Adonis Diaries

Posts Tagged ‘economics

Economics students call for shakeup of the way their subject is taught

Students from 19 countries argue economics courses failing wider society by ignoring need to address 21st-century issues
,economics correspondent at The Guardian published this May 4, 2014

Economics students from 19 countries have joined forces to call for an overhaul of the way their subject is taught, saying the dominance of narrow free-market theories at top universities harms the world’s ability to confront challenges such as financial stability and climate change.

In the first global protest against mainstream economic teaching, the International Student Initiative for Pluralist Economics (ISIPE) argues in a letter to the Guardian that economics courses are failing wider society when they ignore evidence from other disciplines.

The students, who have formed 41 protest groups in universities from Britain and the US to Brazil and Russia, say research and teaching in economics departments is too narrowly focused and more effort should be made to broaden the curriculum.

They want courses to include analysis of the financial crash that so many economists failed to see coming, and say the discipline has become divorced from the real world.

“The lack of intellectual diversity does not only restrain education and research. It limits our ability to contend with the multidimensional challenges of the 21st century – from financial stability to food security and climate change,” they say in their manifesto.

“The real world should be brought back into the classroom, as well as debate and a pluralism of theories and methods. This will help renew the discipline and ultimately create a space in which solutions to society’s problems can be generated.”

The move follows a series of protests in the UK led by students in Manchester, Cambridge and London against academics who have been accused of acting as cheerleaders for the market-financial models that helped push the global financial system into the crisis.

Economics undergraduates at the University of Manchester, who formed the Post-Crash Economics Society, recently issued their own manifesto for reform with the endorsement of the Bank of England’s incoming chief economist, Andy Haldane.

Haldane, who is currently director of financial stability, said economists had forgotten the links between their subject and other social science disciplines, which can give a broader and more accurate picture of how an economy works.

He said: “The crisis has laid bare the latent inadequacies of economic models. These models have failed to make sense of the sorts of extreme macro-economic events, such as crises, recessions and depressions, which matter most to society.” (Actually, economists are Not doing any investigative work, such as in Freakanomics micro-economics behavior of people)

In the decade before the 2008 crash, many economists dismissed warnings that property and stock markets were overvalued. US central bank boss Alan Greenspan was a leading figure who argued that markets were correctly pricing shares, property and exotic derivatives in line with economic models of behaviour. It was only when the US sub-prime mortgage market unravelled that regulators, policymakers and banks realised a collective failure to spot the bubble had wrecked their economies.

In his bestselling book Capital in the Twenty-First Century, the economist Thomas Piketty attacks mainstream economic teaching, accusing academics of believing mathematical models without looking at growing evidence that undermines the conclusions.

Piketty’s look back over the last 200 years of economic development in search of lessons for the next 100 years is currently the best selling book on Amazon in the US.

He says academics have ignored evidence of growing inequality and its influence on GDP growth since the 1970s.

“For too long economists have neglected the distribution of wealth, partly because of the profession’s undue enthusiasm for simplistic mathematical models based on so-called representative agents,” he says.

The student manifesto calls on university economics departments to hire lecturers with a broader outlook and introduce a wider selection of texts. It also asks that lecturers endorse collaborations between social sciences and humanities departments or “establish special departments that could oversee interdisciplinary programmes blending economics and other fields”.

The manifesto says: “Change will be difficult – it always is. But it is already happening.

Students across the world have already started creating change step by step. We have founded university groups and built networks both nationally and internationally.

Change must come from many places. So now we invite you – students, economists, and non-economists – to join us and create the critical mass needed for change.”



By fetishising mathematical models, economists turned economics

into a highly paid pseudoscience, The new astrology

by Alan Jay Levinovitz

Since the 2008 financial crisis, colleges and universities have faced increased pressure to identify essential disciplines, and cut the rest.

In 2009, Washington State University announced it would eliminate the department of theatre and dance, the department of community and rural sociology, and the German major – the same year that the University of Louisiana at Lafayette ended its philosophy major.

In 2012, Emory University in Atlanta did away with the visual arts department and its journalism programme.

The cutbacks aren’t restricted to the humanities: in 2011, the state of Texas announced it would eliminate nearly half of its public undergraduate physics programmes.

Even when there’s no downsizing, faculty salaries have been frozen and departmental budgets have shrunk.

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Economic theory is caught up with abstract theories rooted in shaky hypotheticals. By mistaking mathematical models for empirical science, economists have become like astrologers, peddling ideas that a public is hungry to believe. Last week’s most-read:

But despite the funding crunch, it’s a bull market for academic economists.

