Category: Methodology

An Intellectual Collaboration Beyond the Grave

There is something touchingly noble in this:

(p. 11) There is no direct evidence in the historical record, but it is entirely probable that it was the waterspout sighting that sent Priestley off on his quest to measure the temperature of the sea, trying to marshal supporting evidence for a passing conjecture his friend had made a decade before. Franklin had been dead for nearly four years, but their intellectual collaboration continued, undeterred by war, distance, even death.

Source:
Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

Steven Johnson’s The Invention of Air

InventionOfAirBK.jpg

Source of book image: http://stevenberlinjohnson.typepad.com/photos/uncategorized/2008/09/10/invention_final_81908.jpg

Steven Johnson’s The Ghost Map, about the determined entrepreneurial detective work that uncovered the cause of cholera, is one of my all-time favorite books, so I am now in the mode of reading everything else that Steven Johnson has written, or will write.
The most recent book, The Invention of Air, is not as spectacular as The Ghost Map, but is well-written on a thought-provoking topic. It focuses on Joseph Priestley’s role in the American Revolution. Priestley is best known as an early chemist, but Johnson paints him as a poly-math whose science was of a piece with his philosophy, politics and his religion.
Johnson’s broader point is that for many of the founding fathers, science was not a compartment of their lives, but part of the whole cloth (hey, it’s my blog, so I can mix as many metaphors as I want to).
And the neat bottom line is that Priestley’s method of science (and polity) is the same broadly empirical/experimental/entrepreneurial method that usually leads to truth and progress.
Along the way, Johnson makes many amusing and thought-provoking observations, such as the paragraphs devoted to his coffee-house theory of the enlightenment. (You see, coffee makes for clearer thinking than beer.)

The book:
Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

Financial Crisis Is “A Coming-Out Party” for Taleb and Behavioral Economists

(p. A23) My sense is that this financial crisis is going to amount to a coming-out party for behavioral economists and others who are bringing sophisticated psychology to the realm of public policy. At least these folks have plausible explanations for why so many people could have been so gigantically wrong about the risks they were taking.

Nassim Nicholas Taleb has been deeply influenced by this stream of research. Taleb not only has an explanation for what’s happening, he saw it coming. His popular books “Fooled by Randomness” and “The Black Swan” were broadsides at the risk-management models used in the financial world and beyond.

In “The Black Swan,” Taleb wrote, “The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup.” Globalization, he noted, “creates interlocking fragility.” He warned that while the growth of giant banks gives the appearance of stability, in reality, it raises the risk of a systemic collapse — “when one fails, they all fail.”

Taleb believes that our brains evolved to suit a world much simpler than the one we now face. His writing is idiosyncratic, but he does touch on many of the perceptual biases that distort our thinking: our tendency to see data that confirm our prejudices more vividly than data that contradict them; our tendency to overvalue recent events when anticipating future possibilities; our tendency to spin concurring facts into a single causal narrative; our tendency to applaud our own supposed skill in circumstances when we’ve actually benefited from dumb luck.

And looking at the financial crisis, it is easy to see dozens of errors of perception. Traders misperceived the possibility of rare events. They got caught in social contagions and reinforced each other’s risk assessments. They failed to perceive how tightly linked global networks can transform small events into big disasters.

Taleb is characteristically vituperative about the quantitative risk models, which try to model something that defies modelization. He subscribes to what he calls the tragic vision of humankind, which “believes in the existence of inherent limitations and flaws in the way we think and act and requires an acknowledgement of this fact as a basis for any individual and collective action.” If recent events don’t underline this worldview, nothing will.

For the full commentary, see:
DAVID BROOKS. “The Behavioral Revolution.” The New York Times (Tues., October 28, 2008): A31.

The reference to Taleb’s Black Swan book is:
Taleb, Nassim Nicholas. The Black Swan: The Impact of the Highly Improbable. New York: Random House, 2007.

