Whose brain is it?

This weekend – despite having a small and demanding visitor – I polished off The Idea of the Brain: A History by Matthew Cobb. It has nothing to do with economics of course, but there are a number of things that resonated with me.

One was the way the Nobel-winning Cambridge brain scientist Edgar Adrian brought wartime experience of radio technology to thinking about how neurons respond to stimulus – and also how his commitment to public communication led him to “think about what nerves do in a rather different way from that expressed in his scientific papers. In hunting for terms that would help non-experts understand, “These concepts – messages, codes and information – now form the basis of our fundamental scientific ideas about how the brain works.” I’ve always been deeply committed to (a) explaining things clearly and in ways people can understand and (b) that you can’t explain something like this if you don’t properly understand it yourself.

There’s an interesting but brief discussion of the contrast between reductionist approaches to understanding the brain (which seems dominant) and others pointing to the emergence of complex phenomena from a few simple neural networks. I don’t know what to think of it in this context, but the path of reductionism hasn’t served economics all that well.

Then there’s an extraordinary story about an Australian patient who had an electrode implanted in her brain to manage her severe epilepsy. When she grew used to the device, it transformed her life: “With the device I felt like I could do anything …. nothing could stop me.” But the manufacturer went bust and the device had to be removed. The woman said: “I lost myself.” Horrific. How can the law and economic arrangements enable such a thing to happen? Cobb writes: “In a future world where companies are funding interfaces with our brains, we may lose control over our identity.” This goes to the heart of debates about health data as well, and the legal construct that allows data to be alienated as a piece of economic property. How can an electrode in a woman’s brain be corporate property? Well, in the way General Motors claims it still owns the car you bought because your car sends data back to GM. Watch out for ‘smart’ hip replacements or pacemakers….

Finally, another section that spoke to me points out that ‘The Brain Has a Body’ (the title of a 1997 article) and the body has an environment – “but neither the body nor the environment feature in modelling approaches that seek to understand the brain.” The input from the world is part of the system in which brains operate.

The book‘s history of thought approach is terrific, as is its linkage of technological¬† innovations (watches, computers, radio ….) with how scientists have thought about brains – I found this a really gripping and informative read.

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Women and our economics problem

The Committee on the Status of Women in the Economics Profession was established by the American Economic Association in 1971. Its first survey found that just 6.7% of faculty in US universities were women and more than two thirds of them were on the lowest rung of the profession. Gender and the Dismal Science: Women in the Early Years of the Economics Profession by Ann Mari May documents the route to that shameful situation. It is not surprising that in the late 19th and early 20th century women struggled to access higher education and academic jobs, but economics was distinctively sexist in sustaining 19th century practices into the 1970s.

The book uses archival material to document how this came about. Some of the factors were indeed common across disciplines, such as unwillingness to grant women access to PhD studies, or to hire or retain female members of staff who got married. As US universities professionalised, professional associations determined the boundaries of the discipline and regulated access to PhD programmes and the network of contacts these grew. Two aspects of economics seem distinctive, however.

One is the early dominance of professional journals by what are still referred to as the ‘top 5’, which were run by a remarkably concentrated group of men – in two cases, by individual top departments (Harvard and Chicago). This facilitated the rise to status of an old boys network – it still operates as reflected in long-serving editors disproportionately publishing papers by those they know – and the journals still have outsize influence on professional advancement.

The other is the fact that many early female members of the American Economic Association were associated with social reform movements. And of course the subject matter of economics has significant implications for job markets, monopoly power, migration and other politically-contentious issues. But the resolution of early intellectual conflicts within the AEA went against advocacy and in favour of “disciplinary boundaries that made clear the scientific nature of economics.” Campaigning was for sociology, or theology; economics would deal in facts. Female membership of the AEA didn’t climb above 5% from 1890 until 1928.

The situation has improved in the US – or rather, it did in the 1980s and 1990s – but economics remains a male-dominated field. Cognitive narrowness and a narrow range of experience matter for any subject but particularly for a social science with policy influence. May reports on a survey she and co-authors conducted finding that male and female economists in the US and Europe have systematically different views on some issues. It isn’t obvious, ahem, that male views are more correct. At least now both the AEA and the Royal Economic Society are self-aware, and some male colleagues are truly concerned about the continuing evidence of systematic bias. And of course it extends far beyond women to the even lesser representation of people of colour and people from low-income backgrounds.

