Quick links - History Repeats Itself edition

Some things that I've been meaning to write about, but short on time[*]...

1) A heavily fancied South Africa bombs out during the knock-out stages of the Cricket World Cup. As I wrote on facebook: "Wait. I've seen this movie before." Or, in the endearing words of Yogi Berra: "It's déjà vu all over again!" (In related news, the ever reliable Zapiro brokes little sympathy for the apologists.)

2) Speaking of déjà vu... South Africa's favourite electricity monopoly, Eishkom Eskom, has covered itself in glory yet again. This time, serving up "a comedy of errors" that ultimately resulted in a massive explosion at a key power plant. The end result: Expenses of R3bn ($440m) for the company - thanks tax payer! - and a "severely compromised" national electricity supply. Seriously, is there anyone left who believes that we can delay the move to a competitive power market any longer?

3) More promising news is that South Africa is finally set to hike water rates in a bid to secure desperately needed investment for ageing infrastructure. A.F.T, as far as I am concerned. If you don't charge people rates commensurable to the cost of supplying water, sooner or later you won't be able to supply anyone at all. Or, as I commented: "To speak some 'economese', we need to charge water rates equivalent to the long-run marginal costs of providing it." You can see some of my (brief) previous thoughts on water pricing here and here.

4) I'm less optimistic about the Chinese command-and-control approach to water management, as officials announced plans to reduce water use per unit of GDP by 7%. I share the sentiments of many in thinking that water will ultimately prove the defining barrier for China's continued growth explosion, which has thus far come at a very large environmental and health cost. That the government has pledged a 30% reduction in water consumption (per unit of GDP) over the next five years is a start. Like any good economist, however, I maintain that they'll have to get prices involved if they want to make real improvements in water conservation over the long-term. (Having said that, and while I much prefer the market mechanism, the Chinese have been successful in their stated aims of reducing energy intensity thus far... moderate as these may be in reality.)

5) And now, for something completely different:



Alan! Alan! Alan!... Al! Alan!

I also enjoyed this:

"What was the answer?"
"Spatula. They're just making them up now."

[*] That, coupled with the fact that I was somewhat overzealous at both the gym and (later) the bar over the weekend. I can still barely straighten my arms. Walking around like a hungover T-Rex. 

Guess who has tickets to watch The National?

That would be me.

Campo Pequeno, Lisbon. May 24.



Possibly the coolest group of visibly uncool, thirty-something white guys to hit the music scene since Death Cab For Cutie.

Amped.

Free will in a world of Mad Men

Mark Thoma links to a study discussing the limits -- or "origins" might be more correct -- of free will. I'll just highlight the snippet on implications:

How Free Is Your Will? (Daniela Schiller and David Carmel, Scientific American): 

[The findings] indicate that some activity in our brains may significantly precede our awareness of wanting to [act]. Libet suggested that free will works by vetoing: volition (the will to act) arises in neurons before conscious experience does, but conscious will can override it and prevent unwanted movements. 

Other interpretations might require that we reconstruct our idea of free will. Rather than a linear process in which decision leads to action, our behavior may be the bottom-line result of many simultaneous processes: We are constantly faced with a multitude of options for what to do right now – switch the channel? Take a sip from our drink? Get up and go to the bathroom? But our set of options is not unlimited (i.e., the set of options we just mentioned is unlikely to include “launch a ballistic missile”). Deciding what to do and when to do it may be the result of a process in which all the currently-available options are assessed and weighted. Rather than free will being the ability to do anything at all, it might be an act of selection from the present range of options. And the decision might be made before you are even aware of it. ...

Thoma himself is sceptical about whether this actually says much about free will. Among the more interesting comments on the thread, from my perspective, are those pointing out the mistakes of trying to separate the conscious from the subconscious.