Another review of Taleb’s book is:
Diamond, Arthur M., Jr. “Review of: Taleb, Nassim Nicholas. The Black Swan.” Journal of Scientific Exploration 22, no. 3 (Fall 2008): 419-422.

Leeuwenhoek’s Great Discovery Was at First Rejected by the “Experts”

In the passage quoted below, Hager discusses the reception that Leeuwenhoeck received to his first report of the “animalcules” seen under his microscope:

(p. 42) He hired a local artist to draw what he saw and sent his findings to the greatest scientific body of the day, the Royal Society of London.

(p. 43) Van Leeuwenhoek’s raising of the curtain on a new world was greeted with what might kindly be called a degree of skepticism. Three centuries later a twentieth-century wit wrote a lampoon of what the Royal Society’s secretary might well have responded:

Dear Mr. Anthony van Leeuwenhoek,
Your letter of October 10th has been received here with amusement. Your account of myriad “little animals” seen swimming in rainwater, with the aid of your so-called “microscope,” caused the members of the society considerable merriment when read at our most recent meeting. Your novel descriptions of the sundry anatomies and occupations of these invisible creatures led one member to imagine that your “rainwater” might have contained an ample portion of distilled spirits—imbibed by the investigator. Another member raised a glass of clear water and exclaimed, “Behold, the Africk of Leeuwenhoek.” For myself, I withhold judgement as to the sobriety of your observations and the veracity of your instrument. However, a vote having been taken among the members—accompanied, I regret to inform you, by considerable giggling—it has been decided not to publish your communication in the Proceedings of this esteemed society. However, all here wish your “little animals” health, prodigality and good husbandry by their ingenious “discoverer.”

The satire was not far from the truth. Although very interested in the Dutchman’s discoveries, so many English scientists were doubtful about his reports that van Leeuwenhoek had to enlist an English vicar and several jurists to attest to his findings. Then Hooke himself confirmed them. All doubt was dispelled.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.

“Four G’s Needed for Success: Geduld, Geschick, Glück, Geld”

One of Domagk’s predecessors, in goal and method, was Paul Ehrlich, who was a leader in the search for the Zuberkugeln (magic bullet) against disease causing organisms. He systematized the trial and error method, and pursued dyes as promising chemicals that might be modified to attach themselves to the intruders. But he never quite found a magic bullet:

(p. 82) Ehrlich announced to the world that he had found a cure for sleeping sickness. But he spoke too soon. Number 418, also, proved too toxic for general use. He and his chemists resumed the search.

Ehrlich said his method consisted basically of “examining and sweating”—and his coworkers joked that Ehrlich examined while they sweated. There was another motto attributed to Ehrlich’s lab, the list of “Four Gs” needed for success: Geduld, Geschick, Glück, Geld—patience, skill, luck, and money.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.
(Note: do not confuse the “Paul Ehrlich” discussed above, with the modern environmentalist “Paul Ehrlich” who is best known for losing his bet with Julian Simon.)

Why You Want Your Surgeon to Be a Disciple of Lister

The sources of new ideas are diverse. Sometimes, as below, even a newspaper article can provide inspiration.
The passage below also provides another example of the project oriented entrepreneur, who is motivated by a mission to get the job done.

(p. 60) In Lister’s early years, the mid-1800s, half of all amputation patients died from hospital fever; in some hospitals the rate was as high as 80 percent. Lister, like all surgeons, had little idea of how to improve the situation. Then he chanced on a newspaper article that caught his interest. It described how the residents of a local town, tired of the smell of their sewage, had begun treating it by pouring into their system something called German Creosote, a by-product of coal tar. Something in the creosote stopped the smell. Lister had heard about the work of Pasteur, and he made the same mental connection the French chemist had: The stink of sewage came from putrefaction, rotting organic matter; the stink of infected wounds also came from putrefaction; whatever stopped the putrefaction of sewage might also stop the putrefaction of infected wounds. So Lister decided to try coal-tar chemicals on his patients. And he found one that worked exceptionally well: carbolic acid, a solution of what today is called phenol.   . . .
. . .
(p. 61) Lister’s insistence on stopping the transfer of bacteria in the operating room became absolute. Once when a visiting knighted physician from King’s College idly poked a forefinger into a patient’s incision during one of Lister’s operations, Lister flung him bodily from the room.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.
(Note: ellipses added.)

