31 Dec, 2020 at 18:23 | Posted in Varia | Leave a comment


If thou hast shown mercy

31 Dec, 2020 at 17:18 | Posted in Varia | Leave a comment

tavenerIf thou hast shown mercy
unto man, o man,
that same mercy
shall be shown thee there;
and if on an orphan
thou hast shown compassion,
that same shall there
deliver thee from want.
If in this life
the naked thou hast clothed,
the same shall give thee
shelter there,
and sing the psalm:

On logic and science

29 Dec, 2020 at 11:35 | Posted in Theory of Science & Methodology | 6 Comments

Julia Rohrer ĐČ Twitter: "I don't always tweet about books I haven't  finished yet, but when I do, it's because they're awesome 📘 @_MiguelHernan  & Robins have a (free!) book on causalSuppose you conducted an observational study to identify the effect of heart transplant A on death Y and that you assumed no unmeasured confounding given disease severity L. A critic of your study says “the inferences from this observational study may be incorrect because of potential confounding.” The critic is not making a scientific statement, but a logical one. Since the findings from any observational study may be confounded, it is obviously true that those of your study can be confounded. If the critic’s intent was to provide evidence about the shortcomings of your particular study, he failed. His criticism is noninformative because he simply restated a characteristic of observational research that you and the critic already knew before the study was conducted.

To appropriately criticize your study, the critic needs to engage in a truly scientific conversation. For example, the critic may cite experimental or observational findings that contradict your findings, or he can say something along the lines of “the inferences from this observational study may be incorrect because of potential confounding due to cigarette smoking, a common cause through which a backdoor path may remain open”. This latter option provides you with a testable challenge to your assumption of no unmeasured confounding. The burden of the proof is again yours.

To be ‘analytical’ and ‘logical’ is something most people find recommendable. These words have a positive connotation. Scientists think deeper than most other people because they use ‘logical’ and ‘analytical’ methods. In dictionaries, logic is often defined as “reasoning conducted or assessed according to strict principles of validity” and ‘analysis’ as having to do with “breaking something down.”

anBut that’s not the whole picture. As used in science, analysis usually means something more specific. It means to separate a problem into its constituent elements so to reduce complex — and often complicated — wholes into smaller (simpler) and more manageable parts. You take the whole and break it down (decompose) into its separate parts. Looking at the parts separately one at a time you are supposed to gain a better understanding of how these parts operate and work. Built on that more or less ‘atomistic’ knowledge you are then supposed to be able to predict and explain the behaviour of the complex and complicated whole.

In economics, that means you take the economic system and divide it into its separate parts, analyse these parts one at a time, and then after analysing the parts separately, you put the pieces together.

The ‘analytical’ approach is typically used in economic modelling, where you start with a simple model with few isolated and idealized variables. By ‘successive approximations,’ you then add more and more variables and finally get a ‘true’ model of the whole.

This may sound like a convincing and good scientific approach.

But there is a snag!

The procedure only really works when you have a machine-like whole/system/economy where the parts appear in fixed and stable configurations. And if there is anything we know about reality, it is that it is not a machine! The world we live in is not a ‘closed’ system. On the contrary. It is an essentially ‘open’ system. Things are uncertain, relational, interdependent, complex, and ever-changing.

Without assuming that the underlying structure of the economy that you try to analyze remains stable/invariant/constant, there is no chance the equations of the model remain constant. That’s the very rationale why economists use (often only implicitly) the assumption of ceteris paribus. But — nota bene — this can only be a hypothesis. You have to argue the case. If you cannot supply any sustainable justifications or warrants for the adequacy of making that assumption, then the whole analytical economic project becomes pointless non-informative nonsense. Not only have we to assume that we can shield off variables from each other analytically (external closure). We also have to assume that each and every variable themselves are amenable to be understood as stable and regularity producing machines (internal closure). Which, of course, we know is as a rule not possible. Some things, relations, and structures are not analytically graspable. Trying to analyse parenthood, marriage, employment, etc, piece by piece doesn’t make sense. To be a chieftain, a capital-owner, or a slave is not an individual property of an individual. It can come about only when individuals are integral parts of certain social structures and positions. Social relations and contexts cannot be reduced to individual phenomena. A cheque presupposes a banking system and being a tribe-member presupposes a tribe.  Not taking account of this in their ‘analytical’ approach, economic ‘analysis’ becomes uninformative nonsense.

