Category Archives: Book review

Keep science irrational

By Michael Strevens – Modern science has a whole lot going for it that Ancient Greek or Chinese science did not: advanced technologies for observation and measurement, fast and efficient communication, and well-funded and dedicated institutions for research. It also has, many thinkers have supposed, a superior (if not always flawlessly implemented) ideology, manifested in a concern for objectivity, openness to criticism, and a preference for regimented techniques for discovery, such as randomized, controlled experimentation. I want to add one more item to that list, the innovation that made modern science truly scientific: a certain, highly strategic irrationality.

‘Experiment is the sole judge of scientific “truth”,’ declared the physicist Richard Feynman in 1963. ‘All I’m concerned with is that the theory should predict the results of measurements,’ said Stephen Hawking in 1994. And dipping back a little further in time, we find the 19th-century polymath John Herschel expressing the same thought: ‘To experience we refer, as the only ground of all physical enquiry.’ These are not just personal opinions or propaganda; the principle that only empirical evidence carries weight in scientific argument is widely enforced across the scientific disciplines by scholarly journals, the principal organs of scientific communication. Indeed, it is widely agreed, both in thought and in practice, that science’s exclusive focus on empirical evidence is its greatest strength.

et there is more than a whiff of dogmatism about this exclusivity. Feynman, Hawking, Herschel all insist on it: ‘the sole judge’; ‘all I’m concerned with’; ‘the only ground’. Are they, perhaps, protesting too much? What about other considerations widely considered relevant to assessing scientific hypotheses: theoretical elegance, unity, or even philosophical coherence? Except insofar as such qualities make themselves useful in the prediction and explanation of observable phenomena, they are ruled out of scientific debate, declared unpublishable. It is that unpublishability, that censorship, that makes scientific argument unreasonably narrow. It is what constitutes the irrationality of modern science – and yet also what accounts for its unprecedented success. more>

Why Free Market Ideology is a Double Lie

The free market, it appears, is not about freedom. It’s about power.
By Blair Fix – As social animals, humans live and die by the success of our groups. This raises a dilemma. What’s best for the group is often not what’s best for individuals within the group. If you’re surrounded by a group of trusting individuals, it’s best for you to lie and cheat. You’ll increase your relative fitness. And in evolutionary terms, that’s what matters.

Given that selfish behavior is often advantageous, why aren’t more of us liars and cheaters? One reason, paradoxically, is that we lie to ourselves. We tell ourselves that what’s best for groups is also what’s best for individuals within the group. I’ll call this the noble prosocial lie.

Propagating this noble lie, I believe, is one of the principle roles of ideologies. A good ideology convinces individuals that selfless behavior is in their self interest. This promotes prosocial behavior, making groups more cohesive. And since cohesive groups tend to beat out incohesive groups, the noble lie tends to spread.

Given the benefits of equating altruism with self interest, you’d think that all ideologies would do it. Yet some do the opposite. They promote selfish behavior as good for the group. I’ll call this the Machiavellian lie.

Now here’s the paradox. The Machiavellian lie should be caustic to social cohesion. So you’d expect that group selection would kill it off. But for one Machiavellian lie, that’s not what happened. Instead of dying out, this lie has thrived. In fact, it’s become the dominant ideology of our time. What is it?

The belief in the free market.

Free-market ideology claims that to help society, we must help ourselves. If we all act selfishly, the thinking goes, the invisible hand will make everyone better off. So here we have an ideology that promotes selfishness in the name of group benefit. It’s a Machiavellian lie that should be caustic to social cohesion. And yet free-market thinking has beat out many other ideologies. How can this be?

Here’s what I think is happening. Free-market ideology, I propose, is a double lie.

First, it’s a lie in the sense that its central claim is false. Acting selfishly does not maximize group well being. Modern evolutionary theory makes this clear. Second, and more subtly, free-market thinking is a lie in the sense that it does not lead to greater freedom and autonomy. Quite the opposite. The evidence suggests that free-market thinking actually leads to greater obedience and subordination. The spread of free-market thinking goes hand in hand with the growth of hierarchy.

So the free market, it appears, is not about freedom. It’s about power. Free market thinking is successful, I argue, because it uses the language of freedom to cloak the accumulation of power. more>

We have to accelerate clean energy innovation to curb the climate crisis. Here’s how.

