Defective Equilibrium

Fama/French would probably be my pick as well - th...

2009-10-11T10:15:56.355+13:00

Fama/French would probably be my pick as well - that might also give them a way of kind of diverting attention entirely from the EMH to their later stuff as a reason for the prize.

I agree - I wonder whether it would be a Fama/Fren...

2009-10-10T21:28:29.777+13:00

I agree - I wonder whether it would be a Fama/French combo when it does happen, but now is probably not the hour.
Ken French, in addition to his work, is a remarkable lecturer. I was lucky enough to have him unlock the mysteries of Finance in a first year MBA course. Top of the list was his way of teaching the value of options - using a prisoner at the end of his term, two women and promises of marriage.

You're right that they probably think there ar...

2009-09-24T15:02:55.841+12:00

You're right that they probably think there are peripheral issues of luck - but I think they pretty clearly think that those issues are just that, peripheral, and I think it's intended to be a blanket statement covering at least a large proportion of society, so it's probably fair to treat it as such. I think that's an absurd statement, which is why I put it there.

As such, it's probably fair to say that I gave them perhaps shorter shrift than they deserved if I had been writing a response to the piece, but again, I wasn't really intending to argue with them, but use it as a springboard into a wider discussion. There's a practical limit to how many interpretations I can consider in one sentence!

As to your own views, the Kiwiblog statement seemed pretty clear to me, but one way of muddying the waters would be to say that birth etc aren't truly issues of luck. Seeing as you felt my quote wasn't representative of their position, I speculated that you also may also have held that to be true. That may be incorrect, but I assure you it didn't come from any desire to amalgamate people I disagree with into one position :)

Yeah, I see that my objection is totally periphera...

2009-09-22T17:28:21.711+12:00

Yeah, I see that my objection is totally peripheral to the post.

I'm only objecting to the debating style. As I see it, when we see someone say something that has a silly, obviously wrong interpretation, we should consider whether they might have meant something else by it. In this case, I interpret "I just don't believe in luck" (which, taken completely literally, is not just wrong but is obviously wrong) to really mean the not-obviously-wrong: "I don't believe that luck tends to be a major factor in financial success very often".

You read Overcoming Bias, right? You might have seen Robin Hanson's post, Against Disclaimers: http://overcomingbias.com/2008/06/against-disclai.html

He criticized common presumptions in arguments. Relevantly: 'Any general claim about human behavior [is presumed to be] an absolute law without exception unless it includes qualifiers like "tends" or "often".'

That's what I'm suggesting you've done - presumed an uncharitable interpretation.

Also, relevantly to your comment: "If you quote someone [it is presumed that] you agree with everything they said" and "If you say anything nice (or critical) about anything associated with a group or person you are presumed to support (or oppose) them overall."

I bring that up because of "Perhaps the poster (and also you) don't hold conditions like your parents' income to be a matter of luck". I find it questionable that you are speculating on my understanding of luck, because I have not said anything at all about my opinion on that topic. I think you're presuming that because I'm defending the Kiwiblogger then I share her opinions.

At this point maybe I should add this disclaimer: just because I'm critical of a paragraph of yours doesn't mean I don't like the blog! I've found some interesting things here. Your friend Stephen recommended the blog to me.

I would say that saying "My point is that I j...

2009-09-21T11:15:50.397+12:00

I would say that saying "My point is that I just don’t believe in luck" with respect to achieving financial success is functionally identical to saying that there are no such things as natural disadvantages, which again is pretty much identical to equality of opportunity. I'm not too sure what you're getting at.

Perhaps the poster (and also you) don't hold conditions like your parents' income to be a matter of luck - I would say that they most definitely are. In this respect I think at very least equality of opportunity is a definite consequence of saying that luck doesn't exist.

That said, the post isn't really supposed to be a response to this person, that's just a lead-in to the main idea of the (lack of) value of meritocracy.

