Equilibrium schmequil-schmibrium

A comment by `Zamfir' at crooked timber (via Krugman) jumped out at me:

Lots of mechanics and other physical processes are modelled as equilibria, or quasi equilibria, even when people know that it is not correct. That's typically the opposite of purity-obsessed scholastism, it's more an engineering fix to get bad results that are still better than no results. You multiply the results by an out-of-the-blue correction factor for `dynamical effects', and hope for the best.

Contrast with Philip Ball:

[Economic] models take no account of real human behaviour, which is far too messy to permit any theorems that can be proved rigorously. Economic models become citadels of crystalline mathematical perfection that would shatter if touched by the harsh rays of reality.

(He does immediately go on to say "it would be grossly unfair to suggest that this describes everything that happens in economics, let alone in all social sciences... But it is widespread".)

His target isn't specifically the use of static equilibrium assumptions in economic models, but the view Ball gives is spot on for how most agent-based modellers and complexity thinkers view it. ABM and complexity are seen as "a pioneering break from a moribund Newtonian worldview" (Manson 2001 p.412), obviously superior to those silly static equilibria. Usually they will argue that's the case because it's `more realistic'. Hmm - so's Call of Duty 4, I'm not sure that makes it a better model of anything.

Slightly less flippantly: the models are never the problem. You try what you can and throw it at the wall of reality. Some things stick. Or, as Einstein put it, talking about physics: it's

"a logical system of thought which is in a state of evolution, whose basis cannot be distilled, as it were, from experience by an inductive method, but can only be arrived at by free invention. The justification (truth content) of the system rests in the verification of the derived propositions by sense experiences. The skeptic will say: `it may well be true that this system of equations is reasonable from a logical standpoint. But it does not prove that it corresponds to nature'. You are right, dear skeptic. Experience alone can decide on truth." (Quoted in Kaldor 1972 p.1239.)

Like I say: try what you can, throw it at reality. I'm not saying I'm any good at this - I have a definite tendency to prefer making little pretend worlds - but the point is, there's nothing intrinsically wrong with using static equilibrium as an assumption. Zamfir's quote made me happy thinking about it being used in a practical manner all over the place. In some situations it's useful, in others less so, in some it makes no sense at all. The point is how it's used (already rambled about that at some length).

I have this notion there's a direct parallel to `emergence' in agent modelling. ABM is all about interaction: that's its basic structure and its main strength. The use of physics ideas in classical economics is its strength, but it's also what makes it brittle. The same is true for ABM. To be useful, you want your method to be able to help examine any number of different questions - but in ABM, it's easy to end up defaulting to Epstein's `if you didn’t grow it, you didn’t explain it' (Epstein 2006 p.xii) and thinking you've answered something. Di Paolo and Bullock nail that one: conflating emergence and explanation means whatever you were wanting to look at has been `brushed under the carpet of emergence' (Di Paolo et al. 2000 p.8).

This is somewhat reminiscent of the final deathstar scene in Return of the Jedi: ABM ends up nearly becoming the thing it hates most: wedded to an obsession with realism, it can no longer experiment or pursue a diverse range of questions. Actually, that didn't sound anything like Return of the Jedi.

Cameron climate fudge is hugely dangerous

Cameron at a press conference today:

I think the point I would make is whatever your view about this issue, clearly we have had and are having some pretty extreme weather. So whatever your view about climate change, it makes sense to mitigate it and act to deal with that weather. That is the view of the whole government.

Sounds a little like Mike Hulme's recent take (discussed at P3):

What matters is not whether the climate is changing (it is); nor whether human actions are to blame (they are, at the very least partly and, quite likely, largely)...

It doesn't matter whether humans are to blame? Makes sense to `deal with the weather' and not worry about anyone's views?

What idiocy. If humans weren't causing it - if these were just natural variations - there would be no requirement to cut carbon (or other GGHs) and we could concentrate funding on resilience-building. Decarbonising our global infrastructure is a gargantuan challenge - not an impossible one, but it requires all parties to understand the science. Without that basic agreement, we're going to umm and arr our way into a climate shitstorm.

It's hard to say from that quote whether Cameron is just fudging the word `mitigate' (which would mean actually dealing with the carbon issue) or was just blathering. I suspect the latter, given he's comfortable with appointing a class A climate Gish galloper to the post of environment secretary.

But his line of argument is hugely dangerous: `look, chaps - we all have different views, but let's just concentrate on dealing with the weather right now shall we?' We can persist with dealing with the symptoms for a while, but in the end if we don't address the underlying cause, the disease will overwhelm our ability to cope.

