After reading Chris Auld’s 18 signs you’re reading bad criticism of economics (I agree with most, although by viewing them as “signs” with exceptions), I was thinking about what signs someone should someone look for in a decent critique. So, here are my thoughts. Some are twists on Auld’s points, or could easily be turned into additional reasons that a criticism is likely bad, but they’re a useful initial filter.

1. The criticism is by an economist

There are a lot of exceptions to this rule in both directions (see Auld’s sign #18). Some of the best and most groundbreaking critiques of particular areas of economics have come from outside (just look at the list of Economics Nobel winners who aren’t economists). But as an initial sign, knowing whether the critic is an economist does a pretty good job, particularly for any screed that declares “here’s what wrong in economics”. There simply seems to be a base level of knowledge of economics required to give a decent critique. That knowledge is so rare outside of economics.

Take the common critique that all economists assume that people are self-interested rational automatons. There is a mountain of work in economics that relaxes this assumption, and most non-economists (and a few economists) have almost no awareness of it.

And sorry economists, this sign also works the other way.  There have been some great economic analyses of other fields, but if you’re reading an economic critique of another academic field – “if only they were more statistically rigorous like us” – there’s a good chance it’s breaching the equivalent 18 signs for that field.

2. They know the difference between academic economists, economic consultants, business, bureaucrats and politicians

When a criticism of economics actually identifies work of an academic economist and then seeks to pull it apart, that’s normally a good sign. If they quote Alan Greenspan, Ron Paul, Ayn Rand, a random McKinsey consultant or Jamie Dimon before tearing apart the current state of economics, its unlikely they understand the current state of economics.

Of course, if the critic does follow this rule, there is a good chance that the critique is not actually of economics but rather of some hack’s use of economics for their particular means. “Our stadium will produce 20,000 jobs!” We don’t hold evolutionary biologists responsible for eugenics do we?

3. They distinguish “good for business” and “good economics”

What is good for (existing) business is not necessarily good economic policy. There aren’t many economists who are happy about how the major financial players in the GFC emerged relatively unscathed. And conversely, opposing certain types of banking regulation does not mean that an economist simply wants to protect the banks. What’s good for business and good economics may align, but sometimes it doesn’t.

When an economic critique can distinguish between the two, they tend to do a better job at addressing the underlying argument made by the economist. The assumption that the economist is a “corporate shill” is never a good start for a rational debate (even if they are a shill).

4. They criticise a particular, clearly defined area or use of economics

Economics is full of ideas and sub-fields that could do with a good beating. A critique that takes on a particular idea or field has a chance of hitting on the core issues. Believe that economists should be better macroeconomic forecasters? Take on the economists who research macroeconomic forecasting, point out what is wrong with their approach and suggest how it could be improved. Don’t expand a single issue to all of economics, unless you have a coherent reason as to why the failure of macroeconomic forecasters implies larger problems (as John Quiggin tries to do).

Similarly, there is a big difference between generally criticising economics for the use of rational actors in a model, and criticising an economist using rational actors in a particular model or context. Much of the time, a rational self-interested actor is a simple assumption that does a good job. However, there are some contexts where it is inappropriate and should be called as such.

5. They criticise a specific economist

This is a twist of sign 4. Of course, if that person happens to be Adam Smith, Friedrich Hayek or Milton Friedman, then this sign no longer applies. Chances are that they’ll go on to breach sign 4 by implying that economics is built purely on the back of the alleged problem child they have identified (and likely misinterpreted and possibly never even read).

 6. They recognise that economics and values cannot be untangled, no matter who is doing the analysis

Economics draws heat as it deals with areas where people have strong opinions, regardless of whether they are an economist. And economists can be biased. We can push our favoured theories while ignoring evidence to the contrary, always supporting “our team”. But to claim that “if only evolutionary biologists or anthropologists or physicists were pulling the levers we’d hit on the rights answers” suggests a lack  of self-awareness (which is unfortunately also lacking for many economists).

