The joy of messiness

It’s hard to imagine that Tim Harford ever writes a duff word. His new book, Messy, is a pleasure to read. (It’s published in a couple of weeks but The Economist jumped the gun with a review so I’m going to go ahead with mine now.) Messy is closer in spirit to Tim’s Adapt rather than his Undercover Economist or Undercover Economist Strikes Back. It gathers research and stories from several different fields to weave them into the theme of the title, and make the case for appreciating mess and avoiding tidy-mindedness.

For example, early on the book tells the tale of Robert Propst, an engineer (and much else) who created a design for modular office furniture and partitions for the Herman Miller company – working 150 miles away from headquarters. But his innovative design empowering workers to create their own workspaces was subverted by managers who insisted the partitions stick to 90 degree angles to make regimented lines. The cubicle farm was born. “Propst was left to condemn the peversion of his ideas as ‘monolithic insanity’, ‘hellholes’, ‘egg-carton geometry’ and ‘barren, rathole places’. The account is in a chapter about workplaces, where mess is a sign of individual empowerment and creativity, contrasted with tidy centralisation and control. (Tim has an extract on tidy vs messy desks in the FT Magazine.)

There are many other accounts of mavericks and independent-minded innovators. The book gives examples from military campaigns, creative contexts (such as Bowie’s reinvention of his music in Berlin), business and nature. I particularly liked the example of the way 18th century scientific foresters in Germany tried to measure the forests using the metric of a Normalbaum, or standardised tree. The idea was to make sense of the messiness of the forest by assigning standard sizes to trees so it would be possible to count how many trees of what dimensions there were, and thus assess the total volume of wood. What happened? “The mess of old forests began to be tidied up. The confusing patchwork of threes of various ages and species was replaced with stands of particular species – the Norway spruce was popular – and of a particular age. The foresters lined up the rows to make the forests easier to survey, to police, and in due course to harvest. Dead trees were felled, rotting hulks dragged away, underbrush cleared. The Normalbaum, once a statistically convenient idealisation of a tree, took physical form.” In the short term this was profitable. In the longer term, it destroyed the ecology of the forests. Yields declined, and the Germans by 1968 had a term for it: Waldsterben or forest death syndrome.It’s a terrific, malign example of performativity.

This chapter, called Incentives, has a number of very nice examples of the perverse effects of targetting, with echoes of the manic modernism described in James Scott’s Seeing Like A State, and of the phenomenon known to economics as risk compensation. I’m not sure I agree with the prescription make it messy as a sure-fire fix. One example in Messy is the blurring of how urban space is divided between vehicles and pedestrians. The early schemes suggest a messy arrangement is safer: people take greater care because they are uncertain. But we don’t know what will happen over time as everybody gets used to the new arrangements. On the other hand, it’s hard to disagree with the idea that children need to be allowed to play in non-sanitised, non-health-and-safetied spaces if they are to ever learn to cope with risk in life.

The common theme in these chapters, which on the face of it seem to gather together a somewhat disaparate set of examples of non-conformism, is the need to design for unpredictability or risk, but also for the fact that people (and trees, and the rest of the natrual world) respond to actions and constraints. It is so hard for decision-makers in any context to realise that they are not social engineers, somehow looking down on the world and able to manipulate it. I entirely agree with this, so recommend Messy. It’s right, it’s a pleasure to read, and it’s out just in time for Christmas.51nrnvc3xcl-_sx329_bo1204203200_

Fear of the unknown

It’s a grey, grey day. The nights are drawing in. A gang of crows has settled noisily on the roof of the house opposite, as if sent by Ted Hughes in a bad mood. Most of all, the state of the world in general and UK politics in particular is super-dismaying. So of course I found a blanket and sat down with a book that dropped through the letter box and wasn’t even pre-chewed by the dog before I got to it. The book is An Age of Risk: Politics and Economy in Early Modern Britain by Emily Nacol. Sometimes all you want to do is bury yourself in a scholarly book about 18th century philosophers.

Reaching the chapter on Hume, I read: “Hume understands how hard it is to live with uncertainty. More importantly, Hume is also exceptionally mindful of how, even if humans can push past the morass of uncertainty to identify probable future outcomes, the anxiety proviked by uncertainty remains untouched. He notes in A Treatise of Human Nature that even though uncertainty can trigger hope and fear in individuals, in practice it seems to generate mostly fear and discomfort. And this is true even when people are in possession of relatively sure probable knowledge about the future.”

‘Every thing that is unexpected affrights us,’ he wrote. Like the superb behavioural economist he was, Hume roots this in a diagnosis of cognition.

The book goes on to argue that one of Hume’s aims in writing his essays aimed at a general public was to shift risk attitudes toward recognising the benefits of taking risks, the oportunity for profit in economic ventures. He wanted to open the eyes of the fearful to ‘a counterpoising argument’: “Could such dogmatical reasoners become sensible of the strange infirmities of human understanding, even in its most perfect state, and when most accurate and cautious in its determinations; such a reflection would naturally inspire them with more modesty and reserve, and diminish their fond opinion of themselves, and their prejudice against antagonists.”

