Posts Tagged ‘economics’

IQ and Rationality

I’m reading about the distinction between intelligence and rationality these days:

What Intelligence Tests Miss: The Psychology of Rational Thought
by Keith E. Stanovich

There’s one aspect of the book that I’d like to comment on so far:

Intelligence has to do with the processing power of the brain. Rationality has to do with how we form our beliefs.

In other (my) words: You don’t have to be unintelligent to believe that you’re safer with a gun in your house, or that lower taxes are always better. You just have to be irrational.

What do I mean with irrational? It’s a lot of things, but an important element is our common tendency to be more impressed by evidence that supports our worldview, than by evidence that contradicts it.

Let’s start with the pistols and revolvers. Of course, it’s easy to create in our minds a scenario where you’re safer with a gun in your house than without it. “You hear an intruder. You have time to find your gun and load it before the intruder finds it. You know how to use it effectively and responsibly, even when your adrenaline is sky high. The intruder is either unarmed or unprepared.” And at the end of the story, you are the hero, unhurt, and the intruder is either dead, wounded or (hopefully just) in chains. Read more…


Paul Krugman’s Structure of Excuses

September 28, 2010 Leave a comment

Structure of Excuses


Thanks a lot to Paul Krugman for drawing his flawless logic just one notch too far in this article in the NYTIMES online. There’s nothing that engages me more as a pupil, than when I see my teacher making a mistake.

How can I use words like “flawless logic” and “mistake” about the same article? Read more…

The Long-Overdue Death of an Economic Theory

Four Deformations of the Apocalypse

By DAVID STOCKMAN, Published: July 31, 2010

This article hit the top of the “most popular” list in the New York Times Online this morning, and it’s easy to see why: Finally a compact and easy-to-understand overview of what’s gone wrong with the American economy.

Stockman points out four ideas that have worked together, in a kind of synergy, to undermine our position. Together, they have created a false impression of prosperity that has enticed us to go further and further down the garden path into economic la-la land.

Sixty years ago, the people who lived in our house had to start laundry day by harnessing the horse and hitching it up to the wagon. Then they’d have to drive their laundry down to the river, stoke up the wood-fired boiler on the beach, do their laundry by hand, rinse it in the river, drive home, unhitch the horse and feed it, and then hang up the laundry to dry. That’s the kind of effort it took to create modern, civilized society.

One of our problems today is that other people are still willing to work just as hard, for similar rewards. For a while, they’ve been content to be our servants, supplying us with almost everything we’ve wanted while we ran through our capital. It’s going to be really interesting to see what happens in a generation or two, when they’ve saved some of what we’ve squandered, and invested enough of it in improved local infrastructure and education.


Reflections on the War in Afghanistan

View Is Bleaker Than Official Portrayal of War in Afghanistan

This article in the NYTIMES online by C. J. Chivers, Carlotta Gall, Andrew W. Lehren, Mark Mazzetti, Jane Perlez, and Eric Schmitt, with contributions from Jacob Harris and Alan McLean takes as its starting point the recent publication, through Wikileaks, of thousands of classified documents about the ongoing military operations in Afghanistan.

The article is unpleasant reading. It details, in example after example, how difficult it is to stabilize a country that doesn’t seem to have any interest in stabilizing itself.

My reflections:

1) This is not about Afghanistan, but about every single nation in the world that is falling apart because it can’t feed its population at a living standard they’re willing to accept. While Islam is certainly adding flavour to the problem, the underlying problem is that people are fighting for control over resources. Afghanistan is too hot and too dry, and its population is too hungry. We either have to feed them or fight them.

Read more…