Sunday, 26 February 2017

Sen, Szpilrajn & damaging Democracy.

Amartya Sen's Nobel Prize was for two very different things- one was his theory of famines which was wholly and mischievously wrong and the other was his well publicised belief that  'Democratic commitment' and 'Public Reason' have been greatly advanced by a theorem which either assumes P=NP (i.e. is ignorant) or else is based on a stupid and barefaced lie. 

This theorem (Arrow's Impossibility result) implies that if everyone prefers to have a deterministic Vote aggregating system which everybody agrees delivers results that are the 'best' in some objective, value-free, sense, though they may not be able to at all 'quickly' work out all the steps by which the result was arrived at, (i.e. there is only NP solvability) then, if this system were implemented, it wouldn't be Democratic at all.  What we would actually have is a Dictatorship!

 This theorem is easy to prove iff we define 'Dictator' as a guy who wants and knows what is best for Society- perhaps by some non deterministic procedure, or superior Ethical intuition or 'Divine' inspiration- and therefore makes the same choices as the ideal Bergsonian SWF or Perfect Voting rule. Clearly, the theorem is now a tautology- it poses no scandal unless we think P=NP in which case it is a puzzle as to why a deterministic SWF can't get the same result as a possible voter able to use non-deterministic methods. If, as is likely, P is not equal to NP, there is no scandal- just a tautology of a misleading and disingenuous kind.

Still, one can't deny, this is a very wonderful theorem because it can be also be used to prove the impossibility of my neighbour 's cat iff we define the tabby in question as an Arrowvian method of aggregating preferences which must satisfy certain 'seemingly reasonable' conditions specifically chosen so that the thing is impossible because one of the conditions is not reasonable at all but rather is utterly mad. Of course, we could achieve the same end just by lying. But where's the fun in that?

Sen's greatness lies in his deployment of certain bien pensant caveats which suggests that considerations of Social Welfare exceed economics and involve philosophical issues which may cash out as value judgements, or Samuelson type 'ethics', but not yet, never yet. Instead we should indulge in a type of 'Deliberative Democracy' which never decides anything, preferring instead to just go on repeating platitudes couched in specious arguments and supported by bare-faced lies.

However, if philosophical issues really have salience- i.e. if some process of Public Reason can change Preferences, or motivate meta-preferences, in a manner such that, under ideal- perhaps Rawlsian- conditions, everybody would want the same outcome for Society- then, there could be a Platonic Guardian or Benthamite Oracle or Newcombe Predictor who arrived at the same conclusion independently.

Since, by definition, such a person would be stigmatised as a Dictator if included in the voting process- and Arrow doesn't allow us to exclude such a person- Arrowian Non-Dictatorship would not be a desirable property for a Collective Choice mechanism to boast. Why? Because it specifically bars the sort of outcome which would make it otherwise desirable. 

Had Sen simply said 'Arrow's SWF is not at all isomorphic to a Bergson-Samuelson type SWF and proves nothing except that if you define something which aint Dictatorial as Dictatorial all you have done is utter a stupid lie' then he wouldn't have gotten to an Academic position where he could tell stupid lies about the true cause of the Bengali famine without being laughed at in Oxford or spat upon in Calcutta.

Perhaps Sen couldn't, in good conscience, say any such thing. Maybe, he genuinely thinks Arrow's result implies something very important about the nature of Democracy- viz. that it is shite and so we should all continually talk shite coz that's Democratic and Civilised people are democratic so just get with the program and start talking shite immediately you great big Bengollywog you. Don't let the side down. The World is watching.

He wrote- 
The informational foundation of modern social choice theory relates to the basic democratic conviction that social judgements and public decisions must depend, in some transparent way, on individual preferences, broadly understood. 

If Social Choice has a modern, as opposed to a moribund, incarnation, its informational foundations would be based on computational complexity theory- whose origins postdate Arrow's seminal paper and which was only formalised after Sen's canonical work in the area. Thus, it would not make stupid implicit assumptions like P=NP.

What about the notion that 'Social judgements must depend on individual preferences' ? 
Is that what a truly modern social choice theory would counsel? 

Nope. To reduce vulnerability to predators and parasites, human beings should always try to baffle any preference revelation mechanism. Indeed, not knowing one's own preferences is a safer strategy- which is why Evolution has ensured that there is no Momus window into the heart even for one's own ego.
Similarly, it is better to have Social Judgements which are robust to moment to moment changes in preferences so that the Regulatory or Normative environment is predictable and reduces Uncertainty in formulating long term plans.

Since, Newcombe type problems have salience in many Social and Economic processes, Preference falsification shouldn't be cognitively dissonant- and, indeed, the evidence is, it isn't. Pedagogues who write books are constantly astonished that people are inconsistent. They may support Liberty for themselves but not for others whom they exploit. Such pedagogues attribute causality to soi disant Great Men who wrote some pamphlet long ago descrying this inconsistency. However, such people were dismissed as antagonomic cranks who were either guillotined or condemned to the Bastille of Pedagogy or whose heads were lost to the community by some self-selective process of impressment into the condition of being the galley slave of a Scholarship long since run aground.

Nobody does not know, it is cognitively costly to have rational, or even alethic, preferences over all Social options though 'self deception' in this respect is an Evolutionarily Stable Strategy. Indeed, for analogous reasons, regret minimisation would militate for big saltations or  discontinuities in Preference profiles. Meta-preferences should link to Tardean mimetic rules of a certain sort so that there is canalistion and capacitance diversity.

Ultimately, we have to recognise Preferences are just metaphysical tosh- like Utility functions. Social judgements shouldn't be based on them. Rather, there are canons specific to Judgement that collective Jurisprudence too should adhere to. The same point may be made about Public Decisions. To make them dependent on individual preferences is stupid. Rather they should conform to the canons specific to Public Administration. This is not to say that Information aggregation isn't important. It is, but more important yet is that Public Decisions are free of ambiguity, Agenda control problems, race hazard or concurrency problems and so forth.

Arrow's resurrection of Condorcet in the early Fifties has a certain Historical and Cultural significance. No doubt, back then, there was some point to pretending that mathematical logic could serve an ideological purpose. After all, at that time, Command Economies were spreading faster than Market economies. In the Sixties, following China's humiliating defeat of India, more and more ex-Colonies were choosing to go down the 'One-Party' path.