Now, I'm no neuroscientist (clearly). However, I have read a fair bit of research related to neuroeconomics.[*] My understanding is that many of our decisions and actions are formed at a level that involves very little conscious cognitive thought. Indeed, our brains tend to shift activities from the cognitive, "thinking" cortex... to the affective, "instinctual" cortex as we become familiar with repeated actions. In other words, there's a deeper truth in the meme "practice makes perfect": Our minds (bodies) begin to respond to external stimuli in a far more efficient way over time, simply because we spend less time thinking about our best course of action and instead just react according some (pre-) programmed optimal response.

In this regard, there is a fascinating body of research on the psychology and mental processes of chess players. In particular, what separates the top-ranked players from the rest of us? The answers are rather surprising. Grandmasters, for instance, spend far less time thinking about their moves than simply recognising patterns in play. For their part, players of lesser rank typically analyse and consider a wider variety of possible moves (and their consequences) at each stage of the game, but this is unfortunately much less efficient. The superiority of top chess players does not lie with intelligence per se, but in the ability to recognise meaningful patterns and respond accordingly. [An interesting side note: Grandmasters and other top-ranked players have a tremendous capacity to memorise a multitude of "plays" and board positions. However, arrange chess pieces in unfamiliar positions and their memory advantage regresses to that of ordinary punters.]

Added to all this is the fact that humans are fantastic rationalisers. We naturally seek order. Not only do we have an innate ability to seek out patterns and coincidences, but we look to provide (ex post) justification for our actions and even the actions of others. Along these lines, one of the most interesting findings to come out of hypnosis is the phenomena of rationalisation under post-hypnotic suggestion. A hypnotised patient can be made to (unwittingly) perform an action on a given cue; for example to open a window when the hypnotist claps his hands. Unaware of the true underlying causes, when the patient is asked by the hypnotist why he opened the window, the former will strive to provide plausible -- yet invalid -- reasons (e.g. "I was getting hot"). I believe that the subject of ex post rationalisation also underpins a lot of research in area of addiction studies...

Anyway, all this reminds me of a great Derren Brown clip that I saw a while ago. The influence of subliminal advertising is well publicised (if not entirely understood), but this is perhaps the most impressive exposition that I've seen of it. What makes it all the sweeter is that he is turning the tables on advertising execs here:

(I note that there is a US version of the same set-up here.)

THOUGHT FOR THE DAY: Fascinating stuff. Somewhere, Don Draper is smiling. And boozing. And womanizing. Damn his smooth ways!

"Yes, I believe you heard me correctly. I own your mind.
And I slept with your wife."

[*] If you're interested in reading more about neuroeconomics, this paper by Camerer and Lowenstein (2004) is the standard reference point in the literature.

What's wrong with this paragraph?

From The Economist:

Of the nuclear plants that provide about a third of Japan’s electricity (see chart), Fukushima Dai-ichi is not the first to be paralysed by an earthquake. But it is the first to be laid low by the technology’s dependence on a ready supply of water for cooling.

Well, of course, you have already read this post so you know.

UPDATE: Okay, I'm probably too quick on the draw here. Nuclear reactors and water issues isolated to Japan? Fine. (Although the thrust of the article is certainly to contextualise the role and vulnerabilities of nuclear power on a global scale. In that context, I maintain that including the above sentence without reference to the water-related problems experienced by nuclear plants in Europe the US, is misleading.)

Aphorism of the Day - Harmonicas

A harmonica solo will improve a song's awesomeness by approximately 15%. Stick a Hammond B-3 in there and it'll boost you to 20%.[*]

That is from l'il old me... after being sent this by a friend. And, of course, the level of historical evidence supporting this claim is just about overwhelming.

[*] Apparently 65% of all statistics are made up on the spot.

Nuclear and Water

I've been drowning in work and other stuff lately, so no blog posts. Like everyone else though, I've been watching the unfolding tragedy in Japan and just hope that they manage to contain the radiation from reaching dangerous levels. From the latest news this morning, things don't look particularly good. (On a personal level, I have some friends in Tokyo that have managed to book a flight out so minor relief...)

