Category Archives: Book review

How the body and mind talk to one another to understand the world


By Sarah Garfinkel – When considering the senses, we tend to think of sight and sound, taste, touch and smell. However, these are classified as exteroceptive senses, that is, they tell us something about the outside world. In contrast, interoception is a sense that informs us about our internal bodily sensations, such as the pounding of our heart, the flutter of butterflies in our stomach or feelings of hunger.

The brain represents, integrates and prioritizes interoceptive information from the internal body. These are communicated through a set of distinct neural and humeral (ie, blood-borne) pathways. This sensing of internal states of the body is part of the interplay between body and brain: it maintains homeostasis, the physiological stability necessary for survival; it provides key motivational drivers such as hunger and thirst; it explicitly represents bodily sensations, such as bladder distension.

But that is not all, and herein lies the beauty of interoception, as our feelings, thoughts and perceptions are also influenced by the dynamic interaction between body and brain.

The shaping of emotional experience through the body’s internal physiology has long been recognized. The American philosopher William James argued in 1892 that the mental aspects of emotion, the ‘feeling states’, are a product of physiology. He reversed our intuitive causality, arguing that the physiological changes themselves give rise to the emotional state: our heart does not pound because we are afraid; fear arises from our pounding heart. more>

Tools for thinking: Isaiah Berlin’s two concepts of freedom

By Maria Kasmirli – ‘Freedom’ is a powerful word.

We all respond positively to it, and under its banner revolutions have been started, wars have been fought, and political campaigns are continually being waged.

But what exactly do we mean by ‘freedom’?

The fact that politicians of all parties claim to believe in freedom suggests that people don’t always have the same thing in mind when they talk about it.

Might there be different kinds of freedom and, if so, could the different kinds conflict with each other? Could the promotion of one kind of freedom limit another kind? Could people even be coerced in the name of freedom?

The 20th-century political philosopher Isaiah Berlin (1909-97) thought that the answer to both these questions was ‘Yes’, and in his essay ‘Two Concepts of Liberty’ (1958) he distinguished two kinds of freedom (or liberty; Berlin used the words interchangeably), which he called negativefreedom and positive freedom.

Negative freedom is freedom from interference. You are negatively free to the extent that other people do not restrict what you can do. If other people prevent you from doing something, either directly by what they do, or indirectly by supporting social and economic arrangements that disadvantage you, then to that extent they restrict your negative freedom.

Berlin stresses that it is only restrictions imposed by other people that count as limitations of one’s freedom. Restrictions due to natural causes do not count. The fact that I cannot levitate is a physical limitation but not a limitation of my freedom. more>

Updates from Chicago Booth

Why artificial intelligence isn’t boosting the economy—yet
By Alex Verkhivker – Measured productivity has been declining for more than a decade in the United States and abroad. It calls to mind Solow’s paradox, a 1987 observation by the Nobel laureate economist Robert Solow, who noted that one “can see the computer age everywhere but in the productivity statistics.”

It shouldn’t be a surprise that the same thing is happening with artificial intelligence, or AI, according to MIT’s Erik Brynjolfsson, MIT PhD candidate Daniel Rock, and Chicago Booth’s Chad Syverson.

AI is a once-in-a-lifetime, general-purpose technology that promises to provide an “engine of growth,” they write. This was also true of the steam engine, electricity, and the internal combustion engine.

And yet, the researchers point out, the steam technologies that drove the US industrial revolution took nearly 50 years to show up in rising productivity statistics. And the first 25 years after the development of the electric motor and internal combustion engine were associated with a productivity slump, with growth of less than 1.5 percent a year. Then in 1915, the pace of economic expansion doubled for 10 years.

In these cases, the researchers find signs of what they call “the productivity J-curve,” a period in economic data when productivity growth is underestimated, followed by a period when it’s overestimated. This dynamic may have also applied to the computer-powered information-technology era, with 25 years of slow productivity growth followed by a decadelong acceleration, from 1995 through 2005.

Why does this happen? more>

Related>

Democratising Europe: by taxation or by debt?

Europe desperately needs to resolve its collective-action problem to emerge from the crisis. Democratizing Europe, with a fiscal capacity, is better than monetary easing.
By Manon Boujou, Lucas Chancel, Anne-Laure Delatte, Thomas Piketty, Guillaume Sacriste, Stéphanie Hennette and Antoine Vauchez – On December 10th 2018 we launched a Manifesto for the Democratization of Europe, along with 120 European politicians and academics. Since it was launched, the manifesto has accrued over 110,000 signatures and it is still open for more. It includes a project for a treaty and a budget enabling the countries which so wish to set up a European Assembly and a genuine policy for fiscal, social and environmental justice in Europe—all available multilingually on the website.

In the Guardian, on December 13th, Yanis Varoufakis presented his ‘Green New Deal’ as an alternative to the manifesto, which he considers to be irrelevant.