Those days are long gone. The Berlin Wall fell before Sen got his Nobel. But the Hayekian writing on the wall was clear to see by the beginning of the Eighties- i.e. the last time Arrowvian Social Choice Theory had a pulse. Since then, Chichilnisky and Saari have given us a notion of 'topological dictators' where utility functions are continuous. but the interpretation of the notion has nothing to do with 'Dictatorship' as opposed to Banzhaf Coleman type voting power. 

Currently, Democracy and the Rule of Law are sufficiently attractive in their own right. Mathematical logic can be excused the duty of telling stupid lies in this respect. Why? Rather than prove the existence of God, as in Godel, or the Hitler in the ballot box, as in Arrow, it has genuinely alethic, and therefore useful, things to do.

Sen doesn't. He is still saying shite like this- The emergence of this democratic instinct relates closely to the ideas and events that surrounded the European Enlightenment. Even though the pursuit of democratic social arrangements drew also on various earlier sources and inspirations, it received a definitive delineation and massive public acknowledgement only during the Enlightenment, particularly - but not exclusively - during the second half of the eighteenth century, which also saw the French Revolution and American independence...
Good to know that darker skinned people lacked any such 'democratic instinct'.
Obviously, darkies belong to a different species.
That's why they have different 'instincts'.

However, History teaches us that White people, too, lacked such instincts.

There never has been any, not utterly evanescent, polity where 'Social Judgements' and 'Public Decisions' were not 'protocol bound', subject to 'artificial reason' and wholly robust to changes in individual preferences save by Executive action whether ab ovo legitimate or retrospectively made so. Condorcet perished along with his chimeral mathematical schemes, while the seed of the lawyer John Adams went from strength to strength.

From time to time, a polity may decide that a particular Social Judgement or Public Decision should be made in a way which transparently depends on individual preferences. However the power to make that decision is not itself dependent on 'individual preferences'. It is dependent on authority granted by due process of Law. Whatever the outcome of any Social Choice process- whether it involve preference aggregation or not- it remains the case that it is subject to legal challenge and Judicial review. That's why, contra Sen, a Paretian illiberal is impossible- if 'self ownership' is a Liberal value. Even if everyone wants something abolished- e.g. my right to write this shite which I'd much rather not write so as gain greater utility by whining about the great injustice I've suffered by not being allowed to ventilate my impartial ignorance on this and every other issue- it still can't be abolished save if the Rule of Law is usurped by an arbitrary Dictatorship of some sort.

In any case, the fact is, no Direct or 'Deliberative' Democracy has ever existed.
There has only ever been either the Rule of Law or a Dictator whose word was such.

It is a separate matter that the dynamic benefits gained from the power to raise taxes at low cost of coercion have worked to extend the franchise in certain types of market economies. However, if public goods vital to the continuance of the polity can be paid for some other way- e.g. by a natural resource endowment- there is no biologically ordained or culturally determined 'democratic instinct' in the background militating for effective Democracy- no matter what the Constitution requires. No country has achieved or sustained Democracy without taxing its voters. Some States have greatly enriched their subjects but, so long as those subjects aren't paying for Public goods- no effective, as opposed to cosmetic, self-sustaining Democratic transition has occurred. 

That's why Putin's Russia is the way it is. It's also why Modi is trying to get the poor into the tax/transfer net. He knows India doesn't have a natural resource endowment. The only way kids as poor as he was can come up is if they pay the taxes which fund their civilizational rise. 

'In contemporary social choice theory, pioneered by Kenneth Arrow, this democratic value is absolutely central, and the discipline has continued to be loyal to this basic informational presumption. For example, when an axiomatic structure yields the existence of a dictator as a joint implication of chosen axioms that seemed plausible enough, this is immediately understood as something of a major embarrassment for that set of axioms, rather than being taken to be just fine on the ground that it is a logical corollary of axioms that have been already accepted and endorsed.

No axiomatic structure yields the existence of a dictator 'as a joint implication of chosen axioms'. Arrow defined a possible voter who always agrees with the Bergsonian SWF as a dictator. He arbitrarily restricted the SWF to the class of deterministic functions but allowed profiles to be non-deterministically verifiable solutions to the SWF. Clearly there is a P/NP type problem here and if Social Choice theory hadn't died long ago this would be the focus of research. Arrow's method doesn't make any stipulation about the time class of solutions so it has no real world application.  But for that same reason, we know it to be tautological nonsense featuring semantic dishonesty. His 'Dictator' arises from one of his axioms. It didn't arise from any combination of the others. It is independent, utterly arbitrary, and thus itself quintessentially 'Dictatorial'.

By Dictator, in ordinary English, we mean a guy who has power over others. What Arrow is describing could be a mute or accidental Oracle who has no power. Alternatively, his 'Dictator' could be a Judas Goat or even, as D.G.Saari suggested, a sort of social chameleon like Woody Allen in Zelig

If there is a Dictator in the common acceptation of the word, it would be a foolish waste of time to aggregate preferences or stipulate for 'independence of irrelevant alternatives' or 'Pareto optimality' or anything else. Only one guy matters. Talk of voting systems is stupid.

Did Sen really believe that Arrow's Dictator had power over others? Or did he not understand that the word 'Dictator' in English means a guy like Hitler or Stalin as opposed to someone who knows and votes for what is best for Society but who has no other power?

 We cannot begin to understand the intellectual challenge involved in Arrow's impossibility theorem without coming to grips with the focus on informational inclusiveness that goes with a democratic commitment, which is deeply offended by a dictatorial procedure. This is so, even when the dictatorial result is entailed by axiomatic requirements that seem reasonable, taking each axiom on its own.
A guy votes for a set of things. It turns out that the SWF chooses the same set of things. The guy didn't make the SWF choose those things. Where is the 'dictatorial procedure'? Why should anyone take offence? The thing could have happened by chance. Or it might result from this guy being genuinely more altruistic and knowledgeable than anyone else. It is political correctness gone mad to label someone wiser and better than others as a Dictator simply because there is an objective reason to think that person should be the Dictator. It's like taking offence at 'Brown privilege' on the basis that Brown people could have established hegemony over White people and therefore they actually did so and are thus guilty of a terrible crime and should just shut the fuck up while we moan about the horrible oppression they hypothetically could have inflicted. 

