September 20, 2008

To err is human…

Filed under: Economics, Politics, Sarcasm — duncan @ 10:59 am

From today’s FT leader:

“Naturally, the need for such a government-sponsored rescue is annoying.  Taxpayers may well wish for the imposition of a special tax on recipients of what have turned out, retrospectively, to be unearned dividends and unjustified salaries.  But demanding such a pay-back is infeasible.  The pragmatic thing to do is let bygones be bygones…”

April 17, 2008

Oh For Fuck’s Sake (Nassim Nicholas Taleb’s ‘Fooled By Randomness’)

Filed under: Philosophy, Sarcasm, Science, Self indulgence — duncan @ 9:44 pm

[A ranting post very much not worth your time, I’m afraid.]

I’m proud to say that I’ve been writing a deconstructionist-inclined blog for almost a year now, and have never once engaging in a bitter assault on the popular detractors of continental theory. You’ll notice that no interminable post excoriating Sokal and Bricmont has yet appeared. I am a saint.

On the other hand, I’ve just started reading Nassim Nicholas Taleb’s bestseller ‘Fooled By Randomness’. (In a no doubt misguided attempt to dip my toe into the glibber end of popular accounts of probability theory; I guess I should buckle down and read some real books.) As soon as I figured out the tone, I guessed that an ignorant and philistine invocation of Derrida as charlatan wouldn’t be far away. And, sure enough, on page seven (so soon!) we get an approving reference to a Ph.D. thesis in philosophy. “But not the Derrida continental style of incomprehensible philosophy (that is, incomprehensible to anyone outside of their ranks, like myself).” I gritted my teeth and continued. (Still no ranting blog post! I have the patience of Job!) But then on pages 72-3 we get this – and I boot up my computer.

“Increasingly, a distinction is being made between the scientific intellectual and the literary intellectual – culminating with what is called the ‘science wars’, plotting factions of literate nonscientists against literate scientists. The distinction between the two approaches originated in Vienna in the 1930s, with a collection of physicists who decided that the large gains in science were becoming significant enough to make claims on the field known to belong to the humanities… The Vienna Circle was at the origin of the development of the ideas of Popper, Wittgenstein (in his later phase), Carnap, and flocks of others.”

This is like shooting fish in a barrel. I mean – don’t you think the distinction between the scientific intellectual and the literary intellectual might have had some force before 1930s Vienna? Can the Vienna Circle be entirely accurately described as “a collection of physicists”? Does the later phase of Wittgenstein really originate there (even as a reaction against it)? Be all that as it may; next we get this:

“I suggest reading the hilarious Fashionable Nonsense by Alan Sokal [it’s just inevitable, this reference; the pages might as well be blank; we can fill them in ourselves]… (I was laughing so loudly and so frequently while reading it on a plane that other passengers kept whispering things about me) [Probably ‘what an arsehole’]… Science is method and rigour; it can be identified in the simplest of prose writing. For instance, what struck me while reading Richard Dawkins’ Selfish Gene is that, although the text does not exhibit a single equation, it seems as if it were translated from the language of mathematics.”

Superficial detractors of continental theory often invoke Dawkins as the exemplar of scientific rationality. Don’t get me started on him. (In a word, ‘The Selfish Gene’ is precisely not translated from the language of mathematics, because half the point of the thing is to develop a metaphor – a metaphor, of the ‘selfishness’ of the gene, which may or may not be helpful (and there’s a whole endless debate to be had about the validity of ascribing intentional states to apparently mindless objects, or to parts of/systems within organisms), but that only works as metaphor. Which isn’t to say that Dawkins doesn’t have strictly ‘scientific’ claims to make – but Dawkins himself is perfectly clear (in, for instance, the first chapter of ‘The Extended Phenotype‘) that ‘a change of aspect’, rather than a scientific hypothesis, is the main thing he hopes to advance in his popular science writing.) Anyway.

“[T]here is another, far more entertaining way to make the distinction between the babbler and the thinker. You can sometimes replicate something that can be mistaken for a literary discourse with a Monte Carlo generator but it is not possible randomly to construct a scientific one. Rhetoric can be constructed randomly, but not genuine scientific knowledge.”

