Sunday, January 24, 2016

Decency, righteousness and the add-more-morality error

Having what we might call a moral sense, but which is better called a normative sense, has been basic to the evolutionary success of homo sapiens. The ability to accept, and internalise, constraints on behaviour hugely expands the range of practicable social interactions. Particularly important over the longer run in "scaling up" human social interaction has been the constraint of accepting the right to control specific objects, for that allows exchange to take place. The virtue of exchange is that it permits positive social interactions in the simple swap sense--this thing I have for that thing you have--between individuals with little or no other social connection: an obvious prerequisite for significant "scaling up" of human interaction and resource use.

But the normative sense lowers the costs, and so expands the ambit of, embedded exchange between people with strong social connections, such as those which operated within foraging groups--those who hunt and those who gather sharing the fruits of their labour while shaming or excluding those who attempt to free ride. In other words, normatively constraining aggression--whether active (protection of life and person, blocking theft or deceit) or passive (taking without contributing)--hugely reduces the actual or potential costs of transacting, thereby greatly expanding the range of possible transactions. The increased intensity and extent of socially connected interactions within foraging groups was likely the key arena within which the normative sense evolved due to the high level of interaction and information (pdf) within said groups.

Normative cognition
Expanding the range of social interactions expands both cognitive demands on individuals--particularly the ability to "read others" and to communicate--and increases the return to cognitive ability. If better social cooperation means more children surviving to adulthood, then increased cognitive ability is selected for. Potentially quite strongly. It is likely not accidental that tool using (more specifically tool making) and strikingly swift (in evolutionary terms) cognitive expansion went together. Putting effort into tool making will have rather better returns the more it is embedded within constraints on action (such as accepting tool ownership) that increase the range of, and return on, social interaction.

The interactive expansion of cognition and cooperation pushed homo sapiens across the cognitive threshold of becoming a cultural species: that is, to rely far more on learning and learned patterns than on "hard wired" patterns. The normative sense is about capacities and propensities; that goes with homo sapiens being a cultural species. So it is moulded by experience, example and teaching.

Culture could be used to transmit knowledge and expectations. This also provided a mechanism to transmit norms that did not rely on specific genetic mutations: homo sapiens evolved into permitting social mutation, social diversity. We became a multi-level selection species in a very particular sense beyond that otherwise experienced (pdf) in biology. Human culture built on, directed and, via evolutionary advantage, expanded the normative sense.

Culture exists both as generalised framing (what Anglo-Indian economist Deepak Lal calls cosmological beliefs) and as transmitted techniques (what Lal calls material beliefs). The second, being far more immediately and narrowly instrumental, are more pliable to changes in information and incentives than the first, which is about creating and managing common (or at least sufficiently convergent and coherent) expectations and purposes. Such framings can be so unthinkingly basic to the way folk conceive people and the world that it can be hard to even conceive of people having, let along continuing to be committed to, seriously different framings.

Commerce (exchange) involves beneficial interaction with strangers and people with low social connections. It demonstrably fosters pro-social behaviour. "World religions" (i.e. widespread religions with strong ethical teachings) also foster cooperative norms, particularly (but not only) for fellow-believers. The two factors can work together: it is not surprising that trade routes often spread moralising religions--notably Silk Road Buddhism and Nestorian Christianity as well as Islam in the Malay world.

Norms, by positively or negatively constraining and motivating, are ways for ideas to have great social power. In particular, norms + cognitive abstraction permit generalised notions of status, setting up shared expectations. But status hierarchies can also block various forms of cooperation, as well as discouraging or blocking innovation. The more generalised notions of common status are, the greater the ambit of possible social cooperation and innovation. Shifts from highly hierarchical structures of status to much more generalised notions of status can be expected to have very positive effects on (pdf) social cooperation and innovation. Conversely, shifts in the other direction can be expected to have negative effects on both.

The ability to internalise norms which constrain anti-cooperative, and enjoin cooperative, behaviour is not some incidental side benefit of expanded cognition. It is a fundamental part of the evolutionary process which led to the evolution of (greatly) expanded cognitive capacities. Hence language, face recognition, character reading, agreement, bonding beyond kin: the evolved cognitive consequences that make homo sapiens distinctive in so many ways. Hence homo sapiens having a normative sense.