Using ‘logical’ and ‘analytical’ methods in social sciences means that economists succumb to the fallacy of composition — the belief that the whole is nothing but the sum of its parts.  In society and in the economy this is arguably not the case. An adequate analysis of society and economy a fortiori cannot proceed by just adding up the acts and decisions of individuals. The whole is more than a sum of parts.

Mainstream economics is built on using the ‘analytical’ method. The models built with this method presuppose that social reality is ‘closed.’ Since social reality is known to be fundamentally ‘open,’ it is difficult to see how models of that kind can explain anything about what happens in such a universe. Postulating closed conditions to make models operational and then impute these closed conditions to society’s real structure is an unwarranted procedure that does not take necessary ontological considerations seriously.

In face of the kind of methodological individualism and rational choice theory that dominate mainstream economics we have to admit that even if knowing the aspirations and intentions of individuals are necessary prerequisites for giving explanations of social events, they are far from sufficient. Even the most elementary ‘rational’ actions in society presuppose the existence of social forms that it is not possible to reduce to the intentions of individuals. Here, the ‘analytical’ method fails again.

The overarching flaw with the ‘analytical’ economic approach using methodological individualism and rational choice theory is basically that they reduce social explanations to purportedly individual characteristics. But many of the characteristics and actions of the individual originate in and are made possible only through society and its relations. Society is not a Wittgensteinian ‘Tractatus-world’ characterized by atomistic states of affairs. Society is not reducible to individuals, since the social characteristics, forces, and actions of the individual are determined by pre-existing social structures and positions. Even though society is not a volitional individual, and the individual is not an entity given outside of society, the individual (actor) and the society (structure) have to be kept analytically distinct. They are tied together through the individual’s reproduction and transformation of already given social structures.

Since at least the marginal revolution in economics in the 1870s it has been an essential feature of economics to ‘analytically’ treat individuals as essentially independent and separate entities of action and decision. But, really, in such a complex, organic and evolutionary system as an economy, that kind of independence is a deeply unrealistic assumption to make. To simply assume that there is strict independence between the variables we try to analyze doesn’t help us the least if that hypothesis turns out to be unwarranted.

To be able to apply the ‘analytical’ approach, economists have to basically assume that the universe consists of ‘atoms’ that exercise their own separate and invariable effects in such a way that the whole consist of nothing but an addition of these separate atoms and their changes. These simplistic assumptions of isolation, atomicity, and additivity are, however, at odds with reality. In real-world settings, we know that the ever-changing contexts make it futile to search for knowledge by making such reductionist assumptions. Real-world individuals are not reducible to contentless atoms and so not susceptible to atomistic analysis. The world is not reducible to a set of atomistic ‘individuals’ and ‘states.’ How variable X works and influence real-world economies in situation A cannot simply be assumed to be understood or explained by looking at how X works in situation B. Knowledge of X probably does not tell us much if we do not take into consideration how it depends on Y and Z. It can never be legitimate just to assume that the world is ‘atomistic.’ Assuming real-world additivity cannot be the right thing to do if the things we have around us rather than being ‘atoms’ are ‘organic’ entities.

If we want to develop new and better economics we have to give up on the single-minded insistence on using a deductivist straitjacket methodology and the ‘analytical’ method. To focus scientific endeavours on proving things in models is a gross misapprehension of the purpose of economic theory. Deductivist models and ‘analytical’ methods disconnected from reality are not relevant to predict, explain or understand real-world economies

To have ‘consistent’ models and ‘valid’ evidence is not enough. What economics needs are real-world relevant models and sound evidence. Aiming only for ‘consistency’ and ‘validity’ is setting the economics aspirations level too low for developing a realist and relevant science.

Economics is not mathematics or logic. It’s about society. The real world.

