Tag Archives: review

Secret statistics

Posted on by

Is there a word for ‘serendipity’ that doesn’t have the overtone of being a positive thing? In a horrible coincidence, over the past day or two I’ve been reading the sections of [amazon_link id=”0300188226″ target=”_blank” ]The Theory That Would Not Die[/amazon_link] by Sharon Bertsch McGrayne concerning using Bayes’ Theorem to help trace missing objects at sea, albeit submarines and nuclear missiles gone astray rather than airplane debris. The theme of the book is the way Bayesian statistics survived two centuries of dismissive treatment by the academic statistics establishment because the techniques are just so useful in an acute situation. The description in today’s newspapers of the way Inmarsat and other investigators combined different sources of information to piece together the path of the vanished plane could slot in to the book very neatly.

[amazon_image id=”0300188226″ link=”true” target=”_blank” size=”medium” ]The Theory That Would Not Die: How Bayes’ Rule Cracked the Enigma Code, Hunted Down Russian Submarines, and Emerged Triumphant from[/amazon_image]

Although an econometrician by training, and trained in the early 1980s so almost wholly in frequentist techniques, I’ve never really understood the ‘either-or’ aspect of the debate about Bayesian techniques. Why would you expect the same technique to be useful in every situation? Why would you throw away information? I was a bit disappointed in [amazon_link id=”0300188226″ target=”_blank” ]The Theory That Would Not Die[/amazon_link] for two reasons. One is that it actually doesn’t do a very good job of explaining what the alternative approaches actually are – the explanation of Bayes Rule and how to apply it is left until Appendix B. Maybe an editor said it would be too scary for readers to have any actual statistics in the main text.

The second reason is that I ended up not really clear why Bayesian methods were infra dig for so long – the book describes one thing after another conspiring against public acclaim for ‘Bayesianism’ without giving a synthesis. The closest it comes to a theory is that the code-breakers from Bletchley Park on and the military were such heavy users of Bayesian methods that statisticians actually did use them but never talked about them.

Having said that, the book’s a very enjoyable read. There are lots of episodes and characters new to me, and it’s very well written. The problem-solving sections – finding those nuclear warheads gone astray – are gripping. Bayesian statistics seem particularly appropriate to economics, which has relatively little scope for repeated experiments and much historical, context -specific, non-repeatable evidence. This book made me think I ought to find something far more practical to read – recommendations welcome.

Choose your ancestors carefully

Posted on by

Gregory Clark’s [amazon_link id=”0691162549″ target=”_blank” ]The Son Also Rises: Surnames and the History of Social Mobility[/amazon_link] is one of the most genuinely thought-provoking books I’ve read for quite a while. It’s the fruit of obviously many hours of archival and other research, looking at the lessons that can be drawn from using rare surnames to track directly what happens to status through the generations. The results are startling.

[amazon_image id=”0691162549″ link=”true” target=”_blank” size=”medium” ]The Son Also Rises: Surnames and the History of Social Mobility (The Princeton Economic History of the Western World)[/amazon_image]

Our received wisdom is that social mobility, measured by the persistence of income (usually) or perhaps wealth or education over time, was sluggish, improved in the 20th century, and has perhaps diminished again. The surname evidence indicates very low intergenerational mobility, in many countries and over many centuries. There is a slow, slow regression to the mean in status, but no evidence of any change in trend, even through major political and social changes, such as the extension of the franchise, the welfare state or even the Cultural Revolution in China. Clark writes:

“Mobility is consistent across generations. Although it may take 10 or 15 generations, social mobility may eventually erase most echoes of initial advantage or want. Counter-intuitively, the arrival of free public education in the 19th century and the reduction of nepotism in government, education and private firms have not increased social mobility. Nor is there any sign that modern economic growth has done so.”

So, to give some examples of the data sets used, the records of the Swedish Bar Association show that names associated with the nobility from the 17th century appeared six times as often in 2012 as they did in the general population. “The 18th century elite in Sweden have persisted to the present day as a relatively privileged group.” Sweden! At the present rate of decline of greater-than-average representation of their names among US doctors, “It will be 300 years before the Ashkenazi Jewish population of the United States ceases to be under-represented among physicians.”

In the UK where – notoriously – it helps to have attended Eton to get into the government, the surnames of the mediaeval elite were still eight times over-represented (compared to the average name) at Oxford and Cambridge in 1980. Someone with an unusual  ‘wealthy’ surname was about 50  times more likely to attend Oxford or Cambridge in the mid-19th century, and still 8 times more likely in 2010. “In terms of social mobility, what did the Scientific Revolution, the Enlightenment and the Industrial Revolution achieve? Very little.” Surnames associated with the invading elite after the Norman Conquest in 1066 are still heavily over-represented in Parliament and in the British armed forces.

Even in China after Communism and the Cultural Revolution, Qing elite surnames are found more frequently than the three most common Chinese surnames among elites such as professors, government officials and the chairs of company boards.

There are many examples. The bulk of the book presents the data sets and the persistence of the over-representation of certain surnames among high status groups. The rate of ‘social entropy’ is both high and astonishingly consistent across space and time, at 0.7-0.8.