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If the above signs are present, it’s more likely to be a coherent critique that will draw an interesting response instead of turning into a higher-level flame war that these types of discussion usually trigger. And of course, there is the possibility that you’ll get a poor defence from the economist, but the signs of a poor defence will have to be the subject of another list (Unlearningecon has put together a list that could serve this purpose, of which I’d agree with around two-thirds if I read them sympathetically and as “signs”).

Having said the above, it pays to be humble. One day one of these screed writers might trigger the overthrow a dominant economic paradigm from outside, and people will laugh at what we today call economics. It’s worth looking past the signs that you are reading a bad criticism to see if there might be a charitable way of reading the argument and taking it on board.

Links this week:

1. Carl Zimmer and Razib Khan on sequencing your kids.
2. John Hawks on the Dmanisi skull.
3. The Economist asks whether science is self-correcting.
4. Do hunter-gatherers exhibit an endowment effect?
5. A review of Worldly Philosopher: The Odyssey of Albert O. Hirschman. (HT: Diane Coyle)

As I pointed out in my last post, Jared Diamond called the transition to agriculture the worst mistake in the history of the human race. Yet despite evidence that the early adopters of agriculture were shorter and had worse nutrition and health than the hunter-gatherers that preceded them, the agricultural way of life came to dominate human society. Health may have rebounded as humans adapted to their new lifestyles, and the long-term benefits are now clear, but why would the early adopters of agriculture shift to what would appear to be a much a poorer way of life?

One answer to that question is offered by Paul Seabright and Robert Rowthorn in a 2010 working paper. Seabright and Rowthorn’s idea is that early farming communities needed to develop defences to protect their stationary stores of food. With increased defensive ability comes increased offensive potential and ability to steal from neighbours. As a result, it is optimal for an individual group to adopt agriculture where the benefit from theft exceeds the cost of moving to agriculture.

As neighbouring groups face the same incentives (and hunter-gatherers next to agriculturalists are now experiencing increased theft), all may adopt agriculture. However, once all groups adopt agriculture and the associated defences, there is no longer opportunity to steal to make up for the costs of agriculture. This is effectively a prisoner’s dilemma where it is optimal for each party to adopt agriculture regardless of what the other party does but when all parties adopt, they are all worse off than they would be if no-one adopted.

Seabright and Rowthorn develop a model that demonstrates this point and they considered that the result held for a variety of parameter values (including potential benefits from theft, costs of defences and the difference in productivity between agriculture and the hunter-gatherer lifestyle). They noted that the model could also be applied to other scenarios involving investment in defence which may also have offensive capability.

I have some sympathy for this argument. Archaeological evidence from some of the earliest agricultural settlements indicate the development of defences. Agriculture allows for specialisation, including specialisation in developing the tools of theft and war.

However, I am still to be convinced that this argument is necessary to explain the adoption of agriculture. If, even with their lower health, agricultural communities have higher numbers of children, they will come to form a larger part of the population. Given that many hunter-gatherers spaced births due to their nomadic lifestyle, an agricultural existence may allow for more births, outweighing the health costs of the agricultural existence. Hunter-gatherer populations could then be squeezed out.

One way of framing this argument could be to consider if the agricultural adopters had different preferences for quality or quantity of children to those who remained hunter-gatherers. If the farmers had preferences that gave more weight to number of offspring than health or leisure time, it may be a rational lifestyle to adopt. The higher number of offspring then leads it to become the dominant lifestyle in the total population.

Relative to their hunter-gatherer counterparts, early Neolithic farmers were short, had poor dental health due to malnutrition, bone lesions suggestive of disease and stunted spines from the back-breaking labour. This comparison underlies Jared Diamond’s claim that agriculture was the worst mistake in the history of the human race.

However, this decline in health was not permanent. For example, the health of Egyptians 12,000 years ago, shortly after the shift to farming from foraging, was poor. But by 4,000 years ago, height had returned to pre-agricultural levels and evidence of malnutrition in tooth enamel was lower than that of their hunter gatherer comparators. Agriculturalists adapted to their new diet and environment.