Amidst all the articles and reports, I spotted this one, Japan's Nuclear Morality Tale, by Brahma Chellaney. I mention it not because it provides the most succinct account of the Fukushima plant accident, but rather because it touches on the specific area of research that forms the backdrop for my master's dissertation... the water-energy nexus. A snippet from Chellaney's article:

All energy generators, including coal- and gas-fired plants, make major demands on water resources. But nuclear power requires even more. Light-water reactors (LWRs) like those at Fukushima, which use water as a primary coolant, produce most of the world’s nuclear power. The huge quantities of local water that LWRs consume for their operations become hot-water outflows, which are pumped back into rivers, lakes, and oceans. 

Because reactors located inland put serious strain on local freshwater resources – including greater damage to plant life and fish – water-stressed countries that are not landlocked try to find suitable seashore sites. But, whether located inland or on a coast, nuclear power is vulnerable to the likely effects of climate change. 

As global warming brings about a rise in average temperatures and ocean levels, inland reactors will increasingly contribute to, and be affected by, water shortages. During the record-breaking 2003 heat wave in France, operations at 17 commercial nuclear reactors had to be scaled back or stopped because of rapidly rising temperatures in rivers and lake. Spain’s reactor at Santa María de Garoña was shut for a week in July 2006 after high temperatures were recorded in the Ebro River. 

Paradoxically, then, the very conditions that made it impossible for the nuclear industry to deliver full power in Europe in 2003 and 2006 created peak demand for electricity, owing to the increased use of air conditioning. 

Indeed, during the 2003 heat wave, Électricité de France, which operates 58 reactors – the majority on ecologically sensitive rivers like the Loire – was compelled to buy power from neighboring countries on the European spot market. The state-owned EDF, which normally exports power, ended up paying 10 times the price of domestic power, incurring a financial cost of €300 million. 

Similarly, although the 2006 European heat wave was less intense, water and heat problems forced Germany, Spain, and France to take some nuclear power plants offline and reduce operations at others. Highlighting the vulnerability of nuclear power to environmental change or extreme-weather patterns, in 2006 plant operators in Western Europe also secured exemptions from regulations that would have prevented them from discharging overheated water into natural ecosystems, affecting fisheries. 

France likes to showcase its nuclear power industry, which supplies 78% of the country’s electricity. But such is the nuclear industry’s water intensity that EDF withdraws up to 19 billion cubic meters of water per year from rivers and lakes, or roughly half of France’s total freshwater consumption. Freshwater scarcity is a growing international challenge, and the vast majority of countries are in no position to approve of such highly water-intensive inland-based energy systems. 

[snip]

The central dilemma of nuclear power in an increasingly water-stressed world is that it is a water guzzler, yet vulnerable to water.

At the risk of sounding dangerously hyperopic in the context of a much nearer humanitarian and economic crisis, I believe that the water-energy nexus will receive growing attention in the years to come. And, at risk of sounding spectacularly self-absorbed in the context of a much wider humanitarian and economic crisis, my own research is currently aimed at quantifying the value of water in generating (thermo)electric power. In particular, I've been looking at how electricity prices have been affected by incidences of water scarcity and high temperatures (such as during the European heat waves referred to above). As intimated in the article, the irony is that many low-carbon energy technologies - e.g. nuclear, hydro - become less efficient in a hotter and drier world.

This, in a nutshell, is a research question that I would like to investigate should I pursue a PhD. What are the strategic decisions facing countries in committing to certain energy technologies, given that they might be subject to inherent vulnerabilities as a result of climate change? (For instance, how economically viable is it for an east African country, or China, to invest in massive hydropower projects, when climate models indicate disruptions to future water supplies.) Of course, there are any number of factors affecting this... from a binding emissions agreements between nations, to regional climate specifics; e.g. some areas stand to get much more rainfall and not less. Still, I think that it is an intriguing strategic question that deserves further exploration...

THOUGHT FOR THE DAY: Opportunity costs. There are trade-offs involved in anything we do, and particularly when it comes to energy production and the environment. There are no free lunches... although there might be low-hanging fruit!

Quick links - Saudi Arabia edition

Two interesting takes on Saudi oil production amidst all this trouble in North Africa and the current oil price spike.