The Varoufakis plan builds on the European Investment Bank (EIB) which is responsible for issuing bonds to the value of €500 billion per annum, including these securities in the program of purchase of securities by the European Central Bank (ECB).

The main criticism by Varoufakis seems to be the following: why do you want to create yet more new taxes when one can create money? Our budget is indeed financed by taxation, whereas his plan is financed by public debt.

In his proposals, private firms involved in the ecological transition borrow money from the ECB, after having been selected by the EIB.

In fact, part of this arrangement already exists in the form of the Juncker plan. What Varoufakis adds is the purchase of securities by the ECB rather than by private investors. more>

A New Americanism

Why a Nation Needs a National Story
By Jill Lepore – Carl Degler issued a warning: “If we historians fail to provide a nationally defined history, others less critical and less informed will take over the job for us.”

The nation-state was in decline, said the wise men of the time. The world had grown global. Why bother to study the nation?

Francis Fukuyama is a political scientist, not a historian. But his 1989 essay “The End of History?” illustrated Degler’s point. Fascism and communism were dead, Fukuyama announced at the end of the Cold War.

Fukuyama was hardly alone in pronouncing nationalism all but dead. A lot of other people had, too. That’s what worried Degler.

Nation-states, when they form, imagine a past. That, at least in part, accounts for why modern historical writing arose with the nation-state.

But in the 1970s, studying the nation fell out of favor in the American historical profession. Most historians started looking at either smaller or bigger things, investigating the experiences and cultures of social groups or taking the broad vantage promised by global history.

But meanwhile, who was doing the work of providing a legible past and a plausible future—a nation—to the people who lived in the United States? Charlatans, stooges, and tyrants.

The endurance of nationalism proves that there’s never any shortage of blackguards willing to prop up people’s sense of themselves and their destiny with a tissue of myths and prophecies, prejudices and hatreds, or to empty out old rubbish bags full of festering resentments and calls to violence.

When historians abandon the study of the nation, when scholars stop trying to write a common history for a people, nationalism doesn’t die. Instead, it eats liberalism.

Maybe it’s too late to restore a common history, too late for historians to make a difference. But is there any option other than to try to craft a new American history—one that could foster a new Americanism? more>

Why are millennials burned out? Capitalism.

BOOK REVIEW

Kids These Days: Human Capital and the Making of Millennials, Author: Malcolm Harris.

By Sean Illing – What made millennials the way they are? Why are they so burned out? Why are they having fewer kids? Why are they getting married later? Why are they obsessed with efficiency and technology?

His answer, in so many words, is the economy. Millennials, Harris argues, are bearing the brunt of the economic damage wrought by late-20th-century capitalism. All these insecurities — and the material conditions that produced them — have thrown millennials into a state of perpetual panic. If “generations are characterized by crises,” as Harris argues, then ours is the crisis of extreme capitalism.

What Harris focused on is millennials as workers and the changing relationship between labor and capital during the time we all came of age and developed into people. If we want to understand why millennials are the way they are, then we have to look at the increased competition between workers, the increased isolation of workers from each other, the extreme individualism of modern American society, and the widespread problems of debt and economic security facing this generation.

Millennials have been forced to grow up and enter the labor market under these dynamics, and we’ve internalized this drive to produce as much as we can for as little as possible. That means we take on the costs of training ourselves (including student debt), we take on the costs of managing ourselves as freelancers or contract workers, because that’s what capital is looking for.

And because wages are stagnant and exploitation is up, competition among workers is up too. As individuals, the best thing we can do for ourselves is work harder, learn to code, etc. But we’re not individuals, not as far as bosses are concerned. The vast majority of us are (replaceable) workers, and by working harder for less, we’re undermining ourselves as a class. It’s a vicious cycle. more>

Economics as a moral tale

By John Rapley – Think of human development as a long journey.

At the beginning, we live at the mercy of nature. Dependent on its bounty, we pray for rains and freedom from natural disasters and plagues. At the end of the journey, nature lives at our mercy. We use science and technology to release new wealth and remake the planet.

Economists began to compose the narrative of this odyssey, from subjection to dominion, in the 1700s. Once it became apparent that Europe had broken with millennia of stasis to begin a long period of rising growth – the same through which we are still living – political economists abandoned philosophical reflection to draft roadmaps to development.

Two broad types emerged. One approach described the walk, the other the walker.

The first presumed that the context in which we made the journey – the natural environment, the institutions, the culture, the legal and political systems – determined the direction of the path. In this model, the government bore responsibility to build the path so that it could accommodate as many people as possible.

The second approach took a more individualist perspective. It presumed that the walker determined his or her own success in the journey. It concentrated on the moral, intellectual and physical attributes it believed an individual needed to advance. In this model, the task of the government was to sweep aside obstacles impeding the gifted few from embarking on their personal journeys – restraints that ranged from restrictions on labor mobility to usury laws. Thus liberated, gifted individuals would beat the path to prosperity.