According to a 2015 sociological study in the Journal of Economic Perspectives, the median salary of economics teachers in 2012 increased to $103,000 – nearly $30,000 more than sociologists.

For the top 10%  of economists, that figure jumps to $160,000, higher than the next most lucrative academic discipline – engineering.

These figures, stress the study’s authors, do not include other sources of income such as consulting fees for banks and hedge funds, which, as many learned from the documentary Inside Job (2010), are often substantial. (Ben Bernanke, a former academic economist and ex-chairman of the Federal Reserve, earns $200,000-$400,000 for a single appearance.)

Unlike engineers and chemists, economists cannot point to concrete objects – cell phones, plastic – to justify the high valuation of their discipline.

Nor, in the case of financial economics and macroeconomics, can they point to the predictive power of their theories.

Hedge funds employ cutting-edge economists who command princely fees, but routinely underperform index funds. Eight years ago, Warren Buffet made a 10-year, $1 million bet that a portfolio of hedge funds would lose to the S&P 500, and it looks like he’s going to collect.

In 1998, a fund that boasted two Nobel Laureates as advisors collapsed, nearly causing a global financial crisis.

The failure of the field to predict the 2008 crisis has also been well-documented. (I think many predicted the coming catastrophe: The timing was political in nature)

In 2003, for example, only five years before the Great Recession, the Nobel Laureate Robert E Lucas Jr told the American Economic Association that ‘macroeconomics […] has succeeded: its central problem of depression prevention has been solved’.

Short-term predictions fair little better – in April 2014, for instance, a survey of 67 economists yielded 100 per cent consensus: interest rates would rise over the next six months. Instead, they fell. A lot.

Nonetheless, surveys indicate that economists see their discipline as ‘the most scientific of the social sciences’.

What is the basis of this collective faith, shared by universities, presidents and billionaires?

Shouldn’t successful and powerful people be the first to spot the exaggerated worth of a discipline, and the least likely to pay for it?

In the hypothetical worlds of rational markets, where much of economic theory is set, perhaps.

But real-world history tells a different story, of mathematical models masquerading as science and a public eager to buy them, mistaking elegant equations for empirical accuracy. (Math models should be generated from actual data, and Not used to generate hypothetical numbers)

As an extreme example, take the extraordinary success of Evangeline Adams, a turn-of-the-20th-century astrologer whose clients included the president of Prudential Insurance, two presidents of the New York Stock Exchange, the steel magnate Charles M Schwab, and the banker J P Morgan.

To understand why titans of finance would consult Adams about the market, it is essential to recall that astrology used to be a technical discipline, requiring reams of astronomical data and mastery of specialised mathematical formulas.

‘An astrologer’ is, in fact, the Oxford English Dictionary’s second definition of ‘mathematician’. For centuries, mapping stars was the job of mathematicians, a job motivated and funded by the widespread belief that star-maps were good guides to earthly affairs.

The best astrology required the best astronomy, and the best astronomy was done by mathematicians – exactly the kind of person whose authority might appeal to bankers and financiers.

In fact, when Adams was arrested in 1914 for violating a New York law against astrology, it was mathematics that eventually exonerated her.

During the trial, her lawyer Clark L Jordan emphasised mathematics in order to distinguish his client’s practice from superstition, calling astrology ‘a mathematical or exact science’. Adams herself demonstrated this ‘scientific’ method by reading the astrological chart of the judge’s son.

The judge was impressed: the plaintiff, he observed, went through a ‘mathematical process to get at her conclusions… I am satisfied that the element of fraud… is absent here.’

Romer compares debates among economists to those between 16th-century advocates of heliocentrism and geocentrism

The enchanting force of mathematics blinded the judge – and Adams’s prestigious clients – to the fact that astrology relies upon a highly unscientific premise, that the position of stars predicts personality traits and human affairs such as the economy. It is this enchanting force that explains the enduring popularity of financial astrology, even today.

The historian Caley Horan at the Massachusetts Institute of Technology described to me how computing technology made financial astrology explode in the 1970s and ’80s.

‘Within the world of finance, there’s always a superstitious, quasi-spiritual trend to find meaning in markets,’ said Horan. ‘Technical analysts at big banks, they’re trying to find patterns in past market behaviour, so it’s not a leap for them to go to astrology.’

In 2000, USA Today quoted Robin Griffiths, the chief technical analyst at HSBC, the world’s third largest bank, saying that ‘most astrology stuff doesn’t check out, but some of it does’.

Ultimately, the problem isn’t with worshipping models of the stars, but rather with uncritical worship of the language used to model them, and nowhere is this more prevalent than in economics.

The economist Paul Romer at New York University has recently begun calling attention to an issue he dubs ‘mathiness’ – first in the paper ‘Mathiness in the Theory of Economic Growth’ (2015) and then in a series of blog posts.