This story plays out in a 2007 working paper by Oded Galor and Omer Moav on how the shift to agriculture could have affected life expectancy, and more importantly, still affects life expectancy today. They make a fairly simple argument. When people shifted to agriculture and faced a greater threat of disease and other hazards associated with dense living, those who were predisposed to make larger investments in health (toward, say, higher investment in immune function or, as they model in their paper, resource transfers to children) would have an evolutionary advantage and increase in prevalence. When those threats to the environment later ease, as has now happened in most advanced economies, that higher investment in health translates into higher life expectancy.

The most interesting implication of this argument is the comparison across populations. Those populations that underwent a transition to agriculture earlier will have had more time to adapt to the new high-mortality environment and as a result, will make a larger investment in health. When those same populations transition to a modern low-mortality environment, they have a higher life expectancy than those without the history of agriculture.

Galor and Moav test this idea by examining how the length of time since the Neolithic Revolution is associated with life expectancy in modern populations. Using a range of controls, including latitude, land arability and levels of income in modern times, they found that an extra thousand years of time elapsed since the transition to agriculture results in an extra 1.5 to 2 years of life expectancy for that population. Using those numbers as a rough guide, the extra 3,000 or so years that European populations have experienced agriculture relative to African populations would result in an extra 5 years life expectancy for the Europeans even if gaps in socioeconomic circumstances were eliminated.

There are a couple of implications to this argument. The first is that if mortality risk starts to decline, we would expect investment to start to go the other way, such as focusing on quantity of children. It may be that the couple of hundred years since any population broke the Malthusian shackles is too short for evidence of that rebound. There might also be successive increases in the level of the shock – first with the transition to agriculture, later in the move to high-density disease-ridden cities, with increasing mortality risk playing out right up to the Industrial Revolution.

This paper gets a bit of space in Galor’s book Unified Growth Theory, where it ties in quite nicely. Galor advocates a unified growth theory approach as it captures the patterns in technology, income and population (including a demographic transition) within a single analytical framework. The basic mechanism in Galor’s unified growth models is that investments in education (quality) of offspring feeds technological progress, which in turns feeds the incentives to invest in education. This virtuous feedback loop drives the transition to a modern high-growth economy.

Now take the argument about increasing investment in health when a society has transitioned to agriculture. Those investments form part of the general investment in quality, helping to spur on the growth in human capital. A society with the early transition to agriculture will have higher investment in children, which will in turn drive an earlier transition to a modern growth state than would occur in a society with a short history of agriculture (as is reflected in which populations have made that transition).

Having said all the above, I’m not convinced by this particular argument linking longevity and agriculture (although I could be). Investments in health may trade-off with investments in other types of quality, such as education or brain energy consumption. The transition to agriculture also allowed for higher reproduction rates through the sedentary lifestyle, which is investment in quantity not quality. And lastly, does the difference in longevity simply reflect the maladaptation to modern diets among those with a short history of agriculture? As a test of this, what would be the respective lifespans in a hunter-gatherer context of two groups with short and long histories of agriculture?

Links this week:

1. David Barash reviews some books taking an evolutionary perspective on reproduction. (HT: Andrea Castillo)
2. A cut from the Econtalk interview with Tyler Cowen. Conscientiousness will become more important in response to increasing opportunities for self-improvement.
3. Behavioural economists did not discover irrationality. And while we’re at it, let’s start calling it behavioural science.
4. How much species diversity was there at the time of Home erectus? I love it that such a simple yet obvious consideration can completely change the way of looking at something. (HT: Daniel Lende)

While Malcolm Gladwell bashing season is still in full swing and before the mob burns the Gladwell effigy, I want to record a few thoughts that I feel are under-appreciated (or under-emphasised) by some of Gladwell’s critics. (For those not up to speed, Chabris opens, Gladwell responds, Chabris has another go, Gelman comments, twitter goes nuts, and if you google, you’ll find plenty of other contributions).