Normative variation
Though not necessarily universally so having, or to the same intensity. The genetic dice are always being thrown, and patterns of variations in underlying normative tendencies can nevertheless be sufficiently stable to persist. Different cultural and institutional contexts can also have quite different outcomes. For example, given a population of knaves (non-cooperators), saints (always cooperate) and moralists (cooperate but punish non-cooperators), blocking the capacity (pdf) to punish has strong negative effects (pdf) on cooperation as moralists withdraw in the face of unpunished free-riding. Add in churls (those who punish "excessive" cooperators) and, even with the ability to punish, the introduction of such anti-social punishment means that social cooperation plateaus. Social cooperation can clearly achieve stable social equilibria, but there is no reason to presume that such equilibria cannot be maladaptive or exclusionary (i.e. not universal): indeed, the historical records shows both are eminently possible.

Internalised norms, in order to have any effect, have a trumping capacity; that is, they override narrow self-interest: often by simply removing options from consideration. Since that creates the danger of easier exploitation by the normatively challenged, the failure of always-cooperate to become the universal normative posture is not surprising. But it also means that norms have to operate, at least to some extent, as ends-in-themselves, otherwise they are going to fall to "trump" other motives and considerations; they will fail to constrain behaviour in the required ways. It is therefore not surprising that norm fulfilment has the capacity to activate reward centres in the brain.

I have resisted calling this morality and a moral sense because it is quite obvious that homo sapiens can accept a wide range of norms, some of which can lead to dramatically immoral actions. In-group and out-group divisions are, after all, normative.

But, to the extent that we are considering morality and moral commitment, it has been what we might call everyday morality--don't kill, steal, cheat, etc. What we could also call decency. Not what a Victorian lady might call "decency", since that had a set of taboos embedded in it that led to treating certain vulnerable groups very badly. Just a commitment to a level of other-regarding constrained and enjoined behaviour towards people in general. This is the morality which is necessary to have any sizeable social order at all.

Generalised, such everyday framing of normative constraints can have a strong utilitarian feel to it. It is not big-U Utilitarianism, as it does not try to reduce morality to a single trumping principle. But, in its other-regarding what-do-folk-want? positively constraining practicality, it can seem very utilitarian.

We could speak of everyday norms as a more general concept extending to patterns of civility or courtesy. But systems of courtesy are a bit more like road rules--highly convenient social lubricants but whose actual content is somewhat path dependent and can be used to signal group membership. As for everyday morality, C S Lewis made a notable attempt to identify common elements across a wide range of ethical traditions. While the work of moral psychologist Jonathan Haidt and colleagues has attempted to map, via moral foundations theory, basic elements in human moral reasoning. (The current nominations are care, fairness, liberty, loyalty, authority, and purity.)

Normative exclusion
Everyday morality is also a form of morality that people can be, to a greater or lesser extent, excluded from (as they can also be excluded from courtesy). Which is to say, normatively excluded from. One does not understand bigotry (in the sense of moral exclusion) unless one understands it is always and everywhere a moral (or, at least, normative) claim. It is a claim about standing within the moral/normative order; about what behaviour is, or is not, constrained or enjoined towards members of the excluded group. It is always and everywhere a normative status claim. It arises, not from a lack of "morality", a lack of normative concern but, in a sense, from an excess of it.

In other words, in arguments over moral exclusion, both those for and against a particular moral exclusion think the other side is betraying basic norms, is supporting immorality.

At its most extreme, moral exclusion casts the so-designated entirely outside the circle of moral protections. Alternatively, they might have a narrowed realm of protected action, movement outside of which then strips them of moral protection. They might simply have a lower level of moral protection than others. Whatever the specific pattern, such moral exclusion remains a normative claim, a claim about standing within the moral order. A claim which is, moreover, specific to the excluded group or groups, not a generalised penalty or constraint applying to everyone.

Though such exclusion can sometimes parade itself as a generalised injunction. Sexual taboos in particular can have this form. Injunctions against same-sex activity, for example, looks general but, in fact, it impose wildly divergent penalties--imposing no direct cost on the only-opposite-sex attracted majority but huge costs on the same-sex-attracted minority. (Pretending that sexual attraction is chosen is, of course, a way to evade the huge difference in normative burden.)

Moral exclusions can derive from two origins. One is simply a view that normative (including moral) constraints are based on connection--they apply to kin and tribe and otherwise to those with some personal connection but either not at all, or far less, to outsiders. We can call this limited or narrow morality (pdf). Such exclusion is more a strategy of failure to include rather than one of deliberate and specific exclusion. Tribal and strongly clannish peoples tend to have this type of normative strategy. Confucianism is a philosophically sophisticated version of this normative strategy. A particularly restrictive (even pathological) version of the normative strategy was famously described as amoral familism, though whether it was an accurate social diagnosis is doubtful (pdf).