If I understand him right, Taleb means, by “Monte Carlo generator”, a computer program that is capable of churning out vast numbers of imaginary events, according to a set of predetermined rules. I can’t pretend to understand [which is why I’m reading this stuff, after all] – with my knowledge of computers, it’s amazing this blog is still in one piece. But (in a fairly superficial way) what Taleb’s saying here is surely wrong. A ‘Monte Carlo generator’ can construct scientific knowledge – as Taleb has already told us.

“It is a fact that ‘true’ mathematicians do not like Monte Carlo methods. They believe that they rob us of the finesse and elegance of mathematics. They call it ‘brute force’. For we can replace a large portion of mathematical knowledge with a Monte Carlo simulator (and other computational tricks). For instance, someone with no formal knowledge of geometry can compute the mysterious, almost mystical, Pi.” (p. 47) If existing mathematical knowledge can be replicated in this way, I find it hard to believe that new mathematical – or scientific – knowledge can’t also be so produced. [Okay, I just did my googling. Wikipedia informs me that in mathematics “[t]he method is useful for obtaining numerical solutions to problems which are too complicated to solve analytically.” I need to learn about this sort of thing.] At any rate, the ability of ‘Monte Carlo generators’ to supply Taleb with knowledge and understanding seems to be the main reason he likes them so much.

Anyway. Next we get this:

“This is the application of Turing’s Test of artificial intelligence, except in reverse. What is the Turing test? [We get a description. Taleb continues:] The converse should be true. A human can be said to be unintelligent if we can replicate his speech by a computer, which we know is unintelligent, and fool a human into believing it was written by a human. Can one produce a piece of work that can be largely mistaken for Derrida entirely randomly?”

Well – let’s charitably put down to ‘humorous’ license Taleb’s ‘reversal’ of the Turing test. And lets ignore the fact that the so called ‘random’ production of any text is random only within incredibly limited bounds – most of the game’s effectiveness depends on the non-randomly selected phrases and rules for the combination of phrases that whatever program Taleb’s describing would consist in. (Just as Taleb’s method of ‘randomly’ computing the value of Pi isn’t random at all except in one of the program’s particular functions.) All that said – the answer to Taleb’s last question is: obviously yes. Of course you can ‘randomly’ produce a piece of text that can be mistaken for Derrida – by people who know fuck all about Derrida. In fact, I’d go further – if the program that produces phrases is sufficiently intelligently set up, I daresay I could be fooled by – or at least not confident in my judgement of the provenance of – some phrase or short sequence of phrases. At some point that would collapse – you’re not going to be able to generate an intelligible essay, or even a longish piece of text, using a ‘random’ method. (And if you can, maybe you should apply for that Turing Test prize money.) But I have no idea what Taleb thinks he’s demonstrating here.

“[T]here are Monte Carlo generators designed to structure such texts and write entire papers. Fed with ‘postmodernist’ texts, they can randomize phrases under a method called recursive grammar, and produce grammatically sound but entirely meaningless sentences that sound like Jacques Derrida, Camille Paglia, and such a crowd. Owing to the fuzziness of his thought, the literary intellectual can be fooled by randomness.”

What bullshit. What copper-plated, cast-iron, dug from a farmer’s prize bull’s ditch of prize bullshit bullshit. According to ‘Fortune’ magazine (I know, I shouldn’t expect much, why did I even buy the fucking thing?) ‘Fooled by Randomness’ is “One of the smartest books of all time.” Well, not so much. Not if it has stuff that even vaguely resembles this in it. Good lord. Why do people take this sort of thing seriously? What’s going on?

I was planning to write more, but I think I’ve reached a pitch of intemperance that requires a hasty close. Don’t buy ‘Fooled by Randomness’. I’ve got it here now, and I’m wondering whether to try to finish it or burn it. I guess I should toss a coin.

[Apologies for this nonsense post. Unusually, I have too much time on my hands today.]

April 4, 2008

Keynes Aphorism of the Day

Filed under: Economics, Keynes, Sarcasm — duncan @ 8:41 pm

“Banks and bankers are by nature blind….  A ‘sound’ banker, alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him.”

February 8, 2008

With Friends Like These…

Filed under: Economics, Philosophy, Politics, Sarcasm — duncan @ 9:36 pm

One of the big criticisms directed at poststructuralism, ‘Theory’, academic identity politics, etc. was always that these apparently leftist intellectual trends were thoroughly complicit in the social structures they criticised – that postmodernism, the cultural logic of late capitalism, manifested itself, within the academy, as shilling for the economic status quo. I never had a huge amount of time for that complaint – partly just because I like Theory, but also because I felt that poststructuralism offers critical resources that the left-wing anti-Theorists tended to neglect.