1) Interfluidity ponders what the private cost of keeping oil in the ground is to the House of Saud. In other words, with all this unrest in the MENA region, can we see any signs that the Saudi Royal Family plans to ramp up production just in case it isn't left in power when the time comes to cash in on future oil prices? I was especially struck by this paragraph:

One might even argue that current circumstances amount to a natural experiment by which we might test the question of whether Saudi Arabia in fact has 3.5M barrels a day of spare capacity they can easily bring on line, or whether they’ve basically been running full tilt already. As the probability of revolution — or else a permanent increase in wealth-sharing to forestall revolution — increases, the private value of oil in the ground falls. If flows don’t increase, that could be taken as evidence that the Saudi Arabia is pumping at capacity.

Personally, I don't think that there are any significant risks of coup taking place in Saudi. Still,  an interesting theory no doubt. There's also no hiding the fact that many analysts are now openly questioning Saudi Arabia's ability to pick up the slack if, say, Libyan production does grind to a halt.[*] Speaking of which...


2) James Hamilton compares past Saudi responses to global oil supply shocks over the last two decades (most notably the first and second Persian Gulf Wars). Using some simple charts, he shows how Saudi Arabia has acted as a very important stabilizing force by promptly making up the shortfall in supply elsewhere. However, he is less confident that they'll be capable of doing so going forward:

But Saudi oil production looks quite different over the last few years[...]. The kingdom's production actually declined between 2005 and 2007. Although it subsequently increased, at the peak of oil prices in July of 2008 Saudi production was essentially only back to where it had been in 2005. The failure of Saudi production to increase between 2005 and 2008 in the face of booming demand for oil from the newly industrialized economies was in my opinion a key reason for the dramatic increase in oil prices over that period. 

[snip]

An increase of a million barrels per day in Saudi production relative to reported November levels, some of which may have in fact already been implemented, would put them back up to where they were in July of 2008. If all of Libyan production gets knocked out, we'd need 1.8 mb/d to replace it. If the Saudis weren't able or willing to go above those production levels in 2008 when oil was selling for over $140 a barrel, why would you expect them to do so now with West Texas only at $106? 

My answer is, I don't.

Somewhat depressing, but much food for thought here. More twists in the "call in OPEC" tale, you could say. There will, of course, be responses to such negative outlooks on the oil production side, but I'll say it again... Though the current spike is (hopefully) short-lived, we have moved into an era of higher oil prices. Anyone who is forecasting a return to the glory days of (inflation adjusted) $20-$30/bbl circa the 1990s is dreaming IMHO.

(HT: Mark Thoma and Paul Krugman)

[*] Of course, the world is much better prepared for a unexpected slump in production having learnt the hard way during the 1973 oil embargo. That's why, for example, the OECD countries have, on average, two months' worth of inventories as back-up.

What's in a (psuedo) name?

Let me explain something to you. Um, I am not "Mr. Lebowski". You're Mr. Lebowski. I'm the Dude. So that's what you call me. You know, that or, uh, His Dudeness, or uh, Duder, or El Duderino if you're not into the whole brevity thing.

Jeffrey "The Dude" Lebowski

I've been mulling something over recently; why do I blog under a pseudonym?

I suppose the reasons are largely historical. When I first got involved in the blogosphere ('04/'05), it was primarily to do with a sports website that some friends had started. At the time, no-one seemed to be using their proper names; it was all pretty lame, sport-related chutzpah... E.g. "Bulls4eva" and your other garden variety classics. I wasn't even involved until a friend referred to me in one of his editorial columns, roping me into the whole shebang. Only he left my real identity intact, preferring to use "Stickman" as a play on a rugby nickname that I had earned during university first-year, because of my noticeably short and squat physique (naaaat).

Now, "Stickman"... that's a name no-one would self-apply where I come from.

So, stickman was borne and it's stuck (ha ha) with me ever since... Even as I've seemingly graduated through the blogging ranks, from sports banter to (attempting) serious conversations on important economic, social and environmental issues. However, I can't help but feel a little sheepish every now again about not using my real name. Particularly when I'm involved in-depth discussions with people less prone to pseudonyms. It's almost like I'm not engaging the conversation in fair and honest terms.

