Against The 70s

Someone not so recently asked a big question, "Why does the 1970's inflation matter so much to economic thought?". There are so many stories told about that period that it has passed into myth. It isn't really clear why, at least if you look at it through the lens of high powered macroeconomic theory. Supposedly it all has something to do with the Phillips curve. The Phillips curve is an expression of the observation that the rate of inflation is negatively correlated with the rate of unemployment. The Phillips curve hypothesis is that this correlation is stable (at least, holding institutions constant) and that the order of causation can run from inflation onto unemployment. The usual story is simplistic: "Back then we believed in the Phillips curve, but the 70's taught us not to do so.". That sound you hear is a vortex generated by philosophers of science rolling their eyes.

When you try to put meat on these bones, you find they break too easily. It isn't easy to find a high flying macro theorist who actually believed in a stable, exploitable Phillips curve. The classics certainly couldn't believe in such a money illusion; Keynes couldn't have argued for a stable inflation/unemployment trade-off (if it existed, why would we need G > 0 ?); Samuelson and Solow certainly didn't believe in it; nor did Fed Chairman at the time Arthur Burns. It's hard to find a single person that "believed" in the Phillips curve in the way it is said to have been.

Milton Friedman

These facts - and they are brute historical facts - have led some to believe in a conspiracy theory of the 70's. "Milton Friedman and the Chicago School convinced everyone that the 70's 'proved Keynes wrong because the Phillips Curve was wrong!1!' was all a lie and therefore modern macro is an illusion meant to disguise naked power grabs by The Enemy.". I put it in a way that you could see how fallacious such reasoning is, but I've seen it put almost as bluntly before.

It is strange, you have to admit, that such brilliant people would be snookered by it. Not just right wing radicals who want validation came out of this. Ed Phelps, Stanley Fischer, and Tom Sargent all saw ... something invalidated. But if it wasn't the Phillips curve, what was it?

Stevie Nicks

The first thing that you have to realize about the 1970s is that it was not, in fact, the 2010s. Nobody in 1976 - not Nixon, not Friedman, not Samuelson and not anyone in heterodox economics - was also in 2016. Everybody was groping blindly and if some had more insight than others, well we should be so lucky. The other thing to realize is that high falutin' macro theory is a tiny and rare thing. Nixon certainly never read a single work in the field and didn't have any friends that did. Ed Cole - one of the presidents of General Motors - could tell you a lot about the Chevy Corvair or Vega, but knew and needed to know nothing of the debate over large scale statistical models and certainly he had no opinions worth noting on anything as abstruse as the Cambridge Capital Controversy that was so distracting in the 60's. This is interesting given how macroeconomic his job was. Some basic facts from Wikipedia: GM at its height measured its profits in % of GDP. GM was the second largest employer in the world - behind only the entire Soviet state.

So, given that Cole was no expert in high macroeconomic theory for its own sake, what did he believe? Clearly, I can't read his mind. But I can give you a picture of what he likely believed, even if he would quibble with a nibble or two. If you are a fan of brief summaries, I'll give you one: "He thought he lived in the era of Mad Men.".

John Kenneth Galbraith

The person who most clearly put the vision to paper is J K Galbraith in his books The Affluent Society and The New Industrial State. Since this vision failed, it might seem that I came to pick on him, but I actually a lot of sympathy for him. He was trying his best and had a basically empirical outlook. He was basically right on backing imperfect competition. Even if he went too far and replaced it with something equally simplistic, Galbraith was right to question consumer sovereignty. He worried about the structure of the firm and capture of government legislation by business before it was cool. Galbraith was trying to think through ideas that don't formalize very easily. He was trying to get away from the myth of the rational consumer. Herbert Simon was working on similar ideas and did better work, but never anything macro related. Galbraith tried his hand and if he didn't succeed, well, did anyone?

Carlo Ponzi

Galbraith's method is developed in his second book, The Great Crash, 1929. This is a strange book for a modern to read. The first thing one notices is how little a role the year 1929 plays. The lengthy, hilarious section on the Florida real estate bubble is the best part of the book - but what all does it have to do with the Great Depression? This part of the book is an argument - I don't remember if it is explicit or implicit - that the market is not guided by rational consumers. The masses are irrationally attracted (that is to say, they will invest more than they would expect to receive if held down and forced to think it through) to the promise of easy money, even if it comes from Carlo Ponzi or Donald Trump. They are irrationally repelled by the slightest loss. They put good money after bad. They're moved by emotional displays from the wealthy. They do many things, but they do not maximize net present value like Irving Fisher taught us.