Hume specifically discussed the ‘groundless fear’ of open international trade. Nacol argues that he counters this by suggesting that an open attitude to risk-taking will enrich all parties. I wonder how far Hume would get with his argument these days? (NB, rhetorical question).51pmhydbyel-_ac_us320_ql65_

Resisting the temptation of quantum economics

On the train yesterday I finished an enjoyable book, The Quantum Moment: How Planck, Bohr, Einstein and Heisenberg taught us to love Uncertainty by Robert Crease and Alfred Scharff Goldhaber. It’s the book of a course this philosopher and physicist teach to students who are a mix of humanities and science majors, and it concerns the interactions between discoveries in physics and the wider culture. Now, I must confess that, despite the simplification here, I still don’t understand quantum mechanics, condensates, entanglement and all that jazz: it feels like my brain can almost grasp what’s going on but despite straining can’t quite get there. I’m not alone but at least I don’t pretend; the book has nice examples of ‘fruit loopery’, meaningless claims of spurious authority based on the impressive sound of quantum terminology. The idea of there being no ‘out there’ outside the model, from which an expert and impartial observer can analyse everything, has obvious resonance for a social scientist. But let’s not pretend to do quantum economics.

Even so, the book is convincing in its argument that the Newtonian world (as imported into culture) of straightforward cause and effect has been replaced by a more uncomfortable world of ‘gaps, inconsistencies, warps and bubbles’. The authors think this is a good thing – perhaps it prefigures a ‘new humanism’ they suggest. Hmm. I’m not so sure about that. But I would agree that: “Understanding and appreciating quantum language and imagery – along with the ability to recognise its misuse in fruitloopery – is part of what it means to be an educated person today.” But is there any truly accessible explanation of it for the non-physicist?  51otp0kfvil-_sx331_bo1204203200_

Corruption with Chinese characteristics

As it happened, I read Minxin Pei’s China’s Crony Capitalism in the couple of days after I’d written this article about the importance of property rights in the Financial Times. In this interesting short book, Pei links the emergence of the rampant corruption in today’s China to “partial and incremental reforms of property rights associated with nominally state owned assets in the post-Tiananmen era.” These changes decentralized control over the assets to regional and local officials, without clarifying the ownership rights. The incentive was there, from the early 1990s, to exploit the lack of clarity. At about the same time, a political decentralization created the opportunity. The appointment system went from one where senior officials appointed people one and two ranks down, to one where each layer appointed the next layer down. A market for patronage emerged, which encouraged corruption because officials needed deals with private business to make the money to pay for their jobs. Finally, a fiscal reform enabled local governments to keep the proceeds from land sales while re-centralizing tax revenues to Beijing.

The book concludes: “It is inconceivable that the CCP can reform the political and economic institutions of crony capitalism because these are the very foundations of the regimes monopoly of power.” Even if the corrupt authoritarian regime were to fall, the book argues, liberal democracy would not be the outcome. Something more like Russia’s kleptocracy would emerge. Or will, rather. “The fragility of the institutions of the party state … raies fears that even modest reform efforts could unleash a revolution. The prospect of genuine market-oriented reform is equally unpromising because such a change would eliminate the rents for the ruling autocratic elites.” Any kind of change seems to spell collapse.

In another coincidence, as I finished this book, the FT’s Jamil Anderlini (author of a brilliant e-book about the rise and fall of Bo Xilai) published a big feature on neo-Maoism in China, which he portrays as am anti-elite, anti-inequality, populist movement in the same spirit as Trumpism, Brexiteering and right-wing and left-wing populism around the continent. Sobering stuff.


Not so Nobel?

The Nobel Factor: The prize in economics, social democracy and the market turn by Avner Offer and Gabriel Soderberg is quite an interesting read (if for a niche market) but it’s a book of two parts, albeit braided together. One story is about the decline of the solid post-war social democratic consensus in Sweden over the years. The book argues that the creation of the prize by the Swedish central bank was one of the vehicles for ‘the market turn’, which in the UK had the Institute of Economic Affairs and Margaret Thatcher as its institutional vector, and will have had others elsewhere. Perhaps the prize helped the market turn elsewhere. The book concludes: “The existence of a Nobel prize in economics implied that the ‘market turn’ since the 1970s was scientifically grounded, and that it was objectively necessary.”

The other strand of the book looks at the recipients of the economics prize since its launch in 1969. The argument is that the dominance of Assar Lindbeck on the awarding committee meant the kind of economics that was recognised took a market turn of its own in the1990s with the recognition of Robert Lucas, Robert Merton & Myron Scholes, Ronald Coase and Gary Becker. One of the problems with the book’s thesis, however, is that so many of the winners have clearly not been free marketeers. Indeed, the recipients have arguably tended more strongly toward the maverick free thinkers than in the profession as a whole, and there have certainly been many ‘liberal’ (American sense) winners. Think of Herbert Simon, Joe Stiglitz, Paul Krugman, Robert Solow, Robert Shiller, Elinor Ostrom, Amartya Sen, Daniel Kahneman ….. There are a couple of chapters calculating the ideological leanings of the winners, and it shows the left ahead of the right for all but the periond 1990-97. This figures: the high tide of free marketry in the profession was the 1980s, and significant proponents were awarded the prize about a decade later. As the book notes, the character of economics (in the world of research at any rate) has changed substantially since then.

So if anything, these calculations suggest that to the extent the existence of a prize gave economics ‘scientific’ credibility, it was a liberal, institutionalist, historically and psychologically rich kind of economics! The other point is that there are few, if any, winners who would not be acknowledged by other economists (however grudgingly) as significant intellectual pioneers. Even if you disagree with their political leanings or their economic models, the prize is no mickey mouse affair.

In sum, an interesting book for the economics community, but one whose argument did not convince me.