Alternatively, groups can be actively excluded from normative protections that would otherwise cover them by a process of stigmatisation. Unlike failure to include, such active exclusion requires justification, as it is withdrawing what would otherwise operate. More specifically, it requires stigmatising justification. The more complete the exclusion, the more intense the stigmatising justification required, as the more intensive is the taking-away.

Righteous grandeur
Such deliberate exclusion requires a normative override of everyday norms by something normatively trumping, something with grander normative status. Such an over-arching normative framing we can call grand morality or righteousness.

Grand morality/righteousness is a normative framing that claims some grand, over-arching purpose and status: obedience to God, providing the path to salvation, freeing society from exploitation, or whatever. It can be religious or secular, but regardless of its grounding, such a normative framing claims the right to limit, or otherwise trump, the constraints of everyday morality. Such trumping can, and often does, extend to stigmatising particular groups with various levels of moral exclusion.

The basis for such grand morality, such righteousness, can be as simple as "God says". It can be done on the basis of defining the "properly human" in ways which explicitly or implicitly excludes groups of humans--for example, definitions of "human flourishing" which exclude the same-sex attracted. It can be done on the basis of theories of what is required for social order. Or on the basis of what is required for a morally trumping conception of social order. Or postulating some inherent malice in the stigmatised group. Or some combination thereof.

Whatever the justification, such exclusion uses the trumping nature of morality to trump morality--to expand the cognitive reach of morality in purposeful claims but, in so doing, open up the possibility of dispensing with the constraints of everyday morality. A classic example of grand morality/righteousness trumping everyday morality/decency is found in Deuteronomy 13:6-11:
If your very own brother, or your son or daughter, or the wife you love, or your closest friend secretly entices you, saying, “Let us go and worship other gods” (gods that neither you nor your ancestors have known,  gods of the peoples around you, whether near or far, from one end of the land to the other),  do not yield to them or listen to them. Show them no pity. Do not spare them or shield them.  You must certainly put them to death. Your hand must be the first in putting them to death, and then the hands of all the people. Stone them to death, because they tried to turn you away from the Lord your God, who brought you out of Egypt, out of the land of slavery. Then all Israel will hear and be afraid, and no one among you will do such an evil thing again.
But human history is replete with examples, both religious and secular. Leninism, for example, is a giant exercise in grand morality trumping everyday morality. The Enlightenment, in generating streams of secular grand moralities, did not abolish righteousness, it merely secularised it.

Normative grandeur
It is not surprising that grand morality developed. It marries the ability to abstract, generalise and theorise which goes with expanded cognitive capacities with the normative sense.

Ever since philosopher Karl Jaspers proposed the concept, the Axial Age has been seen as a period of increased sophistication of abstract thought and perspectives. The period saw an upward shift in size of empires (pdf), likely due to the development of disciplined iron-weapon infantry and militarised mounted warfare in the steppes, encouraging more juxtaposition of cultures, and so perspectives. The era saw the development of coinage, which tended to disrupt old social hierarchies and create more fluid social interactions while creating a token-content distinction. Increased trade encouraged more specialisation and more urbanisation, which further encouraged juxtaposition of perspectives and created critical masses of thinkers.

In China, intense inter-state conflict, culminating in the Qin unification, encouraged abstract thought about social order--most famously Confucianism and Legalism. In India, the development of new religious perspectives encouraged abstract thought about cosmic order. In the Greek world, the development of heavy infantry city-states in Greece encouraged the development of that form of social bargaining known as citizenship, which encouraged attention to public persuasion and generated a wider range of political forms, encouraging abstract analysis.

But elements of grand morality are rather older than that. The cosmic-good-versus-cosmic-evil perspective dates back to Zoroaster, who likely lived around 1500BC, which would put him well before the Axial Age. But even older than that, we can see order-versus-chaos perspectives, such as in the Egyptian concept of Maat. With farming societies being susceptible to drought, flood, disease, etc, it is not hard to see how an order-versus-chaos perspective would make sense and frame folks' hopes and fears.

Hierarchical grandeur
So, more complex social orders are likely to generate systems of grand morality. Particularly as, once one gets hierarchical societies, stories of justification are required--since hierarchies are normative. The constraints of hierarchy have to be internalised to have any strength or stability, so social stratification builds on the normative sense.

Note that being internalised does not require belief, in the sense of cognitive commitment, merely that they be routinised; that folk know what is expected and routinely act upon that expectation. Attempts to turn legitimacy into a descriptive characteristic typically claim too much, turning legitimacy into the analytical equivalent of phlogiston--how do we know a structure of power was regarded as legitimate? People obeyed it. How do we know that people stopped regarding it as legitimate? People stopped obeying it. Nevertheless, that justificatory stories are told in an attempt to get cognitive commitment illustrates the importance of the normative sense in socially-embedded behaviour.