Romer believes that macroeconomics, plagued by mathiness, is failing to progress as a true science should, and compares debates among economists to those between 16th-century advocates of heliocentrism and geocentrism.

Mathematics, he acknowledges, can help economists to clarify their thinking and reasoning. But the ubiquity of mathematical theory in economics also has serious downsides: it creates a high barrier to entry for those who want to participate in the professional dialogue, and makes checking someone’s work excessively laborious. Worst of all, it imbues economic theory with unearned empirical authority.

‘I’ve come to the position that there should be a stronger bias against the use of math,’ Romer explained to me. ‘If somebody came and said: “Look, I have this Earth-changing insight about economics, but the only way I can express it is by making use of the quirks of the Latin language”, we’d say go to hell, unless they could convince us it was really essential. The burden of proof is on them.’

Right now, however, there is widespread bias in favour of using mathematics. The success of math-heavy disciplines such as physics and chemistry has granted mathematical formulas with decisive authoritative force. Lord Kelvin, the 19th-century mathematical physicist, expressed this quantitative obsession:

When you can measure what you are speaking about and express it in numbers you know something about it; but when you cannot measure it… in numbers, your knowledge is of a meagre and unsatisfactory kind.

(The irony is that economics can be measured, and the math models are attempts to fit the massive data of all kinds of measures)

The trouble with Kelvin’s statement is that measurement and mathematics do not guarantee the status of science – they guarantee only the semblance of science. When the presumptions or conclusions of a scientific theory are absurd or simply false, the theory ought to be questioned and, eventually, rejected.

The discipline of economics, however, is presently so blinkered by the talismanic authority of mathematics that theories go overvalued and unchecked. (Should be at least evaluated at each crisis and changed)

Romer is not the first to elaborate the mathiness critique.

In 1886, an article in Science accused economics of misusing the language of the physical sciences to conceal ‘emptiness behind a breastwork of mathematical formulas’.

More recently, Deirdre N McCloskey’s The Rhetoric of Economics (1998) and Robert H Nelson’s Economics as Religion (2001) both argued that mathematics in economic theory serves, in McCloskey’s words, primarily to deliver the message ‘Look at how very scientific I am.’

After the Great Recession, the failure of economic science to protect our economy was once again impossible to ignore.

In 2009, the Nobel Laureate Paul Krugman tried to explain it in The New York Times with a version of the mathiness diagnosis. ‘As I see it,’ he wrote, ‘the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.’ Krugman named economists’ ‘desire… to show off their mathematical prowess’ as the ‘central cause of the profession’s failure’. (At least the models should be simple for the financial people understand what they are applying)

The mathiness critique isn’t limited to macroeconomics.

In 2014, the Stanford financial economist Paul Pfleiderer published the paper ‘Chameleons: The Misuse of Theoretical Models in Finance and Economics’, which helped to inspire Romer’s understanding of mathiness.

Pfleiderer called attention to the prevalence of ‘chameleons’ – economic models ‘with dubious connections to the real world’ that substitute ‘mathematical elegance’ for empirical accuracy.

Like Romer, Pfleiderer wants economists to be transparent about this sleight of hand. ‘Modelling,’ he told me, ‘is now elevated to the point where things have validity just because you can come up with a model.’

The notion that an entire culture – not just a few eccentric financiers – could be bewitched by empty, extravagant theories might seem absurd. How could all those people, all that math, be mistaken?

This was my own feeling as I began investigating mathiness and the shaky foundations of modern economic science. Yet, as a scholar of Chinese religion, it struck me that I’d seen this kind of mistake before, in ancient Chinese attitudes towards the astral sciences.

Back then, governments invested incredible amounts of money in mathematical models of the stars. To evaluate those models, government officials had to rely on a small cadre of experts who actually understood the mathematics – experts riven by ideological differences, who couldn’t even agree on how to test their models.

And, of course, despite collective faith that these models would improve the fate of the Chinese people, they did not.

Astral Science in Early Imperial China, a forthcoming book by the historian Daniel P Morgan, shows that in ancient China, as in the Western world, the most valuable type of mathematics was devoted to the realm of divinity – to the sky, in their case (and to the market, in ours).

Just as astrology and mathematics were once synonymous in the West, the Chinese spoke of li, the science of calendrics, which early dictionaries also glossed as ‘calculation’, ‘numbers’ and ‘order’. Li models, like macroeconomic theories, were considered essential to good governance.

In the classic Book of Documents, the legendary sage king Yao transfers the throne to his successor with mention of a single duty: ‘Yao said: “Oh thou, Shun! The li numbers of heaven rest in thy person.”’

