dagblog - Comments for "Some static ideas about upward mobility"

I can understand how you

Elusive Trope — Wed, 21 Dec 2011 15:52:50 +0000

I can understand how you might think I am proposing the hopelessness and fruitlessness of making a decision. In fact there are many times people will throw up their hands in despair when attempting address problems existing in complex adaptive systems. It is frustrating. Just take the education system. It is kind of hard to teach a kid who goes home to a place filled with domestic violence and/or no food in the cupboard. Or home is the parents beat-up station wagon. Meanwhile budget cuts happen every year and fundamentalists have taken over the local school board and cyber bullying is on the rise.

But I don't believe it a recipe for inaction. Instead it means we have to expand the scope of our attention. Early childhood education is a great example. One of the most significant indicators of how well a student will perform in the K-12 system is how well they were prepared during the pre-K years. This includes things like nutrition in their diet to whether they were ever read to, or even seen a book in their house before arriving at Kindergarten. So if people are serious about all children succeeding in school, they need to expand their work to include the families with pre-K children, especially those in poverty, and even the mothers who are pregnant.

Moreover, rather than concluding inaction, it is a call to humility and awareness of our limitations. If one goes barrelling into something thinking one has all the answers, then one is not going to be open to seeing both the new opportunities and problems that might arise after one begin to intervene in a new way.

Te interaction of economic activity and the environment is a great example of this. One specific example of this in which I was involved was dealing with an effort to clear cut the remaining stand of forest in a particular watershed. We were able to prove that doing so would increase the soil erosion into the water system (the previous clear cuts had already created massive soil erosion) to the point it would shut down the fish hatchery downstream. From a pure economic return for the local community, the financial impact from the logging jobs was vastly less than the fishing industry which was dependent in large part on that hatchery. This was due to the fact that the timber extraction was a one time deal in the short run (the regrowth of the watershed would take years and years before another harvest was thinkable) while the fishing industry was providing jobs on a year after year basis.

We are able to get specific results when intervening in any particular CAS. Chaos theory, if one wants to use that specifically, demonstrates that many things that appear chaotic are actually orderly. It is just that the pattern it follows it complex, and never exactly the same way twice. It operates, however, within a particular boundary of possible behaviors. This is why we can't exactly predict the weather, but we can get close in the short term, and we can understand the potential extremes. The value of imperfect predictability is enough that we keep at it in spite of our imperfection. At the same time we make decisions based on those predictions with the knowledge of that imperfection.

Peter, thanks for your

Oxy Mora — Wed, 21 Dec 2011 15:14:28 +0000

In reply to Sorry, I don't share your

Peter, thanks for your comments. I think part of progressives' problems is that the incessant narratives of the Heritage Foundation, et. al, have worked. We ourselves have become brain washed. No one today,for example, would even suggest upper income rates in the fifty percent range, let alone eighties or nineties. Instead we argue about a few percentage points in the thirties or below. We have given up any real progressive tax rate notion and have been beaten down in many other policies which actually worked in the past.

I like Dan's dogged attempts to keep questioning the inevitability of income gaps. Even in my original blog I pivoted quickly away from income inequality, as did others. And let's face it, we will always have inequality. But we need to focus on the fact that many of the economic problems we face now did not take a century to develop---much of it developed within recent history, a couple of decades. We simply need to reverse the policies which put us so far off track.

The Great Recession was not a regular business cycle recession. It was a recession caused by a financial crisis. As Fisher of the Dallas Fed has shown, the difficult recovery we're having now is typical of a financial crisis vs. a business cycle one. It simply takes longer.

The Financial crisis in turn was the result of policy changes. Increasing income at the top and wage starvation in the middle forced consumers to turn to leverage to keep consuming, facilitated by consolidation of banks, lax regulations, easy credit, unbridled fraud and a generational credit spree. In a sense none of this is complicated and it is all reversible over time. To my mind it doesn't require radical social engineering from Progressives. Radical engineering instead means that we have given up the moral and intelligent focus we need to reverse what just happened by just taking the problems head on.

Simply reversing the Bush tax cuts for the next ten years would solve more problems of inequality than anything else we could devise in the way of social engineering. Capitalism is like marriage. Sometimes marriages don't work out but that doesn't impugn the institution of marriage. The same with capitalism---we have had a lot of bad relationships in the last twenty years. We need counseling and some divorces in our capitalistic system, but I don't see the need for radical re-invention of the institution itself.

I have been frustrated with my post, along with my inadequacy in addressing your fine comments. It seems that income inequality isn't really a problem except when it is. It is defining the is which is important and is not being accomplished in a way which advances the ball.

Chaos and fractals? One

Peter Schwartz — Wed, 21 Dec 2011 15:12:33 +0000

In reply to I would add that to the

Chaos and fractals?

One conclusion one could draw from what you say is that good results are almost accidental. If one looks at Finland's educational system, the tendency would be to copy it. But what you say makes that exercise fruitless.

If we do X, who knows what Y will result?

In fact, what is the point of doing anything with a view to getting a specific result?

I'm not really disagreeing with you, but trying to draw out the consequences of what you say...

I would add that to the

Elusive Trope — Wed, 21 Dec 2011 14:53:20 +0000

In reply to Markets are social

I would add that to the extent that the economic system (and to some extent what elements, facets, processes and mechanisms one chooses to be included in the "system" is arbitrary*) has become global is the extent to which one's ability to make the right actions based on right choices is severely limited if one is talking about federal involvement, or state involvement, or local involvement. Actions taken in India or South Africa will influence the larger system, in ways that might not be forseeable, changing the right decision into a wrong (or at least not-so-right) decision.