What should an altruistic and omniscient voter do to avoid the charge of 'Dictatorial procedure' under an ideal voting system? Should he abstain from voting? But then 'informational inclusiveness' and 'democratic commitment' would go out of the window! We can't exclude a guy from voting because his vote is virtuous and well-informed. We have to let him vote even if he is stupid and vicious because that's 'informational inclusiveness'. Similarly 'democratic commitment' means feeling you have a duty to vote- even if you are smarter and more altruistic than others. 

Now, it may be, that Arrow's result has some occult, culturally specific, meaning which has to do with the refugee Ashkenazi Anarchist tradition- perhaps Arrow was mathematicizing Rudolf Rocker's (who was not himself Jewish) 'Nationalism & Culture' as an argument against any sort of 'Organicist' Bergsonian  SWF- and maybe, in line with some hints from Aumann, this has deep roots in Sanhedrin judicial hermeneutics such that even the 'bat kol'- the voice from Heaven revealing Divine Truth- must be excluded from a particular Social process of Deliberation. 

Still, we must admit, Hindu India has no similar tradition. If Sen was enraptured by Arrow's theorem, it was because he was too stupid to understand or too dishonest to acknowledge what is universally meant by the word 'Dictator', not because there existed some deep aporia in the Bengali collective psyche, or some shibboleth in its cultural heritage, or some repeated trauma in its political history, analogous to a certain strain in Ashkenazi Anarchism in the troublous first half of the Century.

True, both the antagonomic or ontologically dysphoric, perpetually kvetching, Yiddish Maven and the endlessly verbose, pointlessly argumentative, Bengali Babu were considered a little too big for their boots but, the fact is, times have changed. The Jews have done very very well politically and economically, and, truth be told, transformed the Sciences and the Arts. By contrast, Bengal has stagnated, it has gone backwards. Sen's Presidency College, for purely political reasons, has been in a state of continuous decline longer than I've been alive.
Bengali public discourse has gotten stupider and stupider, less and less alethic, more and more gestural, yet, because it has never bottomed out as a scurrilous Socioproctology but rather kept up a shabby genteel pretence of rationality and a veneer of Western scholarship, it retains a certain meretricious fungibility.

Thus, Sen could still have helped turn things round a little after he got his Nobel.
He chose to go in the other direction.
Every Bengali knows that Bangladesh was a democracy in 1974.
1.5 million died in a terrible famine.
In 1979 and 1984, Bangladesh was more of a dictatorship. Yet famine was averted.
This didn't stop Sen from idiotically bleating 'Famine can't happen in a Democracy'.
Aren't Bengalis human beings?
If they elect a Government in free and fair elections- why can't they be called a Democratic people?

Sen and Nussbaum's contribution to 'Deliberative Democracy' is the tolmema of telling stupid lies.

This does not mean all academics are worthless or that they should be excluded from any forum where grown-ups talk. Since discourse- public or otherwise- has no means to rule out a priori the possibility that it mightn't be utterly worthless, Arrowvian Dictators, incarnating a Bergsonian SWF, we may always have with us. However, they can't silence Sen-tentious drivel. So such Arrowvian Dictators are useless.

True, if you are really interested in the informational foundations of Economic or Political mechanisms, Arrow's theorem does open doors. It helps you to see the homology between preference revelation problems, agenda control problems, concurrency problems, problems of too much or too little preference diversity, problems of 'dynamic turbulence', hysteresis and ergodicity, Signalling, Coordination and Evolutionary Game Theoretic problems, problems relating to computational complexity classes- all sorts of problems become mutually illuminating. However these problems motivate research programs which increase 'efficiency' in the use of resources. They yield 'value free' objective agreements of a type that motivate the notion of a Social Welfare Function. They aren't a pure waste of time. Thus, they are 'Dictatorial' in an Arrowvian sense, more particularly as extended by Sen. But the corollary is- Democratic 'inclusiveness'  requires we shun such work. Better tell stupid lies instead.

Now to dispose of Sen's proof of Arrow's theorem.
 Adopt a convention such that any Arrowvian Dictator is deemed to have reversed his preferences for the purpose of aggregation. (Alternatively, allow the SWF to be non-deterministic while preserving 'anonymity') Then everything will be hunky dory. 
Proof of the General Possibility Theorem: By the Pareto Principle the set of all individuals is decisive. By the Contraction of Decisive Sets, some proper subset of all individuals must also be decisive. Take that smaller decisive set, but some proper subset of that smaller set must also be decisive. And so on. Since the set of individuals is finite, we shall arrive, sooner or later, at one individual who is decisive. But that violates the Non-dictatorship condition. Hence the impossibility. 

If everyone agrees on something, our Dictator (who knows and wants what everybody will later say was the best Collective decision but who is deemed to reverse his preference) will be the single vote against it. The Pareto Principle has no purchase. 'Contracting the decisive Set' is fruitless. There is no impossibility result because our omniscient and benevolent Sage is deemed to have reversed his preferences. Thus he doesn't fit the criterion for an Arrowvian dictator.

Stuff like this is puerile but then Professors are paid to prolong neoteny.
Economics, at least in India, faced a Credentialist crisis.
Too many graduates chasing too few bureaucratic berths.
Lectures on this type of shite served a warehousing function.
It seems obvious, now, that Sen's contributions to Econ. were either senseless or self-defeating. Still, from a narrowly Academic perspective, since Arrow himself went through Sen's 1970 'Collective Choice & Social Welfare', it is a canonical work. 

Kaushik Basu remarks that the Delhi School of Economics (this was in the economically stagnant and deeply disillusioning Sixties) had become a centre for Social Choice theory- or rather for such cowardly Careerism as chose to instrumentalize that mendacious availability cascade so as to shirk all Social Responsibility or Patriotic Duty and high tail it for Greener Pastures- and that he himself, as a graduate student at the LSE was asked by Prof. Morishima whether he intended to specialise in 'India's subject'- i.e the type of Econ which kept Indians malnourished while Japan rose and rose.

By the early Eighties, Social Choice- always useless- was clearly dead and so Basu and his ilk flourished in some equally arcane but less obviously inutile field.