By 1948, Western economies had emerged from crisis, beginning a decades-long period of rising growth and prosperity. Rather than pack up and go home, the development industry now turned its attention to a new frontier. With Europe’s overseas empires breaking up, dozens of new nation-states were coming into being, each of them eager to ‘catch up’ with its erstwhile colonial master. Amid this exciting atmosphere, the development industry could use its expertise to play a clear and prominent role, one captured in the subtitle to the then-Bible of development, Walt Rostow’s Stages of Economic Growth (1960) – ‘a non-communist manifesto’.

By now, statist economics was enshrined in theory and sanctified by practice. more>

Why Wall Street Isn’t Useful for the Real Economy

By Lynn Stout – In the wake of the 2008 crisis, Goldman Sachs CEO Lloyd Blankfein famously told a reporter that bankers are “doing God’s work.” This is, of course, an important part of the Wall Street mantra: it’s standard operating procedure for bank executives to frequently and loudly proclaim that Wall Street is vital to the nation’s economy and performs socially valuable services by raising capital, providing liquidity to investors, and ensuring that securities are priced accurately so that money flows to where it will be most productive.

The mantra is essential, because it allows (non-psychopathic) bankers to look at themselves in the mirror each day, as well as helping them fend off serious attempts at government regulation. It also allows them to claim that they deserve to make outrageous amounts of money.

According to the Statistical Abstract of the United States, in 2007 and 2008 employees in the finance industry earned a total of more than $500 billion annually—that’s a whopping half-trillion dollar payroll (Table 1168).

Let’s start with the notion that Wall Street helps companies raise capital. If we look at the numbers, it’s obvious that raising capital for companies is only a sideline for most banks, and a minor one at that. Corporations raise capital in the so-called “primary” markets where they sell newly-issued stocks and bonds to investors.

However, the vast majority of bankers’ time and effort is devoted to (and most bank profits come from) dealing, trading, and advising investors in the so-called “secondary” market where investors buy and sell existing securities with each other.

In 2009, for example, less than 10 percent of the securities industry’s profits came from underwriting new stocks and bonds; the majority came instead from trading commissions and trading profits (Table 1219).

This figure reflects the imbalance between the primary issuing market (which is relatively small) and the secondary trading market (which is enormous). In 2010, corporations issued only $131 billion in new stock (Table 1202).

That same year, the World Bank reports, more than $15 trillion in stocks were traded in the U.S. secondary marketmore than the nation’s GDP. more>

How a Decade of Crisis Changed Economics

By J. W. Mason – Has economics changed since the crisis?

As usual, the answer is: it depends. If we look at the macroeconomic theory of PhD programs and top journals, the answer is clearly, no. Macroeconomic theory remains the same self-contained, abstract art form that it has been for the past twenty-five years.

As Joan Robinson once put it, economic theory is the art of pulling a rabbit out of a hat right after you’ve stuffed it into the hat in full view of the audience.

Many producers of this kind of model actually have a quite realistic understanding of the behavior of real economies, often informed by firsthand experience in government. The combination of real insight and tight genre constraints leads to a strange style of theorizing, where the goal is to produce a model that satisfies the methodological conventions of the discipline while arriving at a conclusion that you’ve already reached by other means. It’s the economic equivalent of the college president in Randall Jarrell’s Pictures from an Institution:

About anything, anything at all, Dwight Robbins believed what Reason and Virtue and Tolerance and a Comprehensive Organic Synthesis of Values would have him believe. And about anything, anything at all, he believed what it was expedient for the president of Benton College to believe. You looked at the two beliefs, and lo! the two were one. more>

Economics as a moral tale

By John Rapley – Think of human development as a long journey.

At the beginning, we live at the mercy of nature. Dependent on its bounty, we pray for rains and freedom from natural disasters and plagues. At the end of the journey, nature lives at our mercy.

We use science and technology to release new wealth and remake the planet. Today, as humans implant themselves with microchips, install artificial organs and plan Mars colonies, we even aim for a ‘singularity’ that will lift us out of nature once and for all.

Economists began to compose the narrative of this odyssey, from subjection to dominion, in the 1700s. Once it became apparent that Europe had broken with millennia of stasis to begin a long period of rising growth – the same through which we are still living – political economists abandoned philosophical reflection to draft roadmaps to development.

Two broad types emerged. One approach described the walk, the other the walker. The first presumed that the context in which we made the journey – the natural environment, the institutions, the culture, the legal and political systems – determined the direction of the path. In this model, the government bore responsibility to build the path so that it could accommodate as many people as possible.

The second approach took a more individualist perspective. It presumed that the walker determined his or her own success in the journey. It concentrated on the moral, intellectual and physical attributes it believed an individual needed to advance. In this model, the task of the government was to sweep aside obstacles impeding the gifted few from embarking on their personal journeys – restraints that ranged from restrictions on labor mobility to usury laws. Thus liberated, gifted individuals would beat the path to prosperity. more>