Exact Thinking in Demented Times

I bought Exact Thinking in Demented Times by Karl Sigmund for the genius title, and absolutely loved the book. The subtitle explains what it’s about: The Vienna Circle and the Epic Quest for the Foundations of Science. Karl Sigmund, the flyleaf tells me, is a maths professor at the University of Vienna and one of the pioneers of evolutionary game theory. He also co-curated an exhibition on the Vienna Circle, the inter-war group of philosophers, mathematicians and physicists who between them revolutionised the world’s understanding of – well, the world. Against idealism and metaphysics, seeking the unity of science, their logical positivism transformed Anglo-American philosophy, not least because so many of the Circle’s members had to flee Austria in the 1930s.

Who would have thought this could make a rip-roaring read? The book explains the philosophy and maths in just enough detail – there were a few bits about the maths I decided not to re-read – and weaves the ideas with the personalities, friendships and jealousies. It adds up to a wonderful intellectual history of a place and time. Jenny Uglow’s equally wonderful The Lunar Men would be a good comparator.

I’m not a big fan of logical positivism, or so I thought. Exact/Demented sent me back to my undergraduate copy of A J Ayer’s Language, Truth and Logic, which introduced the ideas to the British public (well, bits of it). I wrote the date inside, and I must have bought it enthusiastically in my first week at Oxford. Looking again reminded me how frustrating I found what seemed like meaningless quibbles about words – “easily understood by the layman”, the back cover claims. Hah! However, Exact/Demented gives a much richer account of the strands of thought in the Vienna Circle and makes it clear that the linguistic rabbit hole was but one element of the underlying empiricism. The account also completely reinforces my belief that Wittgenstein’s work is objectively meaningless and what’s more he was a complete pillock. (Although when I tweeted something from Douglas Hoftstadter’s intro to the book to the same effect, it turned out there are a few pro-Wittgenstein trolls on Twitter, so I’ll get into trouble with them again.)

Other obvious characters feature in the story, such as Kurt Godel, Rudolf Carnap and the positivism critic Karl Popper, as well as Einstein, and lesser known (to me) people, including the Circle’s leading light Moritz Schlick, and some economists orbiting around (Oskar Morgenstern, John von Neumann). The story is bookended by two murders of philosophers, and two tragic world wars. The Vienna Circle survivors ended up split between universities in the US and UK – on one occasion Bertrand Russell, Albert Einstein, Kurt Godel and Wolfgang Pauli all ended up socialising in Princeton, discussing time travel. What an occasion.

Given my own research interest at the moment, I was particularly pleased to learn about Otto Neurath’s innovative data visualization method, through his Institute for Pictorial Statistics, designed to present socio-economic statistics in a form most people could understand. The signature style was the use of rows of little human figures, which ended up being called ‘Isotype’. Who knew infographics were invented in the 1930s?

Poignantly, in 1939 Otto Neurath published a bestseller called Modern Man in the Making. “It employed a tight mesh of texts and pictures to describe the dawning world of globalized exchange, international migration and limitless progress.” How his readers must have been wishing that were true.

And this is the other attraction of this wonderful book. Its subtext throughout is both the need for and the threat to Exact Thinking in Demented Times, a message relevant today.



From ‘Arab Spring’ to Fake News

I’m late to Zeynep Tufekci’s excellent Twitter and Teargas: The Power and Fragility of Networked Protest. It analyses the impact of social media on political events such as the Arab Spring – remember that? – and Occupy. Her thesis is that online organization is a powerful political tool when combined with offline organization, but cannot substitute for it; and the evidence presented here from a range of mass protests certainly convinces me. The problem mass socially-networked protests have lies in their norms of decision making, which are slow and non-hierarchical. This makes them unable to change tactics quickly when hostile authorities respond to the protest, and so the moment passes. If, however, there is a parallel offline organisation with more conventional decision-making structures, the political protest can adapt and continue.

The book is informed by the author’s experiences visiting protests since long before Twitter and Facebook (and this makes it an engaging read). There is a lot of intriguing detail. Why, she asks, do longer-lived protests like Occupy Wall Street or Gezi Park set up libraries? Even clinics and clothing exchanges are probably unnecessary. She argues that the spirit of protest involves expressiveness – taking part is a meaningful or even joyful activity, often with a sense of ritual or transcendence..

A later interesting section of the book concerns the way authoritarian governments are fighting back against protests using social media themselves – not so much by cutting off the internet (which happened more in the early, Arab Spring, days than it does now) as by flooding social media with confusion and false information. I think the book was written before we all became familiar with the phrase Fake News, but here it is presented as a tactic of repression. Even in tightly controlled China, online comment is rarely shut down unless it looks like becoming organised offline action.

All in all, a highly recommended book, albeit not a particularly cheering one. The Arab Spring feels a long time ago, those days when democracy looked like it was still spreading rather than retreating. Tufekci herself ends on a slightly positive note, reporting a conversation with a young activist (one of Sain’s Indignados) about where things might go. The young woman replies with a phrase echoing one the Zapatistas used much earlier: “We will keep walking and keep asking questions.” As long as pepole have the energy to keep on, there’s hope.

I read the book on my trip to the ASSA meetings, also reading Darren McGarvey’s Poverty Safari, a second book by the wonderful new discovery Mick Herron, and Svetlana Alexievich’s Boys in Zinc. All highly recommended.

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No escape from the target setting arms race?

Among my holiday reads has been Jerry Muller’s The Tyranny of Metrics, published in the UK in a couple of weeks (can be pre-ordered now). The broad thesis of the book, which is a lively read, will be familiar to readers of the literature on the gaming of public service targets. This short book is stuffed with examples of the counter-productive results of insistence on numerical targets.