Models may help us think through problems. But we should never forget that the formalism we use in our models is not self-evidently transportable to a largely unknown and uncertain reality. The tragedy with mainstream economic theory is that it thinks that the logic and mathematics used are sufficient for dealing with our real-world problems. They are not! Model deductions based on questionable assumptions can never be anything but pure exercises in hypothetical reasoning.

The world in which we live is inherently uncertain and quantifiable probabilities are the exception rather than the rule. To every statement about it is attached a ‘weight of argument’ that makes it impossible to reduce our beliefs and expectations to a one-dimensional stochastic probability distribution. If “God does not play dice” as Einstein maintained, I would add “nor do people.” The world as we know it has limited scope for certainty and perfect knowledge. Its intrinsic and almost unlimited complexity and the interrelatedness of its organic parts prevent the possibility of treating it as constituted by ‘legal atoms’ with discretely distinct, separable and stable causal relations. Our knowledge accordingly has to be of a rather fallible kind.

If the real world is fuzzy, vague and indeterminate, then why should our models build upon a desire to describe it as precise and predictable? Even if there always has to be a trade-off between theory-internal validity and external validity, we have to ask ourselves if our models are relevant.

‘Human logic’ has to supplant the classical — formal — logic of deductivism if we want to have anything of interest to say of the real world we inhabit. Logic is a marvellous tool in mathematics and axiomatic-deductivist systems, but a poor guide for action in real-world systems, in which concepts and entities are without clear boundaries and continually interact and overlap. In this world, I would say we are better served with a methodology that takes into account that the more we know, the more we know we do not know.

Mathematics and logic cannot establish the truth value of facts. Never has. Never will.

Postmodern thinking

28 Dec, 2020 at 18:27 | Posted in Theory of Science & Methodology | Comments Off on Postmodern thinking

adornoThe compulsive types there correspond to the paranoids here. The wistful opposition to factual research, the legitimate consciousness that scientism forgets what is best, exacerbates through its naïvété the split from which it suffers. Instead of comprehending the facts, behind which others are barricaded, it hurriedly throws together whatever it can grab from them, rushing off to play so uncritically with apochryphal cognitions, with a couple isolated and hypostatized categories, and with itself, that it is easily disposed of by referring to the unyielding facts. It is precisely the critical element which is lost in the apparently independent thought. The insistence on the secret of the world hidden beneath the shell, which dares not explain how it relates to the shell, only reconfirms through such abstemiousness the thought that there must be good reasons for that shell, which one ought to accept without question. Between the pleasure of emptiness and the lie of plenitude, the ruling condition of the spirit [Geistes: mind] permits no third option.

Long before ‘postmodernism’ became fashionable among a certain kind of ‘intellectuals’, Adorno wrote searching critiques of this kind of thinking.

When listening to — or reading — the postmodern mumbo-jumbo​ that surrounds​ us today in social sciences and humanities, I often find myself wishing for that special Annie Hall moment of truth:

‘We read to know we are not alone’

27 Dec, 2020 at 15:46 | Posted in Varia | Comments Off on ‘We read to know we are not alone’


How scientists manipulate research

27 Dec, 2020 at 13:22 | Posted in Statistics & Econometrics | 1 Comment

All science entails human judgment, and using statistical models doesn’t relieve us of that necessity. Working with misspecified models, the scientific value of significance testing is actually zero — even though you’re making valid statistical inferences! Statistical models and concomitant significance tests are no substitutes for doing real science.

In its standard form, a significance test is not the kind of ‘severe test’ that we are looking for in our search for being able to confirm or disconfirm empirical scientific hypotheses. This is problematic for many reasons, one being that there is a strong tendency to accept the null hypothesis since they can’t be rejected at the standard 5% significance level. In their standard form, significance tests bias against new hypotheses by making it hard to disconfirm the null hypothesis.

And as shown over and over again when it is applied, people have a tendency to read “not disconfirmed” as “probably confirmed.” Standard scientific methodology tells us that when there is only say a 10 % probability that pure sampling error could account for the observed difference between the data and the null hypothesis, it would be more “reasonable” to conclude that we have a case of disconfirmation. Especially if we perform many independent tests of our hypothesis and they all give ​the same 10% result as our reported one, I guess most researchers would count the hypothesis as even more disconfirmed.