A detailed road map for building a US energy innovation ecosystem.
By David Roberts – “Innovation” is a fraught concept in climate politics. For years, it was used as a kind of fig leaf to cover for delaying tactics, as though climate progress must wait on some kind of technological breakthrough or miracle. That left climate advocates with an enduring suspicion toward the notion, and hostility toward those championing it.

Lately, though, that has changed. Arguably, some Republicans in Congress are still using innovation as a way to create the illusion of climate concern (without any conflict with fossil fuel companies). But among people serious about the climate crisis, it is now widely acknowledged that hitting the world’s ambitious emissions targets will require both aggressive deployment of existing technologies and an equally aggressive push to improve those technologies and develop nascent ones.

There is legitimate disagreement about the ratio — about how far and how fast existing, mature technologies can go — but there is virtually no analyst who thinks the current energy innovation system in the US is adequate to decarbonize the country by midcentury. It needs reform.

What kind of reform? Here, as in other areas of climate policy, there is increasing alignment across the left-of-center spectrum. Two recent reports illustrate this.

The first — a report so long they’re calling it a book — is from a group of scholars at the Columbia University Center on Global Energy Policy (CGEP), led by energy scholar Varun Sivaram; it is the first in what will be three volumes on what CGEP is calling a “National Energy Innovation Mission.” The second is from the progressive think tank Data for Progress, on “A Progressive Climate Innovation Agenda,” accompanied by a policy brief and some polling.

Both reports accept the International Energy Agency (IEA) conclusion that “roughly half of the reductions that the world needs to swiftly achieve net-zero emissions in the coming decades must come from technologies that have not yet reached the market today.” There are reasons to think this might be an overly gloomy assessment, but whether it’s 20 percent or 50 percent, aggressive innovation will be required to pull it off.

Both reports set out to put some meat on the bones of a clean energy innovation agenda. And they both end up in roughly the same place, with roughly the same set of policy recommendations. more>

‘Shareholder value’ versus the public good: the case of Germany

Support for companies amid the pandemic must come with social and ecological strings attached.
By Emre Gömec and Mustafa Erdem Sakinç – With uncertainty around the world about how and when the coronavirus outbreak will decelerate, whole business sectors have been affected by lockdowns and are facing ruin. In Germany, more than 750,000 companies have put over 12 million employees on reduced working hours (Kurzarbeit), dwarfing the 3 million hit by the 2008 crisis.

Society’s loss goes beyond the toll on employment. As the crisis lengthens, innovative capabilities accumulated over years and even decades may atrophy and disappear, making it far more difficult to emerge from the pandemic with a healthy economy.

This ‘innovation drain’ can be avoided if, and only if, corporations devote every available resource to retaining, and reinvesting, in productive capacity. Implementation of the rescue packages adopted in Germany in March and June must thus fundamentally address future practices of corporate resource allocation.

Making government support conditional on replacing value-extractive practices, such as excessive dividend payments and executive compensation, is the most effective way to block damaging business decisions which undermine investment in productive capabilities and secure employment.

Germany’s case was, it’s true, not as dramatic as that of the US, where S&P 500 companies, having fallen victim to the American disease of corporate financialization, distributed 92 per cent of their net income between 2009 and 2018 in stock buybacks and dividends. Still, in the decade from 2010 to 2019, 65 German companies in the DAX 30 and MDAX 60 indices paid out a total of €338.8 billion, or 46 per cent of their combined profits, in dividends, in addition to €35.3 billion, or 5 per cent of profits, in stock buybacks. more>

How to Disguise Racism and Oligarchy: Use Economics

By Lynn Parramore – James McGill Buchanan is a name you will rarely hear unless you’ve taken several classes in economics. And if the Tennessee-born Nobel laureate were alive today, it would suit him just fine that most well-informed journalists, liberal politicians, and even many economics students have little understanding of his work.

The reason? Duke historian Nancy MacLean contends that his philosophy is so stark that even young libertarian acolytes are only introduced to it after they have accepted the relatively sunny perspective of Ayn Rand. (Yes, you read that correctly). If Americans really knew what Buchanan thought and promoted, and how destructively his vision is manifesting under their noses, it would dawn on them how close the country is to a transformation most would not even want to imagine, much less accept.

