Tony Benn quote

"The case for a European constitution and currency is also presented as a move beyond nationalism, which has brought such anguish to Europe. But I fear that it will stimulate nationalism when angry people discover that they are forced to do things they do not want to do and are tempted to blame other nations, when the fault actually lies with the system itself."
Dare to be a Daniel, 2004.

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Someone else likes Michael Young and thinks he is prophetic. I didn't realise how little known the book was.
If Nathan Barley did agent-based modelling: “I want to bring in… Dinosaurs.... And then the dinosaurs shit bankers.”

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The US knew about Soviet responsibility for the Katyn Massacre in 1943.
Can't beat the Reg headline: "EARTH was a BAKING LIFELESS DESERT for 5 MILLION years".
7 continents of a billion people each:



 The point here is Asia.

Primaries and plebgate

How Andrew Mitchell lost power. The interesting part:

"His authority was shot. He had no authority with backbenchers. They have not come through the party system. They look to their constituency much more than the central party and the whips. A lot of them have got good careers that they could easily go back to if they chose to. They will not be coerced."

Strong centralized parties are good for democracy, because they encourage coherent national programmes. The US's weak party system leads to porkbarrel spending in Congress. Localism in politics is overrated. In this context, the Tories' plans for more open primaries are a bad idea, so we should be glad they appear to be on the back burner.

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Matt Yglesias explains capital versus labour taxation.
Al Roth, Nobel-prize-winning experimentalist, has a blog.
Plus, this fabulous political map of the world from 1821 (via chrisblattman.com). Check the key in the original.

"Net migration"

Inside the migration statistics sausage machine.

If you are concerned about pressure on housing and public services, then it is sensible to focus on net migration. On the other hand, if you care about "integration" -- whatever that means -- then a reduction in net migration may imply a greater overall churn rate; you might want to reduce immigration plus, not minus, emigration. You might also care about who enters and who leaves.

All the immigration anecdotes I have heard suggest that in the attempt to reduce net migration, pressure is being put on the softest targets -- e.g. students. Typically, these are also the most desirable migrants. That is what you would expect if you think that migration policy follows a pattern where the rhetoric aims at the median voter, but policy is really driven by employer demands.

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This thoughtful NYT piece includes an adult discussion of moral hazard in health insurance.
Hooray! Proper feminism is back.

"Arab money talks"...

...boasts Ferrari owner. Of course this is an outrageous claim. The British state is incorruptible by Arab money.

A Model Discipline book review

Got round to this last week. It's refreshingly short, and timely, because right now applied game theorists like me are kind of hunting for justifications for our lives.

The key ideas are, first, that models do many things beyond making predictions, such as organize data, or work out the logic of a particular world view. This is not new, but worth reiterating. Second, we are testing things wrong. Nowadays most articles with formal models test their implications (for example, a comparative static). This is a simple logical error: if model X implies prediction Y, and  prediction Y is true, it does not follow that model X is true. Using probabilistic logic does not help, either. If model X implies Y with high probability, and Y is true, it does not follow that model X has high probability of being true. It does not even follow that I should put higher probability on model X than before I observed Y.

Example. There is a large animal in this box. It could be a dog, a horse, or a unicorn. The ears are sticking out of the box, and they are brown and equine. The unicorn theory scores well for this, because unicorn ears are equine. But the horse theory scores even more highly, because unicorns are white. (Right?) Formal proof at bottom.

The book's claim is that many political science articles are deducing unicorns from horse ears, without considering horses.

This would not be such a problem if we knew all the alternative theories. We could just apply Bayes' rule. Unfortunately, in the complex world of politics, the set of potential theories is unimaginably vast, and we cannot possibly think of them all. (Thinking of new theories is our prime job, after all.)

I am not sure what the solution is. My instinct is that testing many different implications of the theory is a good idea, including specific causal mechanisms.  Political economics is especially bad at this: there is a tendency  to test complex, highly specific theories with a single macro-economic implication (e.g., "spending on public goods is higher under proportional representation").

So this idea was new to me and inspired some thought. My one quibble with the book is that the current emphasis on model testing does not come just from an abstract philosophical debate (e.g. Green and Shapiro's book); it is also a reaction to an overemphasis on formal theorizing a few years back. The pendulum naturally swings between theory and empirics; at the moment, looking at the social sciences broadly, we have probably gone too far the other way and have too many empirical results and not enough theory connecting them. Whether the next wave of theories will be formal is an interesting question.

[Proof about the unicorn:

By Bayes' rule:

Prob(unicorn given ears) = Prob(unicorn) × Prob(ears given unicorn) / Prob(ears)

so my posterior is only higher than my prior, Prob(unicorn), if

Prob(ears given unicorn) > Prob(ears) 

and we can parse out the right hand side as

Prob(ears)= Prob(unicorn) × Prob(ears given unicorn) +
             Prob(horse) × Prob(ears given horse) +
             Prob(dog) × Prob(ears given dog)

which can very easily be greater than Prob(ears given unicorn), if Prob(ears given horse) is high enough.]