Sigmund Freud

Though the masses are not very good consumers, the advertisers and engineers, they're very good (supposedly). From this vision, the corporation emerges as the fundamental entity of economics. A corporation consists of four parts (my typology, not his): the capitalist, the engineer, the laborer and the advertiser. The advertiser has read his Freud and empirically studied the deep parts of human nature. As depicted in Freud On Madison Avenue, the advertiser designs the aesthetics of the car to be a giant phallus with a clitoral emblem on a vaginal grille. He can then determine exactly how much the irrational consumer will buy in aggregate. The engineer then designs the car as a functional item, which selects the costs of production. The laborer and capitalist then build the cars. The income is then divided among the four parts of the corporation by the labor contract (which is fixed by negotiation between the capitalist and labor, which in practice is represented by union officials). Note that it is not the profit that is divided, but the income. That doesn't matter in this system - income and profit are jointly decided by the engineering and advertising experts. The corporation never has to worry about society wanting less products in general, demand will be simply created by the government if it ever accidentally slackens.

There is much to criticize in the above system. The biggest problem is a very strong difference that is assumed to exist between the irrational common consumer and the tiny echelon of experts that control them. There's no way to get around this, there should be no apologetic for it and there is no question into which class Galbraith put himself. It is assumed, not proven. When pushed on this point, Galbraith would fall back on his endless supply of jokes about irrational consumers. In his economics and his novel, this was all but explicit. The only question was whether people Galbraith would be allowed by his fellow elites to make the masses a comfortable world. There is no freedom to give them.

The role of the state is very strong in Galbraith's mind. I've already mentioned maintaining demand at a full employment level. Another is managing labor unions. The labor unions face a macroeconomic prisoner's dilemma. Imagine two labor unions that have the choice of either asking for higher wages or keeping them stagnant. If they both keep stagnant, then the price level stays the same and everyone is well off. If just one asks for an increase, then its members are much better off. But if both ask for an increase, relative wages stay the same but the money price of everything goes up. Therefore, people are worse off. (This actually happened in England in the 70's) This is one of the state's tasks as countervailing power against the large corporations (and their unions). The simplest and most dangerous way of doing this is wage controls - Galbraith never bothered to ask for another one. Price controls in general follow from the same argument on advertisers instead of laborers.

 Panasonic Space Age Television

Outside of the secluded world of high economic theory, much of what I just exposited was uncontroversial. Arthur Burns, the head of the Federal Reserve at the time, believed much of it. Galbraith's books were best sellers. Further, it was in the general culture. To be an adman in the 60's was to be the king of the world.

What happened in the 70's was the fall of the whole idea. For the first time, the mandarins in charge were forced to admit that demand management was non-trivial. The incoherent system of monetary policy, price supports, unpredictable government regulation and massive war time spending interacted with oil-induced supply shocks and changing culture demand shocks to pull aggregate demand in every direction. The net result was gas queues, stagflation and malaise. The role of the failure of price supports, while not shocking to any theorists, bolstered Friedman's claims that markets were a necessary part of demand management (he didn't put it like this). Friedman prestige didn't come from just getting it right, it came from how he got it right. No high powered macroeconomist denied the possibility of stagflation - but Friedman happened to have the perfect combination of being against price supports, for rule based monetary policy, for smooth government regulation (okay, I'll be fair. He was against government regulation in general) and having done deep work about how the economy can smooth over shocks. It was exactly what people needed in 1971 (well, government regulation in general is arguable, but certainly not basically arbitrary price controls).

The markets upset the Galbraithian vision in a deep way. Recall that GM's deeply learned advertisers decide on how much sales they make this year. The human mind cannot resist the sexual allure of their automobiles ... supposedly. But the oil crisis meant that people wanted smaller, more efficient cars, not rolling slabs of steel. The Japanese entered the automobile market with cars that people wanted and GMs sales declined. Wasn't GM supposed to control sales?

Another example. When GE designed a television, they decided the sales. They knew - knew - what people wanted in a TV: they wanted a wood exterior and a durable stainless steel frame. They wanted furniture (I know they thought this, because I've talked with the people who built them at the time). When Japanese companies started exporting cheaper, lighter all plastic televisions, GE was sure no American would want one. As it turned out, those "irrational" consumers resisted the psychological allure of the expensive American furniture and just bought cheap, functional boxes. This is not how the system was supposed to work! Didn't these consumers know that they were irrational?