That is a dangerous blind spot, MacLean argues in a meticulously researched book, Democracy in Chains, a finalist for the National Book Award in Nonfiction. While Americans grapple with Donald Trump’s chaotic presidency, we may be missing the key to changes that are taking place far beyond the level of mere politics. Once these changes are locked into place, there may be no going back.

MacLean’s book reads like an intellectual detective story. In 2010, she moved to North Carolina, where a Tea Party-dominated Republican Party got control of both houses of the state legislature and began pushing through a radical program to suppress voter rights, decimate public services, and slash taxes on the wealthy that shocked a state long a beacon of southern moderation. Up to this point, the figure of James Buchanan flickered in her peripheral vision, but as she began to study his work closely, the events in North Carolina and also Wisconsin, where Governor Scott Walker was leading assaults on collective bargaining rights, shifted her focus.

Could it be that this relatively obscure economist’s distinctive thought was being put forcefully into action in real time?

MacLean could not gain access to Buchanan’s papers to test her hypothesis until after his death in January 2013. That year, just as the government was being shut down by Ted Cruz & Co., she traveled to George Mason University in Virginia, where the economist’s papers lay willy-nilly across the offices of a building now abandoned by the Koch-funded faculty to a new, fancier center in Arlington.

MacLean was stunned. The archive of the man who had sought to stay under the radar had been left totally unsorted and unguarded. The historian plunged in, and she read through boxes and drawers full of papers that included personal correspondence between Buchanan and billionaire industrialist Charles Koch. That’s when she had an amazing realization: here was the intellectual linchpin of a stealth revolution currently in progress.

Buchanan, a 1940 graduate of Middle Tennessee State University who later attended the University of Chicago for graduate study, started out as a conventional public finance economist. But he grew frustrated by the way in which economic theorists ignored the political process.

Buchanan began working on a description of power that started out as a critique of how institutions functioned in the relatively liberal 1950s and ‘60s, a time when economist John Maynard Keynes’s ideas about the need for government intervention in markets to protect people from flaws so clearly demonstrated in the Great Depression held sway. Buchanan, MacLean notes, was incensed at what he saw as a move toward socialism and deeply suspicious of any form of state action that channels resources to the public. Why should the increasingly powerful federal government be able to force the wealthy to pay for goods and programs that served ordinary citizens and the poor?

In thinking about how people make political decisions and choices, Buchanan concluded that you could only understand them as individuals seeking personal advantage. In an interview cited by MacLean, the economist observed that in the 1950s Americans commonly assumed that elected officials wanted to act in the public interest. Buchanan vehemently disagreed — that was a belief he wanted, as he put it, to “tear down.” His ideas developed into a theory that came to be known as “public choice.”

Buchanan’s view of human nature was distinctly dismal. more>

Related>

Updates from McKinsey

The value of value creation
Long-term value creation can—and should—take into account the interests of all stakeholders.
By Marc Goedhart and Tim Koller – Challenges such as globalization, climate change, income inequality, and the growing power of technology titans have shaken public confidence in large corporations. In an annual Gallup poll, more than one in three of those surveyed express little or no confidence in big business—seven percentage points worse than two decades ago. 1 Politicians and commentators push for more regulation and fundamental changes in corporate governance. Some have gone so far as to argue that “capitalism is destroying the earth.”

This is hardly the first time that the system in which value creation takes place has come under fire. At the turn of the 20th century in the United States, fears about the growing power of business combinations raised questions that led to more rigorous enforcement of antitrust laws. The Great Depression of the 1930s was another such moment, when prolonged unemployment undermined confidence in the ability of the capitalist system to mobilize resources, leading to a range of new policies in democracies around the world.

Today’s critique includes a call on companies to include a broader set of stakeholders in their decision making, beyond just their shareholders. It’s a view that has long been influential in continental Europe, where it is frequently embedded in corporate-governance structures. The approach is gaining traction in the United States, as well, with the emergence of public-benefit corporations, which explicitly empower directors to take into account the interests of constituencies other than shareholders.

Particularly at this time of reflection on the virtues and vices of capitalism, we believe it’s critical that managers and board directors have a clear understanding of what value creation means. For today’s value-minded executives, creating value cannot be limited to simply maximizing today’s share price. Rather, the evidence points to a better objective: maximizing a company’s value to its shareholders, now and in the future.