Superhuman passivity

How dare you, George? I've been writing some highly acerbic tweets, I'll have you know. h/t Susan Anderson at P3.

"We appear to possess an almost limitless ability to sit back and watch as political life is seized by plutocrats, as the biosphere is trashed, as public services are killed or given to corporations; as workers are dragooned into zero-hour contracts. Though there are a few wonderful exceptions, on the whole protest is muted and alternatives are shrugged away without examination. How did we acquire this superhuman passivity?"

Dream

A couple of oldies. Transcripts nabbed from here and here, with some corrections.

XKCD:

When did we forget our dreams? The infinite possibilities each day holds should stagger the mind. The sheer number of experiences I could have is uncountable, breath-taking, and I'm sitting here refreshing my inbox. We live trapped in loops, reliving a few days over and over, and we envision only a handful of paths laid out ahead of us. We see the same things each day, we respond the same way, we think the same thoughts, each day a slight variation on the last, every moment smoothly following the gentle curves of societal norms. We act like if we just get through today, tomorrow our dreams will come back to us.

And no, I don't have all the answers. I don't know how to jolt myself into seeing what each moment could become. But I do know one thing: the solution doesn't involve watering down my every little idea and creative impulse for the sake of some day easing my fit into a mold. It doesn't involve tempering my life to better fit someone's expectations. It doesn't involve constantly holding back for fear of shaking things up.

This is very important, so I want to say it as clearly as I can: FUCK. THAT. SHIT.

Waking Life:

Hey, are you a dreamer? I haven't seen too many around lately. Things have been tough lately for dreamers. They say dreaming's dead - no one does it any more. It's not dead, it's just been forgotten. Removed from our language. Nobody teaches it, so no-one knows it exists. The dreamer's banished to obscurity. I'm trying to change all that and I hope you are too - by dreaming every day. Dreaming with our hands, dreaming with our minds. Our planet is facing the greatest problems it's ever faced. Ever. So whatever you do, don't be bored. This is absolutely the most exciting time we could have possibly hoped to be alive. And things are just starting.

UK recession recovery worse than great depression

Following up on the recent OBR / Osborne stuff covered by Simon Wren-Lewis, Krugman does that bloody typical liberal thing of looking at the actual data. There's a lovely comparison of all recent UK recessions, with the recent one bumping along the bottom. As he says, it's a Three Stooges approach to economic policy:

Curly is seen banging his head against the wall; when Moe asks why, he replies, “Because it feels so good when I stop.”

A gradual increase in the consuming power of the natives

A quote from the general introduction to The Resources of the Empire, from 1924, by Sir Eric Geddes. It strikes me as a stark example of the ability to meld cold economic dominion and a sense of worthy purpose without breaking a sweat. He wonders, in a post-World War One situation, how to develop Britain's markets:

"[In tropical climates], any substantial increase in the white population is hardly to be expected, since the bulk of the work of the country must in such climates always be done by the native races. The purchasing power of these territories can therefore only be developed by the steady development of their material resources. This, of course, means recourse to British capital, if Great Britain is to get the greatest advantage from the development and if our Imperial ideal is to be fulfilled. In our present economic condition [post-WWI] this, of course, presents some difficulty, but if we can carry out this programme, there will follow a greater demand for British plant, machinery, shipping, rolling stock, etc., as well as a gradual increase in the consuming power of the natives."

Most businesses fail; high failure rate correlates to high innovation; attacking green investment failure dumb.

Via this Gruaniad comment, this article listing `faltering or bankrupt' US green companies that have received government money.

Krugman provides the basic riposte: "because the private sector never ever puts money into ventures that end up failing." But I thought it worth throwing in a couple of things from here - from Albert Bravo Biosca's `growth dynamics' presentation. The data is from a UK pespective but compares to the US and Europe.

1. Of UK businesses that started in 1998, ten years later only 37.5% survived. Only a very small percentage had anything like strong growth in that ten years.

2. A "5% increase in share of static firms = 1% lower annual TFP [technological frontier of production] growth" . So more stable firms in aggregate means less innovation overall.

So: businesses fail - the majority, in fact. And high failure rates actually correlate to higher innovation overall. The presentation also has data showing Europe to be more static than the US too - there is thus both higher churn and higher innovation overall. Creative destruction indeed.

Of course, people citing failure of government-supported firms generally oppose government intervention of any kind. But in order to make the case they want to make, they'd have to demonstrate those investments are always worse than comparable private sector support. They'd also need to show some statistically significant difference of failure rate between green tech and other business investment. Given how many firms fail, though, a strategy of "listing failed firms" is pure cherrypicking. Shock.