Why are the surname estimates of social mobility so much lower than conventional estimates looking at the correlation of (say) income over time? Clark suggests that this is because a single indicator like income is an imperfect proxy for social status, which will depend on a number of attributes. The resulting error in measuring underlying status will bias downward the estimated persistence (or bias upward the estimate of mobility). Explaining why mobility is more or less constant and universal is harder. The book tentatively suggests that status is an inherited trait in the sense that an initial combination of talent and luck is sustained over the generations by assortative marriage. “The law of social mobility tends to produce a long arc of privilege or want for those who end up at the extremes of the status distribution.”

If correct, the conclusion seems pretty disturbing. But Clark insists that there is no reason for fatalism. Surname is not destiny. Slow social mobility does not imply a society rife with nepotism or corruption. Individuals’ efforts can act on the opportunities they get and the elements of luck that affect all lives. “Even with an inter-generational correlation of 0.75, more than two-fifths of variation in outcomes in generalized social status is still unpredictable.” The chance of moving from the bottom to the top of the pecking order in one generation is negligible, but there is plenty of scope for upward (or downward) movement.

There are both personal and policy conclusions, however. For anxious parents, the message is that much of what you’ve done for your children is genetic, so by all means give them every encouragement but don’t fret about the flash cards and expensive schools. Most of the old Etonians who thrive in modern Britain would have done just as well without costing their families the fees (£33,000 a year plus extras for seven years).

In terms of public policy, the message is avoid institutions and structures that amplify inequality. “If we cannot change the heritable advantages and disadvantages of families in the economic and social world, we should at least mitigate the consequences of these differences.” This means redistributing income via the tax system, providing universal healthcare and education, having a higher education system that avoids sorting by ability (more like the German than the US or UK systems), and so on. Sweden again. If you want to do well in modern Sweden, it helps to have had an ancestor who was ennobled in 1700, but if you don’t have that inheritance, you won’t be as far behind your country’s elite as a scion of the English working class will be behind ours.

It seems hard to quarrel with the data assembled and presented in this book. I certainly wouldn’t argue with the policy conclusions either – why would you want to amplify inequalities anyway?

Still, this is a troubling argument because it does seem to imply a necessary fatalism about our ability to shape social and economic outcomes. I’ve always been greatly encouraged by the work of [amazon_link id=”0262019132″ target=”_blank” ]Jim Heckman[/amazon_link] and others suggesting that early interventions in the lives of disadvantaged children can make a big difference to their lifetime success – partly because of experience in a local primary school making me so aware of how unequal children’s capabilities and prospects are at an early age. Clark challenges the Heckman-type results in one section, presenting some evidence that there is a large effect but temporary, and that it fades rapidly in adulthood.

So I hope [amazon_link id=”0691162549″ target=”_blank” ]The Son Also Rises[/amazon_link] stimulates a lot of further debate and research. It’s an important book, and anybody at all interested in inequality and the kind of society we have should read it. Although there are many charts and a few equations, it’s very well written, and full of fascinating historical detail as well.

Can the Unwinding be unwound?

Posted on by

George Packer’s [amazon_link id=”B00C4GT040″ target=”_blank” ]The Unwinding: thirty years of American decline[/amazon_link] is out in paperback so I’ve caught up with it at last on my travels this week. It’s an absolutely wonderful book, evoking that widespread sense – everywhere in fact, not just in the US – that the system has gone awry, things are misaligned, and no individual can do anything about it.

[amazon_image id=”B00C4GT040″ link=”true” target=”_blank” size=”medium” ]The Unwinding[/amazon_image]

The book traces the 30 years through a braid of several individuals’ stories, recounting their ups and downs through the Clinton years, the Bush years and into the Obama years. Some of the characters are well-known – Newt Gingrich features, as does Peter Thiel. The main threads, though, are unknowns whose stories encapsulate important parts of the nation’s story during its ‘unwinding’ – the unwinding of “the coil that held America together in its secure and sometimes stifling grip.”

Although this is not a technocratic analysis, Packer has an ability to drop in sentences that crisply capture a sharp point. The views of a new (and I turned out, one term) Democratic congressman, Tom Perriello, are summed up thus: “the elites in America didn’t have answers for the problems of the working and middle class any more. Elites thought that everyone needed to become a computer programmer or a financial engineer, that there would be no jobs between eight dollars an hour and six figures. Perriello believed that the new ideas for making things in America again would come from unknown people in obscure places.”

One of his other characters, a longtime Democrat functionary who crosses over into lobbying, is enticed back to work for a senator during the Obama administration. Seeing Rubin, Summers, Geithner getting their posts, and all attempts to bring finance to heel failing, he reflects: “The establishment could fail and fail and still survive, even thrive. It was rigged to win, like a casino, and once you were on the inside you had to do something dramatic to lose your standing, like write a scathing op-ed.” A short chapter about Bob Rubin in the book is absolutely devastating.