Meanwhile Sen's own approach- his version of 'public discourse'-  was increasingly seen to be part of the problem because it made policy space multi-dimensional and thus gave salience to 'agenda control' as predicted by the McKelvey Chaos theorem. Put bluntly, this meant that playing the 'Equity' card was not proof of higher Ethical standing but just part of a corrupt rent-seeking racket or a bureaucratic buck passing strategy. Hurwicz's Mechanism Design, however, could continue to burgeon but Philosophy's intrusion into the Economist's domain merely added noise to signal. Sen himself was seen as a well meaning but ineffectual Mother Teresa- a figure to be venerated not emulated. Pakistan's Dr. Ruth Pfau- a trained Doctor specialising in leprosy- on the other hand, is a nun whose medical work is valuable in itself. Nobody would compare Sen to Dr. Pfau. But then Pfau isn't eligible for a bogus Nobel.

Why did Sen, a patriotic Indian who felt hurt by the suffering of the poor, end up championing failed policies and telling stupid lies? He wasn't really a Communist- indeed, he appears to be a Classical Economist living down a Benthamite predisposition. Why could he not 'speak truth to power'?

Perhaps Sen- as an undergraduate at Presidency didn't understand the Tarskian background to Arrow's theorem when he first chanced upon it. It cast a glamour upon him because he wasn't up to speed- few were, back then- on mathematical logic. Essentially, Arrow was doing something like Kripke (1975) who showed that a formal Language can contain its own Truth Predicate but in a manner that doesn't defeat Tarski but rather illuminates his result. Similarly, Arrow's reckless disregard for the truth in using phrases like 'Non-Dictatorship' or 'Social Welfare Function' is what gave his theorem its seemingly magical property. The Tarskian truth remains that there may be some non-deterministic, ineffable, procedure outside the Language- it may be in its meta-language- which could incarnate as an Oracle function within it- but we couldn't prove, for any given case, this was so. Thus Arrow's Non-Dictatorship might be like a restriction on a non deterministic Turing machine or oracle within the set of preference profiles and thus may be of continuing interest, though this is not something the extant literature has concerned itself with.

The blog 'a fine theorem' has a well researched article on Arrow from which I quote- 
'The usual story is that Arrow’s work on social choice came out of his visit to RAND in 1948. But this misstates the intellectual history: Arrow’s actual encouragement comes from his engagement with a new form of mathematics, the expansions of formal logic beginning with people like Peirce and Boole. While a high school student, Arrow read Bertrand Russell’s text on mathematical logic, and was enthused with the way that set theory permitted logic to go well beyond the syllogisms of the Greeks. What a powerful tool for the generation of knowledge! His Senior year at CCNY, Arrow took the advanced course on relational logic taught by Alfred Tarski, where the eminent philosopher took pains to reintroduce the ideas of Charles Sanders Peirce, the greatest yet most neglected American philosopher. The idea of relations are familiar to economists: give some links between a set (i.e, xRy and yRz) and some properties to the relation (i.e., it is well-ordered), and you can then perform logical operations on the relation to derive further properties.'

... A great theorem due to the Polish mathematician Szpilran, and I believe popularized among economists by Blackwell, says that if you have a quasiorder R that is transitive, then there exists an order R’ which completes it. In simple terms, if you can rank some pairs, and the pairs you do rank do not have any intransitivity, then you can generate a complete rankings of all pairs which respects the original incomplete ordering. Since individuals have transitive preferences, Pareto ranks are transitive, and hence we know there exist social welfare functions which “extend” Pareto.
The Szpilrajn extension theorem, which I believe Sen brought to Arrow's attention and which, perhaps, motivated the latter's admission that he hadn't really killed off the Bergson SWF, depends on the 'Axiom of Choice' or equivalently 'Zorn's lemma' or 'the well-ordering theorem'. Even if we have no philosophical objection to this (i.e. we don't mind 'Banach-Tarski type weirdness or the manner in which any deterministic partial order is magically extended, perhaps by some non deterministic process, into a well-ordered set or continuous utility function) it is still the case that the sort of problems which it is useful for Economist's to work on- like the 'reverse game theory' that is mechanism or auction design- fall within the ambit of Friedman's 'Reverse Mathematics' project. Wikipedia says this approach 'starts with a framework language and a base theory—a core axiom system—that is too weak to prove most of the theorems one might be interested in, but still powerful enough to develop the definitions necessary to state these theorems. ...
'For each theorem that can be stated in the base system but is not provable in the base system, the goal is to determine the particular axiom system (stronger than the base system) that is necessary to prove that theorem'
Natural language discussion- e.g. the Socratic dialogues- proceeds in this manner. Embedding Social Choice in a 'Reverse Mathematics' Research project means there is no discontinuity between 'Philosophy' and 'Economics'. Policy space doesn't become multi-dimensional. There is no problem with Agenda Control.
Similarly, in Linguistics, the Chomskian notion that an 'i-language' exists- i.e the opinions of educated native speakers re. correct usage can be collected and systematised so an 'ideal' 'intensional' language is established as the proper object of study such that something like 'ECP' violation becomes as serious a scandal as CPT violation in Physics- this notion isn't really a step forward. It is a chimera, a mirage. It hasn't raised Language to the level of Physics. Rather it has made Syntax independent of Semantics. An i-language may exist, but the condition for its existence is that it is entirely meaningless.

Sen was a hardworking and smart guy. But he was greatly conscious of India's inferiority. His work on famines was worthless and he lied about it- but then starving people aren't important- that's why, according to him, some Bengalis ate 5 times as much rice during the Famine as they did before thus callously condemning other Bengalis to starve.

 Ken Arrow, however, was important- he was a top Professor related to other top Professors. Sen didn't distort Arrow. He was not intellectually dishonest. He saw that the Arrowvian program for Welfare Economics was going nowhere. It was dead in the water even if no preference-revelation problems arose. But it was still 'Western' and 'Democratic'. 

Sen's solution was worse than the disease. He chips away at the Pareto condition- the one thing everybody can agree on- and brings back 'value judgements' without resurrecting Samuelson's ethical program- this is Philosophy in its most bogus form, i.e. this is 'agenda-control' based rent-seeking sophistry- and does not change course though very much in the loop re. McKelvey & Schofield & Ostrogorski & Anscomb & Saari & Chichilnisky et al.