The important thing about the 70s is that they seemed to show that irrationality could only be pushed so far. Consumer preferences can't be written off as a minor addendum. The point of Friedman about inflation expectations in the Phillips curve is minor. People had been writing about inflation expectations since monetary analysis began. What was influential was his whole approach. It was part of a general tendency to move toward rationality - game theory began to go deeper into traditional economic realms (such as industrial organization). And damn it, if you presume consumers act basically according to their preferences, then price controls and shocks cannot coexist. Friedman and others hammered on these points as far as they could. And then they were pushed even further...

You see, through the lens of the 70s experience outlined above, purely rational expectations economics starts to look good. However, once the "t"s were crossed and the "i"s dotted, the New Classical school that supposedly took them as their basis didn't live up to its promises. I mean this explicitly - they promised to pass statistical tests that they did not. The New Classicals stopped using these statistical methods because "they were rejecting to many 'good' models". Perhaps this movement toward "rationality" was itself irrational. In many ways, by the time the 80s ended, the rationality revolution of macroeconomics was spent. In other fields (the aforementioned industrial organization, for instance), the move to rationality bore better fruit.

Even with all these qualifiers, it was still the 70's that forced people in power to consider the consumer as an autonomous human being. And that is why it looms so large in our thought.

Unexamined Life: What Have I Learned From Philosophy?

I have read a lot of philosophy, perhaps more than the subject deserves and perhaps less. Philosophy is odd, everything is obvious to a philosopher but nothing between philosophers. Philosophy has been prepped for the trash pit many times, by religious fundamentalists, by over-reaching scientists, by mad governments, by great philosophers and - most fatally - by many bored readers.

Albert Einstein

The Pythia said "No one is wiser than Socrates.". In his day, he could walk up to what we would call a scientist and defeat them - clearly, nobody knew more than him. Much of the disrepute of modern philosophy is rooted in this no longer being true. No matter who you think the greatest living philosopher is (and I doubt that is a definite description), you probably wouldn't go on to say that they are the smartest person in the world. You'd probably admit Terence Tao is at least a little better at math.

But I didn't put Einstein up there because I think he was smarter than Husserl. The disrepute of philosophy comes from another, related source: philosophers aren't our deepest thinkers any more. Einstein has had more influence on us how we think about time than Carnap or Heidegger, more on how we think about space than Bergson or Whitehead. Nietzsche's philosophers of the future don't call themselves philosophers.

I do think philosophy has an important place. What makes humans unique is that they can understand what they do (this, of course, is a philosophical opinion!). In many instances, philosophy is just thinking about what we do. When you read a paper like (Alchian, 1950) or (Krugman, 1996), you are seeing philosophical argument. In this case, there is complete agreement, but I would say - another economist, another philosopher might disagree.

Daniel Dennett

So, what have I learned from philosophy? What philosophers - and "philosophers" - have influenced me? The answer is simple: Daniel C Dennett III. I'm going to leave him to another post as being too important. I will admit I have been more influenced by the technical/logical philosophers of the so-called "analytical" school. It isn't that I think they are smarter, just as a mathematician their work is often more directly relevant to my daily life. They are almost all black & white, dead men. I should include female philosophers such as Susan Haack & Deborah Mayo. In fact, the only reason I didn't include Mayo because I left her book in America. I'm leaving continental philosophers for another post.

Jaako Hintikka

Despite my fascination with intuitionist/constructive approaches, their philosophical views I find less interesting. The math is neat, but the philosophy is weak. The philosopher that has influenced my view of mathematics the most is Jaako Hinitikka. Unfortunately, he was not as cool as the above picture makes it seem. Hintikka developed what are called "Game Semantics" for quantifiers. This is the best explanation for why classical analysis has the structure it does. The reason is that classical analysis is based on non-refutable arguments. It's best explained with an example.

Let's say that I claim a given function, perhaps the angle of a shower knob and the equilibrium temperature of the water coming out of the shower head, perhaps the solution to a DE, is continuous. What does this mean? One might say that it takes on the value of the limit on that point. But this is not the point of view of classical analysis. In classical analysis, the important thing about my claim is that you can't disprove it. Let's say we know the function takes on a value at a certain point - we know by, say, measuring the heat of the water when the knob is at a certain angle. When I say it is continuous, that means you can't truthfully say it doesn't get close to that value when the angle is close. If it could, you could say it's getting near some over value. We can call the difference between the measured value and the "error". But any given amount of error is too much, I can always just sneak by it. You can't prove that there is a jump, therefore the function is continuous.

