William James on the value of doctorates and diplomas

Greg Ip at the WSJ has a nice piece responding to the ruckus over the nominations of Stephen Moore and Herman Cain to serve on the Federal Reserve Board. It’s obvious from the Fed’s own history that the mockery of Moore for not having published peer-reviewed journal articles, or not having a Ph.D. in economics, quite misses the point. As Greg nicely puts it, the real question to ask about someone who is may need to make economic policy decisions is whether they are a disciplined thinker, not whether they have a certain credential.

By coincidence, I also recently read an essay by William James entitled “The Ph.D. Octopus,” originally published in the Harvard Monthly in March 1903 (it was reprinted in his essay collection Memories and Studies which is out of copyright and freely available). Some of James’ sentiments still ring quite true:

America is thus as a nation rapidly drifting towards a state of things in which no man of science or letters will be accounted respectable unless some kind of badge or diploma is stamped upon him, and in which bare personality will be a mark of outcast estate. It seems to me high time to rouse ourselves to consciousness, and to cast a critical eye upon this decidedly grotesque tendency.

James worried that the institutionalization of graduate degrees, and in particular their use by employers to screen potential hires, would cause all kinds of negative consequences:

To interfere with the free development of talent, to obstruct the natural play of supply and demand in the teaching profession, to foster academic snobbery by the prestige of certain privileged institutions, to transfer accredited value from essential manhood to an outward badge, to blight hopes and promote invidious sentiments, to divert the attention of aspiring youth from direct dealings with truth to the passing of examinations…

James was deeply aware of the tension between universities’ avowed mission of free intellectual inquiry and their economic function as producers of credentials, and hoped that the former would discipline the latter:

Our universities at least should never cease to regard themselves as the jealous custodians of personal and spiritual spontaneity. They are indeed its only organized and recognized custodians in America today. They ought to guard against contributing to the increase of officialism and snobbery and insincerity as against a pestilence; they ought to keep truth and disinterested labor always in the foreground, treat degrees as secondary incidents, and in season and out of season make it plain that what they live for is to help men’s souls, and not to decorate their persons with diplomas.


Rediscovering the importance of export discipline

The new IMF working paper on industrial policy, by Reda Cherif and Fuad Hasanov, has gotten a lot of notice, and indeed it is very clear, comprehensive, and useful. But for anyone who has already done some reading on the history of successful Asian economies, particularly Taiwan and South Korea, it is not exactly surprising stuff. Here for instance is their quick summary of the key characteristics of these economies’ successful industrial policies:

  • Intervene to create new capabilities in sophisticated industries: Pursue policies to steer the factors of production into technologically sophisticated tradable industries beyond the current capabilities to swiftly catch up with the technological frontier.
  • Export, export, export: A focus on export orientation as any new industrial product was expected to be exported right away with the use of market signals from the export market as a feedback for accountability. As conditions changed, both the state and the firms adapted fast.
  • Cutthroat competition (at home and abroad) and strict accountability: No support was given unconditionally although performance assessment was not necessarily based on short term profits. While specific industries may get support, intense competition among domestic firms was highly encouraged in domestic and international markets.

The combination of a focus on exports with tough competition sounds a lot like what Joe Studwell, in his 2013 book How Asia Works (which is not cited in the IMF paper’s bibliography), called “export discipline.” His explanation is clearer and punchier:

Governments in all the major economies of east Asia tried at some stage to nurture domestic manufacturers. That those in north-east Asia succeeded, while those in south-east Asia failed miserably, turned on a small number of policy differences. By far the most important of these was the presence – or absence – of what I call ‘export discipline’.

This term refers to a policy of continually testing and benchmarking domestic manufacturers that are given subsidies and market protection by forcing them to export their goods and hence face global competition. It is their level of exports that reveals whether they merit state support or not. …

Where export discipline has not been present, development policy has become a game of charades, with local firms able to pretend that they have been achieving world-class standards without having to prove it in the global market place. In south-east Asia, the energies of entrepreneurs were directed towards fooling politicians rather than exporting.

I would still recommend Chapter 2 of How Asia Works as the definitive comparison of successful and unsuccessful industrial policies in Asia.