Still - and blame it on endowment effect if you must - its hard to let the "stickman" moniker go. (Even if I am flippant when it comes to using capital letters.) I mean, we've been though a lot together. Let's also not forget that any rebranding can be a costly exercise. I like to think that I've build up some online intellectual capital over the last few years via my cunning nom de plume. Changing identities midstream might see me lose quite a lot of this, say nothing of confusing the issue. Would Stickman's Corral be even more aimless without some direct reference to its only leading author? Um, ya... probably not worth dwelling on that one.

Relax people. It's just an avatar.

Of course, pseudonyms and alter egos still abound in the blogosphere... Even in the realm of more serious economic and financial discussion. The Zero Hedge collective among the most prominent examples of this, although I was recently surprised to discover that Yves Smith (of Naked Capitalism) is also a pseudonym. I don't want to speak too loudly for anyone else, but there is certainly something innately reassuring about no-one being able to tie your online ramblings to your physical self. Particularly when you've got friends, family and co-workers (employers?) to answer to.[*]

So, that's part of it; the safety net. However, I'm also put off by the idea of people being able to trace almost all my thoughts on past matters back to my future self. Maybe I'm being paranoid, but interviews like this one with Google CEO, Eric Schmidt, don't offer much reassurance. On the academic and professional front, while I'm reasonably confident of the views that I hold on - what I perceive to be - important topics, I like the idea of being able to sound out ideas without being beholden to them.

Still, maybe I'm just being chicken. And, on that note, I suppose it's time to put things right. From now on feel free to call me by my first name.

Oprah.

Just kidding... Grant will do fine.
o-[-<


[*] On that note, here is an interesting article on ZH's anonymity obsession written by non other than Yves Smith. The pseudonym code is clearly more important for ZH, insofar as the authors can talk serious smack about the financial system without fear of reprisal. I'd imagine that they also never want their more bizarre conspiracy talk to be traced back to the original source... even if there were no direct ramifications. No-one wants to be called crazy to their face.

I should say that Fight Club happens to be one of my favourite books (and movies). Part of its brilliance lies with the deliberate ambiguity, which makes it prone to ironic misunderstanding. Following the release of the film especially, loads of people took to aping the story's themes and sub-plots of, as if to give themselves power and purpose, or even answers. However, the real conclusion was that Tyler Durden was just as adrift as anyone else. For one thing, the character comes to embody much of what he proclaims to despise. (E.g. Sticking a six-packed Brad Pitt into Gucci and Diesel did more to bolster male image consciousness than any other film of the decade, despite the narrator's declaration that they "felt sorry for guys packed into gyms, trying to look like how Calvin Kline or Tommy Hilfiger said they should".) It's easy enough to smirk at the college meat-heads smacking each other around in replica "fight clubs" but, you know, I'm not entirely sure that ZH have escaped the irony either...

Muse - Map of the Problematique

That is all.

The Castle: "It's the vibe"

Yesterday, I mentioned The Castle. If you haven't seen this Aussie comedy gem yet, I advise you rectify the situation ASAP. Your life will be better for it.



Tell him he's dreaming!

Hippie Baptists and Libertarian Bootleggers

Like, take it easy, Man.

Disclaimer: I've conflated a lot of libertarianism/Austrianism in post. This was partly for simplicity, but also because I'm recalling a personal exchange where the people involved were familiar with each other's ideological beliefs. My advice before continuing; if the shoe fits, wear it. If not, don't. 