China’s oldest mathematical text invokes astronomy and divine kingship in its very title – The Arithmetical Classic of the Gnomon of the Zhou. The title’s inclusion of ‘Zhou’ recalls the mythic Eden of the Western Zhou dynasty (1045–771 BCE), implying that paradise on Earth can be realised through proper calculation.

The book’s introduction to the Pythagorean theorem asserts that ‘the methods used by Yu the Great in governing the world were derived from these numbers’. It was an unquestioned article of faith: the mathematical patterns that govern the stars also govern the world.

Faith in a divine, invisible hand, made visible by mathematics. No wonder that a newly discovered text fragment from 200 BCE extolls the virtues of mathematics over the humanities. In it, a student asks his teacher whether he should spend more time learning speech or numbers. His teacher replies: ‘If my good sir cannot fathom both at once, then abandon speech and fathom numbers, [for] numbers can speak, [but] speech cannot number.’

Modern governments, universities and businesses underwrite the production of economic theory with huge amounts of capital. The same was true for li production in ancient China. The emperor – the ‘Son of Heaven’ – spent astronomical sums refining mathematical models of the stars.

Take the armillary sphere, such as the two-metre cage of graduated bronze rings in Nanjing, made to represent the celestial sphere and used to visualise data in three-dimensions. As Morgan emphasises, the sphere was literally made of money. Bronze being the basis of the currency, governments were smelting cash by the metric ton to pour it into li. A divine, mathematical world-engine, built of cash, sanctifying the powers that be.

The enormous investment in li depended on a huge assumption: that good government, successful rituals and agricultural productivity all depended upon the accuracy of li.

But there were, in fact, no practical advantages to the continued refinement of li models. The calendar rounded off decimal points such that the difference between two models, hotly contested in theory, didn’t matter to the final product.

The work of selecting auspicious days for imperial ceremonies thus benefited only in appearance from mathematical rigour. And of course the comets, plagues and earthquakes that these ceremonies promised to avert kept on coming.

Farmers, for their part, went about business as usual. Occasional governmental efforts to scientifically micromanage farm life in different climes using li ended in famine and mass migration.

Like many economic models today, li models were less important to practical affairs than their creators (and consumers) thought them to be. And, like today, only a few people could understand them.

In 101 BCE, Emperor Wudi tasked high-level bureaucrats – including the Great Director of the Stars – with creating a new li that would glorify the beginning of his path to immortality. The bureaucrats refused the task because ‘they couldn’t do the math’, and recommended the emperor outsource it to experts.

The equivalent in economic theory might be to grant a model high points for success in predicting short-term markets, while failing to deduct for missing the Great Recession

The debates of these ancient li experts bear a striking resemblance to those of present-day economists.

In 223 CE, a petition was submitted to the emperor asking him to approve tests of a new li model developed by the assistant director of the astronomical office, a man named Han Yi.

At the time of the petition, Han Yi’s model, and its competitor, the so-called Supernal Icon, had already been subjected to three years of ‘reference’, ‘comparison’ and ‘exchange’. Still, no one could agree which one was better. Nor, for that matter, was there any agreement on how they should be tested.

In the end, a live trial involving the prediction of eclipses and heliacal risings was used to settle the debate.

With the benefit of hindsight, we can see this trial was seriously flawed. The helical rising (first visibility) of planets depends on non-mathematical factors such as eyesight and atmospheric conditions. That’s not to mention the scoring of the trial, which was modelled on archery competitions (Unrelated measure, Not measuring valid parameter). Archers scored points for proximity to the bullseye, with no consideration for overall accuracy. The equivalent in economic theory might be to grant a model high points for success in predicting short-term markets, while failing to deduct for missing the Great Recession.

None of this is to say that li models were useless or inherently unscientific. For the most part, li experts were genuine mathematical virtuosos who valued the integrity of their discipline. Despite being based on inaccurate assumptions – that the Earth was at the centre of the cosmos – their models really did work to predict celestial motions.

Imperfect though the live trial might have been, it indicates that superior predictive power was a theory’s most important virtue. All of this is consistent with real science, and Chinese astronomy progressed as a science, until it reached the limits imposed by its assumptions.

However, there was no science to the belief that accurate li would improve the outcome of rituals, agriculture or government policy.

No science to the Hall of Light, a temple for the emperor built on the model of a magic square. There, by numeric ritual gesture, the Son of Heaven was thought to channel the invisible order of heaven for the prosperity of man. This was quasi-theology, the belief that heavenly patterns – mathematical patterns – could be used to model every event in the natural world, in politics, even the body.