Recently, the US Business Roundtable released its 2019 “Statement on the purpose of a corporation.” Dozens of business leaders (the managing director of McKinsey among them) declared “a fundamental commitment to all of our stakeholders [emphasis in the original].” Signatories affirmed that their companies have a responsibility to customers, employees, suppliers, communities (including the physical environment), and shareholders. “We commit to deliver value to all of them,” the statement concludes, “for the future success of our companies, our communities and our country.” more>

Related>

Updates from McKinsey

Personalizing change management in the smartphone era
By Alexander DiLeonardo, David Mendelsohn, Nikil Selvam, and Alexandra Wood – CEOs know that making organizational change stick requires convincing big groups of geographically dispersed people to think, act, and approach their work differently. And this is devilishly hard, as human beings are motivated by many things, have different fears and aspirations, feel varying levels of empowerment and commitment, and tend to be reluctant to change in the first place. Undifferentiated approaches that don’t carefully consider employees’ mindsets will fall flat and may even breed cynicism that saps morale and undermines progress.

The good news is that when it comes to personalization, senior executives have plenty of inspiration, courtesy of analytical pioneers such as Instagram, Netflix, and Spotify, all adept at tailoring products to meet individualized preferences via apps and other easy-to-use digital platforms. A large global manufacturer’s ongoing experiment in tech-infused mass personalization shows how this thinking can be applied to organizational change. The company’s experience suggests how smart combinations of digital technology, analytics, and behavioral science can make change more inclusive and persuasive—and help employees unleash their enthusiasm in ways not possible otherwise. The key is to use the available tools to better understand people and meet them where they are—a guiding principle that’s equally relevant for implementing long-term change and for leading a remote workforce through the current disruptions caused by the COVID-19 pandemic.

For a few years, the manufacturer had tried with limited success to implement cultural changes across a key region’s 7,000-strong workforce—for example, by promoting behaviors it hoped would break down silos, empower and motivate frontline workers, and bolster performance. Now the CEO wanted a fresh start. An assessment highlighted places where the company’s organizational health was poor or needed strengthening. From these areas, senior leaders focused on three management practices: operational discipline, inspirational forms of leadership, and the use of rewards and recognition to better motivate employees.

The company then formed a team to translate these broad cultural goals into specific mindsets and behaviors that would both generate the desired organizational outcomes and also help employees better understand how they personally contributed to the improvement. For example, the manufacturer wanted employees to think of operational discipline as everyone’s job. One tangible way to promote this would be to encourage shop-floor operators and supervisors to consciously review the company’s “golden rules of safety” before every shift. Likewise, the company sought to instill a mindset of valuing continuous improvement and celebrating small victories. One way of doing this would be to encourage people to speak up immediately when they saw a colleague do something positive (a motivational take on the mantra “if you see something, say something”).

The team now had a discrete set of behaviors they wanted to encourage. But they knew that to do so effectively, they needed to meet people where they were—they couldn’t simply tell people to change. The team needed to address any mindsets or beliefs that could act as barriers. more>

Related>

Do civilisations collapse?

By Guy D Middleton – We also need to think about what we apply the term ‘collapse’ to – what exactly was it that collapsed? Very often, it’s suggested that civilizations collapse, but this isn’t quite right. It is more accurate to say that states collapse. States are tangible, identifiable ‘units’ whereas civilization is a more slippery term referring broadly to sets of traditions. Many historians, including Arnold Toynbee, author of the 12-volume A Study of History (1934-61), have defined and tried to identify ‘civilizations’, but they often come up with different ideas and different numbers. But we have seen that while Mycenaean states collapsed, several strands of Mycenaean material and non-material culture survived – so it would seem wrong to say that their ‘civilization’ collapsed. Likewise, if we think of Egyptian or Greek or Roman ‘civilization’, none of these collapsed – they transformed as circumstances and values changed. We might think of each civilization in a particular way, defined by a particular type of architecture or art or literature – pyramids, temples, amphitheatres, for example – but this reflects our own values and interests.