Fresh on the heels of my discussion on the roll of tort law in controlling pollution, say nothing of the asteroid vs taxes showdown, here is another take on the moral implications of dogmatic libertarianism in the presence of negative externalities. In particular, David Sobel argues that strict/deontological libertarianism takes us to untenable places if applied to climate change (and other pollution problems affecting "the commons"):

Libertarianism and Pollution

One might try saying that we are better off because people polluted, or flew, or whatever. If previous generations had been forbidden from doing this, we would have much less material wealth. But again, I might be better off if someone straps me down and involuntarily gives me a root canal, but still, I would have thought, that does not show that doing so does not violate my Libertarian rights. The polluter seems to not leave as much and as good air, water, whatever, for the rest of us, thus seemingly violating the Lockian Proviso. One might try to compensate for the loss but I don’t see how to put a price on the loss. One might give the loss a market price but I might truthfully not have been willing to make the trade at that price. One could try asking me what price I want, but that will result in strategic issues and some rabid anti-pollution folks who will not sell at any price.

Sobel continues in a follow-up post (Property Rights and Moral Seriousness), in which he basically says that failure to distinguish various degrees of rights violations forces libertarians into ridiculous positions:

Now if [all] rights violation were treated as just as morally important as taking someone’s organs against her will, then, since there will be many such rights violations as a result of the pollution, surely such pollution would be impermissible. But this would shut down much of the economy of the world we are imagining and it would radically restrict the liberties of people in such a world. 

[HT: Bleeding Heart Libertarians]

===

Without being too self-congratulatory, I've been trying to point out the same issues to dogmatic libertarian friends of mine for some time. Here is part of an email that I wrote to one such friend last year:

I actually think that the Austrian/Libertarian perspective is particularly weak in this area [i.e. dealing with climate change], given its slavish fixation on property rights. Consider the hypothetical case of some hippie refusing to bargain for any climate change impacts on his property... Let’s just imagine that his love for the environment is not for sale. As far as I understand, he would have the right to enjoin all activities threatening his property under a strict Libertarian framework. Is that correct? If so, couldn’t we literally see a complete shutdown of industry based on the preferences of a very small portion of the population?

My friend responded by saying that other people would hold vastly different subjective valuations of the hippie's property (e.g. $5 versus $5 trillion). Following this, he made the assertion that: "Whatever our subjective valuations are, there will be a market price for this against which the hippie's claim would be measured, to see whether it is reasonable or not." He went on to add that the courts would eventually decide who's claim is most reasonable. I replied:

You haven't answered the question... And it appears that you are abandoning your principles and embracing mine; which would make sense to me, as I can't see the Austrian property fixation holding up to broader logic and a sense of social justice or, (warning: bad word ahead) fairness.  

This is how I understand the "Austrian" position:  

If it is my property, then -- excluding murder and so forth -- I am the only person entitled to decide what happens there. Non-coercion and all that, right? Since we've just been discussing subjective value, isn't it also irrelevant what price you or any other person (including the court) would accept or deem fair for climate change impacts to the hippie's property? He owns this land and $5 trillion is his valuation. To be strictly consistent with your original theory, the court would have to accept that the hippie's subjective value as the only one that ultimately counts... whether everyone else regards it as ridiculous or not. 

A simple thought experiment: Let's imagine it as an extreme version of 'The Castle' [brilliant movie if you haven't seen it - Ed]. Except now substitute the Kerrigins with the hippie, and the Melbourne Airport Company with CO2-emitting industries around the world. The Kerrigins didn't want to move and, ultimately, the courts forbade the Airport company from expanding despite all their financial sweeteners as recompense. In this case, the hippie also doesn't care for generous financial compensation and won't move either. Industry has to stop activities or else find a way to emitting the carbon that impacts the hippie's property. Again: he would ostensibly have the right to enjoin ALL activities impacting his property. 

Of course, I don't regard this is a reasonable position to support. That's why I don't subscribe to it. I think that, somewhere along the line, we have to try and incorporate broader social welfare calculations that transcend the unyielding veto of private property rights. However, as far as I can tell, my little scenario above encapsulates your position pretty well if taken to it's logical conclusion. Either you stick to your guns by accepting that the owner's subjective valuation of his own property right is sacrosanct, and that he has the final say on what happens on his land... Or, you override his subjective valuation through court decision, but betray your fundamental principles in the process. 