Statistics is no substitute for thinking. We should never forget that the underlying parameters we use when performing significance tests are model constructions. Our p-values mean next to nothing if the model is wrong. Statistical​ significance tests do not validate models!

In many social sciences, p-values and null hypothesis significance testing (NHST) is often used to draw far-reaching scientific conclusions — despite the fact that they are as a rule poorly understood and that there exist alternatives that are easier to understand and more informative.

Not the least using confidence intervals (CIs) and effect sizes are to be preferred to the Neyman-Pearson-Fisher mishmash approach that is so often practiced by applied researchers.

Running a Monte Carlo simulation with 100 replications of a fictitious sample having N = 20, confidence intervals of 95%, a normally distributed population with a mean = 10 and a standard deviation of 20, taking two-tailed p-values on a zero null hypothesis, we get varying CIs (since they are based on varying sample standard deviations), but with a minimum of 3.2 and a maximum of 26.1, we still get a clear picture of what would happen in an infinite limit sequence. On the other hand p-values (even though from a purely mathematical-statistical sense more or less equivalent to CIs) vary strongly from sample to sample, and jumping around between a minimum of 0.007 and a maximum of 0.999 doesn’t give you a clue of what will happen in an infinite limit sequence!


27 Dec, 2020 at 10:01 | Posted in Varia | Comments Off on Förnöjsamhet

Monica Blom Art: En förnöjsam dam | Konst

Zufriedenheit, contentedness, contentment, contentezza — en alldeles för underskattad karaktĂ€rsegenskap!

O Nuit! Viens apporter Ă  la terre le calme enchantement de ton mystĂšre

25 Dec, 2020 at 10:58 | Posted in Varia | Comments Off on O Nuit! Viens apporter Ă  la terre le calme enchantement de ton mystĂšre


A winter’s tale

24 Dec, 2020 at 11:13 | Posted in Varia | Comments Off on A winter’s tale

Merry Christmas!

Trots det lever jag utan förtvivlan

24 Dec, 2020 at 00:01 | Posted in Varia | Comments Off on Trots det lever jag utan förtvivlan

lageOm den vÀrld jag tillhör har jag inte nÄgot hopp. UndergÄngen Àr inbyggd i systemet, ty vart varningsrop blir strax förlöjligat och dÀrmed oskadliggjort.

Trots det lever jag utan förtvivlan. Det tillhör den enskildes villkor att leva vid katastrofens rand. VÀgen fram till döden ter sig lika lÄng, var man Àn befinner sig i livet. SÄ Àr det ocksÄ med mÀnsklighetens tillvaro.

Jag uppfattar den vemodsfyllda blick varmed unga mÀnniskor ser pÄ mig. Jag kÀnner igen den. De vet inte att jag betraktar dem pÄ samma sÀtt och mÀter deras ÄterstÄende liv i samma förgÀngelsekÀnslas tecken. Alla hör vi samman.

Olof Lagercrantz

Econometrics — the art of pulling a rabbit out of a hat

22 Dec, 2020 at 17:57 | Posted in Statistics & Econometrics | 5 Comments

Magician Pulling Rabbit From Hat Cartoon Illustration Royalty Free  Cliparts, Vectors, And Stock Illustration. Image 68544338.In econometrics one often gets the feeling that many of its practitioners think of it as a kind of automatic inferential machine: input data and out comes causal knowledge. This is — as Joan Robinson once had it — like pulling a rabbit from a hat. Great — but first you have to put the rabbit in the hat. And this is where assumptions come in to the picture.

The assumption of imaginary ‘superpopulations’ is one of the many dubious assumptions used in modern econometrics, and as Clint Ballinger highlights, this is a particularly questionable rabbit pulling assumption:

Inferential statistics are based on taking a random sample from a larger population … and attempting to draw conclusions about a) the larger population from that data and b) the probability that the relations between measured variables are consistent or are artifacts of the sampling procedure.

However, in political science, economics, development studies and related fields the data often represents as complete an amount of data as can be measured from the real world (an ‘apparent population’). It is not the result of a random sampling from a larger population. Nevertheless, social scientists treat such data as the result of random sampling.