As Ha Joon Chang's Bad Samaritans explains in some detail (echoing List) governments have often provided support and a degree of protection to fledgling industries. The trick is to strike a balance between that and propping up unsustainable organisations (or deciding that some service isn't suitable for the private sector. I know, some people don't really understand those last six words...)

The rest of the presentation is well worth looking through for US/Europe comparisons and some great data-driven contradictions of common business memes (e.g. there are no `high growth sectors'; high growth is a stage some businesses go through; most high growth is from firms over 5 years old...)

Hope is an axe you break down doors with

A quote from Rebecca Solnit via Caroline Lucas talking at the closing session of the Tyndall Centre's radical emissions reduction conference:

Hope is not a lottery ticket you can sit on the sofa and clutch, feeling lucky. It is an axe you break down doors with in an emergency. Hope should shove you out the door, because it will take everything you have to steer the future away from endless war, from the annihilation of the earth's treasures and the grinding down of the poor and marginal... To hope is to give yourself to the future - and that commitment to the future is what makes the present inhabitable.

Decoupling growth from resources: scary numbers via Jorg Friedrichs

From Jorg Friedrichs' The Future is Not What it Used to Be (p.3-4):

For the sake of the argument, assume that world economic output continues to grow by 3 percent per annum. This implies that global GDP will double within twenty-three years, and quadruple within forty-six years. It also implies that, a century from now and other things being equal resources consumed and pollutants emitted will have increased by a factor of more than sixteen. It is easy to see that such enormous growth would not be sustainable. The obvious objection is that resources consumed and pollutants emitted can be reduced by efficiency gains and other forms of technological progress. So let us assume, again for the sake of the argument, that resource intensity and thus pollution can be reduced by a fairly ambitious 50 percent. Even so, under the above scenario, a century from now the world economy would consume eight times as many resources and emit eight times as many pollutants as today.

To continue the thought experiment, let us demand that the world economy should grow for a century by 3 percent per annum, but without any increase of resource consumption and pollutant emissions. By how much would it be necessary to abate the resource and emission intensity of the world economy (resources consumed and pollutants emitted per unit of GDP)? The answer: by a staggering 94.8 percent. To reconcile a century of 3 percent growth with the more ambitious goal of reducing resource consumption and pollutant emissions, the abatement of resource and emissions intensity would have to be even more drastic.

New feudalism?

Way back in the grimey fog of history (2001, I think), a lecturer of mine mentioned new feudalism. It's an idea reflected in the neon-drenched sci-fi of Gibson and cyberpunk before that. It meshed well with dystopic futures (and presents) like those described in Monbiot's Captive State, as well as my old discipline's natural focus on the nature of the state and sovereignty.

An anecdote in this piece by David Simon reminded me of those arguments, and of the occasional old flicker of dystopic visions I get (or possibly utopian, depending on one's particular view of corporations). He's talking about how US health care politics plays out in people's minds:

"The argument comes down to: `Goddamn this socialist president. Does he think I'm going to pay to keep other people healthy? It's socialism, motherfucker.' What do you think group health insurance is? // The treatment comes because you have enough people in your law firm so you're able to get health insurance enough for them to stay healthy. So the actuarial tables work and all of you, when you do get sick, are able to have the resources there to get better because you're relying on the idea of the group.

"When you say, OK, we're going to do what we're doing for your law firm but we're going to do it for 300 million Americans and we're going to make it affordable for everybody that way. And yes, it means that you're going to be paying for the other guys in the society, the same way you pay for the other guys in the law firm... Their eyes glaze. You know they don't want to hear it. It's too much. Too much to contemplate the idea that the whole country might be actually connected."

But maybe it's not about anyone's view of a whole country being connected. It might well just be what people view as acceptable collectives. Here in the UK, the European Union abjectly fails to garner that kind of sense of collective purpose, but we are generally more favourable to viewing the country as connected (and, generally, value the NHS as a reflection of that connection).

Perhaps the idea that healthcare and other life benefits should be provided by the firms we work for is simply more politically acceptable to many than expecting the US government to do it. One might speculate on reasons. What makes a certain kind of collective sovereignty, felt rather than theorised, more-or-less function in the UK, in a bimbling fashion? (Or, England, or... um.) Would an EU-wide health insurance scheme face the same problems Obama has? On the face of it, America clearly has a massively more developed collective sense of itself than Europe does - so what's going on?

At any rate, any new feudalism of corporate fiefdoms would miss most: the majority of businesses are still SMEs, much less able to provide large-scale cover. That still looks a fair bit like both David Simon's vision of two Americas, as well as Gibson's worlds of towering corporate castles hugged at ground level by an excluded underclass.

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