Analytical Egalitarianism Research Articles

Potterian economics

Abstract Recent studies in psychology and neuroscience offer systematic evidence that fictional works exert a surprisingly strong influence on readers and have the power to shape their opinions and worldviews. Building on these findings, we study ‘Potterian economics’, the economic ideas, insights and structure, found in Harry Potter books, to assess how the books might affect economic literacy. A conservative estimate suggests that more than 7.3% of the world’s population has read the Harry Potter books, and millions more have seen their movie adaptations. These extraordinary figures underscore the importance of the messages the books convey. We explore the Potterian economic model and compare it to professional economic models to assess the consistency of the Potterian economic principles with the existing economic models. We find that some of the principles of Potterian economics are consistent with economists’ models. Many other principles, however, are distorted and contain numerous inaccuracies, contradicting professional economists’ views and insights. We conclude that Potterian economics can teach us about the formation and dissemination of folk economics—the intuitive notions of naïve individuals who see market transactions as a zero-sum game, who care about distribution but fail to understand incentives and efficiency and who think of prices as allocating wealth but not resources or their efficient use. ‘I think the writers [of popular literature] are not particularly sympathetic to or don’t understand how a market works. It’s not easy to convey that to a child. It’s not always easy to convey it to grown-ups.’ Gary Becker (New York Times, August 21, 2011, p. SR5). ‘With all due respect to Richard Posner, Cass Sunstein, or Peter Schuck [reference to the books these scholars published in 2005], no book released in 2005 will have more influence on what kids and adults around the world think about government than [Rowling’s] The Half-Blood Prince.’ Benjamin Barton (Michigan Law Review, 2006, p. 1525). ‘As economic theorists, we organize our thoughts using what we call models. The word “model” sounds more scientific than “fable” or “fairy tale” although I do not see much difference between them. The author of a fable draws a parallel to a situation in real life. He has some moral he wishes to impart to the reader. The fable is an imaginary situation that is somewhere between fantasy and reality. Any fable can be dismissed as being unrealistic or simplistic, but this is also the fable’s advantage. Being something between fantasy and reality, a fable is free of extraneous details and annoying diversions. In this unencumbered state, we can clearly discern what cannot always be seen in the real world. On our return to reality, we are in possession of some sound advice or a relevant argument that can be used in the real world.” Ariel Rubinstein (Econometrica, 2006, p. 881). ‘An investigation of novels and [economic] models…may help us better understand how the public thinks about economic issues.’ Tyler Cowen (The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism, 2008, p. 321).

Provincializing economics: Jevons, Marshall and the colonial imaginaries of free trade

Contemporary economics speaks about trade in the familiar abstractions of comparative advantage, tracing the modern formulation of the case for free trade made in terms of welfare maximization to late-Victorian economists like W. Stanley Jevons and Alfred Marshall. Though Jevons and Marshall did formalize theories that treat countries as if they are abstract individuals, a closer reading suggests that their thinking on trade was informed by colonial imaginaries of civilization and race. The economics invented by Jevons and Marshall manages claims about human sameness and difference in a particularly colonial fashion. They both slide readily and uncertainly between the idea that parts of humanity are permanently lesser races and explaining lesser humans as simply developmentally backward. The latter might achieve full physiological and moral humanity over time through the improvements (and attendant but necessary suffering) administered by Empire via market competition. They sometimes point to a common set of desires and calculating capacities, but never so decisively as contemporary economics. Jevons takes these commonalities as the basis of a quantitative science of economics, but doubts their empirical universality. Marshall sees these traits as distinctively modern and achieved only via the rise of modern institutions. By contrast, contemporary economics insists on the universality of these traits, claiming for economics a distinctive “analytical egalitarianism.” But difference is only defined away by fiat in contemporary textbooks and where difference arises, as in the problem of uneven development, the colonial impulse of economics remains. The connection to Jevons’ and Marshall’s own colonial management of difference becomes sharply visible. To return to Jevons and Marshall allows us to provincialize economics.

