Category: Public Choice

A Highly Mathematical Model Endorses Friedman’s View that Feds Directed Economics toward Highly Mathematical Models

(p. 1138) . . . , in many areas, the existing organization of research is characterized by large research institutions staffed with hundreds of
researchers and national funding agencies who set the research agenda for the field. Given the size of such institutions, if they decide to launch a new research program, then the critical mass of scholars can be reached with certainty, and individual researchers need not fear the coordination risk. Researchers should thus choose to work on that research topic, provided that they perceive an expected reward that is larger than s. (p. 1139) Unfortunately, if the large institution selects a poor idea (with a small or even negative θ), it would then be responsible for the emergence of a strand of research with modest scientific value. As an example, Diamond (1996) recalls Milton Friedman’s criticism of the U.S. National Science Foundation, which, in his opinion, has directed the economics profession toward a highly mathematical model.12
. . .
12. Ironically, his opinion is endorsed in this paper by a “highly mathematical model.”

Source:
Besancenot, Damien, and Radu Vranceanu. “Fear of Novelty: A Model of Scientific Discovery with Strategic Uncertainty.” Economic Inquiry 53, no. 2 (April 2015): 1132-39.
(Note: ellipses added; italics in original.)

The 1996 Diamond article mentioned above, is:
Diamond, Arthur M., Jr. “The Economics of Science.” Knowledge and Policy 9, nos. 2/3 (Summer/Fall 1996): 6-49.

Obama’s Harvard Constitutional Law Professor Likens Obama’s Climate Change Policies to “Burning the Constitution”

(p. A1) WASHINGTON — Laurence H. Tribe, the highly regarded liberal scholar of constitutional law, still speaks of President Obama as a proud teacher would of a star student. “He was one of the most amazing research assistants I’ve ever had,” Mr. Tribe said in a recent interview. Mr. Obama worked for him at Harvard Law School, where Mr. Tribe has taught for four decades.
. . .
Next week Mr. Tribe is to deliver oral arguments for Peabody in the first federal court case about Mr. Obama’s climate change rules. Mr. Tribe argues in a brief for the case that in requiring states to cut carbon emissions, thus to change their energy supply from fossil fuels to renewable sources, the E.P.A. is asserting executive power far beyond its lawful authority under the Clean Air Act. At a House hearing last month, Mr. Tribe likened the climate change (p. A15) policies of Mr. Obama to “burning the Constitution.”
. . .
While Mr. Tribe is one of the nation’s foremost experts on constitutional law, and has argued some Supreme Court cases related to environmental law, he said he has never specialized in the Clean Air Act.
. . .
It is widely expected that the fight over the E.P.A. regulations will eventually go before the Supreme Court. If it does, Mr. Tribe said that he expects he “may well” play a role in that case — which would be argued before two other former students, Chief Justice John G. Roberts Jr. and Justice Elena Kagan.

For the full story, see:
CORAL DAVENPORT. “Laurence Tribe Fights Climate Case Against Star Pupil From Harvard, President Obama.” The New York Times (Tues., APRIL 7, 2015): A1 & A15.
(Note: ellipses added.)
(Note: the online version of the story has the date APRIL 6, 2015, and has the title “Laurence Tribe Fights Climate Case Against Star Pupil From Harvard, President Obama.”)

In American Political System “It Will Be far More Difficult to Undo than to Do”

(p. 330) Jefferson traced the formation of the two main parties–to be known as Republicans and Federalists–to Hamilton’s victory over assumption. For Jefferson, this event split Congress into pure, virtuous republicans and a “mercenary phalanx,” “monarchists in principle,” who “adhered to Hamilton of course as their leader in that principle.”
Why did Jefferson retrospectively try to downplay his part in passing Hamilton’s assumption scheme? While he understood the plan at the time better than he admitted, he probably did not see as clearly as Hamilton that the scheme created an unshakable foundation for federal power in America. The federal government had captured forever the bulk of American taxing power. In comparison, the location of the national capital seemed a secondary matter. It wasn’t that Jefferson had been duped by Hamilton; Hamilton had explained his views at dizzying length. It was simply that he had been outsmarted by Hamilton, who had embedded an enduring political system in the details of the funding scheme. In an unsigned newspaper article that September, entitled “Address to the Public Creditors,” Hamilton gave away the secret of his statecraft that so infuriated Jefferson: “Whoever considers the nature of our government with discernment will see that though obstacles and delays will frequently stand in the way of the adoption of good measures, yet when once adopted, they are likely to be stable and permanent. It will be far more difficult to undo than to do.”

Source:
Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.
(Note: italics in original.)