Hintikka gave formal rules for interpreting any sentence from classical mathematics like this. That is by itself a huge deal.

Wittgenstein

The first philosopher to genuinely fascinate me was Wittgenstein. I spent a month reading and re-reading his Tractatus Logico-Philosophicus, trying to find the meat hidden on its austere bones. On the technical side, Wittgenstein co-invented the truth table within it. On the more philosophical side, it pointed to a metaphysical semantics of the new logics and set theory. On a deeper level, it pointed to a world beneath language and made sense of the idea that there was more on Heaven and Earth than in our philosophies. In his later work, Wittgenstein would attack the metaphysical parts of the Tractatus, on the grounds that even if the metaphysics was true they had nothing to do with why we believed that they were the case. This attack, laid out in Philosophical Investigations, naturalized language in a way nobody had seen since Hume. Only after this book could we go back and see how wise Hume was. I don't think that the attack affects the value of the Tractatus metaphysics as a semantics of set theory, but certainly no one will take them without a grain of salt anymore...

Thomas Schelling

Thomas Schelling's Micromotives And Macrobehaviors is one of the greatest books on social philosophy I ever read. Along with the Tractatus, it took me apart and put me back together a smarter and wiser person. It is hard for me to summarize, but I don't feel bad - it is hard for him to summarize too. Often we associate game theory with rigorous mathematical analysis - on the grounds that if Von Neumann was doing, so must everyone else. Schelling was given a Nobel Memorial Prize for contributions to game theory, but he never used math in any deep way in his work (contrast with the other winner, Robert Aumann). The important thing for Schelling was that game theory forced the user to consider the effects of his actions on others, and theirs on himself. What mattered to Schelling, in other words, is the notion of an "equilibrium". Game theory then is as much Hume & Kant as Luce & Raiffia. There is no formal "game theory" in Micromotives and Macrobehaviors, but there are hundreds of examples of equilibrium arising from social interactions giving results paradoxical and straightforward.

It was perhaps Hegel who was the first to recognize the importance of self-negating equilibria. Every society comes with it a set of norms & expectations. But every society so far has had some norms that force in conflict with the expectations. Eventually society adjusts its norms to remove this contradiction. Each society is out of equilibrium and therefore history matters to it. Unfortunately, in Hegel, these notions are tied to a history that is, in most matters of fact, false. I will give the Marxist version: In perfect competition, the wages to labor will be subsistence wages (this assumption was common to all classical economists) and technical change will tend to deepen capital (this is a norm). Capitalists expect capital deepening to profit them (this is an expectation), but will find in the long run they can't all deepen against each other (this is called fallacy of composition). Instead, capitalists will be paradoxically trapped underneath a mountain of less profitable goods. This is a Hegelian contradiction, a self-negating equilibrium. Marx's proof used the labor theory of value instead of the fallacy of composition, but it amounts to a different gloss on the same thing. Marx might have been smart enough to make that argument by himself, but I needed Schelling.

David K Lewis

I feel kind of odd putting David K Lewis on this list. He's too important to me to ignore, but my disagreements with him are part of what made me keep reading philosophy. He was the first academic philosopher that I liked, not just the philosophical aspects of a scientist or economist. Lewis made permanent contributions to mathematics, but I have to say - I basically am completely uninfluenced by them. I've never once started a proof with megethology in mind. Lewis is most famous for his adapting Wittgenstein's "The world is everything that is the case" classical logic semantics for modal logic - the so-called "possible world" semantics. They nearly single handedly brought metaphysics back into academia. Lewis (and, to a greater extent, his ally Daniel Dennett and, to the optimum extent, linguist/mathmatician Noam Chomsky) helped bring analytic philosophy out of behaviorism. But Lewis's solution was Bayesianism, which is not to my own taste (though it is important and I'm glad someone was working on it).

Of his ideas, his concept of a coordination game has been the most important and influential. He claimed to have been inspired by Thomas Schelling above. I first read about it in his book Convention, which is also where it was invented. I've gone over this before. His definition of value as what we "desire to desire" is something I've been thinking about recently. I like the way that it reduces the theory to preference theory (for the classic reference on preference theory, see Debreu's Theory of Value - Debreu's "Value" is value in another sense) without impoverishing the value part of the apparatus. The words of Kant are very comprehensible: what we should desire to desire is those desires that are coherent for the population. The words of Bentham too: what we should desire to desire is the satisfaction of the most individual desires. Hegel (and Marx) pointed out: our desires generally conflict, society is out of equilibrium. You could, if you want, do all social philosophy this way.