Because there is no source of further cases a fiction is propagated—the data is treated as if it were from a larger population, a ‘superpopulation’ where repeated realizations of the data are imagined. Imagine there could be more worlds with more cases and the problem is fixed …

What ‘draw’ from this imaginary superpopulation does the real-world set of cases we have in hand represent? This is simply an unanswerable question. The current set of cases could be representative of the superpopulation, and it could be an extremely unrepresentative sample, a one in a million chance selection from it …

The problem is not one of statistics that need to be fixed. Rather, it is a problem of the misapplication of inferential statistics to non-inferential situations.


22 Dec, 2020 at 12:52 | Posted in Varia | Comments Off on Hommage


Sven-Bertil Taubes med rÀtta hyllade förestÀllning pÄ Cirkus i Stockholm ligger nu pÄ SVT Play. Se den!

Ekonomiprofessorerna och ‘tĂ€mjandet’ av marknadskrafterna i skolan

21 Dec, 2020 at 13:15 | Posted in Education & School | 4 Comments

Friskolorna tar hem vinsternaI Sverige Ă„r 2020 lĂ„ter vi friskolekoncerner med mĂ„nga gĂ„nger undermĂ„lig verksamhet fĂ„ plocka ut skyhöga vinster, vinster som den svenska staten lĂ„ter dessa koncerner ta av vĂ„r skattefinansierade skolpeng. En av landets största friskolekoncerner — Engelska skolan — gjorde senaste Ă„ret en vinst pĂ„ 250 miljoner kronor (för varje elev genererades 10 000 kronor i vinst). 

MÄnga Àr med rÀtta upprörda och de som Àr kritiska till privatisering av skola har haft gyllene tillfÀllen att tydligt och klart tala om att man nu vill se till att undanröja möjligheterna för vinstdrivande bolag att verka inom skolan. Men sÄ har inte skett. Som min gamla kollega  Ann-Marie PÄlsson skriver i Sydsvenskan idag:

Lite tillspetsat har friskolereformen gjort skolan till en handelsvara och omvandlat det offentligas skyldighet att förse de unga med utbildning till en rĂ€tt för skolbolag att ta ut obegrĂ€nsade vinster. Regeringarna har haft Ă„rtionden pĂ„ sig att rĂ€tta till detta. Men inget har skett. IstĂ€llet har marknadens logik brett ut sig allt mer. Talande Ă€r att ingen reagerade ens nĂ€r en stor friskolekoncern – Internationella Engelska Skolan – köptes upp av ett riskkapitalbolag med sĂ€te i Luxemburg.

I DN (20/12 2020) skriver fyra ekonomiprofessorer och föreslÄr ett antal reformer som ska göra marknadskrafterna mer aptitliga i skolan:

Att slÀppa in marknadskrafterna i skolan pÄ det radikala sÀtt som gjorts i Sverige Àr inte okomplicerat utifrÄn ekonomisk teori och empiri. Oavsett syn pÄ 1990-talets reformer kan nog de flesta acceptera att det finns ett betydande utrymme för reformvÄrdande ÄtgÀrder som kan fÄ marknadskrafterna i skolan att fungera bÀttre. I det hÀr inlÀgget föreslÄr vi ett antal reformer som frÀmjar kunskapsbildning utan att skapa onödig ineffektivitet eller orÀttvisa.

Men vĂ€nta lite nu! ReformvĂ„rdande Ă„tgĂ€rder? Var det inte sĂ„ att nĂ€r man pĂ„ 1990-talet pĂ„började systemskiftet inom vĂ€lfĂ€rdssektorn ofta anförde som argument för privatiseringarna att man just skulle slippa den byrĂ„kratiska logikens kostnader i form av regelverk, kontroller och uppföljningar? Konkurrensen – denna marknadsfundamentalismens panacĂ© – skulle ju göra driften effektivare och höja verksamheternas kvalitet.

