BigBlog

 If the title has suggested to you that there has been a theme running through my blogging in June 2010, then I must apologize.

How bounded is rationality? This post could be described as an economist's perspective on Jonah Lehrer's recent book, ‘How we Decide'. The book provides a highly readable discussion of the ways in which limited cognitive abilities can affect decision-making.  The book has reinforced my support for the view that governance structures will fail if they make large demands on the cognitive capacities of managers.

Does history give undue prominence to scribblers? In this post I suggest that an historical account of some student protests at the University of New England during the 1960s has given undue prominence to my contribution as the editor of the student newspaper.

Is there a crisis of capitalist democracy? This is a discussion of Richard Posner's recent book, ‘The Crisis of Capitalist Democracy'. Most of the book is about the recent financial crisis in the US. The title of the book reflects Posner's view that while the American political system can react promptly and effectively to an emergency, it ‘tends to be ineffectual' in dealing with the longer term challenge of maintaining fiscal responsibility. I think the major political parties in America still have a few years left to change their political culture before a democratic crisis becomes imminent.

Does parenting make a difference? Bryan Caplan suggested that parenting doesn't make much difference (in a recent article in the Wall Street Journal) and uses this as one of several reasons why parents should consider having more children. I was prompted to look at Steven Pinker's review of the evidence on effects of parenting, which gives prominence to the role of peer groups in child development.

How large a role does luck play in our lives? Genes, family environment and peer groups can only explain about half the variation in life outcomes, so luck must play an important role at an individual level. Luck must also play an important role at a society level because economic growth rates vary a lot among countries and over time for reasons that have little to do with resource endowments, institutions or government policies. At both the level of the individual and society, however, we can make our own luck by moving the odds in our favour.

In May I had two posts on the proposed new resources rent tax:

Does a resource rent tax solve the problem of sovereign risk?

I argue that investors will have perceived that the risks of investing in Australia to have increased as a result of the government’s proposal that the new tax will apply to existing mines.

Is state sovereignty relevant to resource rent taxation?

I argue that as a result of failure of the federal government to consult with state governments prior to introduction of the new tax there is still potential for state governments to increase royalty charges.

Will history judge Marx to have been right about the effects of technological progress on income distribution?

I suggest that history will probably continue to judge Marx to have been largely wrong, even though future prospects are not likely to be great for people without formal qualifications or interpersonal skills - unless they own robots that they can send out to earn a living.

What metaphors help us to understand the relationship between reason and emotion?

In this post I discuss the relative merits of Plato’s charioteer metaphor, Jonathan Haidt’s rider and elephant metaphor and Jonah Lehrer’s pilot and autopilot metaphor.

How can we ensure that parliaments are representative and governments are accountable?

My discussion leads to the conclusion that the system of government that we have in Australia may not be a bad compromise.

Would an hedonimeter help us to choose between push-pin and poetry?

If you don’t know what an hedonimeter is or what push-pin is you should read the post to find out. If you already know, then you should probably read the post in order to consider whether your reflective self has been paying too little attention to your experiencing self. 

Should we ever play the man rather than the ball?

No, not on my blog – not even if ‘the man’ is a particularly dirty player.

Which books should I recommend?

I have recommended 10 books that might be of interest to a person with a background in business or economics who is taking a broader interest in issues relating to human flourishing.

My posts during April covered a wider variety of topics than usual.

How can policy advisors come to grips with complexity?  This post comments on an aspect of the Australian Treasury's wellbeing framework for policy advice. Some of my former work colleagues (outside Treasury) might think that the message I was trying to convey was that the people who wrote this document are very clever, but perhaps not quite as clever as they think they are. What the post actually does is to present some points relating to the implications of complexity that I think the authors of the document should have incorporated explicitly.

Why should we view individual rights as metanormative principles? The short answer is because individual rights are needed to enable individuals to flourish according to their own values; they stand apart from the consideration of what we should value. The post suggests that several different arguments for individual rights are metanormative, including Robert Sugden's argument that opportunity should be viewed as mutual advantage.