Which I still believe. But as I try to study economics I notice myself becoming markedly less sympathetic to Theory. And the situation is hardly helped by stuff like this. It’s a quote from J.K.Gibson-Graham’s ‘The End of Capitalism (as we knew it)’ (1996) – a feminist ‘critique’ of political economy I started reading today.

“To the extent that firms in the finance sector are engaged in commodity production, some will be capitalist sites where surplus labor is appropriated as surplus value from employees whereas others will be sites of independent commodity production – for example, the personal investments manager who is a self-employed entrepreneur and appropriates her own surplus labour – and therefore noncapitalist.” (p. 18).

Laughing out loud. Rolling on the floor. Oh My God. Because, you see, according to Gibson-Graham [= Katherine Gibson & Julie Graham, though I like the single author idea] the self-employed personal investments manager isn’t part of capitalism. No capitalists here. No exploitation! Because she’s self-employed, our Wall Street entrepreneur appropriates her own labour… not anybody else’s. You might ask what “commodity” she produces. You even might ask where the value of her work comes from. You might believe (if you’re an old school Marxist) that it has something to do with her clients’ investments converting surplus value into the means of production. That would be… um… the creation of capital – the most basic and pervasive operation in the constitution and reproduction of capitalist societies, according to Marx. This self-employed entrepreneur wouldn’t then be so much “noncapitalist” as… the embodiment of capitalism.

It’s a little dizzying that the author(s) a) know(s) enough about Marx to be able to write that sentence, and b) went ahead and wrote it. (Without, I should add, any kind of gesture towards the incongruity; I’m not massively distorting this by taking it out of context.) So: a reminder from the man himself. “If money, according to Augier, ‘comes into the world with a congenital blood-stain on one cheek,’ capital comes dripping from head to toe, from every pore, with blood and dirt.” No more anti-essentialism, please, until you’ve taken full account of this fact.

February 3, 2008

Dino Comic

Filed under: Sarcasm, Self indulgence — duncan @ 5:51 pm


January 27, 2008

Is It Still Schadenfreude If You Suffer Too?

Filed under: Economics, Sarcasm — duncan @ 6:31 pm

The loathsome Slate describes the loathsome Larry Summers (via the loathsome Greg Mankiw). Summers has been complaining about sovereign wealth funds at Davos. “It’s the premise of capitalism that people own shares to maximize value. But if you think of an investment made by a state fund, there could be multiple motives… When there’s no assurance that value maximization is being pursued, there is a potential question… [S]uppose that a country ran an active trading operation… Would we be comfortable with the concept that the nation of X had decided that nation of Y’s currency was overvalued and launched an attack? There should be some kind of understanding that that won’t happen. Also, the SWF of country A makes an investment in a major bank in country B. The bank gets in big trouble. Is there any control in the world that can assert, that with billions of dollars on the line, their head of state and foreign minister are not going to get involved in the negotiations?”

Yeah, Larry – God forbid that finance and politics should become intertwined. God forbid that investment should be used to serve narrow political ends. As former U.S. Secretary of the Treasury and ex chief economist of the World Bank, I think you’re in an ideal position to make this complaint.

Kristin Halvorson, Norway’s minister of finance, listened patiently, and was unruffled. “It seems you don’t like us, but you need our money.”

December 3, 2007

Oh Fuck

Filed under: Economics, Politics, Sarcasm, Self indulgence, Vitiated by Ignorance — duncan @ 4:16 pm

No, I don’t understand. But as far as I can tell, three things are behind the current fears of a dollar rout and a world recession. America’s massive current account deficit is largely the product of 1) a hugely expensive war of choice, and 2) tax cuts for the wealthy. And the ongoing subprime crisis was mostly created by 3) deregulation. Am I missing something? And if not, could someone explain to me again why left wing economic policies are naïve?