Och nu nĂ€r privatiseringsvĂ„tdrömmen visat sig vara en mardröm sĂ„ tror man att just det som man ville bli av med – regelverk, tillsyn och kontroll – skulle vara lösningen. Ska man genomföra de Ă„tgĂ€rdspaket som förs fram undrar man ju hur det gĂ„r med den dĂ€r effektivitetsvinsten. Kontroller, uppdragsspecifikationer, inspektioner kostar ju pengar och hur mycket överskott blir det dĂ„? Och hur mycket vĂ€rd Ă€r den dĂ€r ‘valfriheten’ nĂ€r vi ser hur den gĂ„ng pĂ„ gĂ„ng bara resulterar i verksamhet dĂ€r vinst genereras genom kostnadsnedskĂ€rningar och sĂ€nkt kvalitet?

DÀrutöver kan man klart ocksÄ frÄga sig varför samhÀllet ska lÀgga omfattande resurser pÄ att granska och inspektera skolföretag vars verksamhet stÀndigt verkar ge upphov till skandaler, resursslöseri, försÀmrad kvalitet och allt sÀmre resultat.

All form av ekonomisk verksamhet bygger pĂ„ eller inbegriper nĂ„gon form av delegering. En part (uppdragsgivaren) vill att en annan part (utföraren) ska utföra en viss uppgift. Grundproblemet Ă€r hur bestĂ€llaren ska fĂ„ utföraren att utföra uppdraget pĂ„ det sĂ€tt som bestĂ€llaren önskar. Det finns en uppenbar fara i att basera ersĂ€ttningssystem pĂ„ enkla objektiva mĂ„tt nĂ€r det vi vill ersĂ€tta i sjĂ€lva verket har flera och komplexa dimensioner, exempelvis ersĂ€ttning efter antal utskrivna patienter, lĂ€rarlöner kopplade till betyg eller dylikt. Ofta har vĂ€lfĂ€rdssektorns verksamheter denna karaktĂ€r av ‘fleruppgiftsverkamhet’ och dĂ„ fungerar inte incitamentkontrakt eller provisioner. I sĂ„dana fall kan ‘byrĂ„kratier’ vara mer Ă€ndamĂ„lsenliga Ă€n marknader.

Internationella jĂ€mförelser visar att det system vi har i Sverige med vinstdrivande skolor leder till att vĂ„ra skolor blir allt mindre likvĂ€rdiga – och att detta i sin tur bidrar till allt sĂ€mre resultat. Ska vi rĂ„da bot pĂ„ detta mĂ„ste vi ha ett skolsystem som inte bygger pĂ„ ett marknadsmĂ€ssigt konkurrenstĂ€nk dĂ€r skolor istĂ€llet för att utbilda frĂ€mst Ă€gnar sig Ă„t att ragga elever och skolpeng, utan drivs som icke-vinstdrivna verksamheter med kvalitet och ett klart och tydligt samhĂ€llsuppdrag och elevernas bĂ€sta för ögonen.

Friskoledebatten handlar numera frĂ€mst om vinstdelning – om vinsten ska fĂ„ lov att lĂ€mna verksamheten i form av t. ex. aktieutdelning. Detta avspeglas ocksĂ„ i val av bolagsform och vilka aktörer skolföretrĂ€dare vĂ€rnar. De som prioriterar lönsamhet och finansiĂ€rer, vĂ€ljer ofta att driva verksamheten i bolagsform eftersom det underlĂ€ttar för externa finansiĂ€rer att fĂ„ avkastning pĂ„ satsat kapital. TvĂ„ tredjedelar av dagens friskolor drivs i bolagsform och de största skolkoncernerna Ă€gs numera av riskkapitalbolag vars huvudsakliga syfte Ă€r att förvĂ€rva företag för att sĂ„ snart som möjligt avyttra dem med vinst.

I ett samhÀlle prÀglat av jÀmlikhet, solidaritet och demokrati borde det vara sjÀlvklart att skattefinansierade skolor inte ska fÄ drivas med vinst, segregation eller religiös indoktrinering som frÀmsta affÀrsidé!