I am not saying Sen did anything wrong. He was an academic and that's what academics do- which is why we consider them drudges and donkeys. It wasn't his fault, his chosen field had turned moribund. Everyone assumed Sen had found himself another niche- something to do with saying 'guys, lets stop being dicks and just help poor and starving people already'- or that he was actually a Philosopher or maybe that he knew about ancient Indian thought.
But that was precisely the problem. The Indians too- including people like me- thought he must be capable of saying sensible stuff. He wasn't. He talked worthless self-regarding shite and made truly horrible policy prescriptions. His career as Chancellor of Nalanda University revealed him to be on a par with the most useless and corrupt of our own homegrown academic thugs. True, he ensured that the PM's daughter's friends got very well paid sinecures. That was right and proper and in keeping with Indian best practice. But, when a new PM came in, those ladies couldn't have their contracts extended in violation of the Charter because they had failed to get themselves powerful backers while the going was good.
Sen thinks 'autonomy' means 'keep the ex-PM's daughter's chums in office though it is illegal to do so and they have failed to secure political backing' and that such 'autonomy' turns a University- even one located in rural Bihar- into an international powerhouse. This isn't the case. Sen failed to get autonomy when it would have benefited his proteges. Why harp on the subject now that the other party has got its own man in as Chancellor?  

Things didn't have to go down this way. Sen could have embraced evolutionary game theory, like Binmore, and ended up showing the Govt. of India how to raise billions from Spectrum auctions. At the very least, he could have uttered 'truth to power' about the failures of the Public Education & Health System. But, he was afraid of the Left and chose, instead, to talk utter nonsense. He was quite close to the previous administration. Yet he says that his old colleague, Manmohan Singh, tried to turn India into a global economic power with a sick and uneducated workforce. Sen doesn't explain why Manmohan Singh was so cruel and stupid. No doubt, Sen thought he was criticising the new PM- Narendra Modi. But Modi isn't a friend of Sen's. Sen doesn't know what Modi is or is not trying to do. He did know what Singh was trying to do. Thus his stricture can only apply to Singh not Modi.

Sen, like Chomsky, has turned into a fake news guy because of intellectual grandiosity of a technical kind. He chose to take as his subject a Szpilrajn extended set which assumed the axiom of choice but which failed to account for the possibility this introduced- viz. Non Dictatorship will be violated by a non-deterministic Oracle (with a particular 'maximal' property) which must necessarily exist, though, realistically, it may be inaccessible for in a much higher complexity class. It is precisely the informational foundation of the subject which this grandiosity has destroyed in advance.

Chomsky did something similar to defend the question begging notion of an 'i-language'.  In other words, these two famous atheists first turned their subject into something God-like in its set theoretic properties and then became reconciled to saying it was meaningless save in some special sense known only to themselves and thus still part of 'Public reasoning'.
By contrast, 'Reverse Maths', doing useful things with more parsimonious axioms is a good way forward which meshes well with what increased computing power and 'Big Data' allows smart people to do. But then Evolution itself takes this humble, regret minimising, route. No doubt, the fitness landscape is multi-dimensional but there is a workaround in terms of canalisation and capacitance diversity.
Something similar saves Public Discourse from Manichaean stasis or Corrupt 'Agenda Control' or buck passing concurrency deadlock. Why? Because people move on with their lives. Publicity Hungry Pundits can ignore how people vote but they can't ignore falling book sales. They have to jump on a Fake News bandwagon and advertise their meretriciousness more nakedly than every before.
A few hours after Ken Arrow's death was announced, this is Sen talking up the re-issue of his old book-
Sen begins by pretending that his 1970 book was concerned with what was actually happening in 1970. It wasn't. It was wholly abstract. It might have been a prediction of the sort of political processes which might obtain once 'the State had withered away' and Socialism had been established. It had no connection at all to American or British or Indian politics.
Public reasoning can't be Academic reasoning if the latter is based on an intensional language or relies crucially on things like Szpilrayn's theorem and therefore the axiom of choice. Why? Public reasoning must be in a natural language whose acceptations are common knowledge. Even if the public is super smart, its metaphysics must still be parsimonious and its semantics extensional. Otherwise well formed sentences in its language will be verifiably meaningless save adventiously or by means of an Oracle.

Trump may well have been wrong on the state of the US economy just as Kennedy was wrong about the 'missile gap'. So what? That's not why he was elected. No Trump voter is now saying 'whoops. I thought unemployment was rising so I voted for a guy with strange hair and an orange tan because...urm, that's what smart people do, right?'
Why does Sen assume that rational people will vote for an elderly property developer who has never held any sort of Govt. job or political office in his life just because they think that Unemployment is rising?
Is Sen a misogynist? Does he think that a woman in the White House would be incapable of reducing Unemployment despite being a Democrat? Even if Sen is a misogynist, why does he assume that the American voter shares his view?

Sen can't reason- at least in public- can he state verifiable facts? Asked about Modi's demonetisation, he says-
The Govt. gains seigniorage through demonetisation. It is a tax. It yields a very large dividend- one sufficient to implement a 'Basic Income' type cash-transfer which, by the second fundamental theorem of Welfare Econ, is allocatively efficient and, perhaps, India's only hope of of implementing a Social Minimum. Poor Indians are cash poor. Even Sen must know this. This isn't a regressive tax, though no doubt poor implementation may make it so for some. Notice, Sen isn't focusing on poor implementation. He is saying the idea is senseless in itself.

Why is Sen lying? Why is he saying it can't yield a dividend? Does he mean that the monetary shock will be so severe that tax revenue will fall? He knows that won't happen. So he isn't saying that. He's just lying is all.
Perhaps you think I'm being too hard on a senile man. Maybe he doesn't realise that '86 percent' of the monetary base isn't really being destroyed. But, this isn't actually the case is it?  His own remarks show that he knows that those who came by their cash honestly can exchange old notes for new ones. Those who didn't will take a hit. 
Longer term, this will tip Indians to move towards mobile banking. Vested interests- of a sort ordinary Indians come across in their day to day life- want briefcases of cash. They will have to find a new modus operandi. The State has an opportunity, which may be frittered away, to change the fiscal equation. I don't know the outcome. Nor does Sen. But Sen is willing to tell lies about it.
He's a shill for a Academic Ponzi scheme repackaging a worthless book he wrote in 1970.
Okay. Fair enough. That's Globalisation for you- just Capitalism at work- so what?