It is the same with the Maya and with the Easter Islanders. In both cases, civilization and state have been confused and conflated. The Maya world was spread across a huge area with many different environments, from the dry northern Yucatán Peninsula to the river-fed lowlands in the south, and beyond into the mountains. It was an old and interconnected world of cities and kings, divided up among super-states of wide influence and more modest kingdoms that could fall under their spell. There were probably 60 to 70 ‘independent’ states; the fortunes of all waxed and waned. It was a bigger and more complex world than Late Bronze Age Greece.

he idea of a collapse of Maya civilization seems just wrong – and it carries with it the wrong kind of implications – that the Maya all disappeared or that their post-collapse culture is less important or less worthy of our attention. Via many individual collapses, Classic Maya society transformed through the Terminal Classic and into the Postclassic – a development that is hardly surprising when compared with the changing map of Europe across any five-century period. Maya society continued to change with the arrival of the Spanish, and through the colonial and modern eras. If we value the Maya’s so-called Classic period more than their culture at other times, this is our choice – but it is one that should be recognized and questioned. more>

Out of the tragedy of coronavirus may come hope of a more just society

The lessons of necessity and solidarity learned during the pandemic must inform a transition to a just society within ecological limits in its aftermath.
By Michael D Higgins – The global loss of life and disruption to our daily lives resulting from the coronavirus pandemic is unprecedented in living memory. We have learned through tragedy that we have a shared, globalized vulnerability common to all humanity. We are learning how we, as a matter of urgency, must make changes to improve resilience in a range of essential areas: employment, healthcare, housing. We have been forced to recognize our dependence on our public-sector frontline workers, and the state’s broader role in mitigating this crisis and saving lives.

The coronavirus has magnified the scale of our existing social crises and has proved, if ever proof were required, how government can act decisively when the will is there. It has shown us how so many are only ever one wage payment away from impoverishment, how those in self-employment or workers in the ‘gig’ economy lack security and basic employment rights, how private tenants in unregulated housing markets are at the mercy of their landlords, how many designated ‘key workers’ are appallingly undervalued and underpaid. Averting our gaze to these grim truths is no longer an option.

Years of eroding welfare states in many societies have had to give way, under pressure from the virus, to significant welfare actions as emergency measures. These reflect the impact decades of unfettered neoliberalism have had on whole sectors of society and economy, left without protection as to basic necessities of life, security and the ability to participate.

There is now a widespread, recovered recognition not only of the state’s positive role in managing such crises but of how it can play a decisive, transformative role in our lives for the better. The erosion of the state’s role, the weakening of its institutions and the undermining of its significance for over four decades has left us with a less just and more precarious society and economy. more>

Covid-19 Is a Tragedy of the Commons—but We Can Collectively Mitigate the Tragedy

By Robert Kadar and Steve Roth – Coronavirus is a classic Tragedy of the Commons problem: everyone acting in their own self-interest leads to worse outcomes for the collective. But Nobel Laureate Elinor Ostrom has a solution to that tragedy: design principles for the commons. “Social Distancing” and “flattening the curve” are examples of community design principles for managing our common health and healthcare resources.

It’s Time to Replace the Economics of “Me” with the Economics of “We” by Jonathan Rowe and David Bollier

Optimizing for Human Well-Being by Douglas Rushkoff

The Tragedy of the Commons: How Elinor Ostrom Solved One of Life’s Greatest Dilemmas by David Sloan Wilson

Why Common Ownership Is a Route to Social Transformation by George Monbiot

The Woman Who Saved Economics from Disaster by David Sloan Wilson

Cooperation Beats Competition; Pro-Sociality Beats Self-Interest

Neoclassical economics claims that “greed is good”—by following one’s own self-interest, “all boats rise.” Unfortunately, we have evidence—from biology to anthropology to sociology to economics—that it simply isn’t true. Only through pro-social, cooperative behavior can we all thrive. It’s time to put these principles into practice as we collectively tackle Coronavirus.

Where Do Pro-Social Institutions Come From? By Pseudoerasmus

You Might Have Earned It, But Don’t Forget That Your Wealth Came from Society by Ryan Avent

How Norway Proves Laissez-faire Economics Is Not Just Wrong, It’s Toxic. By David S. Wilson and Dag O. Hessen

Are We Cooperative or Competitive? Our View Shapes the Economy by Sandra Aamodt

Here Is Why Economics Is Built on a Monumental Mistake by Jag Bhalla

Parasites, Security, and Conflict: The Origins of Individualism and Collectivism by Daniel Hruschka
more>