Within and between variation

Here is a very interesting post about violent crime and climate change. (There is a paper behind it. Hat tip to Andrew Gelman.)

I think we should be skeptical, for the following reason: within-variation is not between-variation. A helpful analogy is with income. It is widely reported that within a country, richer people are happier, but that above a certain level richer countries are not happier countries. (Which may well be false, but leave that to one side.) The putative explanation is that happiness comes from being richer than others around you, not from just being richer.

In the climate context, it may be that there is a fixed amount of crime in a society, of which more happens on the relatively hotter days. You can tell a physical story to fit this - maybe people get used to the mean annual temperature and react physiologically to deviations. The paper, surprisingly, does not discuss this issue, and indeed touts its array of county-month and county-year fixed effects as a virtue.

Unfortunately, a lot of cross-country regressions in the social sciences involve hoping that variation within a dataset of country-years from maybe the 1950s onwards (why are some countries now richer/more democratic?) will explain variation in a much larger universe of data (why did some countries get rich/democratic in the first place?) Since history is not much like a repeated set of experimental trials, this is just not a very plausible strategy.

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El Reg discusses the media on climate science. El Reg is way too denialist, IMHO, but quite open-minded underneath. Here is a Nature editorial about a new trend: statistical methods for attributing particular extreme events to climate change, rather than just shrugging one's shoulders and saying "climate ≠ weather, you can't blame global warming for specific events".

Saw Thermae Romae on the flight over. It's quite cute and very, very, very silly.

Badiou

This pretty much sums up Badiou for me, but is still too generous:

More compelling than any economic or political argument he makes is his aesthetic exclamation, apropos of May 1968: “Now that is a great image! You have to have seen what this country looked like with all the factories flying red flags. No one who saw it will ever forget it.”

Compelling, how? Grown-ups don't judge politics by aesthetics.

Evaluating Thatcherism II: pseudomarkets

In Vancouver for a wedding. An old friend who teaches in Chicago waxes bitter about the charter school system. He has terrifying anecdotes about the school management: hiring their own relatives at inflated salaries, wasting vast sums on school construction. "There's no oversight, no accountability," he says. I am embarrassed. This is not what the Economist says! (Ah, but -- side note -- the Economist is part-owned by Pearson Plc, which makes a lot of money from standardized testing and "learning services", and wants to make more.) My friend has interests too, he is now a union rep., but his stories are convincing, and he transparently cares about his pupils.

My friend is on weaker ground with school choice. "But why should parents be able to choose their kid's school?" he asks. That line is pretty much an argument-loser.

This all brings me back to the vicissitudes of the Thatcher agenda. As the neolibs moved from things you could privatize to things that, politically, you could not -- from telephones to trains to education -- they cast around for new ways to bring in choice. Their solution was to introduce incentives and competition, but with the government as centralized buyer: what this blog calls pseudomarkets. Schools could be evaluated by standardized tests for pupils; privatized services would have Ofcom and Ofwat to measure their performance -- these are not Norse gods, but official regulators; policemen could get promoted based on the number of crimes they cleared up.

And lo, the performance measurements increased and the government saw the statistics and was well pleased, so pleased that the Blairites took over this part of the agenda and pushed it further still.

And yet the people who actually experienced the public services were not as happy as the performance measurements suggested. And they started to mutter about "teaching to the test" and "valuing what you measure instead of measuring what you value". (And nerds among them pointed to a famous paper by Holmstrom; and the others retorted, "yeah, that's what we said" and took a headache pill for the maths.)

But the agenda was still very popular with politicians: perhaps because politicians do not have many ideas, and keep doing what seemed to work before; perhaps because they were inside the whale, and truly believed the statistics that their civil servants read out; perhaps because "choice and competition" enabled accounting shenanigans which made debts vanish from the government's books, but the debts would still come back in the end.

Which brings us more or less up to the present day. So what do we do now?

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Frightening questions about Spanish politics.
I parse this like a game theorist: multiple equilibria and incomplete information make the world unpredictable, because we do not know what is inside people's heads, and reactions to new information can be self-fulfilling.
Jeffrey Frankel does a funny take-down of Romney's claims about the 47%, but has he never heard of the ecological fallacy? This is especially relevant because red-state Republicans are the rich, not the poor in their pickup trucks.

Why AA is so bad

American Airlines is terrible and so is Heathrow, perhaps you knew that. Here is some analysis of why. Here is a paper by yours truly, explaining what goes wrong when employees are afraid of losing their jobs. The context is different but the ideas seem to transfer across fairly simply.

Monkey power!

Hurray! http://www.bbc.co.uk/news/uk-19817798

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Why people don't trust bankers: ethnographic evidence.
... and why academia may be next in line for a trust problem. Yikes.