Should we welcome globalization or fear it?  Gregg Easterbrook suggests that there is plenty to welcome and plenty to fear in his new book, Sonic Boom. I think he over-does the anxiety-inducing aspects of globalization.

What if people want governments to regulate them?  This is a discussion of paternalism, with particular reference to seat-belt laws. This regulation been widely supported in Australia as a cost-effective way to help people to develop a good habit that might save their lives if they are involved in an accident. Even so, people who see such regulation as unwarranted interference with their lives should have the right to opt out.

Why should we be concerned that paternalism will foster dependency?  One area of concern is the development of cycles of dependency on welfare benefits in which several generations from one family become dependent on government hand-outs as the major source of their income. This may be more manageable, however, than the increasing tendency for people from all walks of life - including people who are quite capable of looking after themselves - to look to government to provide protection against all kinds of risks.

Does identity economics predict happiness in different societies?  Yes, no, perhaps. In any case I think identity economics - as presented by George Akerlof and Rachel Kranton - makes a useful contribution to our thinking about the influence of identity and norms of behaviour on happiness.

Would the politics of happiness be any better than what we have now?  Derek Bok argues for a new kind of politics - the politics of happiness - in his recent book of that name. The main difference would be to re-focus priorities away from economic growth toward social policies designed to raise happiness levels. Bok argues that the findings of happiness research provide support for his view. I think he is wrong.

Should schools and universities teach students how to be happy?  I don't think so, but the question is worth considering. It would be better if children could be mentored by people who had some knowledge of positive psychology rather than pop psychology. And Australian universities should be trying to find out why their graduates are less happy than young people with less advanced vocational qualifications.    

The theme of my blogging for the last six months has been ‘the good society' and ‘progress'. In the last 3 months of 2009 I was more or less writing to a plan to explore whether the good society was a useful concept. During the first 3 months of this year my blogging has been driven more by what I have been reading and thinking about. I began March thinking about democracy, switched to progress and wellbeing, then gross national happiness and Bhutan, then Buddhism and individualism and ended up thinking about policy advice.

Is democracy akin to a process of scientific experimentation? Timothy Ferris argues that it is in his book, ‘The Science of Liberty'. I think he has a good point, but it is often difficult to end political experiments that partially fail. I use the current system for public hospital funding in Australia as an example of an experiment that should have been abandoned long ago in favour of a system more in tune with market realities.

Is there a progress paradox? Gregg Easterbrook's book, ‘The progress paradox', is a great source of information about how practically everything in our lives has been getting better. However, his argument that people have been feeling worse while their lives have been getting better does not stand up to scrutiny.

Are Bhutanese people grossly happy? In this post I revisit an article I wrote last year on gross national happiness and compare some well-being indicators for Bhutan and India.

Is Buddhism opposed to individualism? Again, this question arises from my article on gross national happiness. I think the differences between Asia and the west on issues relating to emotional management and ethics are often exaggerated.

How should well-being be considered in providing policy advice? The Australian Treasury seems to be proud of its wellbeing framework for provision of policy advice. I decided that the time had come to take a closer look at what the Treasury might mean by opportunity and freedom.

I began April still thinking about Treasury's framework for provision of policy advice, but I hope soon to get back to reading Gregg Easterbrook's new book, ‘Sonic Boom'.

I wrote about a few different things during February.

Does the concept of national character make sense? J S Mill's concept of national character is linked to his views about progress (see posts in January). Mill suggested that the success or failure of different societies depends to a large extent on national character. What he had in mind seems to be related to what Douglass North has referred to as informal institutions or constraints.

Who can tell the history of the future? This is a brief review of  ‘A brief history of the future', by Jacques Attali.

How far can Ayn Rand's ethical egoism be defended? This is a selective summary of a seminar in Cato Unbound which seemed to me to shed some light on relevant issues.

Does persistence provide a basis for morality? This is a review of Martin Walker's book, ‘Life, Why we exist ... and what we must do to survive'.

Is a great big new tax such a bad idea? Tony Abbott refers to Kevin Rudd's proposed emissions trading scheme as a great big new tax. My point is that a great big new tax might be worth thinking about as a ‘no regrets' policy if the revenue it raised was used to replace less efficient taxes.