The point of such a comparison is to move beyond sterile debates over whether industrial policy can ever work, since in fact basically all countries have some kind of policy for promoting particular industries. As Cherif and Hasanov put it, “The key question is, if many countries have been conducting industrial policy anyway, what should the right way to do this be.” The presence or absence of export discipline should be a useful way to evaluate whether industrial policy is likely to be successful.

Even within Asia this lesson is not as widely appreciated as it perhaps could be. For instance, former Chinese finance minister Lou Jiwei recently made a surprisingly harsh public criticism of Made In China 2025 (for which he has apparently been forced into early retirement). He called it a waste of taxpayers’ money and an unwarranted intrusion of government: “those industries are not predictable and the government should not have thought it had the ability to predict what is not foreseeable.”

While I have a lot of respect for Lou, I’m not sure this is the strongest criticism of Made in China 2025. It’s not clear that “the market” would necessarily pick different industries as being desirable to invest in now: the ideas that people have about what technologies are going to be important in the future don’t seem to be that different across the public and private sectors. The Chinese government have have a plan to promote artificial intelligence, but private venture capital firms are also throwing plenty of money at that sector as well. Semiconductors are one of the key sectors targeted by The Made In China 2025, and I don’t think many people are seriously arguing that semiconductors won’t be important in the future.

This is not to say that venture capital investors are necessarily going to be right about the future either, just that both government officials and venture investors can read the same things and are influenced by the same conventional wisdom. This point is not original to me: I picked it up from Brad DeLong’s 2010 book with Stephen Cohen, The End of Influence:

Americans like to say scornfully that industrial policy is about “governments picking winners.” Picking winner industries is not that hard—even for governments. Most countries trying to climb the ladder of quality and industrial sophistication through selective promotion compiled pretty much the same lists at the same time. Even at the leading edge of the technological frontier, the industries that governments are tempted to promote are largely the same ones picked by the analysts and brokers at investment firms such as Merrill Lynch, Nomura, or Rothschild’s.  …

Picking “winner industries” is not the hard part; winning is. It is difficult to create actual winners, companies that develop into successful competitors.

And that, of course, is where export discipline comes in.


Oliver Sacks on the nineteenth century’s love of facts

Oliver Sacks’ posthumously published essay collection The River of Consciousness is a surprise and a delight. While it has some pieces in his familiar style of reflections on neurological casework, the highlights are the truly wonderful essays on the history of science. Who knew that Darwin discovered the pollination of flowers by insects? Or that Freud did foundational research on the structure and role of nerve cells?

Informing these essays is Sacks’ deep affection for and engagement with the work of nineteenth-century scientists, particularly Darwin and Freud, but also many more obscure toilers. At one point, when investigating some of the peculiar visual hallucinations experienced by his migraine patients, he can find no help in twentieth-century psychiatric literature, so he looks further back:

When I searched the current literature, I could find no mention of these [phenomena]. Puzzled, I decided to look at nineteenth-century accounts, which tend to be much fuller, much more vivid, much richer in description, than modern ones.

Sacks found that those nineteenth-century writers, while often lacking a theoretical framework to interpret their observations, were meticulous recorders of what they observed. Twentieth-century psychiatry had a more developed theoretical system, but had little time for phenomena that did not easily fit into that system, and so ignored them. There is perhaps a parallel for this in anthropology, where the extremely detailed accounts of early fieldworkers can still be usefully mined for insights for decades afterward–something it is difficult to imagine happening with many contemporary works with a much more elaborate theoretical apparatus. A mindset that places value on facts is itself something of value.

In the nineteenth century, an era of naturalistic description and phenomenological passion for detail, a concrete habit of mind seemed highly appropriate, and an abstract or ratiocinating one was suspect—an attitude beautifully brought out by William James in his famous essay on Louis Agassiz, the eminent biologist and natural historian: “The only man he really loved and had use for was the man who could bring him facts.”

The nineteenth-century genius for, or mania for, the collection and description of facts is definitely one of the most distinctive traits of the epoch. Jürgen Osterhammel’s The Transformation of the World: A Global History of the Nineteenth Century, one of my favorite history books, describes this very well, though with more attention to the social than the natural sciences:

The novelty in nineteenth-century Europe was that, over and above a normative political and social theory, branches of knowledge arose with the aim of describing the contemporary world and grasping the patterns and regularities beneath the surface of phenomena. …

“Factual investigation”—which Joseph A. Schumpeter contrasted to “theory” in his great history of economic thought—acquired new scope and significance in the nineteenth century, when Europeans produced incomparably more self-observational and self-descriptive material than they had in previous centuries.