The historical perspective in this book is an interesting supplement to the recent literature on this structural deformation of the economics profession – both the new empirical documentation of the scale and scope of the problem, and the history of thought approaches that emphasise the desire to be ‘scientific’ (often linked to logical positivism but evidently with roots back in the early days of universities and the emergence of disciplinary boundaries). The data May has assembled on the history of the US profession is a real trove. And the individual stories of injustice make one’s blood boil…

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Fitting economics into a theory of justice?

I spent a relaxing week at the Welsh coast doing only light reading, but have a few posts to catch up on about books I read before the holidays – including a couple out in September, Brad Delong’s Slouching Towards Utopia and Jacob Soll’s Free Market: The History of an Idea. First up, though, some thoughts prompted by A Political Economy of Justice, a collection of essays edited by Danielle Allen, Yochai Benkler, Leah Downey, Rebecca Henderson and Josh Simons. That’s a wonderful line-up of editors, and the chapters emerged from a seminar series at Harvard. As with all essay collections, they are variable in quality and cover a wide range of subjects – from ‘Beyond GDP’ to theories of change in a democracy to the US ‘prison industrial complex’. Nevertheless, the book is well worth it for the introduction alone.

The intro makes the case for considering capitalism as a multi-level system whose economy is institutionally embedded, reflects power relations, depends on social norms and instantiates certain values. It thus argues that neoliberalism as an economic ideology ignores these contextual aspects, claiming an impossible universalism (although the book isn’t particularly interested in the varieties of capitalism literature). The editors also argue strongly for the discussion of social justice and the values of the capitalist economy to focus on the organization of production as well as – or rather than – the distribution of income and consumption. They want economic analysis to rediscover politics and to make explicit issues of justice such as race and gender, or corporate purpose and sustainability.

Individual chapters focus on specific issues and proposals – there’s a clear progressive slant to all, however. Interestingly, the editors note that one area on which they could not reach consensus was the question of effective freedom and property rights in a market economy: does ownership inevitably imply unequal power relations?

There’s also some discussion – interesting to me! – of the implications of economic measurement, the definitions and metrics particularly GDP, for social justice: “Contemporary theories of justice have given these questions little sustained attention.” The introduction takes it as a given that the specific aim of growth in GDP should not guide a fair society. The chapter on this issue (by Julie Rose) takes the perspective of a history of thought about idea of the stationary state, invoking Mill, Keynes and Rawls. It argues for an alternative aim: “To fairly and reliably expand people’s opportunities,” and paints GDP growth as a subsidiary aim. Fine as far as it goes, but not actionable – although I must say I’d expected a traditional ‘degrowth’ argument and was relieved to find Rose doesn’t fall in to that trap. Although an analysis of the argument from a social justice perspective would be telling. Throughout, the book assumes the inadequacy of GDP growth but is vague about alternative metrics, while clearly sympathetic to the capabilities approach.

This and much more. While the focus on institutional specifics is welcome, it means the book is almost wholly US-focused. There’s also an inevitable tension between acknowledging the specificities of time and place and articulating a reasonably universal theoretical framework. The book goes heavily for “historically grounded explanations” involving “socialized or embedded individuals”, and with power and conflict central to economic relations. “There is no Archimedean point on which to perch microfoundational agents….” I tend to agree that economic analysis needs far more history, social relations and politics – but take it too far and ‘political economy’ loses the economics part.

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Gangsters, politicians and international bureaucrats

Graeme Garrard’s The Return of the State; and why it is essential for our health, wealth and happiness wears its heart on its jacket sleeve. The title will put off some readers and attract others – it will end up preaching to the converted.

The book – just under 200 pages long – starts out with a necessarily brief account of the swing of the pendulum in the centuries-long political debate between those who think more state is the problem and those who think it’s the solution. I began by thinking this could be a useful introduction to, say, undergraduates who hadn’t come across this history before. I also liked the fact that the book weaves in the role of powerful non-state actors – not just today’s mega-corps but also international mafia and the gazillions of dirty money sloshing around the financial system. The role of the illegal economy is overlooked in mainstream economics – probably because there’s no time series data to download and run regressions on.