In fact, one reason I like Lewis is his congenial approach to formalization. Formalizing philosophical concept of value by putting it in terms of (in some sense "reducing" it to) the preference theory of economics allows us to sharpen and clarify the philosophical differences of old - but shouldn't try to artificially "solve" them. This seems to me to be a right way to go about things.

Robert Nozick

Okay, so if I felt odd about David K Lewis, I have to say this about Nozick: I've never read his big book on political philosophy. I've read an article attacking Ayn Rand and another one attacking "Austrian" Economics, but hey, easy targets. I'll come out and say it: Nozick tried to make a philosophical explanation of what we call "libertarianism" or "classical liberalism". I won't address whether his argument fails since, again, I haven't read it. I kind of doubt that reason/philosophy alone can make a political argument look good - logic shorn of evidence tells you nothing about reality.

What I find most interesting about Nozick is his last book, Invariances. In this book, Nozick develops a novel explanation of what is "objective". The usual philosophical gloss is that something is "objective" iff we could conceive of a completely physical description. This does not match what we usually mean by the word. When someone is pointing a gun at me, I would say they are objectively being a menace. I do not mean that there is some physical description of him being a menace. What I mean - according to Nozick - is that their being a menace is invariant over the variations relevant to the conversation. This ties down the notion of objectivity to Wittgenstein/Lewis idea of language games.

Nozick is interested in the implications for ethics - Could there be "objective ethics"? This is less interesting to me, but I'll go through it nonetheless. Nozick tries to build up from a libertarian state to a democratic state using the idea that some values (desired desires) can be better served by democracy/market mixture than a "pure" market. Rawls, another ethical/political philosopher, proposes his "veil of ignorance" argument as basically Nozickian objective ethics. I think that shows that there are, in fact, too many Nozickian objective ethical systems. These examples can be multiplied until and beyond one reaches the count of ethical philosophers. Nothing says that one definition of relevant variations is the right one.

My plan now is to do three more posts like this. One on Daniel Dennett, the philosopher who influenced me the most. Then a third post on classical and continental philosophers, who are important and deserve mentioning even if they haven't struck my fancy.

First color picture of the post

Also, you may or may not see a review today. I've been having internet troubles and am having a hard time watching videos.

A Grab Bag of Thoughts About Democracy

I think people are too hard on Rousseau. The "will of all" and the "general will" are difficult doctrines that lead to confusion. And Arrow's Theorem must be contended with - saying democracy is "no more than a sum of particular wills" is evading the deep questions. How the sum is carried out matters. But this being said, there is little that makes Rousseau stranger than that of innumerable other 18th century thinkers, Locke looking for lessons of statecraft in the Garden of Eden for instance. Indeed, when one looks into the guts of how Rousseau's system was to work, he was not as married to simple averaging as it might have seemed:

"It is therefore essential, if the general will is to be able to express itself, that there should be no partial society within the State, and that each citizen should think only his own thoughts: which was indeed the sublime and unique system established by the great Lycurgus. But if there are partial societies, it is best to have as many as possible and to prevent them from being unequal, as was done by Solon, Numa and Servius. These precautions are the only ones that can guarantee that the general will shall be always enlightened, and that the people shall in no way deceive itself."

If we interpret Rousseau charitably as a precursor to modern ideas about collective cognition, he becomes much more comprehensible. There are many even today who can't wrap their minds around any collective action more complex than simple averaging. And there are many others who cannot understand, but prostrate themselves before collective actions rising out of certain market structures. These men and women don't even have the luxury of being from the 18th century to excuse their confusion.

The received Viennese view of  democracy is that it is not the details of voting that matter, that democratic control works because of Competition for Political Leadership in Schumpeter's words (incidentally, Schumpeter's wacky ideas about the importance of intellectuals is false in most societies, for instance the modern US, and are rather strange reading for the historically minded):

"It will be remembered that our chief troubles about the classical theory centered in the proposition that 'the people' hold a definite and rational opinion about every individual question and that they give effect to this opinion — in a democracy — by choosing 'representatives' who will see to it that that opinion is carried out. Thus the selection of the representatives is made secondary to the primary purpose of the democratic arrangement which is to vest the power of deciding political issues in the electorate. Suppose we reverse the roles of these two elements and make the deciding of issues by the electorate secondary to the election of the men who are to do the deciding. To put it differently, we now take the view that the role of the people is to produce a government, or else an intermediate body which in turn will produce a national executive or government. And we define: the democratic method is that institutional arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people’s vote."

