Freedom Riders

Fifty years ago, May 4, 1961, seven blacks and six whites left Washington, DC in two commercial buses enroute to the deep south. Their aim: to challenge segregation of facilities used in interstate transportation.

Monday night, May 16, 2011 at 9:00 pm, Public Television will broadcast a documentary about the event.

These young people showed remarkable courage and their peaceful, non-violent challenge transformed America.

We should all be grateful.

I strongly recommend everyone view the film.

Governing is Prediction

My last post called attention to W. Edwards Deming's observation that management is prediction.

This is true of government as well.

Ideally, both elected officials and civil servants would take into account during policy deliberations some prediction of the effects of the policies. But how can the public follow the issues and know what are the intended or probable outcomes of government measures?

We have prognosticators. Pundits. Professional explainers and predictors. Some write for newspapers and magazines and some talk on television. Surely the most influential of these pundits are the ones whose punditry is most accurate, right?

Not Exactly.

Recently a group of scholars in Public Policy at Hamilton University decided to examine the accuracy of prognostications by professional prognosticators, with interesting results.

This was not a ground breaking study. A more comprehensive twenty-year study of political and economic forecasting was summarized by Philip Tetlock in his book Expert Political Judgment. Tetlock's study was based on predictions by 284 experts on political and economic trends, and a subsequent analysis of the accuracy of the predictions. His findings:

-Extrapolation using mathematical models does better than human prediction
-Education and popularity increase the predictors' confidence but not their accuracy
-Prognosticators overpredict change and underpredict the status quo
-Extremists predict worse than moderates
-Some people predict better than others, even outside their area of expertise

The Hamilton study was more limited in time and scope, but focused on contemporary prognosticators. The most accurate prognosticator in their study was Paul Krugman of the New York Times. The least accurate was Cal Thomas. In general, they found that liberals were better prognosticators, especially if they had no law degree.

Management is Prediction

"The theory of knowledge helps us to understand that management in any form is prediction."

-W. Edwards Deming, The New Economics

Other Deming observations:

Knowledge is built on theory;

Use of Data requires prediction;

There is no true measurement without an operational definition;

Information is not knowledge.

Oh, That's Just a Theory!

It's often the case that people unfamiliar with or resistant to scientific undertakings dismiss peer-reviewed research by saying: "that's just a theory." As if it were an unsupported guess.

I have even said something like that myself: "I have a theory" about something. What I mean to say is, "I have a hypothesis."

A hypothesis is more than a guess. It is a supposition based on familiarity with the subject, experience, or deep thought. A proper hypothesis must be testable.

The point of testing a hypothesis is to disprove it. No hypothesis can be proven. It can only be disproven. If a proper test fails to disprove a hypothesis, the next step is to try another test. Collect more data. Give the problem more thought. Examine whether we have a case of coincidence or one of cause and effect.

Then take all the data collected, observations made, and develop a theory. The theory must be compatible with all the observed data. The theory should also be testable. If the tests fail to disprove the theory, then it may be adopted as the best explanation available, but no theory can ever be proven. It is the job of scientists to reexamine accepted theory in light of new knowledge, new methods of measurement and observation.

Theory is the best you get. There is never final certainty.

Silence on the Line Explained

Blogger has been down the last couple of days. I need to do a couple of new posts to catch up.

Interdependent World

Bad news for China?

Harold Meyerson in today's Washington Post writes about China's bad economic news and what it may mean for us and Europe. In brief, the answer isn't simple. Worth reading.

Economists

"An economist's guess is liable to be as good as anybody else's. "

Will Rogers

I think Will was too kind to the economists of his day. As of his death in 1936, none of the neoclassical economists had figured out how it came about that the economy had stabilized at a low utilization of economic resources. It took John Maynard Keynes to figure that out, and his General Theory wasn't published until after Rogers' fatal airplane crash at Point Barrow.

Here is what Keynes had to say about economists:

"But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."

I'm not convinced that even Keynes got this right. The power of vested interests, when coupled with the writings of defunct economists, amplified by "voices in the air" heard only by madmen in authority, can be very powerful, indeed. Present concerns about the nonexistent "debt crisis" and the imagined specter of "inflation" and "bond ratings" are examples. It's like relying on Elwood P. Dowd's conversations with Harvey for economic advice.

Even in Keynes' day, the intellectual influence of defunct neoclassical economists on policy led the Roosevelt administration to prematurely attempt to balance the budget in 1937, setting off a second dip of the Great Depression.

I was there.

It took five more years and immense war spending to dig out of that hole. Let's not go there again.

On Cooperation

"Competition leads to loss. People pulling in opposite directions on a rope only exhaust themselves: they go nowhere. What we need is cooperation. Every example of cooperation is one of benefit and gains to them that cooperate. Cooperation is especially productive in a system well managed. It is easy to make a list of examples of cooperation, some of which are so natural that we may not have recognized them as cooperation. Everybody wins."

W. Edwards Deming