For the most important analysts of political and social reality—one thinks of Thomas Robert Malthus, Georg Wilhelm Friedrich Hegel, Alexis de Tocqueville, John Stuart Mill, Karl Marx, Alfred Marshall, and the chief figures in the German “Historical School” of economics, including the early Max Weber—factual investigation was closely bound up with the theoretical quest for connections and correlations.

Indeed, Schumpeter’s History of Economic Analysis has a lot of praise for “factual investigation,” and he particularly liked works that defied the stereotype of economics being excessively theoretical:

Of particular interest to us is the type of analysis that combines presentation and explanation of facts in such a way that the two cease to be distinct tasks and mutually condition one another at every step: the type of analysis that arrives at its results by means of discussing individual situations. … It is hardly possible to overlook the factual complement in the Wealth of Nations—though some critics seem to have accomplished even this feat.

A lot of those massive, fact-filled nineteenth-century tomes are certainly impossible to read today, but the greats of the era were able to integrate voluminous facts with theorizing and strong arguments. Such a style of analysis was precisely what Sacks enjoyed about Darwin’s later botanical works. These are little known compared to the Origin of Species, and yet Darwin spent decades of his life on them.

Darwin spoke of the Origin as “one long argument.” His botanical books, by contrast, were more personal and lyrical, less systematic in form, and they secured their effects by demonstration, not argument. …

Botany was not a mere avocation or hobby for Darwin, as it was for so many in the Victorian age; the study of plants was always infused for him with theoretical purpose, and the theoretical purpose had to do with evolution and natural selection. It was, as his son Francis wrote, “as though he were charged with theorising power ready to flow into any channel on the slightest disturbance, so that no fact, however small, could avoid releasing a stream of theory.”

Sachs accepts that the twentieth-century transformation of botany and zoology from sciences founded in descriptive natural history to more theoretical enterprises led to tremendous progress, but “it was clear that something was being lost, too.” With economics also having taken an empirical turn over the past couple of decades, perhaps there will be a swing back to appreciating some of those nineteenth-century virtues.


The Dave Hutchinson view of Europe grows increasingly plausible

It’s always dangerous to take a fictional character’s utterances as a stand-in for the author’s views, but this passage from Dave Hutchinson’s Europe in Winter does at least seem like a clear statement of the premise of the book:

Kaunas took a moment to gather his thoughts. “Europe is inherently unstable. It’s been in flux for centuries; countries have risen and fallen, borders have ebbed and flowed, governments have come and gone. The Schengen era was just an historical blip, an affectation.”

Hutchinson’s book, and its two predecessors, are thrillers set in a future world where Europe has fractured into a number of microstates and “polities,” coexisting with recognizable nation-states, the remnants of the European Union, and miscellaneous other transnational actors. It’s a festival of borders and bureaucracy, with lots of convincing detail (for instance, how after the UK dissolves, the spymasters of England spend a lot of time worrying about territorial threats from Scotland and Wales).

This is maybe not too surprising a vision for a novel published in 2016, the year of the Brexit vote. But Europe in Winter is the third book in a series; the first, Europe in Autumn (and still the best I think), was published in January 2014. Hutchinson should, I think, get credit for seeing before many others that the centrifugal theme in European history was not quite played out. And most would agree that evidence in favor of the hypothesis “Europe is inherently unstable” has increased since he wrote those words.


The underrated role of fear in economic development

William Overholt’s book China’s Crisis of Success covers a lot of different topics, but one theme that he keeps coming back to is fear.

A lot of what drove China’s daring early economic reforms was fear of falling back into the chaos of the Cultural Revolution. Fear can motivate political leaders to do things that are out of the ordinary, and motivate the population at large to accept them. It is not a coincidence, in Overholt’s view, that the miracles of economic growth in Asia followed national catastrophes:

The societies that have been able to implement the required policies [for rapid economic growth] are all ones that have experienced excruciating trauma and intense fear: Japan after losing World War II; South Korea after the Korean War; Taiwan after the Chinese Civil War; Singapore after its traumatic separation from Malaya (which meant facing two much larger powers, Indonesia and Malaysia); Vietnam after wars with France, the United States and China; and China after a century of foreign humiliation and tens of millions of deaths from domestic strife. …

The policies required for rapid growth entail enormous social dislocations, and political leaders who consider imposing such dislocations reasonably fear for their jobs. They only try when they are terrified of the alternative, and when a population fearful of collapse accepts otherwise unacceptable stresses. These are the political prerequisites of miracle-level growth.