Well, actually there's a tragic twist to this tale
Arrow, as a young man, made his name by using what had become a highly emotive word- viz. 'Dictator' -in a dishonest way. He was trying to get the ethics out of Welfare Econ by unethical means while pointing to a type of Maths which in time would become genuinely important. Suppose he'd used the word 'Paedophile' instead. Then, Sen and other young Bengalis- who for historical reasons thrilled to the word 'Dictator' but, quite rightly, experienced no similar frisson at the term 'kiddy fiddler'- would not have written so much worthless nonsense nor would they now be habituated to telling such stupid lies. Instead, genuine Philosophers- motivated by Platonic dialogues like the Lysis and the Phaedrus- which are about fucking rich kids in the ass- would have taken up Arrow's theorem and that would be all right because they'd now be in jail having their heads kicked in, all of which only goes to prove true Democracy can guard us against Famine. Or if not Famine, at least it can do the washing up.
Just checked.
It hasn't.

Friday, 24 February 2017

Ship of Stone, Caravan of tears

Finding we can't budge the rock of the heart's tomb
How atone for winding the clock of Love's doom?
Thy Ship of Stone, to Everyman, appears
Hajj completed, a Caravan of tears.

Sunday, 19 February 2017

Toni Erdmann- funnier than its American remake.

This is a German movie whose great novelty is the irony free manner in which it alludes  to its Hollywood remake which, of course, we have all already sat through umpteen times on Red-eye flights we can't remember having taken.

Ex-hippy, Bill Murray is trying to reconnect with his daughter- Anne Heche- a cold-hearted Corporate drone sent to downsize a cat factory in Louisiana by outsourcing the entire anus assembly line to Romford.

Bill disguises himself as a NAFTA cat anus Inspector so as to play a series of increasingly outrageous pranks on his daughter and her team of Wharton stuffed shirts till she realises her bosses are a bunch of sexist cat anus surrogates and recovers her sense of humour sufficiently to attach a Hitler 'tache to her twat and fist herself furiously all through a Cajun fundraiser for Clinton's cat's anus.

The German version is twice as long, omits stellar cameos and clever symmetries, and thus almost infinitely funnier because Germans know they are so genuinely humourless they don't need to make a big production out of phoning in hilarity on a joyless script. Rumania, where most of the film is set, is well and truly shat upon probably because it's just sitting there taking up space Singapore could use so much more mythopoiecally.

Thursday, 16 February 2017

Nalanda University- comedy of errors continues

Nalanda now has about 130 students doing Masters degrees in soft subjects like History, Ecology and Buddhist Philosophy.
The Govt. of India, in its infinite wisdom, has appointed a Science guy, Vijay Bhatkar - who built the first Indian Super Computer- as its Chancellor. Bhatkar is an RSS stalwart whom existing faculty are likely to have problems with.

An Engineering College with Bhatkar at the helm would have no problem getting students. But currently only soft subjects are taught there. Even the most Hindutvadi engineering type doesn't want to mingle with stupid cow worshipping History students. Jhollawallah Marxists are fine because they enjoy a tot of liquor, spicy chicken wings and a meditative puff of charas. Actually that last is a Shaivite trait but I doubt goody goody RSS types keep up that particular aspect of our sacred culture.

The other problem with appointing Bhatkar is that Nitish Kumar- Nalanda's Godfather- is bound to feel aggrieved that his pet project is going to turn into an RSS base. Rajgir residents are already pissed off that their sons and daughters are not being provided for while a huge amount of land and vast sums of money have been lavished to attract some foreign students. Maybe Bhatkar can build links to local schools and promote IT education. But, once again, a man of his seniority seems out of place. I'm not saying Bhatkar can't make something of Nalanda. If he actually goes and lives there half of the problem is solved. Or is it? Suppose Bhatkar makes his home in Rajgir for the next 5 years. He goes to visit local schools and to talk with local communities. Students from Nalanda get involved in local projects. What happens? Nalanda becomes what it used to be- a local institution fostering a local community which attracted foreign students because of localised knowledge based public goods. In other words, Nalanda would succeed but only by being the polar opposite of Amartya Sen's dream for Nalanda- viz. an extra-territorial entity whose staff would have diplomatic passports and get paid in US dollars. Surely, that is the true meaning of Internationalism?

Tyler Cowan, Karl Marx and transition costs of automation.

Tyler Cowan writes-
The Western world managed the shift out of agricultural jobs into industry, and continued to see economic growth. So will not the jobs being displaced now by automation and artificial intelligence lead to new jobs elsewhere in a broadly similar and beneficial manner? Will not the former truck drivers, displaced by self-driving vehicles, find work caring for the elderly or maybe fixing or programming the new modes of transport?
As economics, that may well be correct, but as history it’s missing some central problems. The shift out of agricultural jobs, while eventually a boon for virtually all of humanity, brought significant problems along the way. This time probably won’t be different, and that’s exactly why we should be concerned.
Consider, for instance, the history of wages during the Industrial Revolution. Estimates vary, but it is common to treat the Industrial Revolution as starting around 1760, at least in Britain. If we consider estimates for private per capita consumption, from 1760 to 1831, that variable rose only by about 22 percent. That’s not much for a 71-year period. A lot of new wealth was being created, but economic turmoil and adjustment costs and war kept down the returns to labor. (If you’re wondering, “Don’t fight a major war” is the big policy lesson from this period, but also note that the setting for labor market adjustments is never ideal.)
By the estimates of Gregory Clark, economic historian at the University of California at Davis, English real wages may have fallen about 10 percent from 1770 to 1810, a 40-year period. Clark also estimates that it took 60 to 70 years of transition, after the onset of industrialization, for English workers to see sustained real wage gains at all.
If we imagine the contemporary U.S. experiencing similar wage patterns, most of us would expect political trouble, and hardly anyone would call that a successful transition. Yet that may be the track we are on. Median household income is down since 1999, and by some accounts median male wages were higher in 1969 than today. The more pessimistic of those estimates are the subject of contentious debate (are we really adjusting for inflation properly?), but the very fact that the numbers are capable of yielding such gloomy results suggests transition costs are higher than many economists like to think.
Industrialization, and the decline of the older jobs in agriculture and the crafts economy, also had some pernicious effects on social ideas. The early to mid-19th century saw the rise of socialist ideologies, largely as a response to economic disruptions. Whatever mistakes Karl Marx made, he was a keen observer of the Industrial Revolution, and there is a reason he became so influential. He failed to see the long-run ability of capitalism to raise living standards significantly, but he understood and vividly described the transition costs and the economic volatility.
Cowan is wrong about the history. The French Revolution and subsequent wars, changed how the British viewed a standing army. It was no longer seen as the tool of the 'Court party' (i.e. increasing the power of the monarch) or as potentially hostile to the Established Church and Property arrangements (as happened under Cromwell). Rather, the military- as represented by 'the Iron Duke'- became a bastion against internal subversion which could be used against working people- for e.g. at 'Peterloo'.