A nitpick - I think you misrepresented the point m...

2009-09-20T21:42:38.897+12:00

A nitpick - I think you misrepresented the point made at Kiwiblog. You stated that she informed that "full equality of opportunity exists - the only reason you might be unsuccessul in life is because you're lazy."

The closest I can see to that is:
"I just don't believe in luck. When a person realises that they are in charge of their life and they are the one that gets to make the choices and decisions; then that is the moment that that person becomes powerful"

That's not the same claim. Sure, it's not very carefully worded, but I don't think you're invoking the principle of charity[1] when you transform it to your version.

(This is a personal annoyance for me. I'm a fan of Paul Graham's essay on How To Disagree[2], where he notes that to refute someone effectively, you probably have to quote them to prove that you're responding to something they actually said. I try to follow this unfailingly in my own writing.)

[1] http://en.wikipedia.org/wiki/Principle_of_charity

[2] http://www.paulgraham.com/disagree.html

I think Rawls is pretty clear about how he thinks ...

2009-09-08T13:25:47.460+12:00

I think Rawls is pretty clear about how he thinks the basic structure of society should be organised - but he also makes it clear that his is not a work of economics - it only says what the moral goals are to be achieved, rather than the best way to achieve those goals.

I am pretty sure Rawls is quite confident of his ideas, as he spent basically his whole life defending them.

Granting that he is as you trying to correct injus...

2009-09-06T23:31:20.760+12:00

Granting that he is as you trying to correct injustice, it is difficult to see how his principals might be tested or even how he believes them to be useful himself since he lays them out so removed from any real world activity. The sub- domains are left to be regulated "according to the nature of that thing" (tj 29) leaving no grounds to accept or reject any higher principals he outlines on any grounds. If he was convinced himself, the convincing would be integrated into his explanation of his political philosophy. As it is written, it appears desriptive of ideas he does not seem to own or attribute to any agent. This vague style is sure to allow for endless reinterpretations.

But take out the "+" before summer.

2009-09-02T20:31:07.012+12:00

But take out the "+" before summer.

There is some evidence that such figures are true ...

2009-09-02T20:30:30.777+12:00

There is some evidence that such figures are true - although the meaningness of happiness research should be called into question:

http://www.cis.org.au/POLICY/summer%2007-08/whittington_+summer07.html

Lol. He was in the Press today claiming that after...

2009-09-02T09:39:54.837+12:00

Lol. He was in the Press today claiming that after earning $25,000 a year peoples happiness 'plateaus'.

Thanks - I enjoyed that post. I'm not sure it&...

2009-08-28T14:54:10.093+12:00

Thanks - I enjoyed that post. I'm not sure it's more dogmatic - I might say more persuasively argued, with less sitting on the fence.

I've written a post on just these same questio...

2009-08-27T21:14:34.943+12:00

I've written a post on just these same questions over here; it's rather more dogmatic, and rather less theoretical—not the same thing as more practical—than yours though.

BK - thanks. You are quite right - that was obviou...

2009-08-25T12:19:21.777+12:00

BK - thanks. You are quite right - that was obviously an error from an earlier draft where I had the sentence the other way around... I've corrected it now.

Excellent post, although I suspect I'm saying ...

2009-08-25T11:51:51.442+12:00

Excellent post, although I suspect I'm saying that because I agree with it. One small quibble: your first sentence is rather confusing: by definition, the status quo *is* the "current situation."

Well firstly: It seems like you don't support...

2009-08-21T12:01:33.453+12:00

Well firstly:

It seems like you don't support a 'pure' meritocracy. That is, you're happy if it 'gravitates' towards it, rather than actually exactly being precisely meritocratic. Presumably then there will be a lot of people who are rich (or poor) not in line with their merit. How do you justify that?

Secondly, the market doesn't reward 'merit', unless you define 'merit' as 'wealth', in which case it's circular. The market rewards, by and large, marginal product. It's quite a jump from that to 'merit'. Merit along what dimension? Just because you value wealth-creating ability doesn't mean that's an objective standard of merit.