Macro- and microcosm were scaled reflections of one another, yin and yang in a unifying, salvific mathematical vision. The expensive gadgets, the personnel, the bureaucracy, the debates, the competition – all of this testified to the divinely authoritative power of mathematics.

The result, then as now, was overvaluation of mathematical models based on unscientific exaggerations of their utility.

In ancient China it would have been unfair to blame li experts for the pseudoscientific exploitation of their theories. These men had no way to evaluate the scientific merits of assumptions and theories – ‘science’, in a formalised, post-Enlightenment sense, didn’t really exist.

But today it is possible to distinguish, albeit roughly, science from pseudoscience, astronomy from astrology. Hypothetical theories, whether those of economists or conspiracists, aren’t inherently pseudoscientific. Conspiracy theories can be diverting – even instructive – flights of fancy. They become pseudoscience only when promoted from fiction to fact without sufficient evidence.

(But for no avail. Experimental minds to learn how to design and run experiments are Not formed in schools, even in most universities)

Romer believes that fellow economists know the truth about their discipline, but don’t want to admit it. ‘If you get people to lower their shield, they’ll tell you it’s a big game they’re playing,’ he told me. ‘They’ll say: “Paul, you may be right, but this makes us look really bad, and it’s going to make it hard for us to recruit young people.”’

Demanding more honesty seems reasonable, but it presumes that economists understand the tenuous relationship between mathematical models and scientific legitimacy.

In fact, many assume the connection is obvious – just as in ancient China, the connection between li and the world was taken for granted. When reflecting in 1999 on what makes economics more scientific than the other social sciences, the Harvard economist Richard B Freeman explained that economics ‘attracts stronger students than [political science or sociology], and our courses are more mathematically demanding’.

In Lives of the Laureates (2004), Robert E Lucas Jr writes rhapsodically about the importance of mathematics: ‘Economic theory is mathematical analysis. Everything else is just pictures and talk.’ Lucas’s veneration of mathematics leads him to adopt a method that can only be described as a subversion of empirical science:

The construction of theoretical models is our way to bring order to the way we think about the world, but the process necessarily involves ignoring some evidence or alternative theories – setting them aside. That can be hard to do – facts are facts – and sometimes my unconscious mind carries out the abstraction for me: I simply fail to see some of the data or some alternative theory.

Even for those who agree with Romer, conflict of interest still poses a problem. Why would skeptical astronomers question the emperor’s faith in their models? In a phone conversation, Daniel Hausman, a philosopher of economics at the University of Wisconsin, put it bluntly: ‘If you reject the power of theory, you demote economists from their thrones. They don’t want to become like sociologists.’

George F DeMartino, an economist and an ethicist at the University of Denver, frames the issue in economic terms. ‘The interest of the profession is in pursuing its analysis in a language that’s inaccessible to laypeople and even some economists,’ he explained to me. ‘What we’ve done is monopolise this kind of expertise, and we of all people know how that gives us power.’

Every economist I interviewed agreed that conflicts of interest were highly problematic for the scientific integrity of their field – but only tenured ones were willing to go on the record. ‘In economics and finance, if I’m trying to decide whether I’m going to write something favourable or unfavourable to bankers, well, if it’s favourable that might get me a dinner in Manhattan with movers and shakers,’ Pfleiderer said to me. ‘I’ve written articles that wouldn’t curry favour with bankers but I did that when I had tenure.’

when mathematical theory is the ultimate arbiter of truth, it becomes difficult to see the difference between science and pseudoscience

Then there’s the additional problem of sunk-cost bias.

If you’ve invested in an armillary sphere, it’s painful to admit that it doesn’t perform as advertised. When confronted with their profession’s lack of predictive accuracy, some economists find it difficult to admit the truth.

Easier, instead, to double down, like the economist John H Cochrane at the University of Chicago. The problem isn’t too much mathematics, he writes in response to Krugman’s 2009 post-Great-Recession mea culpa for the field, but rather ‘that we don’t have enough math’. Astrology doesn’t work, sure, but only because the armillary sphere isn’t big enough and the equations aren’t good enough.

If overhauling economics depended solely on economists, then mathiness, conflict of interest and sunk-cost bias could easily prove insurmountable. Fortunately, non-experts also participate in the market for economic theory.

If people remain enchanted by PhDs and Nobel Prizes awarded for the production of complicated mathematical theories, those theories will remain valuable. If they become disenchanted, the value will drop.

Economists who rationalise their discipline’s value can be convincing, especially with prestige and mathiness on their side. But there’s no reason to keep believing them. The pejorative verb ‘rationalise’ itself warns of mathiness, reminding us that we often deceive each other by making prior convictions, biases and ideological positions look ‘rational’, a word that confuses truth with mathematical reasoning.

