The publishing business must be in a desperate state because after all demand for ideas and creativity has fallen to an all-time low, no? Oh, no, actually industry data indicates strong revenue growth – here are some US figures. And I don’t think I’ve ever know in my lifetime such an immense appetite for debate and exchanging ideas. So while technological and market change is certainly causing upheaval on the supply side of the industry, both publishers and retailers, healthy demand growth makes for a fundamentally healthy sector. I’ve written before about the scale of innovation in publishing – another announcement this week from Princeton University Press, my own publisher (on whose European Advisory Board I also sit). But none of this gives the pessimists any pause – as this essay from Lapham’s Quarterly indicates.

There are far too many economists and other social scientists who want to tell me what to do. I particularly object to those who tell me that too much choice is making me unhappy. Professor Barry Schwartz was one of these – in his book [amazon_link id=”0060005696″ target=”_blank” ]The Paradox of Choice[/amazon_link] he tried to tell me what kinds of clothes I should be buying. Well, not me personally, but one of his main examples of excessive choice was the range of styles of jeans available in The Gap. (What would he make of Selfridges if he thinks there’s too much in The Gap?) I for one don’t want economics and psychology profs telling me what to wear. Nor do I hear them saying there’s too much choice when it comes to books, or charities to donate to. No, the supposed surfeit of choice is restricted to purchases they themselves don’t care about.

A new book by Gilles Saint-Paul, [amazon_link id=”0691128170″ target=”_blank” ]The Tyranny of Utility: Behavioral Social Science and the Rise of Paternalism[/amazon_link], does a great job of articulating this kind of concern about behavioural and ‘happiness’ economics. As he says in the Introduction, “In recent years a new brand of economics (labelled ‘behavioral’) departs from those [individualistic Enlightenment] foundations and brings new ammunition to state involvement in private lives.” (p2). He is concerned about the combination of theorising about psychological “biases” that can be corrected by wise paternalists and information technology giving governments better tools to “guide” behaviour.

The observation that behavioural economics or ‘nudging’ is paternalistic is not new, and is one reason that the fashion for behavioural theorising is relatively contained. Indeed, I would say it has met with more enthusiasm in government than in academic circles. The great contribution of this new book is to link the paternalism of these models to the utilitarian philosophy that also underpins the ‘happiness’ movement. (Regular readers of this blog will know my scepticism about happiness as a policy target.) Accepting both utilitarian philosophy and the clear empirical evidence about the existences of biases in decisions takes one inevitably down the road of constraining individual choice for their own and society’s welfare.

Saint-Paul makes a powerful case for accepting what appear to be flawed market outcomes in order to protect liberty. After all, while a little bit of nudging may be sensible, taken too far it could undermine the validity of private contracts, because who is to say what psychological biases I was labouring under when I signed up for an insurance policy? At a time when there is an understandable but inevitably extreme reaction against markets, it’s great to have somebody making a powerful case for the philosophical merits of markets as well as states as an organising mechanism for society. He sums up: “Individual freedom and responsibility must be recognized as central social values.” Even if we get things wrong all the time.

[amazon_image id=”0691128170″ link=”true” target=”_blank” size=”medium” ]The Tyranny of Utility: Behavioral Social Science and the Rise of Paternalism[/amazon_image]

I’m not sure what I think of Jaron Lanier’s [amazon_link id=”B004OBIZFI” target=”_blank” ]You Are Not A Gadget[/amazon_link], not least because it’s written in a foreign language which closely resembles English but reflects a way of thinking completely alien to me. Which is odd, because there’s a lot of overlap between the categories ‘economist’ and ‘nerd’, so I can usually cope with techno-literature, and you don’t really get anyone closer to the heart of the techno-aristocracy than Lanier. Maybe it’s because, towards the end of the book, Lanier explains that he would quite like to be cephalopod like an octopus or squid, creatures he seems to hold in far higher regard than he does the majority of humans he comes across on the internet.

Or maybe it’s because the entire book is a blast against reductionist logic. Although, despite repeatedly stating that he has a mystical view of human beings whose inherent spirit he fears is being undermined by the internet, he is highly critical of those technologists like Kevin Kelly who have a mystical view of the machine instead, and await breathlessly the dawn (or whatever) of the ‘Noosphere’. I don’t have a mystical view of anything, so this clash of mysticisms is a bit – mysterious, I guess.

Anyway, it was a perfectly enjoyable if slightly brow-furrowing read. Here’s what I got out of it. There is a long section arguing that the way computers and the internet have developed has locked in certain unfortunate characteristics that do not correspond to the way humans really perceive or think. I’m sure this is correct. Lock-in is what technologies do – take the internal combustion engine, for example. I also, as an economist frequently on the receiving end of similar criticisms, enjoyed this statement:

“What I’m struck by is the lack of intellectual modesty in the computer science community. We are happy to enshrine into engineering designs mere hypotheses – and vague ones at that – about the hardest and most profound questions faced by science.” (p51 Vintage paperback)

But stating that history has happened can only be a first step in a polemic. What should we do about it? It seems that Lanier’s main answer is to end anonymity online. I have great sympathy with this, as there is far too much nastiness occurring under the cloak of anonymity, and making it somewhat harder to hide one’s true identity would do a lot to restore to the online world the everyday civility that makes normal life possible. However, I don’t share his hope that having to use a genuine identity would make people less celebrity and Lolcat obsessed. It isn’t possible to reverse-engineer out human stupidity and triviality by changing online conventions of behaviour.