First, I am not a fan of, for want of a better way of describing it, the conformist strain that underlies some of the critiques. “There’s our way or the highway.” There is a role in science for speculation, for advocacy, for taking a position and seeing how far you can push it (even if you don’t believe it). Gladwell’s stories make you think about issues in ways you haven’t before. It’s through confronting and dismantling those stories that you get to understand the question better. Of those who have read Outliers, who hasn’t thought more about the mix of training and talent behind elite performers. Daniel Kahneman’s Thinking, Fast and Slow was a richer read (for me) having previously read Blink and thought about the two systems that Kahneman dissects (in fact, Blink triggered a path of reading that continues to this day). I largely agree with the “stone soup” section of Gelman’s post, which captures this point better than I do here.

Having said this, there are times where I would prefer more evidence to underlie Gladwell’s claims. In fact, I often wish that about whatever I read. I recently wished the same thing about Dan Ariely’s The Upside of Irrationality. But Gladwell does draw on a lot of peer-reviewed science (just not always the papers preferred by his critics). The 10,000 hour rule did not come from nowhere. Of course, the flip-side of this demand is a world there every word is vetted, every claim pinned to a peer-reviewed paper, and no-one wants to read.

I suspect part of my discomfort with the critiques of Gladwell is that so much of what is published as peer-reviewed science won’t stand the test of time (particularly in economics, psychology and other human focused fields). It won’t (or can’t) be replicated. It relies on tortured statistics. Those who don’t want to believe it won’t, or they’ll stick to their preferred piece of the literature while ignoring the rest. And among that mess, we pick on Gladwell for being too neat or not logical enough or making general claims without evidence (and why aren’t more of the criticisms of Gladwell being directed at the authors of the studies he is referring to and not Gladwell himself).

In that context, another part of my discomfort comes from the expectation that despite my “superior logic”, Gladwell might well be right on some points where I (and others) disagree with him. A small degree of humility does not go astray.

Gladwell is also not as neat in his story telling as he is often accused. You can see why he laments that people only read the first half of Blink, when the latter chapters are filled with examples of where snap judgments fail. If anything, parts of Blink seem inconsistent and by the end of the book, un-reconciled. His recent story on whether drugs may be a fair way to overcome genetic differences in sporting ability is a great example of his ability to raise a murky question and let it linger in the air (in my opinion, Gladwell is a better essayist than book author).

Finally, although Gladwell doesn’t seem keen to engage in a back and forth debate, when he does, he doesn’t do too badly. Or, as I’d rather put it, his opponents don’t deliver the slam dunks you might expect. Andrew Gelman suggested that “Gladwell’s credibility has been weakened over the years by fights with bigshots such as Steven Pinker”. But if you read the exchange between Pinker and Gladwell, Pinker’s major sources were blogs and petitions. Maybe the bloggers and petitioners were right, as Pinker suggested (I think they were). But it’s hardly the dismemberment that someone of Pinker’s stature might be expected to deliver. Of course, over the next couple of years, some of those critiques strengthened. Thanks to Malcolm Gladwell, people thought about it more and nailed their arguments down.

Having said the above, I disagree with a lot of Gladwell’s arguments, including many of the central themes of Outliers. I am with Steven Pinker on the lonely ice floe of I.Q. fundamentalism (although threads started by Gladwell played a small part in convincing me that traits such as time preference and conscientiousness are also important). But I’d like to hear less criticism of Malcolm Gladwell as a package and more of “That’s interesting, but I think it’s wrong. Here’s why.” Because its when people grapple with Gladwell’s ideas that his true value has been realised. Those areas touched by Gladwell are better for it.

*If you want more Malcolm Gladwell love, try this piece by Ian Leslie.

Links this week:

1. Talks for the Darwinian Business conference have been posted online.
2. A great interview with Richard Thaler.
3. Taboo genetics.
4. Robert Kurzban and Rob Brooks on religion and cooperation.
5. The Gladwell debates continue. Chabris writes a second piece. Gladwell responds. Andrew Gelman weighs in.