October 12, 2007


Filed under: Sarcasm — duncan @ 8:29 pm


Writing at work: a corporation I can’t name. (I’ve signed a form: no blogs, no internet forums, no discussion.) What is the relation between company loyalty and liberty? Between capitalist and ‘corporate’ values? ‘Corporate values’: “Steve really lived the values of the company”; “Marsha embodies the company’s core values”. This is what you sell, on the free market: an attitude, a set of convictions. It’s not a service industry; it’s a belief industry – disseminating moods and loyalties. This is how the capitalist ideal propagates itself: those who adhere to it most zealously advance; dissent is unproductive. Politicians complain about our generation’s apathy: but apathy is also a political activity, a form of ideological challenge. This is the revolution sweeping corporate life: slight laziness; slight weariness; ennui; griping. A fundamental attack on the American dream. The storming of the Bastille as cigarette break.


September 7, 2007

Friedman on Drugs

Filed under: Friedman, Politics, Sarcasm — duncan @ 9:30 pm

Contrariwise, check out this interview with Friedman. It has two main positive features:

1) I agree with it, more or less. (Legalise all drugs; destroy the black market; make the war in Afghanistan at least not wholly untenable; have a big party.)
2) It’s hilarious.

On the other hand, Friedman as ever seems almost psychotically impervious to the real world.

“Interviewer: But with regard to crack, considering the fact that it’s very addictive and considering the fact that…

Friedman: That’s very dubious. It is addictive, but I understand from all the medical evidence that it’s no more addictive than other drugs. In fact, the most addictive drug everybody acknowledges is tobacco.”

“everybody acknowledges” is the killer.

May 17, 2007

Murdoch and Dow Jones. The Pleasure Principle.

Filed under: Media, Sarcasm — duncan @ 7:08 pm

Now if I’m not very careful, this entire blog could degenerate into an interminable, underinformed, sceptical exegesis of The Economist magazine. Every week I buy it; every week I read it; every week I am gripped and appalled. I will try to limit myself, ration myself, impose guidelines, restraints, obligations. I will try not to let the free market of my soul supply its own demand. But it’s difficult.

In the May 5th edition, for instance, The Economist had a couple of articles about Murdoch’s bid for Dow Jones: a leader, arguing that “Murdoch would make a decent owner of the Wall Street Journal”, and a longer article in the business pages, asking why he would even want it. (Conclusion: either he’s got something up his sleeve that we don’t know about, possibly involving ‘new media’, or he’s an out-of-touch old man who wants to own a serious financial newspaper to augment his reputation. Or both.)

Here’s the leader: “There is a charming irony in the idea of Mr Murdoch’s many critics rushing to the defence of the Wall Street Journal. Its opinion pages are home to a brand of conservative commentary that makes Mr Murdoch’s natural enemies wince. Yet as evidence of Mr Murdoch’s baleful influence, the worriers can point to the Sun and the New York Post, two exultantly bullying tabloids; to the populism of the Times in Britain; to the dumping of a book that might have offended China; and, most controversially, to the pro-Republican Fox News, whose motto (“We report. You decide.”) is about as convincing as an anchorman’s suntan.”

Now the Economist is well informed, intelligent, internationalist. Because it’s a weekly, it’s able to take a broad enough perspective to give some context to its reporting; but it’s also able to respond to unfolding events. Much of the time it’s smart and balanced enough that the flaws behind its editorial positions take some effort to think through. But sometimes its insane logic comes screaming to the surface. Sometimes The Economist blows its cover.

“The second reason to welcome, rather than fear, Mr Murdoch’s approach is that he is a brilliant businessman. Good businessmen make companies flourish. Flourishing companies have a better chance of making a good product and selling it to a lot of people. The Times may have shuffled downmarket since the days of Mr Murdoch’s predecessors; but it is still a good newspaper, and many more people buy it these days than when it did not stoop to celebrity news.”

Do equivocations come any cruder than this? One piece of evidence for Mr Murdoch’s baleful influence is the Times’ populism. But that’s okay – because its populism is popular. The Times may have shuffled downmarket, and become a worse newspaper. But because it has moved downmarket it sells more copies. It is flourishing; and flourishing companies have a better chance of making a good product. So: the fact that the Times is now worse means that it is now able to be better.

Has the Economist gone mad? Does it suffer from hysterical symptoms? Is it a neurotic? Or is this editorial the first sign of the onset of psychosis – complete severance from reality; total dissociation of belief from evidence? If we were to psychoanalyse the Economist, what would it confess?