“The Most Celebrated Meal in American History”

(p. 328) If we are to credit Jefferson’s story, the dinner held at his lodgings on Maiden Lane on June 20, 1790, fixed the future site of the capital. It is perhaps the most celebrated meal in American history, the guests including Jefferson, Madison, Hamilton, and perhaps one or two others. For more than a month, Jefferson had been bedeviled by a migraine headache, yet he presided with commendable civility. Despite his dislike of assumption, he knew that the stalemate over the funding scheme could shatter the union, and, as secretary of state, he also feared the repercussions for American credit abroad.
Madison restated his familiar argument that assumption punished Virginia and other states that had duly settled their debts. But he agreed to support assumption–or at least not oppose it–if something was granted in exchange. Jefferson recalled, “It was observed… that as the pill would be a bitter one to the southern states, something should be done to soothe them.” The sedative measure was that Philadelphia would be the temporary capital for ten years, followed by a permanent move to a Potomac site. In a lucrative concession for his home state, Madison also seems to have extracted favorable treatment for Virginia in a final debt settlement with the central government. In return, Hamilton agreed to exert his utmost efforts (p. 329) to get the Pennsylvania congressional delegation to accept Philadelphia as the provisional capital and a Potomac site as its permanent successor.
The dinner consecrated a deal that was probably already close to achievement. The sad irony was that Hamilton, the quintessential New Yorker, bargained away the city’s chance to be another London or Paris, the political as well as financial and cultural capital of the country. His difficult compromise testified to the transcendent value he placed on assumption. The decision did not sit well with many New Yorkers. Senator Rufus King was enraged when Hamilton told him that he “had made up his mind” to jettison the capital to save his funding system. For King, Hamilton’s move had been high-handed and secretive, and he ranted privately that “great and good schemes ought to succeed not by intrigue or the establishment of bad measures.”

Source:
Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.
(Note: ellipsis in original.)

Rich Slaveholders “Posed as Plucky Populists”

(p. 267) As Hamilton tangled with Lansing, neither knew that Virginia had on June 25 become the tenth state to ratify the Constitution. Like their New York counterparts, antifederalists there posed as plucky populists, even though their ranks included many rich slaveholders. Patrick Henry, the leading antifederalist, warned delegates who supported the Constitution, “They’ll free your niggers.” George Washington noted the hypocrisy of the many slaveholding antifederalists: “It is a little strange that the men of large property in the South should be more afraid that the Constitution will produce an aristocracy or a monarchy than the genuine, democratical people of the East.”

Source:
Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.

Obamacare Advisor Says Obscure Law Passed Due to “Stupidity of the American Voter”

(p. A4) Jonathan Gruber, the economist at the heart of a fresh debate about the Affordable Care Act, has had more than a dozen appointments to visit the White House since Democrats began drafting the health law in 2009, records show.
The visits included at least one group meeting with President Barack Obama , as well as appointments with senior administration officials who helped shape the 2010 law that expanded health insurance to millions of Americans.
The White House in recent days has tried to distance itself from Mr. Gruber, a 49-year-old Massachusetts Institute of Technology economist, since a 2013 video surfaced last week in which he said the law passed because of the “huge political advantage” of the legislation’s lacking transparency. He also referred to the “stupidity of the American voter.”
Republicans have seized on the comments as evidence that supporters of the law purposely misled the public about its costs.
“It is amusing to watch Washington liberals discount Mr. Gruber’s truth-telling as a gaffe and disown” his involvement in the law, said Sen. Orrin Hatch (R., Utah).

For the full story, see:
STEPHANIE ARMOUR and COLLEEN MCCAIN NELSON. “Health Adviser Gruber Logged Regular White House Visits.” The Wall Street Journal (Tues., Nov. 18, 2014): A4.
(Note: the online version of the story has the date Nov. 17, 2014.)

“Peer Review Institutionalizes Dogmatism by Promoting Orthodoxy”

(p. 305) Peer review institutionalizes dogmatism by promoting orthodoxy. Reviewers prefer applications that mesh with their own perspective on how an issue should be conceptualized, and they favor individuals whom they know or whose reputations have already been established, making it harder for new people to break into the system.6 Indeed, the basic process of peer review demands conformity of thinking and disdains a maverick’s approach. “We can hardly expect a committee,” said the biologist and historian of science, Garrett Hardin, “to acquiesce in the dethronement of tradition. Only an individual can do that.”7 Young investigators get the message loud and clear: Do not challenge existing beliefs and practices.
So enmeshed in the conventional wisdoms of the day, so-called “peers” have again and again failed to appreciate major breakthroughs even when they were staring them in the face. This reality is evidenced by the fact that so many pioneering researchers were inappropriately scheduled to present their findings at undesirable times when few people were in the audience to hear about them.

Source:
Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.

With Targeted Research, Scientists Not Allowed to Pursue Serendipitous Discoveries

(p. 303) When scientists were allowed to pursue whatever they found, serendipitous discovery flourished.
Today, targeted research is pretty much all there is. Yet, as Richard Feynman put it in his typical rough-hewn but insightful manner, giving more money “just increases the number of guys following the comet head.”2 Money doesn’t foster new ideas, ideas that drive science; it only fosters applications of old ideas, most often enabling improvements but not discoveries.