Doctors Rejected Pasteur’s Work

Whether in science, or in entrepreneurship, at the initial stages of an important new idea, the majority of experts will reject the idea. So a key for the advance of science, or for innovation in the economy, is to allow scientists and entrepreneurs to accumulate sufficient resources so that they can make informed bets based on their conjectures, and on their tacit knowledge.
A few entries ago, Hager recounted how Leeuwenhoek faced initial skepticism from the experts. In the passage below, Hager recounts how Pasteur also faced initial skepticism from the experts:

(p. 44) If bacteria could rot meat, Pasteur reasoned, they could cause diseases, and he spent years proving the point. Two major problems hindered the acceptance of his work within the medical community: First, Pasteur, regardless of his ingenuity, was a brewing chemist, not a physician, so what could he possibly know about disease? And second, his work was both incomplete and imprecise. He had inferred that bacteria caused disease, but it was impossible for him to definitively prove the point. In order to prove that a type of bacterium could cause a specific disease, precisely and to the satisfaction of the scientific world, it would be necessary to isolate that one type of bacterium for study, to create a pure culture, and then test the disease-causing abilities of this pure culture.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.

Amateur Leeuwenhoek Made Huge Contribution to Science

(p. 40) Antoni van Leeuwenhoek was a scientific superstar. The greats of Europe traveled from afar to see him and witness his wonders. It was (p. 41) not just the leading minds of the era—Descartes, Spinoza, Leibnitz, and Christopher Wren—but also royalty, the prince of Liechtenstein and Queen Mary, wife of William III of Orange. Peter the great of Russia took van Leeuwenhoek for an afternoon sail on his yacht. Emperor Charles of Spain planned to visit as well but was prevented by a strong eastern storm.

It was nothing that the Dutch businessman had ever expected. He came from an unknown family, had scant education, earned no university degrees, never traveled far from Delft, and knew no language other than Dutch. At age twelve he had been apprenticed to a linen draper, learned the trade, then started his own business as a fabric merchant when he came of age, making ends meet by taking on additional work as a surveyor, wine assayer, and minor city official. He picked up a skill at lens grinding along the way, a sort of hobby he used to make magnifying glasses so he could better see the quality of fabrics he bought and sold. At some point he got hold of a copy of Micrographia, a curious and very popular book by the British scientist Robert Hooke. Filled with illustrations, Micrographia showed what Hooke had sen through a novel instrument made of two properly ground and arranged lenses, called a “microscope.”  . . .   Micrographia was an international bestseller in its day. Samuel Pepys stayed up until 2:00 A.M. one night poring over it, then told his friends it was “the most ingenious book that I ever read in my life.”

Van Leeuwenhoek, too was fascinated. He tried making his own microscopes and, as it turned out, had talent as a lens grinder. His lens were better than anyone’s in Delft; better than any Hooke had access to; better, it seemed, than any in the world.  . . .  

(p. 42) Then, in the summer of 1675, he looked deep within a drop of water from a barrel outside and became the first human to see an entirely new world. In that drop he could make out a living menagerie of heretofore invisible animals darting, squirming, and spinning.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.
(Note: ellipses added.)

The example above is consistent with Baumol’s hypotheses about formal education mattering less, in the initial stages of great discoveries. (And maybe even being a hindrance).
See:
Baumol, William J. “Education for Innovation: Entrepreneurial Breakthroughs Versus Corporate Incremental Improvements.” In Innovation Policy and the Economy, edited by Adam B. Jaffe, Josh Lerner and Scott Stern, 33-56. Cambridge, Mass.: MIT Press, 2005.

