Friday, December 18, 2009

Economic Freedom and Quality of Life

I'm in favor of improving the lot of life for everyone the world over. I think a lot of people are. The disagreements occur regarding the best means for improving people's quality of life. How do we best help people move from poverty to wealth? To move from starvation to satiety, from satiety to abundance?

Some believe that governmental intervention is an absolute requirement - the welfare state, social democracy, call it what you will. These people, from what I can tell, believe that a free market will not help all people to improve their lot - only some people. This is an ongoing argument, but I don't think they are correct. I have all kinds of reasons to think that, but I will only offer one element here that I haven't seen elsewhere.

I was discussing this point with a fellow the other day, and I pointed out the importance of economic freedom for development. He then forwarded me the Economist's Quality of Life index and said that economic freedom was unimportant for quality of life. Well sir, that's just not so.
The Economist's Quality of Life index is from 2005 - I don't think they maintain a time series. So, I grabbed the Heritage Foundation's Index of Economic Freedom (which they have from the early 1990s to 2009) and matched them up. Turns out the correlation between the two indices is 70%. That ain't not bad.

There are methodological differences that can explain the lack of a higher correlation, though. First, the Quality of Life index includes climate and geography, stuff that economic freedom can't change. And, frankly, has little or any relationship with. The Quality of Life index also includes a "community life" measure, which is equal to one if the country has high church involvement /or/ trade union membership. Obviously this latter works against labor freedom. The rest of the elements, like health, material well being, political stability, and political freedom tend to be consistent with ideas captured by the economic freedom index.

I have a serious objection to how the economist captures community life - the church side I can see. Trade unions though? What have these got to do with community life? They foster an atmosphere of exclusion and elitism, not inclusion and camaraderie. Surely there must be better ways of measuring community life. How about volunteer hours/person? Museums, art galleries, and other art projects add to a spirit of community too. I'm not sure how to measure all this, but I'm sure others have good ideas here.

Anyway, the long and short of it: economic freedom and quality of life are positively correlated. To me, this is not surprising. Hopefully this will cause people who think more governmental control is the answer to poverty to think twice.

Sunday, November 29, 2009

Agnosticism in the Social Sciences

Being a social science professor, one becomes accustomed to seeing a variety of different ways of looking at the same problem, same data. These reflect the various methods in the social sciences of organizing data into a worldview. The problem with these data is that they are rarely, if ever, 100% in favor of one particular worldview. Two researchers with different worldviews can look at the same data and claim the data supports each of their views.

As more and more governmental policy comes to rely on social science research as a sort of apologia for the policy, the data gets pushed harder and harder as showing one of a number of potential explanations for the data as being correct. Since the data are rarely inconvtrovertible, using some data to guide or shape governmental policy is exceptionally dangerous, because the policy could entail exactly the wrong thing.

Social science is not hard science - and it's especially not physics. In hard science, from the point of view of a social scientist, there are true answers. The speed of light, for example, is a constant. Nothing can change that. Social science is the study of human action - there can be no universal laws here, because all human action shapes and is shaped by the environment in which it takes place.

What does all this have to do with agnosticism? Just this - in social sciences, we never know the true, or correct, answer. Often, there isn't one. This level of uncertainty should cause us to refrain from making public policy based on social science research, because we simply don't know for sure. I often hear, about some problem plaguing the world, that it is better to do something than nothing. But how do you know? How do you know?

Saturday, November 14, 2009

The Cranky Prof's First Post

I was finally motivated to communicate something to the anonymous world of the blog. I believe in the importance and desirability of humility, among other things, as a personality trait. My arguments for why it's desirable will wait for another post. This round, I'm going to comment about the lack of humility amongst newly-minted Ph.D.s and the potential problems this creates.

For anyone who doesn't know the path to the Ph.D., it basically consists of a long slog in a narrow field. You gotta read everything (almost) that has come before you in the field, and then add something original of your own to the field. The point to the Ph.D. is to become a researcher in your field, and advance knowledge in the area.

I want to highlight a few personality traits or attributes that are necessary to get a Ph.D. in most cases. I say in most cases because there are a few exceptions, as always. The first trait is curiosity. This is an absolute requirement because otherwise you will get bored, tired, and walk away from the program. It takes a long time to go through all the history in a field, and it can get tremendously boring if you aren't curious enough.

The second trait is discipline. This tends to go along with curiosity, but it's the trait of being able to sit and concentrate for long periods of time and think deeply about an issue. The curiosity motivates you to look at the topic; the discipline keeps your butt in the seat.

These two traits, discipline and curiosity, are the only necessar traits to get a Ph.D. in most fields that I'm familiar with: humanities and social sciences. The hard sciences, especially those that are highly mathematical, require a the third: a high degree of quantitative intelligence. You need a lot of horse-power to crank through all those equations. Not to say that you can't learn the math if you're not terribly smart, but it is to say that mastery of the field requires a special level of mathematical intelligence and discipline and curiosity.

By and large, though, most Ph.D. holders are not especially gifted people - they have an above average level of discipline and curiostiy for their topic, however. This leads us to be especially well-versed in our own narrow field, which is desirable, since that's the knowledge we're trying to build. However, and here's the point of this post, getting the Ph.D. often leads people to believe their own hype, and think they in fact are quite intelligent.

This has gotten to be long enough, and I'm in the habit of writing lengthy pieces. As it is my first post, I think I'll leave off here, and pick up this topics again later.