However, the book then lost me in a chapter (4) that segues from weak states being the prey of multinational criminal gangs to their being similarly vulnerable to the World Trade Organization, World Bank and International Monetary Fund. Of course there is an imbalance of power between these organisations and a weak ‘client’ government but the implied moral equivalence is breathtaking: “While such agencies don’t use armed force, unlike criminal groups, they wield vast economic power that can be more damaging to the authority of the states who [sic] are subject to it than physical force. Weak states are often squeezed between well-armed criminal organisations within and dictatorial economic institutions without. Both show little mercy…” Both tattoed gangsters and suited officials carrying a briefcase are described as ‘tyrants’. I stopped reading then; this is not a meaningful discussion of the legitimacy or the politics of international organisations.

My other comment (on the first half of the book at any rate) is that the account ignores politics. The pendulum swings because of politics, and states are governed by politicians. Politics inflects what the state deliver and how well it does so. Although I lean toward the needing more state side of this debate in today’s context, it’s hard to be optimistic about the capacity of current politics to deliver. A recent UK survey by ONS showed just 35% of respondents saying they trust the government; turn on the news and understand why. The picture is the same in many OECD countries.

So – a timely and important subject but I wouldn’t recommend this one.

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Ethics, culture and economics

It was thought-provoking reading Deirdre McCloskey’s Beyond Positivism, Behaviorism and Neoinstitutionalism in Economics right after Jamie Susskind’s Digital Republic. They’re about different subjects of course, but also have contrasting philosophies. The Susskind book points to more government action, much more, in shaping digital markets, and I agreed with some – althoug not all – of his suggestions. McCloskey is concerned to make the case against the frequently-heard kind of analysis that market failure X requires government action Y to fix it. And I sort of agree with her too. Am I just hopelessly inconsistent?

To take a step back, this book has three messages. One is that it’s incorrect and misleading of economists to claim – as so many of us always do – that the positive and the normative can be separated, and all we’re doing is the objective, evidence-based analysis. In this section the book targets a 2017 paper by Werner Erhard and Michael Jensen that I haven’t read but sounds philosophically naive. For a little reflection – really only a little – shows this to be false: if we’re recommending an action for its good outcomes, ‘good’ is an inherently normative, evaluative criterion. I wholeheartedly agree with McCloskey on this point and wish I’d been able to read this book before writing those sections of Cogs and Monsters.

McCloskey’s second point is to argue for a broader, multi-dimensional, humanities-inflected approach to economic analysis. She takes particular aim at ‘neoinstitutionalists’ from Douglass North to Daron Acemoglu for their reductionist view that economic institutions are wholly described by incentives and utility-maximising outcomes, arguing that standard economic models alone are insufficient for explaining modern economic growth. Her own view – set out in her major Bourgeois virtues trilogy – is that a change in culture toward liberal (in the old-fashioned sense) ideas are needed to explain the scale of change between 1800 and now. Changes in incentives bring small (Harberger-triangle sized) gains, not increases in incomes by many multiples. I’m on board with this too, while still thinking the economic max-U approach brings interesting and useful insights.

Her third aim, though, is to argue for a more libertarian public philosophy: governments mess up economies more than they fix problems, and policies had little to contribute to the massive growth of the past 200 years. Here is where I diverge. For sure there have been many government failures too. Indeed, markets and governments tend to fail in the same contexts and for the same reasons (natural monopoly, externalities, incomplete markets etc). But I disagree with her implied counterfactual that there would have been an even more massive improvement in living standards in the era of modern growth without government. Collective action problems need collective action even if the location of the need shifts over time with technology, or with the complexity of high fixed-cost markets characterised by technological or other uncertainties, or with social expectations. So yes, there are a lot of simple-minded government-can-fix-it proposals – on this point McCloskey takes aim at Mariana Mazzucato‘s claim that the government in effect brought us the smartphone, albeit caricaturing it somewhat. But I’d contend we’ve of late had too little market-shaping policy rather than too much – including in digital domains.

Some of the terrain will be familiar to McCloskey’s readers – the importance of ethics in economics, of culture in growth, the misleading cult of statistical significance. I enjoyed reading this book nevertheless – her style is a bit of an acquired taste and I like it although I know others don’t. And it’s a compact discussion of some crucial issues economists should be contermplating. Even where I disagreed, it made me think.

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