THOUGHT FOR THE DAY: Making compromises is part of life. Taking the dogmatic/ deontological libertarian position to its ultimate conclusion often leads - I believe - to untenable outcomes. The case of global warming is a prime example. Libertarians that slavishly hold personal property rights above all else would inadvertently open the way for eco-fundamentalists to enjoin virtually all industrial activity. In doing so, they would threaten to form an unholy coalition that makes it impossible for society to react to an immensely complex problem in any sensible way. They would, in effect, become Baptists and Bootleggers for the 21st century.

Sisters: Doing it for themselves

xkcd - Beliefs

Can't believe I missed this one...


HT: Lou Grinzo

Action Axiom: Rothbard contra Mises/Kant

Okay, last thing I'm going to post on the action axiom for a while, but a friend (of unabashed anarcho-capitalist persuasions) emails me:

You may find it interesting that [Murray] Rothbard actually disagreed with Mises on the falsifiability and empiricism of the action axiom. I'm surprised to see no-one has mentioned this in the thread...

Turning from the deduction process to the axioms themselves, what is their epistemological status? Here the problems are obscured by a difference of opinion within the praxeological camp, particularly on the nature of the fundamental axiom of action. Ludwig von Mises, as an adherent of Kantian epistemology, asserted that the concept of action is a priori to all experience, because it is, like the law of cause and effect, part of "the essential and necessary character of the logical structure of the human mind." Without delving too deeply into the murky waters of epistemology, I would deny, as an Aristotelian and neo-Thomist, any such alleged "laws of logical structure" that the human mind necessarily imposes on the chaotic structure of reality. Instead, I would call all such laws "laws of reality," which the mind apprehends from investigating and collating the facts of the real world. My view is that the fundamental axiom and subsidiary axioms are derived from the experience of reality and are therefore in the broadest sense empirical. I would agree with the Aristotelian realist view that its doctrine is radically empirical, far more so than the post-Humean empiricism which is dominant in modern philosophy.  

[snip]

If, in the broad sense, the axioms of praxeology are radically empirical, they are far from the post-Humean empiricism that pervades the modern methodology of social science. In addition to the foregoing considerations, (1) they are so broadly based in common human experience that once enunciated they become self-evident and hence do not meet the fashionable criterion of "falsifiability"; (2) they rest, particularly the action axiom, on universal inner experience, as well as on external experience, that is, the evidence is reflective rather than purely physical; and (3) they are therefore a priori to the complex historical events to which modern empiricism confines the concept of  "experience."

You can find the whole article here if you want to read it.

While I certainly don't profess to share my friend's strong anarcho-capitalist leanings[*], I found this an intriguing passage and certainly appreciate the heads-up. Indeed, I was not aware that Rothbard had rejected Mises's invocation of Kant in isolating the action axiom. Of course, there seems to be no significant disagreement on the issue of falsifiability even though they use different epistemological perspectives... Back to square one? Anyway,  I'm heading out now so will just leave this here as food for thought for anyone interested in the discussion.

Have a good weekend, everybody!

[*] I believe that he has read Man, Economy and State cover-to-cover, which is more Rothbard than I'm likely to get through in my entire lifetime.

To PhD, or not to PhD

That is the question...

Links - Anti-polemic edition

It's something of a point of pride that I don't wish this blog to descend into a polemic. In that spirit, here are several links to some interesting articles regardless of whether I support the views of the author (or subject) or not.

Note the seamless transitions...
<winks eyebrows>

1) Letters to a heretic: An email conversation with climate change sceptic Freeman Dyson. The science editor of The Independent, Steve O'Connor, sets out to establish why eminent physicist Freeman Dyson remains one of the (apparently) few high-profile scientists not to endorse the mainstream theory on anthropogenic global warming. For me, this is ultimately a very disappointing conversation which degenerates into an abrupt (non) conclusion. As usual, both sides are claiming victory against the other as a result. My own feeling is that nothing was gained and I left two comments to this effect, including a link to a superior article on Dyson, as well as some information for those whining about use of the word "heretic". [Note: While I do regard Dyson as ultimately being at fault for pulling the plug on interview, I think that O'Connor's line of questioning became increasingly poor as the interview went on. With Dyson getting tetchy, why not engage him on the specific issues surrounding the use of computer models? How are people improving them and what makes him confident that they are overstating the role of carbon when the models have proved to be accurate - or, if anything, overoptimistic - until this point?]