And there are heaps of examples where it doesn't even do that. What about people that find oil in their backyard? Or have both their legs cut off in an acident? It hardly seems like the market is rewarding these people consumate with their 'merit', by reasonable definition of it. Not to mention first-mover advantages, natural monopolies, etc. Also, what of gifts? Gifts from the 'meritorious' to the 'less meritorious' upset the meritocracy. Should we outlaw them?

Finally, the word 'erstwhile' means 'former'. I most certainly continue to exist as a pundit. And as you will have noticed when you wrote your comment, the space I fill on this blog is a pleasant creamy-brown colour.

Sorry, but I consider this to be an egregious stra...

2009-08-21T11:50:09.417+12:00

Sorry, but I consider this to be an egregious straw man argument. I have never seen "meritocracy" used in the sense in which it is being postulated here in order to knock it down. On the contrary, in theory an objective, rational society resulting from a truly free market will naturally gravitate toward rewarding merit. That market will, in fact, define what "merit" is. This other "definition" appears to be nothing but utter bunkum from erstwhile pundits with white space to fill and nought to fill it with.

-AleG

Yes. The fact that few are willing to concede posi...

2009-08-12T14:37:05.540+12:00

Yes. The fact that few are willing to concede positive fiscal externalities, which Time magazine commissioned a study on which showed cigarettes should be subsidised, suggests to me that most fiscal externality arguments are merely paternalism dressed in the language of ecnomics.

Sorry that link doesn't work, try this: http:/...

2009-08-12T09:06:27.900+12:00

Sorry that link doesn't work, try this:
http://defectiveequilibrium.blogspot.com/2009/07/why-government-should-lie-to-us.html

Thanks for that! I'm a little more amenable ...

2009-08-12T09:02:47.019+12:00

Thanks for that!

I'm a little more amenable to argument from fiscal externality than Crampton, at least in a theoretical sense - you can see my take on a possible Government response here. That doesn't quite cover your question, but Buchanan's argument is probably worth a whole new post, and probably a fairly dry one! Still, it might be fun.

It's also probably worth noting that a lot of things we might think have negative fiscal externalities actually have positive ones - smoking for example, at least given how heavily it's taxed.

Wikipedia, that Hayekian force in all its magnific...

2009-08-12T01:17:30.105+12:00

Wikipedia, that Hayekian force in all its magnificence, declares that:

"...Pigou is responsible for the distinction between private and social marginal products and costs. He originated the idea that governments can, via a mixture of taxes and subsidies, correct such perceived market failures — or "internalize the externalities".

Unsure, but I think it was Pigou. Just majorly di...

2009-08-12T01:16:47.824+12:00

Unsure, but I think it was Pigou.

Just majorly disappointed it was not Coase. Would have prevented a whole lot of rubbish.

What do you know about fiscal externalities? Crampton linked to an interesting paper on why they do not matter from an efficiency perspective by Buchanan, but its complexity was beyond my reach.

Surely, though, if you're God, you can just ki...

2009-08-11T19:09:12.158+12:00

Surely, though, if you're God, you can just kill everyone with a big fuck-off meteor and then make everyone believe some random guy was responsible? Quick, easy, painless, no blame at your feet. After all, as God, you can do anything - surely that includes altering memories.

Unless, of course, you're a God who doesn't like doing things simple.

Matt: My fault, I wasn't specific. What if I s...

2009-08-11T16:07:25.907+12:00

Matt: My fault, I wasn't specific. What if I support a carbon tax in New Zealand, whether or not it happens overseas? Or what if I just impose costs on myself to be more carbon-neutral?

No. You would support an enforced co-operative so...

2009-08-11T14:51:11.689+12:00

No.

You would support an enforced co-operative solution to avoid the pareto inferior nash equilibrium.