and social distancing.

The ads should not be judgmental or use difficult terms, indulging in statistics or ideologies, because those would allow the audience to dismiss them. All they should do is show the emotions of the victims in the context of how their hurt relates to the policies pursued. Whilst facts and arguments can always be challenged and ignored, hurt is much harder to dismiss.

The hurt of the victims of the policies has to be put on the table.

Posted in Coronavirus crisis, Death and taxes, Economics and public policy, Education, Employment, Health, Life, Media, Politics - national, Science, Social Policy, Society | 79 Comments

The competition delusion: the presentation

Posted on August 4, 2020 by Nicholas Gruen

Early this year I published an essay in the Griffith Review critiquing what I called the competition delusion. I was passing by more common critiques of competition, which for instance argue that competition isn’t necessarily a great idea in numerous social services. All I have to add to that debate is to argue, as I did here, that that debate usually skips over what should be a prior question, but amazingly is not. That is, there’s not much point in having arcane debates about industry structure if you don’t have a system that helps you work out whether you’re doing a good job or not.

The phenomenon I christened the ‘competition delusion’ is the tendency to assume that competition is good, or at least OK when that competition is about the rules according to which competition takes place. That’s wrong – a delusion. Competition is for private goods, and the terms of that competition, which includes all manner of rules and governance of the competition is a public good. And though economists tend to argue that public goods should be delivered cooperatively because there’s no alternative, I make a stronger claim. That, if something’s a public good, delivering it competitively will degrade it. (This is distinct from a situation in which a body charged with delivering a public good competitively tenders out inputs to that good.)

In any event, one of the things I enjoy doing is presenting ideas as well as I can according to the demands of different genres. I was pleased when I came up with the basic idea behind the competition delusion because of its simplicity which can be very effectively demonstrated by analogy with sport. In a presentation, the challenge becomes how to present the central ideas in pictures. Anyway, I’ve done my best. Further ideas or critiques of my basic case welcome in comments below. With three months having passed since it was published, I’m able to reproduce the essay here, which I do below the fold. Continue reading →

Posted in Democracy, Economics and public policy, Education, Ethics, History, Philosophy, Political theory, Sortition and citizens’ juries | 6 Comments

The Road to Political Reform Based on Sortition: Guest Post by John Burnheim

Posted on August 4, 2020 by Nicholas Gruen

Scrap attempts to reforming politics as a whole. From a practical point of view attempts to do so by legal constitutional change have no possibility of succeeding from a theoretical point of view, it is folly to assume that if we agree broadly about principle and are motivated to act we will reach a practical agreement. As soon as you analyse the range of possibilities that emerge once one envisages ways of putting all those abstract principles into practice, the more one runs into a host of incompatible proposals. Especially between rigorists who think that their proposal is the only acceptable way of achieving justice, freedom, people power or whatever, and those who insist on a fluid pragmatic approach. The fact is that up to a point both may be viable if only we could choose to follow a particular proposal consistently. But people will not, cannot, arrive at such an agreement if they start from first principles. Continue reading →

Posted in Democracy, Philosophy, Political theory, Sortition and citizens’ juries | 1 Comment

Non-linearities, risk, policy and administration

Posted on July 27, 2020 by Nicholas Gruen

Slightly updated from its being published at the Mandarin.

The catastrophe of Victoria’s resurgence of COVID is a lesson in non-linearity. This reminds me of Paul Romer’s recent comments to the effect that, since economists have foisted cost/benefit analysis on others as a one size fits all means for thinking through decisions, they might try to focus some of it on their own contribution. As he puts it:

There is a clear logic to cost-benefit analysis that is obvious to economists when they impose it on others. Like it or not, this same logic still applies when we are the subjects. Among its implications:

    • Intentions do not count.
    • You can’t justify a collection of activities by cherry-picking a few that are beneficial.
    • Nor can one count wins and loses and declare victory if there are more wins. A few instances of massive harm can outweigh many contributions that yield small benefits. The only meaningful way to calculate net benefit is to put dollar values on all the successes and all the failures, then do the math.
    • Finally, no one gets a free pass by claiming that estimates of costs and benefits are uncertain. Remember, we economists were the ones who told everyone that we could improve the analysis of health and safety regulations by putting a dollar value on a lost life. If an uncertain value for a life is revealing, so too is an uncertain estimate on the cost from a careless approach to financial or an intellectual movement that provided cover for large firms that want to stop enforcement of antitrust law.

If economists turned this unforgiving lens on themselves what would they find? Continue reading →

Posted in Cultural Critique, Economics and public policy | 34 Comments

The post-COVID recovery: a snippet

Posted on July 25, 2020 by Nicholas Gruen

There were some pretty stupid illustrations of the post COVID economic recovery. The people in this picture are also doing something pretty stupid. But they’re working for their living. They are not consultants, and they are not posing two scenarios, one called “Fortress Australia” and the other called “Enterprise Australia”. They’re still saying stuff like that. Srsly!

Doing a little pontificating in one of those surveys for the media on where the economy is going, the final question was whether I wanted to add anything. So I added this, very much in the spirit of thinking aloud. I’d be interested in others’ views.

There is little leadership on the question of what adjustments need to be made to our economy to get it to thrive again. We’ve lost a lot of national income, export demand will be down for some time. So I suspect we need to do something a little like was done in the early Hawke years. We should try to share the burden of relatively lower per capita national income with some notion of equality of sacrifice.

But the point of this would be to expand growth as fast as possible. Further, we don’t have the ‘real wage overhang’ that characterised the early Hawke years that meant that the burden of restraint should be in wage restraint.

To me this suggests strong fiscal expansion for some time, particularly directed to those on lower incomes and those with children with higher propensity to spend. 1 This should be paid for with higher taxation where it has least impact on consumption, which means those on higher incomes, though ideally one would phase this in as it became macroeconomically sensible over time.

These thoughts are tentative. I’d like to see them critiqued and clarified in a debate. But not only is no one of any political authority speaking like this. The likelihood is that we head in the opposite direction with tax cuts for those who are best off, and austerity to pay for it.

  1. Thinking of it now, some Green New Dealing would be useful here too and other investment (particularly human capital) as I suggested in an earlier post, but I didn’t add that in my survey question. ↩
Posted in Economics and public policy | 1 Comment