Seeing as we're on the subject of the carbon cycle...

2) The Economist reports on the "Deep Carbon" project, an attempt to expand the knowledge of the carbon cycle. I noted with interest that article makes reference to the abiogenic theory of petroleum, which I first heard about (briefly) in a class that I took on petroleum economics. Basically, the abiogenic theory holds that - rather than being the remains of organic material - oil originates from the earth's core where extreme pressures and heat convert carbonates into hydrocarbons. If true, this would mean that there is practically no limit on how much oil could ultimately be extracted for human purposes. Widely disregarded elsewhere, this theory still holds credence among a number of scientists from the former USSR countries, where it gained particular attention during the Cold War. Of course, most Western geologists and scientists regard this hypothesis as akin to the phlogiston theory of fire and thoroughly discredited. For their part, the proponents of the abiogenic theory continue to offer alternative evidence as "proof" that no such debunking has taken place. It all makes for enteraining reading, but you certainly wouldn't catch me putting any money on it. {Side note: I can't help but notice the eerie parallels between the abiogenic theory and those put forward by the increasingly delusional characters in Umberto Eco's occultist spoof Foucalt's Pendulum, e.g. serpentine mechanisms vs telluric currents.[*]}

Speaking of oil...

3) "The age of cheap oil is over" according to the International Energy Agency. (Hmmm, what's that Radiohead song again...?) I've been holding back on posting anything regarding the recent spike in oil prices that has followed the turmoil in North Africa, mostly because it has been exhaustively covered and is entirely expected. However, these temporary factors notwithstanding, I think it's pretty safe to assume that we have already entered a higher oil price plateau. Primary reasons: i) Rapidly increasing demand from emerging economies such as China and India, and ii) Increased cost of extraction from new sources (tar sands, deep offshore drilling). Then, there's always the possibility that the world might sometime revoke the obscene level of subsidisation that characterises the global fossil fuels industry ($350bn-$550bn). Of course, its not all bad news as high prices are the invaluable investment signal for further petroleum exploration and/or bringing alternative energy sources on-stream. Every cloud...

Okay, there's no seemless transition next as we're back to dealing with climate change and, more specifically, the factors that underlie peoples' almost visceral reaction to the subject. Although, in that way, I suppose it certainly concerns polemics...

4) Noam Chomsky has thoughts on how climate change became a 'liberal hoax'. As always, the mention of Chomsky's name calls forth much unfounded vitriol in some corners. I left a comment on another wesbite after seeing some of the usual suspects ranting about this "Pol Pot lovin', murderin' Marxist"... which , of course, is complete BS. I tried to point out how Chomsky was factually critiquing the biased U.S. media coverage of foreign policy and the very important context in which he made these remarks. You don't need to support all, or even most of Chomsky's views, but you at least owe it yourself to understand what he was critiquing. A section of my comment: [T]his bizzare manufactured controversy regarding [Chomsky's] comments on Cambodia show up his critics for what they really: Rabid idealogues who are unable to engage him in honest debate. It says volumes about your character (say nothing of the paucity of your arguments) if you can only resort to deliberate distortions of your opponent's argument and perpetuate outright lies in order to achieve any kind of advantage. Unfortunately, I see more and more situations every day where the above sentiments could be applied.

Finally (again, no relation to the previous point!)...

5) Mattheus and Jonathan at Economic Thought offer their thoughts on my concerns regarding Mises's action axiom and it's qualification as a Kantian synthetic a priori fact.


[*] Speaking of serpentine forces and conspiracy theorists, compare this amusing quote from the book: "The animal that coils in a circle is the serpent; that's why so many cults and myths of the serpent exist, because it's hard to represent the return of the sun by the coiling of a hippopotamus."