Lanier’s other big point is to rail against the culture of ‘free’ among the techno-enthusiasts. He argues that a lot of online material is parasitic on material originated by old media organisations, which are decreasingly able to finance its creation. And that open source projects such as Wikipedia and Linux are not as good as they’re made out to be, and indeed inferior to something that could be produced commercially – although their existence now makes that impossible. These points both have some validity. Certainly, there are important public goods aspects to creative and high quality online content, and it is likely to be under-supplied without a serious effort to populate the ‘digital public space‘. But there are countervailing arguments, of course, not least the bone-headedness of thinking ever-longer extensions to copyright terms will somehow bring the law out of its current disrepute. For me, You Are Not A Gadget is weakened by omitting all the economic arguments, but then I would say that.

The best bit is Lanier’s description of the experience of immersive virtual reality being like becoming an octopus. He explains the way that the mind can find ways to manipulate extra limbs (tentacles?) inside the virtual reality, and experiences the virtual world as real. It sounds an extraordinary experience, and I hope it becomes widely available. Trouble is, all the Lolcat-lovers will want to use it too.

[amazon_image id=”B004OBIZFI” link=”true” target=”_blank” size=”medium” ]YOU ARE NOT A GADGET: A MANIFESTO BY Lanier, Jaron(Author)PaperbackFeb-08-2011[/amazon_image]

Yesterday I started reading Jaron Lanier’s [amazon_link id=”0307389979″ target=”_blank” ]You Are Not A Gadget[/amazon_link]. The intro to the paperback recommends an E.M. Forster story, The Machine Stops, calling it a “preternatural oracle of internet culture”. I must say, the theme of the story seems to me the highly familiar one of ‘techno-anxiety (over-dependence)’. I’m sure I read something similar by Andre Norton or Ursula Leguin in my teens – kudos to anyone who can remember which novel I mean. However, reading the Forster (‘Only connect!’) has certainly illustrated Lanier’s mindset, so I know more or less what to expect from You Are Not A Gadget.

[amazon_image id=”0307389979″ link=”true” target=”_blank” size=”medium” ]You Are Not a Gadget: A Manifesto (Vintage)[/amazon_image]

I picked up Graeme Maxton’s [amazon_link id=”0470829982″ target=”_blank” ]The End of Progress: How Modern Economics Failed Us [/amazon_link] with a dutiful sigh, expecting one of the now-standard rants about my profession having caused the financial crisis. I mean, it’s obvious to all but a few diehards that standard macroeconomics has been demonstrated to have serious flaws, and will have to change. But a new consensus doesn’t emerge overnight. Hence at the moment we have the Punch and Judy show amongst macroeconomists about deficit reduction that is an action replay of the monetarist vs Keynesian battles of my student days. So yet another book pointing out the flaws of macroeconomics wouldn’t be adding much.

Then I started reading and was, briefly, pleasantly surprised. The book zeroes in on exactly the same set of long-term economic challenges that I wrote about myself, namely financial crisis, environmental sustainability, and the damage unfairness is doing to the social fabric. So of course I agree with Maxton that these are serious and important issues, as anyone would. These concerns are very much in the air, and widely shared. I settled down to enjoy the rest of the book.

The rest was a disappointment. I like the author’s passion about these issues but was driven to distraction by his apparently not having read directly any of the recent economic literature on them (the notes to each chapter typically cite one official report and several media articles). Worse, there are some really bizarre claims. For example he defines externalities as “variables that were not obvious at the time” (?) and says: “Modern economic thinking encourages us to price the world’s natural resources incorrectly.” I suppose this is meant to be accessible to a general, non-expert audience. But of course, environmental economics, a huge field of research, is all about externalities and I don’t know an economist who doesn’t recommend a carbon tax or carbon pricing mechanisms to correct for them.

Some chapters were clearly better informed and therefore more informative, such as one about Chinese attitudes to the rest of the world (although, on China’s African investments, I’d recommend Deborah Brautigam’s more detailed and nuanced view in [amazon_link id=”0199606293″ target=”_blank” ]The Dragon’s Gift: The Real Story of China in Africa[/amazon_link]).

But although the author’s heart is in the right place, I found the book simply too full of infelicities and bizarre interpretations. I do also think that  people who are going to criticize wholesale all of modern economics should actually read and cite some economists. After all, nobody would think it acceptable to rail against the hopeless state of modern physics (string theory? Higgs bosons? parallel universes? Be serious!) without actually knowing a reasonable amount about the physics they were criticising. And – as I said – there is definitely something to criticise about macroeconomics, as lots of thoughtful economists recognise.

Other readers, less kindly disposed than I am to economists, and just as concerned about the state of the world, might nevertheless find this an enjoyable airport bookstore rant, with lots of one ‘punchy’ sentence paragraphs and a seasoning of hyperbole.

[amazon_image id=”0470829982″ link=”true” target=”_blank” size=”medium” ]The End of Progress: How Modern Economics Has Failed Us[/amazon_image]