British industrialization failed to raise real wages because the political system became increasingly weighted towards big Landowners and certain vested commercial interests. This happened because the pattern of representation in the House of Commons did not reflect demographic shifts. There were 'rotten boroughs'- once thriving market towns- which contained only one or two voters. Meanwhile rapidly growing urban centres had little or no Parliamentary representation. Under these circumstances, purely political forces, not economic ones, conspired to worsen the lot of the working man.

The Corn Laws kept the price of bread high so that the aristocrats prospered. The Combination Laws criminalised Trade Union activity. The Poor Law was used by the wealthy to reduce their labour cost and shift the burden to the rate-payer. Thus, an independent weaver like George Eliot's 'Silas Marner', or a small farmer working the land with his own family members, was forced by law to subsidise the wage bill for the big manufacturer or large agricultural estate.

David Ricardo, representing the new rentier middle class and a section of the City of London, developed an Economic theory which stigmatised the 'unearned increment' enjoyed by the Landowners. According to his theory, stagnation was inevitable unless the Entrepreneur, not the Landlord, got to keep a bigger share of the Social Product. The movement for Parliamentary Reform gained an impetus from his theory, though the Rev. Thomas Malthus developed an effective 'under-consumption' argument in favour of the idle rich but for whose prodigality the working man would starve in yet greater numbers.

Ricardo died in 1823, at the height of reaction, but had he lived he would scarcely have felt vindicated. The Corn Laws did not disappear after the Reform Act of 1832- after all, the wealthy Manufacturer could invest  in, or hold mortgages on,  Agricultural Estates-  and so the 'Chartist' struggle turned in a more radical direction. However, the lesson of Revolutionary year of 1848 when 'History reached a turning point, but failed to turn', had already been learned by the 'Physical Force Chartists'. It was the State which possessed a monopoly of coercion and was prepared to use it in a wholly ruthless manner. 

Marx and Engels differentiated themselves from the 'Young Hegelians' on the Continent by immersing themselves in English language empirical studies of the 'Proletariat'. However, in making sense of the huge amount of data Early Victorian reformers produced, Marx neglected the salience of distortions introduced by the Legal/Legislative system preferring to develop an abstract 'essentialist' theory. Thus, though a Classical Economist like Smith and Ricardo, Marx's oeuvre was not directly linked to contemporary agitation against corrupt rent-seeking in high places. On the one hand, this meant that there were no 'Marxist' politicians who, once elected, did a deal with Vested interest groups- i.e. Marxism retained a sort of intellectual purity. On the other hand, precisely because this intellectual purity would brook no competition, British Marxists resisted the Ricardian or populist conclusion- viz. tax 'the unearned increment' represented by Rent and eliminate other distortions in the Justice and Legislative system which had been introduced by rent-seeking. 

One major problem with Marx's theory is that he assumed that 'the organic composition of capital' in agriculture and mining was different- much more labour intensive- than in manufacturing. Further, because his analysis assumes a free market steady state, 'absolute rent' would not exist if agriculture or mining became more capital intensive than the average.

We, of course, live in a very different world from Marx. When Kennedy and Johnson deported hundreds of thousands of Mexican farm-workers, real wages for agricultural labour did not go up but capital intensity did. Crops which could not be mechanically harvested were abandoned. Agriculture adjusted to the supply shock very quickly- within a year. More importantly, 'Agribusiness' used some of its profits for 'rent-seeking' behaviour- i.e. influencing political and legal decisions to protect its own interests.

This is not to say that Marx's world was kinder than ours. In Ireland and the Highlands of Scotland, the Victorians presided over a vast depopulation on a familiar English pattern- sheep devoured the peasants- though the transition was longer and much more painful than in the case of the Mexican braceros.
Tyler Cowan, in his article, thinks that the transition from Agriculture to Industry in England was in conformity with Economic laws, rather than Political and Legal distortions which created rents. He thinks that Marx observed the costs of this transition and thus gained salience. He writes-
Western economies later turned to variants of the social welfare state, but along the way the intellectual currents of the 19th century produced a lot of overreaction in other, more destructive directions. The ideas of Marx fed into the movements behind the Soviet Union, Communist China and the Khmer Rouge. Arguably, fascist doctrine also was in part a response to the disruptions of industrialization in the 19th and early 20th centuries.
Cowan, admittedly, is painting with a broad brush, but there is a serious error in the above. The fact is Marx chose, like Cowan, to ignore actual rent-seeking, in order to develop a 'pure' or 'essentialist' theory of absolute rent. However, this theory was understood- for e.g. by Lenin- to mean that it was bourgeois capitalism which benefited by nationalising land. In other words, the Soviet Union, Maoist China, the Khmer Rouge and so on were always disingenuous in their land policy. The subscribed to an abstract essentialist Economic philosophy which classified the peasant proprietor as no better than a capitalist and therefore a 'class enemy'. This pathology in Communist thought did not arise because 'Marx was a keen observer of the (transition costs) of the Industrial Revolution' but because Marx chose to be a theoretician, abstracting from actual rent-seeking in England which is what caused real wages to fall, in order to have salience as the propounder of 'universal economic laws' for thinkers on the Continent where the Legal/Legislative regime was wholly different.

Cowan thinks Marx's mistake was 'the iron law of wages'- i.e. the notion that real wages can't rise for Malthusian reasons. Actually, the Marxist Economic system says nothing about what the physical standard of living will be. If the proletariat won't have babies (which is what the word proletariat means) unless a material threshold is met, then that is the new 'natural price' of labour and everything has to be adjusted accordingly.
If Cowan was correct in his analysis every Marxist in the world since 1960 would be either a fool or a hypocrite. 

More seriously, Cowan by ignoring what Marx, at least the mature Marx, too ignored- viz. rent seeking as responsible for the high transition costs in English industrialisation- is vitiating his own analysis of the likely costs of further automation.

Within the Marxist fold, we may mention Ernest Mandel as having salience here, however it is the American, Henry George, whom Cowan praised as one of the finest advocates of free trade, who really carried forward the Ricardian program and seized this bull by the horns.