I think there is something to this, even if it’s not the kind of insight that seems particularly easy to run regressions on (parts of Europe after the second world war probably also belong on the list).

Overholt calls China’s current situation a “crisis of success” because it has in fact succeeded in dispelling fear of national collapse. But without that fear, it is harder for political leaders to make disruptive changes to the system, and it is harder to convince interest groups to accept such changes.

One of China’s current problems is that shared national fear of collapse has given way to complacency and some hubris. …

As fear segues into confidence, the willingness of the population to endure terrible stresses dissipates and so does the motivation of the leaders to take great risks.

For this reason he thinks it is becoming difficult for China to continue liberalization that would reduce the role of government intervention and state-owned enterprises in the economy (the book, which came out at end-2017, is somewhat equivocal about this, but in person Overholt nowadays is more decisively pessimistic).

In recent years, advocacy for continued economic liberalization in China has been organized around the idea of the “middle-income trap”: if China does not do XYZ reforms, the argument goes, it will fall into this trap and not realize its full potential. But the middle-income trap is not a disaster or national catastrophe; it’s just things being not as good as they perhaps could be:

The stakes are different now – not war, not chaos, not financial collapse, just slower growth.

Since China’s growth is going to slow anyway, no one can honestly promise China that, if they do XYZ reforms, growth will not slow down. All they can argue is that growth might not slow down as much as it otherwise would. Which is not that compelling of an argument. So fear of the middle-income trap may not be enough to motivate the Communist Party to make politically difficult changes that reduce its ability to direct economic activity.

Fear does seem to be a stronger motivator in environmental policy: families rightfully fear for the health of their children, and political leaders rightfully fear the anger of families. The “fear model” thus suggests China could continue to make progress in reducing pollution, even if future economic liberalization is limited.


How plausible is the China in Kim Stanley Robinson’s *Red Moon*?

The premise of Kim Stanley Robinson’s new novel Red Moon is that China has taken the lead in colonizing the moon, leaving America far behind. I am a Robinson fan, and since the theme of China overtaking the US is very much in the air these days, I was interested to pick up the book to get his take on it.

Here is how one character describes China’s decision to establish a lunar base:

At the Twentieth People’s Congress, in 2022, the Chinese Communist Party and its Great Leader President Xi Jinping decided that the moon should be a place for Chinese development, as one part of the Chinese Dream. In the twenty-five years since that resolution was made, much has been accomplished in China’s lunar development.

Later a character explains:

In China, if the Party chooses to do something, then the whole country can be rallied to that cause. One out of every six humans alive, in other words, devoted to the project of establishing a base on the moon. This was far more than needed to do the job! Not every Chinese person was involved, and only a small percentage of China’s capital reserves had to be directed up here, even though it was a pretty big project. But it wasn’t that big, and in the end it was just more infrastructure.

This is not bad! For China to treat a lunar base as an extension of the Belt and Road Initiative, and “just more infrastructure,” is a fairly straightforward extrapolation of recent trends in Chinese political economy. And it has a ripped-from-the-headlines feel, given that in January, China became the first country to land a spacecraft on the far side of the moon. With India and Israel also planning lunar missions, lunar exploration is in fact a good reflection of the shift from bipolar or unipolar world to a multipolar one.

But sharp-eyed readers will have noticed that in the above Robinson says “People’s Congress” when he really means “Party Congress.” Annoying errors like this abound. Even more troubling are the names of the many Chinese characters, which often seem to be invented randomly without reference to the actual Chinese language. The president of China in 2047, for instance, is supposedly named Shanzhai Yifan. Not only is shanzhai not even a Chinese surname, it is (as anyone who uses the internet should know) a slang term meaning something like “cheap knockoff.” So did one of Robinson’s sources play an elaborate joke on him? Or is this just sloppiness?