Links this week:

1. Enrico Spolaore and Romain Wacziarg write on genetic barriers to growth. I have previously posted on their work here, here and here.
2. Doug Kenrick on Free Market Psychology. There needs to be a rule that only those who have read Adam Smith are allowed to describe Adam Smith’s take on the invisible hand
3. Also at Psychology Today, Matthew Rossano on human and Neanderthal rituals. The difference – cost. (HT: OneNakedApe)
4. Malcolm Gladwell is interviewed in The Telegraph. Christopher Chabris reviews Gladwell’s latest book.
5. More Gladwell – on genes and fairness in sport. Despite Gladwell’s flaws (see my thoughts on Outliers), I need to find some time to write a contrarian “In praise of Malcolm Gladwell” piece during this Gladwell bashing season (which it must be based on my twitter feed).
6. Finally, the Human Fertility Collection has been launched. It is a supplement to the Human Fertility Database, and contains additional data that doesn’t meet HFD standards.

Well, one anthropologist anyway. I’m normally the first person to admit that economics would benefit from incorporating findings from other fields into its understanding of human behaviour, be that from anthropology, biology, evolutionary psychology or whatever other field might yield useful insight. After all, that is one of my focuses for this blog. But sometimes the caricatures of economics become too much to bear. So for this post, I want to take a moment to defend economics.

In a post over at The Primate Diaries, Eric Michael Johnson argues that few economists will admit that economics is inextricably tied to moral behaviour. I’m not sure if Johnson has set foot in an economics seminar before, or read the debates on economic blogs, but morality is often at the forefront of economics debates (even if it’s not called “morality”). Adam Smith, who he picks on at one point for getting hunter-gatherer economics wrong, wrote a whole book on morality. It’s hardly a back seat consideration.

But rather than focus on the morality question, I want to look at Johnson’s framing of the state of economics. There’s one paragraph toward the end of the post where Johnson lets loose in particular, so I’ll pull that paragraph apart one piece at a time. First:

Social scientists are increasingly reaching the conclusion that economics is a field in disarray.

So what is the benchmark for disarray? Johnson provides two potential reasons:

Not only is the economic outcome so often in conflict with our most celebrated moral principles, …

Following Johnson’s link, it seems that economics is in disarray because the Pope is concerned about our economic system. So economics in disarray because the subject of study isn’t behaving in the way that someone wants?

Finishing Johnson’s sentence:

… leading economists can’t even agree on the core assumptions in their field.

The article that Johnson links to is a piece in Evolution: This View of Life by Terence Burnham, who points to disagreement between neoclassical and behavioural economists about their assumptions of human behaviour. To illustrate, Burnham notes the dispute between two University of Chicago economists, Richard Thaler on the behavioural economics side and Eugene Fama on the neoclassical. Fama doesn’t think that some of Thaler’s articles should have been published (who hasn’t thought that about an article before?) whereas Thaler has picked on Fama for being “the only guy on earth who doesn’t think there was a bubble in Nasdaq in 2000.”

But how much disagreement is a sign of a field in disarray? Take the bitter struggle over the origins of kindness between groups of evolutionary biologists. Or Dawkins versus Gould. Or David Sloan Wilson and E.O. Wilson against most evolutionary biologists on group selection? It seems sociobiology is in disarray too.

Turning to Johnson’s own field, cultural and evolutionary anthropologists still debate about the blank slate picture of human nature. Napoleon Chagnon’s recent book, Noble Savages, triggered another round of battles between anthropologists about his fieldwork with the Yanomamö, with Marshall Sahlins resigning from the National Academy of Sciences following Chagnon’s election as a member. At least Thaler and Fama still work at the same university.

And of course, Fama and Thaler have much common ground. Even Thaler thinks that the selfish, rational agent model is the best theory of economic behaviour available. The question is when is the right time to use that abstraction, and when not.

As a a result, I’ll accept that economics is in disarray if evolutionary biology, sociobiology and anthropology are in disarray too.

