Today's Buggy Topic Is Found . . .

as usual at Economist View, where as thread was started with the laudable boss-wizard of that web site, Professor Mark Thoma, started a thread by linking to a non-scholarly piece by Professor Robert Shiller, an economist at Yale --- and one of the pioneers of behavioral economics, especially in financial matters. 

Behavioral economics is aimed at challenging the theoretical postulate of rational-choice behavior that extends back over a century to neo-classical work in what we would now call microeconomics: all economic agents--- whether financial investors, business owners, the managers of financial institutions, consumers, and workers --- all follow rational behavior in seeking their self-interest in the economic realm.  The assumption allows for a big simplification that enables economists to work methodologically on the assumption that all economic actors are therefore self-interested maximizers (or optimizers).  With that assumption, all sorts of formal mathematical modeling is then made possible --- including, since 1945, game theory (or strategic interaction between two or more economic agents --- or even two or more nation-states treated as unitary agents). 

Strategic Action Meaning What Exactly?

Simply this: what one economic agent can achieve--- say, a new start-up company breaking into a fairly new industry dominated by a few giants (say again, Google, created by three Stanford students in 1995 or so, no longer just a search engine company, but the biggest challenge to Microsoft) --- will depend on what Microsoft and Intel seek to achieve.  In principle, their interactions --- given rational-maximizing assumptions of self-interest (measured in perhaps profits or market share or both) --- can be set out in at least "ordinal" or "rank-order" fashion. 

Rank-order refers, as an example, to 4000 IQ test-takers, being ranked comparatively in relation to others.  IQ tests are always normed for 100 with a standard deviation around the mean of 15 points (16 in some tests.  But you can't say that an IQ  of 170 --- way in the genius range --- is twice as intelligent as 85.  There is no zero, no way to say that 4th in rank is twice as high as 2nd in rank, and hence no way that this is strict  numerical or "interval" or "cardinal data."

Without the assumption of maximizing rational actors --- seen, say, as individual businesses in a perfectly competitive market (where there are large numbers of firms, no one firm can influence the general price of the products in that industry, and there is "free entry" and "free exit"  --- the latter referring to bankrupty) or in an oligopolistic market (a few giant firms that track one another's pricing and product innovations and quality to which game theory is applicable) --- mathematical economics of any sort (called econometrics) would be possible

Enter Psychological and Social Psychology That Cast Lots of Doubt on This Rational-Choice Postulate

The criticisms of that postulate are numerous and emerge from experimental laboratory work of how individuals and small groups behave in a controlled situation. 

 Since the early 1960s, their impressive work --- which doesn't mean it has its limitations (all spelled out in Prof Bug's post at Economist View --- has made inroads into economics, generating among other things behavioral economics that uses psychological work and does a lot of digging into economic behavioral data to come up with alternative theoretical postulates and modeling.  Robert Shiller, as we noted earlier, is one of them ---- and for that matter, though none of the habitual posters at Economist View seemed to remember it --- so was John Maynard Keynes, the great pioneer economist of macroeconomics.  Using essentially his intuitive folk knowledge of economic actors, not least financial and business investors, Keynes said in 1936 amid the Great Depression that what drives economic behavior is "Animal Spirits".  

In the boom phase of the business cycle, the spirits of investors and consumers become "irrationally exuberant" to use the phrase coined in the late 1990s stock market boom by Alan Greenspan.  In the Great Depression (recessionary phase), said Keynes, they become the opposite: extra-pessimistic depressed spirits. 

Small Wonder,

. . . as prof bug alone noted in that long thread at Economist View, that  Prof Shiller and his co-author George Akerlof (a Nobel-Prize winning eonomist at Berkeley) published a popularizing book last year entitled "Animal Spirits: How Human Psychology Drives the Economy and Why It Matters for Global Capitalism."

Today's Buggy Topic

It's found in a thread at the web site of the estimable Chronicle of Higher Education . . . the thread kicked off by a review of a recent French book by Emmanuel Faye on Heidegger's fervent Nazi beliefs in the 1930s and during WWII, all of which he sought to conceal or whitewash in the 31 years that he lived after 1945. 

The exchanges in the thread are of a high quality, especially since most of them were left, it seems, by philosophers . . . some defending Heidegger, others attacking him for his Nazism.  Prof bug's lengthy commentary seeks to show that the defenders of Heidegger's philosophical work --- most of the defenders acknowledging his Nazi party membership, but claiming it didn't influence his major philosophical publications --- are simply wrong.  To show this, prof bug cites all sorts of different studies and on a variety of topics relating to Heidegger and Hitler and the Nazi anti-modernist revolution that he fervently supported . . . right down to merging his traditional view of German superiority in the world as rooted in a Greek-like genius of the soil, its language, its cultural creativity with Hitlerian genocidal racism in the 1939-1942 period of WWII.

Please Note 

The buggy prof post ended up with strange spacing between the paragraphs.  The reason? 

Well, I banged out the Heidegger stuff in Word, then tried to post it at the Chronicle of Higher Education web-site, but --- as it happened --- the posting-box for comments in the thread wouldn't accept any pasting from Word . . . something I learned yesterday when I tried it.  So, after musing what to do --- the alternative of typing in 5000 words or more in the comment box something that rankled him --- prof bug used an automatic formatting program that takes Word-formatted script and re-formats it in HTML, the computer language of the Web.  And it worked, only . . . . well, for reasons that puzzle me, the huge empty spaces between paragraphs showed up in the posted buggy commentary.  Nothing, alas, to be done.

Click Here for the Thread and the Buggy Post:

Right now.

Today's Buggy Topic . . .

. . . unfolds in four lengthy posts that prof bug left in a thread at Economist's View the last three days, much to the discomfort of left-wing critics (some of them professors).  Click here for the buggy stuff and the critics.

As you'll see, the two sorts of approaches to understanding human behavior and social life happen to be linked historically to noticeably different intellectual styles that prevailed in  Europe and the USA historically, with a prof bug analysis of where democracy emerged early and stabilized itself in effective and legitimate political institutions, and where the opposite occurred.  No need to say more.  Be sure to read the illuminating introductory commentary by Professor Daniel Little that kick-started the thread.

Today's Buggy Topic

Found, as usual, at Economist's View, the topic was inspired by a thread that Professor Mark Thoma, the man who runs that web site, started with a link to a Brookings Institute study on welfare and food stamps and black families. 

The key issue for prof bug?   To what extent, can the explosive growth of out-of-wedlock births in the African-American community between 1965 and 1995 --- a high-octane surge from 25% of illegitimate births to nearly 70% in that thirty year period, an astounding change, with lots of problems in inner city communities that ensued --- be attributed to the pre-reformed welfare system?

The Background

It was President Lyndon Johnson who initiated the system with aid-to-dependent families in 1965, always with good intentions.  And very frequently with intrusive government social policies --- guided by misleading social science theories that don't fully understand the complexity of the problems that generate those policies --- that welfare stem entailed, over time, bad unintended consequences entirely beyond the predictive powers of those theories.

In turn, as research began to find out with more illuminating studies --- focused on the harmful results of single-parent families for their infants and children --- that research showed how children from such families are at risk in a variety of ways: not least, in delinquency of different sorts: some minor, some more serious, some deadly.

No Need To Say More Here

The lengthy buggy post in that thread should be easy to follow.  Just be sure to read the thread's introductory comments that kick off the subsequent posts.

Click here.