MÄnga som Àr verksamma inom skolvÀrlden har haft svÄrt att förstÄ politikers instÀllning till privatiseringar och vinstuttag i vÀlfÀrdssektorn. Av nÄgon outgrundlig anledning har ledande politiker under mÄnga Är plÀderat för att vinster ska vara tillÄtna i skolor och vÄrdföretag. Ofta har argumentet varit att driftsformen inte har nÄgon betydelse. SÄ Àr inte fallet. Driftsform och att tillÄta vinst i vÀlfÀrden har stor betydelse.

Till skillnad frÄn i alla andra lÀnder i vÀrlden har svenska politiker gjort det möjligt för privata företag att göra vinst pÄ offentligt finansierad undervisning. Och detta trots att det hela tiden funnits ett starkt folkligt motstÄnd  mot att slÀppa in vinstsyftande privata företag i vÀlfÀrdssektorn.

De fyra ekonomiprofessoreran skriver i DN att “marknadskrafternas roll i skolan kommer att vara en fortsatt kontroversiell och komplicerad frĂ„ga”. Ja visst — men sjĂ€lva tar de uppenbarligen för givet att marknadskrafterna ska ha fritt tilltrĂ€de till vĂ„ra skolor och att allt som behövs Ă€r “reformvĂ„rdande Ă„tgĂ€rder”!

Men grundfrĂ„gan Ă€r inte om skattefinansierade privata företag ska fĂ„ göra vinstuttag eller om det krĂ€vs hĂ„rdare tag i form av kontroll och inspektion eller krav pĂ„ lĂ„ngsiktigt engagemang. GrundfrĂ„gan Ă€r inte om marknadskrafterna i skolan ska “tĂ€mjas” eller ej. GrundfrĂ„gan Ă€r om det Ă€r marknadens och privatiseringarnas logik som ska styra vĂ„ra vĂ€lfĂ€rdsinrĂ€ttningar eller om det ske via demokratins och politikens logik. GrundfrĂ„gan handlar om den gemensamma vĂ€lfĂ€rdssektorn ska styras av demokrati och politik eller av marknaden.

Bright eyes (personal)

20 Dec, 2020 at 16:56 | Posted in Varia | Comments Off on Bright eyes (personal)


In loving memory of Kristina Syll — beloved wife and mother of David and Tora.

The Coase Theorem at 60

19 Dec, 2020 at 23:01 | Posted in Economics | Comments Off on The Coase Theorem at 60

Steven Medema — who knows more about the theories of Ronald Coase than any other economist yours truly is familiar with — has written an incisive and learned article about the history of the Coase theorem —  The Coase Theorem at Sixty — in the latest issue of Journal of Economic Literature. Medema concludes :

The Coase theorem is, by any number of measures, one of the most curious results in the history of economic ideas. Its development has been shrouded in misremembrances, political controversies, and all manner of personal and communal confusions and serves as an exemplar of the messy process by which new ideas become scientific knowledge. There is no unique statement of the Coase theorem; there are literally dozens of different statements of it, many of which are inconsistent with others and appear to mark significant departures from what Coase had argued in 1960.

Applying the theorem (nota bene, as emphasized by Medema, the theorem does not in its standard rendering even come close to Coase’s own thoughts on the issue) in the real-world certainly can be dangerous:

misWillingness​ to walk away from an ‘unfair’ offer is [one] reason why the predictions of the Coase theorem often fail. I had discovered this firsthand many years earlier in Rochester. Our home there had a willow tree in the backyard … The neighbor hated that tree. He asked me to have the tree removed …

I knew the Coase theorem … So I went to talk to my neighbor and told him that, while the tree did not bother me, if he felt strongly about it, I would let him arrange to remove it at his own expense. He thought this was the most outrageous suggestion he ever heard, slammed the door in my face, and never broached the subject again.

When people are given what they consider to be unfair offers, they can get angry enough to punish the other party, even at some cost to themselves. That is the basic lesson of the Ultimatum Game. As the willow tree story illustrates, the same can occur in situations in which the Coase theorem is often applied.

For yours truly’s own take on the Coase theorem — in Swedish only — see here or my “Dr Pangloss, Coase och vĂ€lfĂ€rdsteorins senare öden,” Zenit 4/1996.

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