The example is also consistent with Terence Kealey’s claim that important science can often arise as a side-effect of the pursuit of business activity.
See:
Kealey, Terence. The Economic Laws of Scientific Research. New York: St. Martin’s Press, 1996.

Based on Past Experience, the Renaissance Was Impossible

(p. 26) Even the wisest of them were at a hopeless disadvantage, for their only guide in sorting it all out—the only guide anyone ever has—was the past, and precedents are worse than useless when facing something entirely new. They suffered another handicap. As medieval men, crippled by ten centuries of immobility, they viewed the world through distorted prisms peculiar to their age.

In all that time nothing of real consequence had either improved or declined. Except for the introduction of waterwheels in the 800s and windmills in the late 1100s, there had been no inventions of significance. No startling new ideas had appeared, no new terri-(p. 27)tories outside Europe had been explored. Everything was as it had been for as long as the oldest European could remember. The center of the Ptolemaic universe was the known world—Europe, with the Holy Land and North Africa on its fringes. The sun moved round it every day. Heaven was above the immovable earth, somewhere in the overarching sky; hell seethed far beneath their feet. Kings ruled at the pleasure of the Almighty; all others did what they were told to do. Jesus, the son of God, had been crucified and resurrected, and his reappearance was imminent, or at any rate inevitable. Every human being adored him (the Jews and the Muslims being invisible). The Church was indivisible, the afterlife a certainty; all knowledge was already known. And nothing would ever change.

The mighty storm was swiftly approaching, but Europeans were not only unaware of it; they were convinced that such a phenomenon could not exist. Shackled in ignorance, disciplined by fear, and sheathed in superstition, they trudged into the sixteenth century in the clumsy, hunched, pigeon-toed gait of rickets victims, their vacant faces, pocked by smallpox, turned blindly toward the future they thought they knew—gullible, pitiful innocents who were about to be swept up in the most powerful, incomprehensible, irresistible vortex since Alaric had led his Visigoths and Huns across the Alps, fallen on Rome, and extinguished the lamps of learning a thousand years before.

Source:
Manchester, William. A World Lit Only by Fire: The Medieval Mind and the Renaissance, Portrait of an Age. New York: Little, Brown & Co., 1993.
(Note: italics in original.)

The Current Financial Crisis Reveals a Need for Reform

As I think about the current financial crisis, I have been struck by the uncertainty among economists about what should be done. Many economists are silent. Those who speak, have offered very diverse opinions. And even among those who express opinions, there is a lack of confidence in their opinions.
Milton Friedman used to say that economists will be listened to when there is a crisis, and that economists need to be ready, as Friedman himself was with his floating exchange rate proposal. (Milton, we need you again.)
I believe that one lesson from the current crisis is that we need reform—reform of economists’ research priorities and methods. We should become more interested in policy relevance, history and institutions; and less interested in mathematical rigor.
We should avoid what Schumpeter called “the Ricardian Vice.” (Highly stylized, aggregated models, based on unrealistic simplifying assumptions, that are then blindly applied to policy decisions in the actual, richly “thick” world—see McCloskey’s essay on thick and thin methods in economics.)
We also should spend less time in studying cute, counter-intuitive results (“freakonomics”), and spend more time on the big issues.
We should be willing to suggest institutional reforms and experiments, and participate in experiments (natural and artificial) to see how they work. (Spontaneous order is nice when it happens, but entrepreneurial vision and initiative can improve the world too.)
Capitalism has produced huge gains in longevity and standards of living. Yet capitalism is in danger of being hobbled or destroyed.
Schumpeter warned of “the crumbling of the protecting walls.” We should have been better prepared to rebuild and defend them.

Note: The “Ricardian Vice” phrase is from Schumpeter’s History of Economic Analysis, p. 473; the “protecting walls” phrase is from Capitalism, Socialism and Democracy, p. 143.

The McCloskey essay mentioned is:
McCloskey, Deirdre. “Thick and Thin Methodologies in the History of Economic Thought.” In The Popperian Legacy in Economics, 245-57. Cambridge, UK: Cambridge University Press, 1988.