Attitudes Towards Race, Hierarchy and Transformation in the 19th Century

Using the debates between Classical political economists and their critics as our lens, this paper examines the question of whether we’re the same or different. Starting with Adam Smith,Classical economics presumed that humans are the same in their capacity for language and trade;observed differences were then explained by incentives, luck and history,and it is the“vanity of the philosopher”incorrectly to conclude otherwise.Such “analytical egalitarianism”was overthrown sometime after1850,when notions of race and hierarchy came to infect social analysis as a result of attacks on homogeneity by the Victorian Sages (including Thomas Carlyle and John Ruskin), in anthropology and biology(James Hunt and Charles Darwin), and among political economists themselves (W.R.Greg).Two questions were at issue.Do everyone’s preferences count equally,and is everyone equally capable of making economic decisions?In Smith’s account,philosophers and subjects alike are capable of making decisions.The oppositional view held that some are different from others.Since“difference”implied“superiority”in the period we study, we call this doctrine“analytical hierarchicalism.” JEL classification numbers:B12,Z1.

The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism

The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism

The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism, edited by Sandra J. Peart and David M. Levy

The Street Porter and the Philosopher: Conversations on Analytical Egalitarianism, edited by Sandra J. Peart and David M. Levy

Larry Moss and the Struggle Against Racism by the Whately Professors of Political Economy

AbstractIn this note, we highlight an important consideration of Larry Moss's life's work, the continual struggle within economics against racism. Larry initiated and supported the symposium on eugenics published by the American Journal of Economics and Sociology in July 2005. He edited the volume Social Inequality, Analytical Egalitarianism and the March Toward Eugenic Explanations in the Social Sciences in August 2008. These constitute obvious signs of Larry's concern.He conjectured that the Trinity College Dublin political economists who held the Whately professorship should be thought of as a school. Such a school was in fact identified in 1850 by an outsider who pointed to their shared opposition to racial explanations within an institutional setting. That shared opposition allowed them to speak against the narrow interests of the rulers of the country. Of course, other political economists of the time, Mill in particular, were also emphatic in their anti‐racism. Thus, not only do we need to take up Larry's challenge to describe the Trinity College school but we must also seek its connections with the Scottish‐English group of anti‐racists.

Sandra J. Peart and David M. Levy (eds): The Street Porter and the Philosopher

The volume under review is a collection of essays some of which have been published previously, some of which are based on events sponsored by the Summer Institute for the Preservation of the History of Economics. All of the essays are authored by recognized experts in the history of economics, and, as such, represent a notable contribution to this sub-discipline within economics. Chapter 1 provides the reader with a plan of the collection and its unifying theme: the interplay among the three competing philosophies of analytical egalitarianism (AE), practical egalitarianism (PE), and analytical hierarchicalism (AH). The result is a fascinating collection of essays for those readers who are well-versed in the history of economic thought: the novice may be intimidated by the authors’ command of their chosen subject.

Peart, S. - Levy, D. M. (eds), The Street Porter and the Philosopher – Conversations on Analytical Egalitarianism

Abstract Peart, S. - Levy, D. M. (eds), 2008, The Street Porter and the Philosopher - Conversations on Analytical Egalitarianism, Ann Arbor, The University of Michigan Press, pp. 437, US$ 70.00, ISBN-13: 978-0-472-11644-7.