Being fuzzy about the details of foreign languages and political systems is not a criminal offense for a writer of speculative fiction, who after all is supposed to be speculating rather reporting. But it seems that apparently neither Robinson nor his publisher could be bothered to run the manuscript by an actual Chinese-speaking person before publication. I’m not even a native speaker, and I could have fixed most of these minor issues in a couple hours of work. As a result, the book is something that no Chinese-speaking person could ever take seriously.

The more fundamental problem with the future China in this book is that it’s not really a future China: it’s just today’s China with some of the names changed. And sometimes not even that: in 2047 Chinese people are apparently still sending each other messages on WeChat on their mobile phones, and complaining about the Great Firewall. There’s a whole subplot about a social revolution unfolding in China, in which people’s grievances seem to have been lifted from dated magazine articles: the “breaking of the iron rice bowl” and the hukou system. That subplot is very thinly sketched and happens mostly offstage, and as a result is not even convincing as narrative, even aside from the details.

Red Moon has generally received mixed reviews, as it has other narrative weaknesses besides the poor portrayal of China. I think we’re still waiting for a work of fiction that gets to the heart of how America deals with a rising China — admittedly a pretty demanding task.

For better recent Robinson, I would recommend Aurora, and also Shaman, which I think is underrated, and features some of his best nature writing.


On atheism and the objective understanding of society

Atheism, says Tim Whitmarsh, is a “tradition that is comparable in its antiquity to Judaism (and considerably older than Christianity or Islam).” In his fascinating book Battling the Gods: Atheism in the Ancient World, he conducts what he calls an “archaeology of religious skepticism,” digging out evidence of atheism in ancient Greece and Rome from hints and scraps in various sources.


He is not trying to argue that the classical world was some kind of freethinkers’ paradise, or a hotbed of religious skepticism. Greek and Roman polytheism frowned on those who denied the reality of the gods, and often repressed them. The philosopher Socrates was famously charged with committing the crime of “not recognizing the gods the state recognizes,” and when found guilty chose to drink poison rather than accept exile. But Whitmarsh does think that atheism was tolerated much more than it would be in later centuries:

There were no social mechanisms whose jobs were to create consensus in the matter of religion, and in any case society as a whole invested little in defining the nature of divinity precisely. This meant that for much of Greek antiquity atheism was not treated as a heretical position, the “other” of true belief; it was seen rather as one of the many possible stances one could take on the question of the gods (albeit an extreme one). It was only in Christian late antiquity that atheism began to be constructed in systematically antithetical terms, as the inverse of proper religion, a threat to the very foundations of human civilization.

In Whitmarsh’s view, this relative tolerance–or to put it more precisely, the fact that the power of the state was generally not used to enforce religious orthodoxy–had important intellectual consequences. The speculations of the pre-Socratic philosophers are often seen as precursors to modern science because they tried to explain natural phenomena in terms of its physical properties rather than the actions of the gods. History and social science–which explain events and institutions in terms of human rather than divine actions–were also products of this intellectual climate:

According to his ancient biographer, Thucydides studied philosophy with the pre-Socratic materialist Anaxagoras and “as a result was whispered to be an atheist.” Some modern scholars have agreed with the latter assessment. We will of course never know about the personal beliefs of the historical Thucydides who wrote the words, but his History of the Peloponnesian War … is the culmination of the fifth-century tendency toward the exclusion of divine explanation. Not only does he refuse to admit non-naturalistic causality, but he cynically skewers any attempts on the part of the actors in his story to invoke the gods. Whatever his own personal beliefs were, the History can reasonably be claimed to be the earliest surviving atheist narrative of human history.

One of the many fascinating fragments that Whitmarsh quotes is a speech from a drama attributed to Critias, Plato’s uncle, which gives a cynical account of the origins of religion. More elaborate version of this type of cynicism–religion is the “opiate of the masses,” or a tool of oppression–should be quite familiar to us today:

Here was a time when humans’ life was unordered,
Bestial and subservient to violence;
When there was no reward for the noble
Or chastisement for the base.
And then, it seems to me, humans set up
Laws, so that justice should be tyrant
And hold aggression enslaved.
Anyone who erred was punished.
Then, when laws prevented them
From performing open acts of force,
They started performing them in secret; and then, it seems to me,
Some shrewd man, wise in his counsel,
Discovered for mortals fear of the gods, so that
The base should have fear, if even in secret
They should do or say or think anything.
So he thereupon introduced religion

The fact that such views can once again be openly discussed in the modern world is, in Whitmarsh’s account, a return to the historical norm after the millennium-long diversion of Catholic Christianity. If there is a villain to his story, it is the Roman emperor Theodosius, who in 380 AD declared Christianity the official religion of the empire and required all subjects to follow it. Traditional Roman polytheism was banned, and heresy became a crime against the state (as it also was for Socrates, but this time with a much more effective and aggressive state).  This “alliance between absolute power and religious absolutism” essentially made objective inquiry into the functioning of human society illegal.