Source:
Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.

Government Funding Rewards Conformity

(p. 302) Inherent in the system is a mindset of conformity: one will tend to submit only proposals that are likely to be approved, which is to say, those that conform to the beliefs of most members on the committee of experts. Because of the intense competition for limited money, investigators are reluctant to submit novel or maverick proposals. Needless to say, this environment stifles the spirit of innovation. Taking risks, pioneering new paths, thwarting conventional wisdom–the very things one associates with the wild-eyed, wild-haired scientists of the past–don’t much enter into the picture nowadays.

Source:
Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.

Government Funding Not Conducive to Serendipity

(p. 301) Even in the early twentieth century, the climate was more conducive to serendipitous discovery. In the United States, for example, scientific research was funded by private foundations, notably the Rockefeller Institute for Medical Research in New York (established 1901) and the Rockefeller Foundation (1913). The Rockefeller Institute modeled itself on prestigious European organizations such as the Pasteur Institute in France and the Koch Institute in Germany, recruiting the world’s best scientists and providing them with comfortable stipends, well-equipped laboratories, and freedom from teaching obligations and university politics, so that they could devote their energies to research. The Rockefeller Foundation, which was the most expansive supporter of basic research, especially in biology, between the two world wars, relied on successful programs to seek promising scientists to identify and accelerate burgeoning fields of interest. In Britain, too, the Medical Research Council believed in “picking the man, not the project,” and nurturing successful results with progressive grants.
After World War II, everything about scientific research changed. The U.S. government–which previously had had little to do with funding research except for some agricultural projects–took on a major role. The National Institutes of Health (NIH) grew out of feeble beginnings in 1930 but became foremost among the granting agencies in the early 1940s at around the time they moved to Bethesda, Maryland. The government then established the National Science Foundation (NSF) in 1950 to promote progress in science and engineering. Research in the United States became centralized and therefore suffused with bureaucracy. The lone scientist working independently was now a rarity. Research came to be characterized by large teams drawing upon multiple scientific disciplines and using highly technical methods in an environment that promoted the not-very-creative phenomenon known as “groupthink.” Under this new regime, the competition (p. 302) among researchers for grant approvals fostered a kind of conformity with existing dogma. As the bureaucracy of granting agencies expanded, planning and justification became the order of the day, thwarting the climate in which imaginative thought and creative ideas flourish.

Source:
Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.

Consumers Cannot Count on Regulators for Safety

(p. A1) WASHINGTON — The nation’s top auto regulator faced withering criticism across Capitol Hill on Tuesday over its failure to identify a deadly defect in General Motors cars — even as its top official tried again and again to shift the blame back to the automaker.
Hours after a House committee released a scathing report about the agency’s yearslong failure to spot the ignition-stalling defect that has now been linked to 19 deaths, a Senate subcommittee hearing turned angry and tense. Lawmakers from both parties accused the agency, the National Highway Traffic Safety Administration, of overlooking evidence that could have saved lives and of deferring to the auto industry rather than standing up to it.
The agency was “more interested in singing ‘Kumbaya’ with the manufacturers than being a cop on the beat,” said Senator Claire McCaskill, the subcommittee’s chairwoman, in sharp questioning reminiscent of her interrogation of G.M.’s chief executive, Mary T. Barra, in a hearing before the same panel in the spring.
. . .
(p. B2) “You want to obfuscate responsibility, rather than take responsibility,” Ms. McCaskill, a Missouri Democrat, said, her voice rising. “We’ve all said shame on G.M.” She added, “You’ve got to take some responsibility that this isn’t being handled correctly.”
. . .
Watching from a seat just behind Mr. Friedman [deputy administrator of the N.H.T.S.A.] was Laura Christian, the birth mother of Amber Rose, a teenager who was killed in 2005 when her Cobalt ran off the road, into a tree, and the air bags did not deploy.
As Mr. Friedman continued to speak, Ms. Christian said she could feel herself getting flushed and increasingly upset over the agency’s lack of remorse.
“It was extremely frustrating to hear David Friedman go on about how his agency was this wonderful thing,” she said. “All along they missed the glaringly obviously defects.”

For the full story, see:
HILARY STOUT and AARON M. KESSLER. “Congress Castigates Auto Regulator Over a Deadly G.M. Defect.” The New York Times (Weds., SEPT. 17, 2014): A1 & B2.
(Note: ellipses, and bracketed words, added.)
(Note: the online version of the story has the date SEPT. 16, 2014, and has the title “Senators Take Auto Agency to Task Over G.M. Recall.” In the Midwest edition that I receive, this article started on p. A1; according to the indexes, and the online edition, in the New York edition, the article started on p. B1.)