Thinking About Analytical Egalitarianism

On the occasion of this symposium we have taken the opportunity to revisit what we have called analytical egalitarianism with the comments of our colleagues in mind. Before we began Vanity, we were intrigued by two discussions about types of agents. early work in public choice by James Buchanan and Gordon Tullock (1962) held emphatically that agents in market transactions were no different from agents in political transactions. socialist calculation debate illustrates the danger of supposing that planners could be counted on to act in the public interest (Levy and Peart 2008d). Folk wisdom in economics also suggests that economists are not exclusively truth-seeking agents. Torture the data until it confesses is one expression of this attitude attributed to Ronald Coase. Edward Leamer's Let's Take the 'Con' Out of Econometrics (1983) is perhaps the best known statement of this. What we've tried to do in Vanity is to recover a tradition. We offer two requirements for analytical egalitarianism (AE). First, differences among types of agents in an AE model are endogenous to the model. Second, the theorist who creates an AE model is the same type as the agents in the model. We prefer this characterization to the older nature and nurture terminology that Kevin Hoover suggests because our characterization explicitly takes the modeler into consideration. These conditions are in keeping with our reading of Adam Smith's practice. Philosophers and porters are very different types of people, but all differences are explained by the working out of the model that Smith describes. As a result of the division of labor, philosophers offer their insights in exchange for other goods. question is how to keep the benefits of the division of labor (expertise) without giving experts the power to exploit the deference accorded to them. AE is thus a characterization of types of agents in a model and the relationship between the model and the modeler. For many problems we can adopt the familiar as-if move. Indeed, as we are unlikely to work with models in which height is an interesting variable, we can afford to laugh at ourselves and the AE supposition. hard question is, what do we do when both AE and laughter fail? We start where we began, with Smith. In Theory of Moral Semtiments, Smith writes about those whose natural endowment is a cause for regret (idiots), and he distinguishes between those who accept their inferiority and those who out of pride struggle to see themselves as the equal of others ([1759] 1982 VI iii: 49). An example closer to the material in Vanity was provided by A. C. Pigou in the chapter from Economics of Welfare entitled The Quality of People. chapter starts by asking the question of whether the claims of the biostatisticians concerning genetic differences among people, which Pigou accepts as true, imply that the traditional imperative of economic utilitarians toward income equality would be reversed. What if some people were more capable of happiness than others? Pigou developed the intriguing line of argument that if the capacity for happiness were endogenous, equalization of income in itself would help equalize the capacity for happiness ([1932] 1950: 106-122). This aspect of Pigou's work is apparent also in John Rawls's commentary on the utilitarian tradition (Rawls [1971] 1999: 222; Levy and Peart 2007). endogeneity of capacity may help explain why the traditional measure of cognitive capacity--performance on IQ tests--has been growing rather markedly over time (Flynn 2007). We now turn to some specific points for discussion. For ease of exposition, we'll divide the responses into two sections; first, those that are correct and, second, those that warrant further discussion. I Criticisms That Are Precisely Right DAN HAMMOND RIGHTLY HIGHLIGHTS what is in the shadows of Vanity: religion. While the Irish as a people are targets of those who favored hierarchy, behind the people often lurked their religious beliefs. …

Classical Equality: On the Content of Analytical Egalitarianism

Abstract. Sandra Peart and David Levy in The “Vanity of the Philosopher” champion a concept of “analytical egalitarianism.” Equality is a difficult concept. Peart and Levy attempt to reconstruct analytical egalitarianism from the classical writing of British political economy from Adam Smith to John Stuart Mill. Aspects of this reconstruction touch on a number of different egalitarian conceptions, including: (1) equality of capacity and talent, (2) racial equality, (3) equality in the marketplace, (4) equality of opportunity, (5) equality of material conditions, (6) equality of happiness, (7) equality before God, and (8) political equality. This paper briefly considers the relation of each of these equalities to Peart and Levy's analytical egalitarianism. The hope is that such exercises can help elucidate Peart and Levy's reinterpretation of classical economic's understanding of equality. A central theme does emerge. Peart and Levy, echoing the classical economists themselves, seem reluctant to follow their radical assumptions concerning talent and capacity for happiness to radical conclusions concerning the appropriate provenance of redistributional policies.

The “Vanity of the Philosopher”: Analytical Egalitarianism, Associationist Psychology, and Eugenic Remaking?

Abstract. These comments explore the relationship between analytical egalitarianism, race‐blind theorizing, and associationist psychology. Associationist psychology, though making an implicit appearance in Vanity, was central to the egalitarian analysis provided by James Mill and John Stuart Mill. Indeed, associationist considerations lay at the heart of Mill's race‐blind analysis of cottier tenure, and his exchange with Thomas Carlyle over the “Negro Question.” These comments also note some intriguing comparisons between the debate over eugenics and the debate over socialist calculation.