As long as we attempt to approach economic systems as closed linear systems, we will consistently head down the wrong path, surprised that decisions that had short-term benefits and eliminated or minimized present-day problems, have long-term negative outcomes that generate greater and more complex problems than the previous problems.

*a good example of this is the K-12 education system, a CAS if there ever was one. The impact of the outcomes from a local or national education system on the economic systems are obvious. But if one includes this CAS into the larger economic CAS, the challenges and problems are expanded and the solutions more complicated to derive. Then one has to look at early childhood education (children from 0-5 yrs of age), which studies show have an enormous determinate value upon the success of the K-12 system. Now one finds oneself, in attempting to address economic issues, talking about how physicians and the medical community work with social agencies in supporting pregnant mothers in poverty.

The term "invention" can lead

Elusive Trope — Wed, 21 Dec 2011 14:35:20 +0000

In reply to Markets are social

The term "invention" can lead us to perceive markets as being similar to strictly material inventions like airplane. What you are touching upon in discussing "when we mess too much..." is economic markets are complex adaptive systems (CAS). Moreover, not only are there a multitude of economic CASs interacting with and within one another, they are interacting with and fused with a multitude of other non-economic CASs.

Complex adaptive systems are characterized as follows^[3] and the most important are:

The number of elements is sufficiently large that conventional descriptions (e.g. a system of differential equations) are not only impractical, but cease to assist in understanding the system, the elements also have to interact and the interaction must be dynamic.

Interactions can be physical or involve the exchange of information.

Such interactions are rich, i.e. any element in the system is affected by and affects several other systems.

The interactions are non-linear which means that small causes can have large results.

Interactions are primarily but not exclusively with immediate neighbours and the nature of the influence is modulated.

Any interaction can feed back onto itself directly or after a number of intervening stages, such feedback can vary in quality. This is known as recurrency.

Such systems are open and it may be difficult or impossible to define system boundaries

Complex systems operate under far from equilibrium conditions, there has to be a constant flow of energy to maintain the organization of the system

All complex systems have a history, they evolve and their past is co-responsible for their present behaviour

Elements in the system are ignorant of the behaviour of the system as a whole, responding only to what is available to it locally.

One key element to be considered is that while markets are inventions of human beings, markets are an invention in which human beings participate. Human beings are elements of the invention as the wiring and bolts are part of the invention known as airplanes.

Markets are social

Peter Schwartz — Wed, 21 Dec 2011 14:21:41 +0000

In reply to Markets are social

Markets are social inventions.

This is another key point. Most people would agree that we can and should make rules for the market, but that the market is not just a "social invention" that can be changed willy nilly, somewhat the way we change clothes or domiciles.

One sign that it may not be just an invention is that when we mess with the market too much, bad things tend to happen--or at least, bad things have happened in the past. Sort of like when you mess with the environment too much, bad things, or at least unintended things, tend to happen.

IOW, we're unable to remain in control of the change we're trying effect. It tends to have a "mind" or a trajectory of its own.

But if we can show that the market really is nothing more than a social invention, created in the same way, perhaps, as we created the Constitution, then lots of changes should be possible, and it's just a matter of making the right changes.

Sorry, I don't share your

Peter Schwartz — Wed, 21 Dec 2011 14:14:21 +0000

In reply to Sorry, I don't share your

Sorry, I don't share your what appears to be your vision of a world of unavoidable canyons of wealth between the rich and the poor, with some ameliorative liberalism taxing away a little bit of the surplus so the poor can be raised up just a tad.

I would listen and try to address Verified Atheist below this comment. You may not share this view, but I think we need to address it.

Unless we're going for some kind of absolute equality of wealth--a program that may do as much violence to people as it attempts to eliminate--then I think we're stuck with some inequality, and the question becomes how much and what type of inequality is acceptable or, really, inevitable.

Liberalism, in its day, didn't tax away just "a little bit of the surplus." In the 1960s, for example, we taxed away a lot and we had a lot more equality than we do now. Yet the rich were still a lot richer than the middle class.

It seems to me that a lot of

Peter Schwartz — Wed, 21 Dec 2011 14:09:36 +0000

In reply to Markets are social

It seems to me that a lot of educated and culturally privileged people these days have convinced themselves that moral disapproval of greed and excess is a déclassé mark of lower-class resentment. It's oh-so-unsophistacted and lacking in "nuance" to disparage the rich on account of their riches, in the way the ignorant working class sometimes does.

But isn't this unfair to the argument, if not to some of the sentiments expressed? Many of these folks will say, with some justification, that they started with little, or not much more than most people, and by dint of hard work, discipline, perseverance built their wealth--following all the rules set down by society.

And they really can't see how their increased wealth made anyone else poorer.

While I share your sentiment, I don't think it's productive to simply toss aside their argument with a rhetorical flick.

Along the lines of the gender

Elusive Trope — Mon, 19 Dec 2011 17:37:51 +0000

In reply to Maybe the transition we are

Along the lines of the gender comment I made below, there is an article I have been working with for a future blog - The End of Men - which makes the case that women are more suited for this next phase of the modern (post) industrial world, in part because of their greater proclivity towards cooperation rather than competitiveness, as opposed to the male of species. Of course, this is a generalization, and breaks gender down into the limited binary view of gender. But that is another story, as they say.

Maybe the transition we are

Oxy Mora — Mon, 19 Dec 2011 17:30:23 +0000

In reply to Looking at the two approaches

Maybe the transition we are in is actually moving toward more cooperation, having pushed the competitive model to its logical limits.