Interestingly Stiglitz has a 'Henry George theorem' that is relevant in this context. A Technological revolution is like a public good. If it is associated with localised externalities and network effects then rents go up and can be taxed. This means that either equitable Hicks-Kaldor redistribution or the creation of new jobs can occur.

The problem is that such 'Knowledge Revolutions' may be 'off-shorable'. If Capital too has gone off shore, what is to prevent Technological Unemployment from triggering urban collapse? Increased Agricultural productivity depopulated the countryside. Might not once great cities- e.g Detroit- suffer a similar fate?

Subsidies to agriculture may have some good 'regret minimizing' or external benefits- e.g. maybe farmers can manage the countryside in a ecologically worthwhile manner- but politically motivated subsidies to sunset industries are unlikely to have any such advantage. During the stagflation of the Seventies, State subsidies to manufacturing industry worsened incentives to rationalise and innovate.

A Public good is something which has a zero marginal cost- it is ‘non rival’ and ‘non excludable’- like everybody profiting without necessarily having to individually pay for the benefit from National Defence or the Justice system. We have a free-rider problem here- people who benefit may not want to pay. Stiglitz has a ‘Henry George Theorem’ which says that for a localised public good- e.g. good transport infrastructure- rents go up in a particular way and the Local Authority can tax those rents so as to cover the deficit associated with providing the public good. A new Technology could be localised- e.g. around a Lab or University dept, or a particular company’s R&D facility. Some agents in this local networks can’t be excluded from having this new knowledge and can innovate on that basis. Intellectual property regimes differ but even the most stringent doesn’t allow a general Scientific principle or paradigm to be copyrighted. Since some of these agents are free-riders, there is a danger that the ‘Knowledge’ public good will be underprovided because not everybody who benefits pays for it. However, if some entity paying for the Knowledge production can levy rents, or extract rents by some mechanism, on local properties owned by these ‘free-riding’ agents, then the problem is solved.

Take a Govt. which pays for R&D at a University. It can make some of the money back by taxing property in the technology hub. Still, if the Knowledge and associated Capital can be moved off-shore- e.g. factories and labs can be moved overseas- then rents overseas will rise and so Stiglitz’s theorem seems to be defeated. The irony here is that Stiglitz is a champion of pro-poor Globalistation. However the argument could work for Trump. If the advanced country- the US- triggers a bad overseas intellectual property regime by taking Protectionist measures- Knowledge revolutions might yield only local public goods. Innovators will be wary of opening factories or labs in faraway places where the locals might simply steal their ideas. So, maybe, they will do ‘capital deepening’- i.e. double down on innovation in their own country and region. Then the Local Govt. can tax the rise in property values to fund the innovation in a virtuous circle. They could also compensate people who lose their jobs.

 A Hicks Kaldor improvement is one where we know that some people are benefiting so much they could compensate all the losers and still come out ahead. This is unlike a ‘polluter’ who makes money by inflicting more cost to others than he gets in benefit. Localised externalities and network effects should lead to higher ‘economic rent’- i.e. bigger gap between what can be earned in the next best occupation- for all inelastic factors of production. Land is what Henry George focused on but we can generalise this to other resources of an arcane type like 4G Spectrum. In theory, we can tax this ‘rent’ without a disincentive effect because the alternative occupation is so much less rewarding. In practice, this analysis falls down because longer term everything is elastic and so incentives matter more and more.

 Artificial restrictions like ‘zoning’ or ‘educational credentials’ (sheepskin effect) will tend to distort things and impose bigger and bigger ‘allocative’ efficiency losses. This is the big argument for Free Trade. Long run, any artificial distortion creates perverse incentives. The problem is that for an advanced country with very rapid Technological change and fundamental Knowledge revolutions, it may be that only the short run matters because faster innovation changes the landscape so much. It could be that by taking ‘offshoring’ off the table, a lot of time and effort which goes into doing things where it is cheapest will go instead into doing things smarter right here. The difference is that local people can capture some ‘rent’ associated with this. In particular, people who lose their jobs in manufacturing or admin can move to well paid service jobs in the same area because even if more work is done by robots or computers still the profits remain localised and so spending on high value added services will go up. One final point. Tiebout sorting means agents have a choice as to which ‘town’ to migrate to. Each town has a different mix of taxes and local public goods. Competition between towns makes for efficiency. Now imagine that Towns compete for different types of Technology/Knowledge goods. If agents are risk averse, the Town can offer a sort of implicit contract that if automation cuts jobs on the production line, locals will get preference in re-employment. Some ‘Company Towns’ do have this philosophy already. Long term, this may be what a lot of voters want- a new type of Social Contract where Knowledge based disruption is mediated by some Henry George type mechanism whereby the winners indirectly compensate the losers. The problem is that this limits the benefits of Globalised free trade. Returning to the story of ‘transition costs’- just as the majority of Britons suffered far more than necessary during the transition to Manufacturing because of corrupt political rent-seeking causing massive distortions, so too might the transition costs of a new type of Globalisation, in which Technology could be almost frictionlessly transferred to low-wage countries, have been greatly exacerbated by all sorts of distortions introduced by lobbyists. However ‘property rights in jobs’ and Trade Union power also represent distortions. A better way forward might be a new ‘Social Contract’ where the needs and fears of ordinary people are better addressed at the local level.

Trump's economics might appear completely foolish. Yet it continues a line of thinking found in Ross Perot- a billionaire with a much better reputation. In Economics, there is always another side to any argument. Thus, if 'Knowledge Revolutions' can be made to behave like 'local public goods' by certain measures we think of as Protectionist- more especially for advanced countries- then it may be possible to increase Equity without too much of an Efficiency cost because a 'Henry George mechanism' would exist so as to prevent net job loss. With subsidiarity, we might see diverse Tiebout models based on different mechanisms. In this case, even if one's job disappears because of new Technology, another job oriented towards the same Knowledge Culture would become available and so no great trauma would be experienced.

Will automation impose heavy transition costs? Yes, unless both mobility and 'Henry George type' Tiebout model diversity increases more quickly. This is unlikely to happen as a result of State action because the knee-jerk reaction would be to focus on the worst affected area and to subsidise a sunset sector while pretending to invest in a new technology centre which, it will turn out, is actually already obsolescent. Labour mobility gets frozen. Rent seeking snowballs. Stupid bureaucrats back losers. Policy Space becomes multidimensional and McKelvey Chaos prevails.