To be rational is, simply, to think in ratios, like the ratios that govern the geometry of the stars.

Yet when mathematical theory is the ultimate arbiter of truth, it becomes difficult to see the difference between science and pseudoscience. The result is people like the judge in Evangeline Adams’s trial, or the Son of Heaven in ancient China, who trust the mathematical exactitude of theories without considering their performance – that is, who confuse math with science, rationality with reality.

There is no longer any excuse for making the same mistake with economic theory. For more than a century, the public has been warned, and the way forward is clear.

It’s time to stop wasting our money and recognise the high priests for what they really are: gifted social scientists who excel at producing mathematical explanations of economies, but who fail, like astrologers before them, at prophecy.

The ‘suicide belt’ in farming regions: Monsanto of “genetically modified seed” is the culprit

A farmer has been committing suicide every 30 minutes: And Monsanto was the cause. How that?

5 million farmers are launching a lawsuit against Monsanto for as much as 6.2 billion euros (around 7.7 billion US dollars). The reason?

As with many other cases, such as the ones that led certain farming regions to be known as the ‘suicide belt’, Monsanto has been reportedly taxing the farmers to financial shambles with ridiculous royalty charges.

The farmers state that Monsanto has been unfairly gathering exorbitant profits each year on a global scale from “renewal” seed harvests, which are crops planted using seed from the previous year’s harvest.

The practice of using renewal seeds dates back to ancient times, but Monsanto seeks to collect massive royalties and put an end to the practice. Why?

Monsanto owns the very patent to the genetically modified seed, and is charging the farmers not only for the original crops, but the later harvests as well. Eventually, the royalties compound and many farmers begin to struggle with even keeping their farm afloat.

It is for this reason that India slammed Monsanto with groundbreaking ‘bio-piracy’ charges in an effort to stop Monsanto from ‘patenting life’.

Jane Berwanger, a lawyer for the farmers who went on record regarding the case, told the Associated Press:
“Monsanto gets paid when it sell the seeds. The law gives producers the right to multiply the seeds they buy and nowhere in the world is there a requirement to pay (again). Producers are in effect paying a private tax on production.”

Note 1: Currently, the African State of Burkina Faso (Haute Volta) is the prime State for the US multinational Monsanto, growing genetically altered grains (mainly tomatoes and cotton) on vast land…

Note 2: This is technically a reblogging from a top post, with slight editing and addition of a note

Compensation: An Experimental mind


I recall my advisor telling me once in frustration “At your age I was professor and had raised a family”.  He had two grown up sons and a daughter who just got married.  I didn’t need this reminder to comprehend my desperate situation: I am just plainly stubborn with no imaginations on earning money.  These long years in a PhD program in the specialty of Human Factors, at the age 35 to 41, should be considered a waste of time for any career-minded student but they were valuable for my mind. My exposure to the methods and vocabulary of five other different fields of study in psychology, business, marketing, economics, and education permit me to think that I acquired an experimental mind, a mind that not many could claim to explicitly have.  I was exposed to various experimental designs, not necessarily cause and effects designs, and inevitably to different statistical results and interpretations.  I witnessed graduates focusing on the technicality of terms and so many “point statistics” that basically means nothing, and a fortiori meant nothing in the minds of the graduates but their experimental minds were lacking in comprehension.  The end result is millions of graduates publishing papers not valid scientifically and unable to interpret results.   

When someone asks “how” (the mechanical process or procedure) it is tacitly understood that he comprehend the why and what of the subject matter or the system; that he knows all the factors and variables that may affect the outcome of a system, including the human element within the system.  Maybe a practicing or a professional knows his particular system, (he should though implicitly most of the times, as engineers learn), but the fundamental question remains “has he acquired the generalized method and rationality to investigating systems outside his discipline?” 

I know what I am talking about but the difficulty is to express and disseminate the problem.  I have taught engineers who had no understanding for discriminating among variables such as dependent, independent, or controlling variables; you think that they implicitly know how to differentiate among the variables; wrong, they don’t. Even after three sessions coupled with examples they were still in the dark and still wondering what is all the fuss about. You think that they can interpret graphs, extract wealth of information and comprehend pages of written materials from one meaningful graph, they generally cannot.  I can testify that 30% of my engineer classes could not read; another 30% could not understand what they read.  It was a pleasure to educate a couple of good minds.  I have written several articles on that subject in my category “Professional articles” for further detailed clarification.

Worst, undergraduates are almost never exposed to research papers.  Most Master’s graduates barely comprehend or interpret correctly research papers.  Graduates join the “work force” of the rational minds practically illiterate; they cannot resume any continuation learning programs for a simple reason: they are illiterate in reading and comprehending research papers.