I sometimes find it helpful to consider the press from the perspective of Freudianism. All magazines and newspapers are governed by the relationship between the pleasure principle and the reality principle. (Yes, like all the concepts in Freud’s system, that of the pleasure principle is divided. On the one hand – there is nothing outside it. On the other hand, the pleasure principle only has meaning in relation to its antithesis: the forces of displeasure that Freud calls, at times, anxiety, and at times Thanatos. Let’s ignore all that.)

In the conceptual organs of the press, experience takes the form of ‘News’. The function of the press is to transmute the influx of News into a form that gives maximum pleasure to the consumer. Sometimes this is easy: the news is good. Sometimes it’s even easier: the news is bad in a satisfying and enjoyable way. (The Daily Express’s continuing coverage of Diana’s death seems a text-book case of repetition compulsion).

But the most efficient way of transmuting news into pleasure is simply to deny the existence of unpleasant News. This is repression, and it has its corollary – the return of the repressed. Hysterical symptoms are generated when the affect associated with a repressed experience is redirected towards a proxy. (Asylum seekers; paedophiles; the EU). This proxy will carry an emotional charge out of all proportion to its apparent importance.

But here the reality principle rears its head. Since our pleasure is dependent on circumstances in the world, a complete rejection of the unpleasant facts of experience will, in the long run, lead to much greater unpleasure than that created by the initial experience. The pleasure principle thus learns to moderate itself, accepting pain now for pleasure later. The pleasure principle accommodates itself to the reality principle – the agent of the world.

This is the function of reporting. In this schema, reporting represents the reality principle in newspapers. Blogs like this are almost pure pleasure (with perhaps the occasional piece of disproportionate affect). The same goes for celebrity gossip, in which, as the Economist says, whether the stories are true or not doesn’t matter in the slightest. This is the realm of phantasy; dream; wish-fulfilment.

Murdoch’s populism is based in this world of wish-fulfilment – whether through Page Three girls, celebrity gossip, or Bill O’Reilly. The fear for The Wall Street Journal is that Murdoch’s smart-business emphasis on phantasy will undermine the reality-principle of good old fashioned reporting.

But we needn’t worry.

“It does not matter terribly to readers if the gossip about celebrities is true or exaggerated – indeed, when it comes to titillation, there is much to be said for falsehood. [Pure dominance of the pleasure principle; sexual phantasy unmediated by any reality.] But financial news that is untrustworthy is useless. When readers do deals based on financial-news reports, they expect the information to be accurate, down to the last detail. [For the reader of a financial paper already has her pleasure cathected in real-world objects: literal investments. The pleasure principle is thus served by maximum attentiveness to the real world.] If Mr Murdoch gets hold of the Journal, he will ensure that its reporting is excellent not out of altruism, but because, in the financial newspaper business, that is how you make money. [Murdoch too derives his pleasure from his income, and thus requires some contact with reality.]”

But what governs the relationship between the reality principle and the pleasure principle here? What dictates how far reality is permitted to make inroads into pure phantasy?

It is only beneficial to take account of reality if one’s accommodation of reality has a good chance of materially increasing one’s pleasure. The more one is in control of one’s own destiny – that is, the more power one has – the more beneficial the accommodation of reality will be. Therefore, in the press, the relation between reality and pleasure principles is determined by class.

Murdoch’s populism is directed, above all, at the (relatively) powerless: those who don’t need facts about the world, because knowledge of the facts won’t make any material difference to their lives. Readers of the Wall Street Journal and the Economist, on the other hand, need to be in touch with political and economic reality, because the manipulation of the world described in newspapers is the source of their income. They need to know about the sources of their treasure and slaves.

Phantasy has not been banished, however. Wish-fulfilment still has force. The Wall Street Journal’s readers are ambivalent: they don’t just want to exploit the world’s poor – they want to feel good about doing so.

The Economist, and publications like it, have their own form of populism. Not a populism directed at the masses, but at the Economist’s own niche audience: the wealthy business classes who want to reassure themselves that their rapaciousness will, in the long run, bring peace and joy to the earth.

Often the Economist can make this phantastical agenda convincing; it is a master at integrating reportage with ideology. But in the battle between phantasy and reality – reality will have to go.

So: Murdoch lies to get audiences. The Economist defends Murdoch. This defence is a lie. It is a lie intended to get the Economist an audience. An audience of people like Murdoch.

The circle closes. The pleasure principle is victorious again. There is nothing outside of it.

That’s good economics.

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