There is reason, then, to think that the toleration of atheism is part of the intellectual framework necessary for the objective understanding of human society, and thus for the practice of social science and economics. If social institutions are the creation of divinity and cannot be questioned, neither can they be analyzed or changed. Many of the founding figures of European social science in the nineteenth century were in fact militant atheists.

Yet the cynical atheist’s take on religion–that it is “just” an invention of the powerful, or the cloaking of baser realities in high-flown language–itself is hard to sustain under objective scrutiny. The complexity and richness of religion as a human institution can only be reduced to such simple terms by doing violence to the facts.

Timothy Larsen’s excellent book The Slain God: Anthropologists and the Christian Faith shows that some of the greatest analysts of religion as a human institution were themselves strongly religious. (Thanks to Tyler Cowen for alerting me to the existence of this book). The early anthropologists Edward Tylor and James Frazer were skeptics who viewed Christianity and “primitive” religions as equally wrong, and their writings functioned more as polemics against belief than as plausible accounts of religion. Their work has, quite justly, been largely forgotten.


By contrast, three of the greatest anthropologists of the twentieth century–E.E. Evans-Pritchard, Mary Douglas, and Victor Turner–whose work very much has endured, were themselves believers. All were aware that this separated them from the majority of their colleagues. Another prominent British anthropologist, Edmund Leach, once even called Mary Douglas’ work “Roman Catholic propaganda.”

Yet it seems clear that these anthropologists achieved a depth of understanding and insight that escaped many others, in part because they had sympathy with the religious believers they studied. Larsen says that Evans-Pritchard thought Christian theology to be “sophisticated, insightful, and true”–and that the theology of the Nuer people he worked among was no less so. This sympathy was not simple credulity. In Evans-Pritchard’s classic Witchcraft, Oracles, and Magic among the Azande, he writes that “witches, as the Azande conceive them, clearly cannot exist.” But he was not preoccupied with demonstrating the falseness of their belief in witchcraft, but in understanding how it worked and why it made sense.

Atheism thus seems like a necessary but not sufficient condition for the understanding of human social institutions, including religion. A society in which belief cannot be questioned will not produce accurate histories of those beliefs. But a religious skeptic is also not necessarily the person best equipped to enter into the thought-world of religious believers. Producing convincing accounts of religion seems to require a peculiar combination of objectivity and sympathy, which itself is rather difficult to explain.

It seems that neither religiosity nor skepticism on their own will always prove reliable guides to understanding. The anthropological approach is not to privilege either one, but to see both religiosity and skepticism as normal social phenomena that themselves can be explained. Mary Douglas, who was perhaps the most brilliant of the figures in Larsen’s book, attempted to do just this in her book Natural Symbols.

But since the back-and-forth between religiosity and skepticism itself has such a long history, it should also not be surprising that she was not the first to make this intellectual move. The early American anthropologist Paul Radin, whose 1927 book Primitive Man As Philosopher was a recent and surprising choice for reissue by New York Review Books, argued passionately that a diversity of beliefs and attitudes is the norm for all human societies:

It is a matter of common experience that in any randomly selected group of individuals we may expect to find, on the whole, the same distribution of temperament and ability. Such a view, I know, has certain terrors because of national and class prejudices but I do not think it can be really seriously questioned. Primitive peoples are, we have seen, quite as logical as ourselves and have perhaps an even truer sense of reality. …

I feel quite convinced that the idealist and the materialist, the dreamer and the realist, the introspective and the non-introspective man have always been with us. And the same would hold for the different grades of religious temperament, the devoutly religious, the intermittently, the indifferently religious man. If individuals with specific temperaments, for instance the religious-aesthetic, have always existed we should expect to find them expressing themselves in much the same way at all times. And this, it seems to me, is exactly what we do find.