My contention is this.  If you acquired an experimental mind then you should be eligible to comprehend any field of study by reading the research papers in the field.  The major contraption devised my professions to discriminate among one another is a flimsy mask targeted in changing the technical terms and vocabulary; a secret ritual inherited from ancient times to creating castes of literates. Other than that, the experimental methodology is fundamentally the same.  When you acquire an experimental mind then all disciplines are one course away; you need to learn the slang, a new language that sound familiar, but with terms that have different meanings and connotations.  The ultimate goal of teaching is for every university graduating mind to be trained to comprehend research papers of other disciplines.

May I refer the reader to my current article “Rationality Fraud: Can our leading minds pass Socrates’ dialogue test?”

Are you poor? Raise your hand! (January 20, 2009)

            If you are in a situation that prevents you to participate in social life then raise your hand: you are considered materially and morally poor.  It follows that you are poor if you are stuck in your “home” because you cannot mingle with people, in a society that expects standards in elegance, in frequency of eating out, of taking vacations, and of transportation means.  In a culture of “fitting in” you are poor if you were raised not to incur debt that your hard earned job cannot cover.  You are the poorer if the standard of living in your country is expensive and the facilities of support are not suitable in times of emergencies, for health coverage, for children well being, for continuing education, and for opportunities to work. 

If you feel ashamed to invite “friends” home because it is in shamble, the furniture and appliances outdated, or the walls needing another layer of paints then you are poor in such a society.  If you feel inclined to cancel invitations to weddings because you cannot afford a decent gift for the married couple then you are poor in such a society. If you are unable to enroll your kids in private schools because public schools are considered not equipped for the education “performance” standards then you are poor in such a society. You got the gist of my definition; except in situations of basic survival necessities, then the concept of being poor is specific to the culture and tradition of a society.

            There are many definitions of belonging to a “poor status”; it ranges from daily nutritional quality, to the minimum hourly labor rate, to the minimum amount for renting, and leading an independent living; to the bare subsistence for survival such is the condition of over two billion people around the world. 

            The European Union has come up with a statistical limit for being classified as poor. The office of statistics in the EU (Eurostat) adopted the median income for a State (the dividing amount of income that splits two equal number of earners) and then categorizes the poor whose income is within the 60% of the lower median income range.  Thus, it does not matter how the State’s economy improved, or the standard of living improved, or your income improved there will always be 30% of the population considered as poor (for example, 60% *50% = 30%).  Consequently, an EU State member has to allocate budget and plan to support 30% of the needy population.

            The EU definition for being considered poor is an operational categorization for a consumer economy.  If your income or the financial facility structure in your society prevents you to fit in a consumer society, to purchase an outfit that is the fashion of the year, to participate in the cultural and artistic activities, to visit a bar once a month, to go out and see the latest movie, or to buy tickets for festivities and sport events then you are not promoting the internal market economy and you are poor and need serious support to fit in as a citizen.

            The life of the hermit in a remote location is certainly hard; the life of a forced hermit in towns and cities is by far much harsher.  The hermit in cities has to construct his own model or philosophy to life and death; he has to build his specific character to survive the harsh facts within his society.  I have this theory: a poor State economy combined with poor financial credit facilities and high consumer standards the higher the odds for frequent civil wars.

What future for our kids? Hang on buddy! (November 8, 2008)

            Regardless of a scenario or a combination of scenarios, there are trends that have definite paths in the foreseeable future. For example:

1.              Population on Earth will continue to increase; it might or might not reach a plateau.

2.              Potable water will dwindle and its quality will deteriorate fast.

3.              Quantity of water for irrigation will diminish.

4.              Degradation of the soil for agriculture will resume its fast pace because of intensive methods and increase in fertilizers and pesticides and deforestation and acid rains…

5.              Cultivable lands will shrink to make rooms for increased infrastructures and habitable estates.

6.              The virgin forests in the Amazon, Canada, and Africa are disappearing much quicker than reforestation policies.

7.              The concentration of carbon dioxide is increasing exponentially and there are no effective policies to make do without oil and increased coal mining.

8.              Cheaper car productions in China and India will saturate the highways and deplete even faster the oil reserves.

9.              The prices of medicines and chemical products will shoot to the roofs because of lack of oil and the necessary ingredients in the equatorial forests.

10.           The ozone layer will continue is depletion process.

11.           Biological diversity will no longer be that diverse.

12.           Maritime sources of protein are already scarce and polluted.

13.           Renewable sources of energy will not match the ever increase in demands on energies.

14.           Concentration of people in mega cities; since China joined the free market economy 150 million Chinese peasants flocked to the major cities and the same trend in India and everywhere.