This is not so far from an ordinary theory of democracy as it seems, and indeed it economizes on our assumptions. It explains why "one party state" is synonymous with tyranny. Rousseau held that politics was an "art". From this, it follows that expert artisans (statesmen) may be - and "may be" is doing a lot of work here! - necessary so that the artifice of government is beautiful. But this is not really much closer to a theory of democracy than Rousseau. It doesn't explain how government institutions loved by none - such as the NSA - remain in power, or how extremely unpopular doctrines, such as net non-neutrality, can be foisted. It doesn't explain how minority cabals - such as the pro-slavery Southern United States before the Civil War - can steal power from majorities (mostly by brinkmanship). Schumpeter would be forced to say that these situations are insufficiently democratic, and in so doing would reveal the secret orthodoxy of his doctrine. This view is also propounded by Karl Popper in a less idiosyncratic form. None of them seem to have been aware or care about the obvious connection between their ideas and the American Pragmatism philosophical movement.

A modern, Samuel Bowles, propounds the idea that liberal ideals (classical liberal, that is. Is democracy not a part of that? Even Schumpeter thought it was, but maybe he means something different than most of history...) comes from older traditions that it subverts. This is hard to understand, since liberal ideology have been part of at least English speaking since the 17th century (if we let them start with Hobbes) - and were dominant for huge stretches of that time. If they are subverting real morals, why would Bowles have first hand knowledge of them? True "recent studies show moral sentiments ... indicated that incentives that appeal to material self-interest often undermine interpersonal trust, reciprocity, fairness, and public generosity." but recent studies also show all sorts of wacky things about diets. More importantly and less sarcastically, Bowles (and Herbert Gintis, though it is well known that they are the same person) have presented studies showing that people who live in market societies actually perform well on on fairness games when not coached not to do well. It seems that liberal society - though not perhaps certain liberal ideologies - works fine - with "trust, reciprocity, [and] fairness" at least.

EDIT: The above paragraph is very sloppy written, it makes it seems that Bowles argues both for and against this thesis. I should make it clear that Bowles is presenting evidence that classical liberal society actually encourages social values. If a society puts its members in contact with a lot of strangers, it will be more stable if people are nice to strangers. I was going to focus this post entirely on non-moderns, but I remembered that Bowles paper and wanted to include something empirical. Unfortunately, I did so hastily, without checking if what I said had any resemblance to what I meant. This is sloppy and silly, so I will re-write the paragraph so as to be slightly more descriptive of what the paper is about:

A modern, Samuel Bowles, examines [note: propounds sounds too much like "defends" to me] the idea that liberal ideals (classical liberal, that is. Is democracy not a part of that? Even Schumpeter thought it was, but maybe he [that is, Schumpeter] means something different than most of history...) comes from older traditions that it subverts. This doctrine is hard [for me] to [even] understand, since liberal ideology have been part of at least English speaking since the 17th century (if we let them start with Hobbes) - and were dominant for huge stretches of that time. If they are subverting real morals, why would [its proponents, people who live at the same time as Bowles] have first hand knowledge of them? True "recent studies show moral sentiments ... indicated that incentives that appeal to material self-interest often undermine interpersonal trust, reciprocity, fairness, and public generosity." but recent studies also show all sorts of wacky things about diets [a point that Bowles does not makes because he's going to need "recent studies" if he wants to do empirically grounded moral psychology]. More importantly and less sarcastically, Bowles (and Herbert Gintis, though it is well known that they are the same person) present studies in this paper showing that people who live in market societies actually perform well on on fairness games when not coached not to do well. It seems that liberal society - though not perhaps certain liberal ideologies [such as?] - works fine - with "trust, reciprocity, [and] fairness" at least. [Are these studies good? Good compared to what? Perhaps I should have said something]

Finally, the ever brilliant Machiavelli propounded a fact of common observation that seems to be missed by intellectual opponents of democracy: that the people are wiser and more constant than leaders. No ordinary person has ever called for regulation or deregulation of electricity (that is, electricity directly, ignoring environmental considerations), since they care nothing about the industry save that electricity is cheap. Democracy is preferred, for Machiavelli, because it is harder for the entire country to fall for a fad than a particular administration, and a king's court is nothing more than a long lasting administration.