There is an interesting chapter on the origins of metric-fixation (at least in capitalist economies – the Soviet Union was always rather keen on it), which starts: “The demand for measured accountability and transparency waxes as trust wanes.” Social change following the explosion of protest against authority in the 1960s and the erosion of the post-war class certainties contributed to this process. So did the evident failures in public services and nationalised industries by the 1970s. But as the book goes on to note – and has been explored in the academic literature – public services are not like businesses, having a larger, complex set of aims and depending fundamentally on intrinsic motivation. A thriving public sector is important to the health of the wider economy: “A capitalist society depends for its flourishing on a variety of institutions that provide a counterweight to the market with its focus on monetary gain.”

The book goes on to give a range of examples of targets turned counter-productive in arenas from higher education to medicine and policing to business. Yes, business too. For here targets are linked to remuneration. Yet, as the book notes, economic theory (Holmstrom and Milgrom, as I describe here) and evidence point firmly away from rewarding the attainment of targets whenever individual effort is un-monitorable. Not that this has prevented to spread of performance pay or bonuses, Muller observes: “Although there is a large body of scholarship in the fields of psychology and economics that call into question the premises and effectiveness of pay for measured performance, that literature seems to have done little to halt the spread of metric fixation.” The book ends with a section describing how to use targets intelligently – think about what you’re trying to measure, why and for what purpose. Above all, think. The frustration is that it offers no thoughts about how to roll back the vast swathes of counter-prouctive targetry already afflicting us. Just imagine the outcry if any politician promises a ‘bonfire of the targets’ or less transparency. On the contrary, the arms race seems as intense as ever – when the pitfalls of one type of target are recognized, the solution is more complicated metrics. But dearmament is what we need.

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There is no alternative?

Is Capitalism Obsolete by Giacomo Corneo is framed as an exploration of alternatives to capitalism by an economics professor father to his idealistic daughter. The Prologue is an email exchange between them, in which she writes: “Your economic system is wasteful, unjust and alienating. And wastefulness, injustive and alienation are not the result of some natural law. They are the result of particular social rules, the rules of capitalism. And keep in mind that the capitalist economic system is the product of a relatively short period in history. Just as it once emerged, it will one day decline and be replaced with a better set of rules.”

Set up in this way, the book explores some of the alternative models posited at various times, from Plato’s Republic and Thomas More’s Utopia through anarchism and socialist planning to modern variants including ‘shareholder socialism’ (state ownership of key industries) and the currently fashionable cure-all, Universal Basic Income. At the end of this journey, the economist concludes: “There is, at present, not really much else on offer.” However unfair, wasteful etc capitalism is, there is no convincingly superior alternative. Instead, the author proposes a range of reforms – cracking down on cross-border tax avoidance/evasion, investing in infrastructure & public services etc – concluding, “A pluralist market economy with an effective and generous welfare state represents the best economic system that is currently available to us.” An appendix contains a more detailed specific reform proposal, the idea that the state should invest in quoted companies to build up a socially responsible sovereign wealth fund paying a social dividend to citizens.

I have never found the abstraction ‘capitalism’ a helpful term when it encompasses societies as contrasting as Norway and the United States, and have always quite liked the slightly out-of-fashion ‘varieties of capitalism‘ approach. Even if you think the term useful, though, looking at the news this past week, Corneo is surely rather optimistic here in seeing any possibility for reform. Capitalism might be declining, as the daughter asserts, but it looks more likely to be replaced by something worse, call it plutocracy, than by something better.

This is a slighly odd book. I guess it’s meant to be pedagogical, taking students on a tour of historical thinking about economic systems, but this makes the framing material about the current day rather perfunctory, and then the actual reform proposal is stuck in an appendix. Although a mildly diverting read, I’m not sure it works well either as a history of thought book or as a current affairs one.


No Ordinary Woman

I’ve really enjoyed reading No Ordinary Woman, a biography of Edith Penrose by her daughter-in-law Angela Penrose. It is a life story kind of biography – only one chapter (by Edith’s grandson Jago) covers her economic thinking in The Theory of the Growth of the Firm – but what a life.

There’s no question in my mind that, had she been a man, Penrose would be far more esteemed within the economics profession. I haven’t read The Theory of the Growth of the Firm (shame on me – got it out of the library now), and it seems it has been far more influential in management and business schools than in economics. It seems, from the chapter here, that it explores the firm as an institution, and the dynamics of the way firms shape the economic environment.  One can see how this is more at home in the business literature, valid (in fact, essential) as this kind investigation is.

But whatever its stature, Penrose had an extraordinary career as an empirical economist helping shape the field of study of multinational firms, an academic leader (head of the economics deparment at SOAS as it built its reputation, and later at INSEAD), and a public servant (serving on many public bodies and commissions after she and her husband settled in the UK). At the time the OPEC crisis erupted, she was just about the only academic who had studied the oil industry and the Middle East economies. She travelled widely, learnt Arabic and did some consultancy work in her spare time – and all this while bringing up her family and being a housewife to her husband, much-loved but clearly a traditional man of his era.

Anyway, from this affectionate biography, Penrose sounds like she would have been terrific fun and stimulating to know. And it is inspiring to read about a woman who accomplished so much against great odds. Next week in Manchester we’re hosting an event for 14-15 year old school girls to encourage them to do economics in the 6th form. Edith Penrose has to join the pantheon of female economists we’ve been preparing.