Shall I go on?  There are several scenarios to remedy to this bleak future; not necessarily to stop the trends, but just to maintain the survival of human species a while longer. There are at least four scenarios. First, we might very plausible maintain the free market economy, consumerism, multinationals and higher rate of growth.  This policy has proven its catastrophic effects but no alternative economic policies are studied seriously.

            The second scenario is security first for the rich nations; the poor immigrants would be warded off these “islands” of prosperity and affluence and let the third world go to hell.  This scenario is gaining ground in Europe and the USA and tighter measures to exclude the other non-developed populations have been in place for some time.

            The third scenario is for the western nations to coordinate political policies through financial incentives and tax cuts and centralized planning with fixed objectives. Obviously, these centralized policies will be heavily biased toward the life-style of the developed and rich nations.

            The fourth scenario can be summarized by Gandhi’s statement: ” True civilization is not the multiplication to infinity the wants of man, but their deliberate limitation so that to allow each individual to share what is essential for survival”.  It is fundamentally a strategy of long term durability to maintaining the survival process by relying on the basic necessities.  This scenario screams for drastic cultural change in our behavior and consumption and the quest for renewable matters and sources of energies.

Well, we cannot expect the western civilization to make a dent in the fourth scenario; not because they lack moral character but because of the daily pressures to fit in a well established consumerism society.  This is basically the lesson of history that the vast majority has to sacrifice so that the very few could enjoy life to blotting!

In the meantime, there are these rarest of events or natural cataclysms that re-establish equilibrium to Earth survival and rejuvenation.  This time around it is man that would have been the catalyst. Human spices might or might not survive.  One thing is certain; if human kind survives the same cycle of development will recur, unless the fourth scenario culture has been inculcated deep in our psychic or animal instincts.

Have I increased your doze of pessimism? Anyway, we are all living a worried life to the benefit of the entertainment industries.  No wonder that terrorist activities are increasing; that mass destruction philosophies are common policies; that vast “collateral damages” are acceptable; that extreme, salafist behavior are widespread among all religions and sects; that mysticism is gaining wide disciples, and that patience for rational discussion is dwindling!  I would not kill your grain of hope.  Hang on buddy.

Blood all over the floor (December 8, 2008)

It is 1952 and General Douglas Mac Arthur was saying “Our relative decline, our incapacity to conserve our resources, the vertiginous growth of our national debt, and the weight of our financial engagements are putting our next generations at risk”.

It is 1972 and the inflation was rampant; the Midwest farmers were in high debt and Latin America was in acute debt. President Carter order the FED chairman Paul Volcker to contain inflation.

Volcker invited the Wall Street Journal executives for lunch and asked them “When blood is all over the floor, would you guys support my policy?” 

The executives did not hesitate and they were affirmative.

The US returned to a strong dollar policy.

The Midwest farmers sold their farms at peanut prices and Latin America experienced blood shed for half a century, such as genocides, dictatorship, military coups, facilitating the investment of the US multinationals, destroying the equatorial forests, and barbarically excavating raw material mines in Chili and Peru and so on.

The US has been indebted for over half a century at the expense of over two billion people living under the survival level. I have a simple question:

And the question remains|:”why the US should not experience blood on the floor?”

In the nineties, many books were published warning that the premises and practices of “mondialization, or globalization” are volatile and highly flammable.

For example, Danny Roderick (1997), in his “Has globalization gone too far in its way?”, stated that

1. First, eliminating regulations on commerce and investment was premature;

2.  Second, that there was lack of fairness in the practices among the developed and under-developed States.

3. Third, that the US and European quality standards were being forced on States that cannot produce according to the satisfaction of the western nations; that was an excellent excuse for outsourcing and relocating factories in countries with cheaper manpower; the consequence was that all these products could not be exported but into States with the same quality standards.

What would happen if these markets stopped importing?

All the products that are not fit for inner commerce would have to be sold as scrap.

4. Fourth, the coverage of social guarantees was exhausted in the under-developed States and the population left to mend for themselves. The Establishments in the US mocked these warnings since “History has reached an end” and the US economic model was in for ever.

The unemployed in the US have no where to go to die within their family members.

In China, millions of the little people are being forced back into their remote villages. To do what?

Most probably the Chinese out of work in sweat shop factories would die away from urban eyes and far from the media.

The US people have been in debt for a decade to cover all kind of charges because their earnings in the last two decades were lowered constantly while 1% owns one fifth of the US wealth.

I have a simple question “why those blood sucker billionaire capitalists should not have their blood spattering on the floor?”




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