The Vanity of the Economist: A Comment on Peart and Levy's The “Vanity of the Philosopher”*

Abstract. In the Vanity of the Philosopher, Sandra Peart and David Levy reconsider “postclassical” economics from the vantage point of Adam Smith's “analytical” egalitarianism. Analytical egalitarianism is assumed, not proved; and Peart and Levy's criticisms of many 19th‐ and early 20th‐century economists, as well as eugenics in general, depend on equivocating between analytical and substantive egalitarianism. They fail to provide a non–question‐begging critique of eugenics.

Introduction to the Symposium on Ethics

The three papers in this symposium were originally presented at the 2003 Summer Institute for the Preservation of the History of Economics. Two were subsequently revised and presented at the Joint Statistical Meetings in San Francisco. Those facts are perhaps sufficient to suggest a certain eclectic flavor to the collection. Notwithstanding this, the papers have a common purpose: our original goal was to explore the nature of ethics and ethical constraints within economics. For Levy and Peart, these questions arose in a historical context. Our previous work on eugenics [Peart and Levy 2005] served to convince us that, historically, economists and social commentators who made policy recommendations were insufficiently constrained by ethical considerations. We came to realize that the lack of such constraints ? and of ethical considerations more generally ? made it easier for social scientists to treat the "unfit" and "infirm" as human cattle. We also came to realize that an important check on such policy recommendations follows from the acceptance of a form of what we have called "analytical egalitarianism" ? the presumption that we are equally competent. If we are equally competent, or must treat people as if they are, then it follows that policy makers, economists, and other experts on social matters are equally able to be ethical and to be unethical. We are all tempted to the unethical, by whatever tempts any among us. The trick is to recognize this basic fact and then, having done so, to put into place constraints that serve to attenuate the temptations that experts, those whose advice is sought, face. So the papers that follow are united by a common theme, namely that those who study human choice are no different from the people whose choices they study. If incentives matter for consumers and producers, they also matter for economists. If competitive markets fail to produce an efficient level of output, economists often recommend a change in incentives facing firms. Rarely, however, do we consider how or whether economists' research may produce an efficient output. This is the hard question we tackle below. While we do not hold that "efficient" is (quite) the same as "ethical," we see enough overlap to at least begin to tackle the ethics problems using the machinery associated with efficiency. Thus, Levy and Peart develop the statistical equivalent of a prisoner's dilemma in the economic account of expert witnesses. Perhaps counter intuitively, the motivating mechanism is an 18th- and 19th-century device known as sympathy or the desire for approbation. In our account sympathy is truncated ? partial ? since it consists of the statisticians' sympathy for the client's desired outcome. In keeping with our professed analytical egalitarianism, we recommend a change in the incentives facing expert witnesses. Secondly, Martin Zelder argues that with plausible parametric assumptions inefficient outcomes are highly likely in the game of econometric "con." He

The Vanity of the Economist: A Comment on Peart and Levy's 'The Vanity of the Philosopher'

In 'The Vanity of the Philosophers,' David Levy and Sandra Peart reconsider post-classical economics from the vantage point of Adam Smith's egalitarianism. Analytical egalitarianism is assumed, not proved; and Levy and Peart's criticisms of many 19th- and early 20th-century economists, as well as eugenics in general, depend on equivocating between analytical and substantive egalitarianism. They fail to provide a non-question-begging critique of eugenics.

Analytical egalitarianism, anecdotal evidence and information aggregation via proverbial wisdom

In this paper, we compare how individuals acquire and process information relative to their scientific counterparts. Individuals rely on a heuristic, what we call 'proverbial wisdom', while experts rely on models. We then examine the properties of 'proverbial wisdom' relative to models. As a preliminary step towards comparing models and proverbs, we propose commensurate idealizations of models and proverbs. We then demonstrate that aggregated anecdotal evidence can improve upon the expert's model-based estimation if the model is not exactly correct. Thus, neither the expert nor ordinary people dominates the other and so we allow for the possibility of the relationship of exchange. Our technical construct - what we call the median of anecdotal evidence - supports the possibility of analytical egalitarianism by providing a theoretical counter-example to analytical hierarchy. Our evidence consists of the sort of Monte Carlo study employed to study estimation procedures in non-ideal circumstances.