Monday, October 5, 2009

Why I shall not read Steven Landsburg(II)

Why I shall not read ...(I)

Before I go on with this discussion, I must make a few "confessions".

First, to be honest, I am not an "environmentalist". I am afraid that I am not planning to dangle from a bridge under a Greenpeace sign, nor am I likely to shout to people on the street "Recycle!Save the trees!". This "confession" shall eliminate from the start the reader's assumption that I shall not read Steven Landsburg's The Armchair Economist because I belong to some kind of environmental sect that brain washed me...

Second, I am not an economist either. In fact I gave my class in Economics as much attention as it was needed to get an A. I am trying to achieve a concentration in marketing and that does explain why I do not see markets with the same "eye" as an economist. but what is most important I do not claim that marketing is a science in the sense that an economist will claim about economics.

And third, the enviromentalism is like many other "isms" as Capitalism, Socialism, Christianism, Judaism, Islamism, Marxism-Leninism a mix of politics and religion (2).And as any other mix of politics and religion it can have a positive influence on life or if pushed to extremes or mistaken for science it can destroy it.

Ok, now I shall proceed to the text:

After my anonymus reader accused me of lack of critical thinking skills:"Do you really not try to engage the material? Do you really not understand logic and reason?" and after I cooled myself down a little bit, I read a bigger excerpt here:

and after I could not help myself and peep at some fragments from the first chapter here:

and a short explanatory note here:

I had to admit that Professor's Landsburg text is a lot wittier and he is a much better writer than it appeared from the fragment quoted in my textbook. The text raises a few interesting points but fails to provide me with a good incentive for reading it. There are other books I am trying to juggle now on top of my school lectures, books that are equally wittier and well written and a lot more enjoyable when complementing the lectures for my finance class.

Now, it is claimed that people are motivated by incentives. I totally agree. It is also claimed that there is a reason (or explicitable motivation, I assume) beyond each of our actions. I tend to disagree with this assumption, but for the time being let say it is so. There is also that analogy with the lab rats, it did had a chilling effect on me for sure, but let's assume that Professor Landsburg implies that cognitive sciences are still in the same stage as they were when Skinner's behavioral theories were still a fad.(2) Thus, we know now that incentives matter. And that Professor Landsburg thinks , like B.F. Skinner once did ,they are the main factor determining human behvior.

But let's go to the fragment from "Why I am not an Enviromentalist".

He claims that "Economics is the science of competing preferences.Enviromentalism goes beyond science when it elevates matters of preference to matters of morality" .
Ooops, wait a minute...preferences? This is a book for "ordinary people" so I can only assume he uses preference with its common language meaning. And let me ask you, when you use preference in common language do you use it with a subjective or an objective meaning? I'd bet it's subjective. So economics is now the science that wants to quantify the subjective , which is by definition non-quantifiable. Thus, it is not a science - and do not take my word for it, read Wittgenstein, that's a guy that raises some issues worth a serious debate.
Now we could say "Marketing deals with competing preferences. Commercial marketing deals with preferences, social marketing with beliefs. " And even though market research does attempt to quantify those preferences -it only does it for a pragmatical, descriptive purpose -and it admits its limits(3). But this I already knew.

Let's not be to picky...He does admit this is not a science book, but one that turns "the discussion of vexing exonomics into an activity that ordinary people might enjoy."

Let's come back to the quotation from the last post.

"The hallmark of science is a commitment to follow arguments to sheer logical conclusions. [...]I am sure that if we found a way to recycle, the population of cattle would go down, not up. If you want ranches to keep the cattle, you should eat a lot of beef. Recycling paper eliminates the incentive for paper companies to plant more trees and cause forests to shriek".

Now we get it: if paper plants do not have an incentive to plant trees we may have less trees. If we stop eating beef, ranchers lose their incentive to grow cattle.

But do you remember the Hindu states? It looks like they found different incentives to grow cattle, one being of religious nature. It also seems to work. So environmentalism, like the belief that cows are sacred, is supposed to add an incentive to plant trees. Just in case the paper plants will be able to use only recycled paper and stop planting trees. Because, as Professor Landsburg probably knows or otherwise would not have feared that his daughter would become indoctrinated by her preschool teachers, our preferences are rooted in our deepest beliefs. And in those beliefs we can find the best incentive for human behavior.

But let's say that I agree that recycling paper may cause forests to shriek. Or, it may not. Or, it is also equally possible that more forests will grow. Which it does not matter, because the reasons why I support recycling are reducing waste (4) and local economic growth (including job creation for the type of jobs cannot be outsourced.) The benefit is for the local community (here) and for the time being (now).Because as I said my concentration is marketing and not economics. But since I am quite serious about recycling , and since Landsburg's book does not give me any answers to the waste issue thus it is not going to help me much, I decided that I shall not read Landsburg but Porter instead.

And since I agree that "the discipline of economics is the fertile ground for the growth of values like tolerance and pluralism", let me add that I do not have the slightest intent to convert professor Landsburg, his daughter or my anonymous reader to environmentalism. I do respect their beliefs. I ask them to respect mine, and I feel responsible towards my children to avoid being converted to scientism. Because , as any other "-isms" the belief that all can be reduced, explained and solved by science is not science but a sort of religious belief itself. And, pushed to its extreme, it bears the same risk for blindness as does environmentalism, or Christian-ism or.. .

Now. look, the problem is that no matter how serious and clever a scientist might be, and I am sure Professor Landsburg knows it, his final argument will still be : "I, at any rate, am convinced that He does not throw dice." Science does not hold all answers and Economic-ism - an economic theory that claims to hold a solution to all human questions is no less religious than the Environmental-ism it is so critical of…Thus, what Landsburg suggests is just another paradigm, another final vocabulary. However, even though I admit that his final vocabulary is as valid as any other final vocabulary, I do not feel attracted to it. And not because I lack the reason or logic I was accused of, but because I just choose another final vocabulary. For I am free to do so…


(1)by religion here I understand our most fundamental system of beliefs that is not questionable (or questioned) by the evidence presented. Rorty talks about a final vocabulary, Wittgenstein about concepts that can not be captured by language unless it is used in a metaphorical sense.
(2) I took into account my anonymous reader comment and since it was mentioned :"Professor Landsburg is asking serious questions." , I excluded the possibility of mere sarcasm and assumed that it is behavioral assumption rooted in B.F. Skinner's work. Nowadays, though, any serious student in cognitive science can tell you that human behavior is much more complex than that, but that's another discussion...
(3)For example, a good marketer does not claim to be able to build a marketing model with universal value, neither does he claim the ability to predict the market's behavior in the future- in fact a good marketer knows that he only builds a here and now model. Economics as science shall hold both universal and predictive value. Nash equilibrium and Sharpe's risk theories are both universal and hold predictive value.
(4) The issue of waste goes well beyond household recycling, to operations management and financial markets. Not because pollution is evil or waste is bad, but because it is not cost efficient to produce that much waste any longer (hint: why did GM file a bankruptcy and Toyota did not?)

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