A lot of this, we know. But this book rekindles one’s outrage by attaching people and their emotions and stories to a clear X-ray vision of the underlying economic and social changes. I thought it was a terrific read. But also depressing. Can the Unwinding be unwound? Obviously not. In optimistic moods, I’m with congressman Perriello in holding out hope for the obscure people weaving a new social fabric. It’s just not always easy to stay optimistic.

Reason on trial

Posted on by

I’ve been putting off reading [amazon_link id=”1849546223″ target=”_blank” ]Prisonomics[/amazon_link] by Vicky Pryce because I’ve known and liked and admired her for many years, and was absolutely shocked by her getting a prison sentence. In the book she says she had her first good sleep for a long time on her first night in Holloway, after the stress of two trials and the media frenzy, but I spent that night sleepless worrying about what the experience would do to her. The book is her account of her time in prison, and what she learned from both personal experience and subsequent research. I’m very glad to have read it. It’s actually a page turner, well-written, full of information and insight, and a powerful analysis of the extremely poor value the UK gets from the way its criminal justice system treats women. And it turns out Vicky coped well with being in Holloway and then one of the country’s only two open prisons for women, thanks in large part to the support she got from other prisoners.

[amazon_image id=”1849546223″ link=”true” target=”_blank” size=”medium” ]Prisonomics: Behind bars in Britain’s failing prisons[/amazon_image]

It wasn’t really a surprise to learn that imprisoning women is terrible for their children, has no deterrent effect, and that lots of women in prison have mental health and drug problems. But the figures set out in the book are staggering. The research suggests 40% of women in UK prisons have learning diificulties, and 48% have a reading age of 11 or lower. Nor did I know that prisoners are released with just £46 even if they have no accommodation – many (4 in 10) lose their homes while inside, and the book tells of one woman deemed by her local authority to have made herself ‘intentionally homeless’ (and therefore not meriting housing) by being sent to prison. Ex-prisoners find it hard to get jobs because they have to declare their convictions. Reoffending rates are high after prison sentences at least in part because of sheer desperation.

Very few women prisoners have committed violent crimes, yet the high rate of imprisonment in the UK (compared to other countries) inflicts dreadful emotional violence on their children, contributing to family breakup and children going into care – and thus increasing the likelihood of their lives deteriorating. There is so clearly an overwhelming value for money case for spending public funds on helping women bring order to their lives, getting training and jobs, rather than imprinsoning them at high cost and with adverse effects on the rest of their lives and their children’s. Yet the UK saw a 27% rise in the women’s prison population between 1996 and 2011. We have a public culture that emphasises retribution in criminal justice and that demonises women too.

So Vicky’s book makes a powerful case for change, and her experience has turned her into a ardent campaigner for reform. I do recommend reading it, not only for its inherent merit but also because royalties go to the charity Working Chance. But it’s depressing too. The system is awful. But can you imagine a single high-profile politician campaigning for criminal justice reform rather than competing to appear ‘tough’ on crime? There is truth in the cliche: you can’t reason people out of what they were never reasoned into.

Freedom and virtue

Posted on by

On the Eurostar to and from the OECD yesterday, I read [amazon_link id=”B0079EW3ZK” target=”_blank” ]The Needs of Strangers[/amazon_link] by Michael Ignatieff, an old book first published in 1984, with my 2nd hand paperback even more mauled by the fact that the dog got to the post before I did that day.

[amazon_image id=”B0079EW3ZK” link=”true” target=”_blank” size=”medium” ]The Needs of Strangers[ THE NEEDS OF STRANGERS ] By Ignatieff, Michael ( Author )Sep-05-2000 Paperback[/amazon_image]

I wish I’d read it before attending the recent Christ Church, Oxford symposium on [amazon_link id=”0241953898″ target=”_blank” ]How Much Is Enough?[/amazon_link] by Edward and Robert Skidelsky. It’s on the same territory. Ignatieff makes very clear the possibly irreconcilable tension between freedom to choose and a shared agreement on the constituents of ‘the good life’. The book starts with a reflection on the welfare state. It assumes everyone is equal, and reasonably so, but in uniformity of treatment is unable to respond to individuals’ specific needs. Hence the seeming lack of care in the way welfare is sometimes delivered to people. He writes: “We think of ourselves not as human beings first, but as sons and daughters, fathers and mothers, tribesmen and neighbours. It is this dense web of relations and the meanings which they give to life that satisfies the needs which really matter to us.” Hence the utopian aspect of Rousseau’s writing or Marx’s – freedom and happiness have to be reconciled by everybody making choices anchored in equality and fraternity.

The book goes on to explore the tension between communitarian visions of moral agreement about necessities of the good life and the restlessness of commercial society, as reflected by Smith and Hume. “How is moral virtue possible in a society which is constantly pushing back the limits of need?” The Skidelskys claim that needs were satisfied by 1974, but that seems absurd to me. Since then we’ve had everything digital, vastly improved medical treatments, longer life expectancy, lower infant mortality, central heating in most homes in the UK, and so on. Rousseau would have been happy to ban machines and trade – virtuous stasis came above freedom in his eyes.

Ignatieff doesn’t answer the dilemma of course, but the book is a very interesting exploration of how it continues to be relevant to modern societies.