Moving to Johnson’s next sentence,

Despite the millions of dollars that go into economic think tanks and the construction of complicated financial models we can’t even come to a consensus on whether government spending helps or hurts an economy in recession.

Actually, there’s a surprising level of consensus. A poll of Chicago Booth’s Economic Experts Panel found 80 per cent agreed unemployment was lower in 2010 than it would have been without the stimulus bill (and only 86 per cent responded, making it 2 per cent uncertain and 4 per cent disagreeing). There was less (but still moderate) agreement about the long-term costs and benefits once future tax changes and the like were taken into account, but how can there be consensus when you don’t even know what form those future tax and policy changes will take? So who are these disagreeing people who Johnson refers to? Follow the link and you find its Republicans and Democrats.

To be fair to Johnson, there is a lot that economists do not know about stimulus. In an update to his post, he quotes Doyne Farmer, Duncan Foley, Olivier Blanchard and friends on that point. But it’s hardly surprising. We have a highly complex system involving millions of people and firms, complex networks and masses of complex regulation and bureaucracy, together with an astounding range of ways in which stimulus might be implemented. In Australia, one of the prime forms of stimulus after the financial crisis was installation of insulation bats in house roofs. How is that going to play out in your economic model? (So far, the result seems to be a boost to employment in bat installation, more energy efficient houses, house fires, fraud, the occasional electrocution, a couple of government inquiries and continuing debate about whether it was worth it.)

All up, Johnson’s caricatures distract potential supporters of his more important argument. The paragraph I pulled apart could have simply been omitted from Johnson’s post and other statements tweaked, and his central argument would not have been any weaker (and we might be responding to and talking about that instead of the caricature).

Alternatively, Johnson could have acknowledged that economics is a huge field with many economists working on fairness, cooperation and altruism. He could have noted that most economists are actually concerned with “how people behave in the real world” (any popular economics book gives a taste of that) and that morality is often a central consideration in economic thought. Even Alan Greenspan influencer Ayn Rand, who Johnson has targeted before, wrote Atlas Shrugged as part of her work on moral philosophy. And then Johnson could have said that research from anthropology shows that these conceptions of morality are wrong or under-utilised, and that anthropology could provide evidence to resolve disagreements within the field. Not as exciting or politically charged, but more likely to allow focus on the core argument than the burning straw man.

Another alternative would be to get a deeper understanding of which parts of the economics profession deserve to be set on fire and address them head on. There are plenty of potential targets, from the confidence with which economic forecasts are made, to the abuse of complex statistical techniques in econometric analysis, to the question of when it is appropriate to ease the assumption of humans as rational animals in analysis of financial markets. Even drawing a distinction between macro and microeconomics would help (each have their own problems).

A more focussed approach would have the benefit of not turning off those who might learn from Johnson, and give a better picture of what Johnson’s conception of morality would actually add to economics. Because the question I have at the end of Johnson’s post is, “what exactly would change if economists adopted Johnson’s conception of morality in their analysis?” I expect it’s not determining the effects of economic stimulus.

*In the comments to Johnson’s post, Chris Auld makes some good points.

Links this week:

1. Paul Frijters on race and IQ (also read the comments). And if you want some perspective on the epigenetic undertone to that post, Kevin Mitchell’s piece from the beginning of the year is worth a read.
2. An article that got plenty of press – how heritable is IQ for people of low SES? The Wall Street Journal comments. There is an excellent discussion of the paper in the comments (including from one of the paper’s authors) over at Information Processing.
3. Peter Turchin and friends have a new paper out in PNAS on the transition from small-scale societies to today’s massive, complex and largely anonymous societies. Turchin blogs on the paper (and provides a Q&A).
4. If you are overwhelmed by the book offerings during peak-Paleo^TM, Daniel Lieberman’s forthcoming book, The Story of the Human Body: Evolution, Health, and Disease is probably a good one to put towards the top of your reading pile. The Guardian asks him a couple of questions. (I’m hearing positive things about John Durant’s book too.)