One of the signs of increased social ranking is the switch from egalitarian ritual houses to hierarchical temples. And an effective ource of social power and status is to be a gatekeeper of righteousness; someone who specifies what is required by the shared normative order and who is excluded from the same, why and to what degree. A role priests and clerics have taken down the ages and which secular clerisies have also adopted. A Soviet commissar was a gatekeeper of righteousness every bit as much as a Catholic priest, a rabbi or an iman. In the contemporary world, democracies can also throw up bodies that act as would-be gatekeeper's of righteousness.

Mainstream Islam, by positing a huge moral gulf between believer and unbeliever, is a limited morality with universalist claims. The believer/unbeliever gulf profoundly limits its doctrinal commitment to everyday morality and sells a powerful status claim exulting believers while its complex, revelation-grounded, rules and taboos undermine ordinary moral judgement and reinforce the normative believer/unbeliever gap. Sharia, as the laws of God, sovereign of the universe, make Islamic religious scholars, through the process of fiqh, pervasively gatekeepers of righteousness. Whether mainstream Islam can shed the patriarchal misogyny, the queer- and Jew-hatred, the disdain for the religious "other", the social imperialism which is so built into its traditional structure is precisely what so many people are currently killing, and being killed, over.

Christianity is grand morality via love God, but everyday-morality-on-steroids in its love thy neighbour as thy self. Hence the development of asterisk Christianity: love thy neighbour as thyself except *(Jews, queers, heretics, ... )--add in excluded group as required, as has been perennially done by Christian gatekeepers of righteousness selling believer-virtue.

Normative overkill
The profound difference between everyday morality and righteousness is why adding more morality can be the opposite of a solution to social ills: the greatest crimes in the modern age have been from an excess of moral fervour, not the lack of it. It is far from silly to write of, for example, The Nazi Conscience. The Armenian genocide, the Greek-Pontic and Assyrian genocides were all built on Islamic teachings turning religious difference into a profound normative distinction. While the democides of Leninism were perpetuated by self-identified Left regimes who engaged in mass murdering tyranny in the name of a world-historically grand normative framing. They mass murdered, oppressed and tyrannised not because of a lack of moral purpose and commitment, but because of a grand-morality-trumping-everyday-morality excess of it. Indeed, the denial and excuse-making, the apologetics that occurred about the actions of such regimes within Left-circles in the West were precisely because of the shared commitment to a system of secular righteousness. A pattern which lives on with the memory-hole treatment of that bleak history within large sections of contemporary academe.


Morally deformed individuals dispense with the requirements of everyday morality if it is personally convenient for them to do so. But how do we systematically dispense with the constraints of everyday morality? By trumping it with grand morality. Bigotry is indeed a deforming of everyday morality, but it is invariably based on some sort of grand morality.

So, the grander the moral project, the more everyday morality is likely to be sacrificed in its name.
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In the realm of grand morality, of righteousness, one can play a game of normative one-upmanship--our moral project is so much grander than yours. With all the implicit, or explicit, status claim that goes with that. Worse, by exulting righteousness as an all-trumping concern tied to moral status, an upward bidding process can be set in motion whereby each upward righteousness cycle dispenses with another layer of everyday morality. There can also be self-reinforcing networks of righteousness.

Minorities are easy targets for gatekeepers of righteousness, operating either as authority-holders or networks. Sexual and gender minorities particularly, as they are born as isolated individuals in overwhelmingly straight families and social milieus and the differences involved lend themselves so readily to normatively differentiating rules of righteousness that look general but in fact impose massively uneven burdens--effortless virtue for the straight majority, intense burdens on the queer minority. But religious minorities, particular occupations, ethnic minorities, belief minorities--they have all proved easy targets for gatekeepers of righteousness.

Normatively knowing
Being a gatekeeper of righteousness uses a certain form of human capital--education in the system normative framing used. And certain forms of social capital--setting the requirements and policing the membership of social networks.

Possessors of human capital have a long history of seeing themselves as the purveyors of virtue. They may even present (to themselves above all) as the purveyors of "sweetness and light" (capital). In fact, they are possessors of we-know capital, which easily becomes we-know-better-than-you capital, which easily becomes we-are-so-more-knowingly-virtuous-than-you capital. There is nothing more grand, after all, than knowing the "proper" ordering of society and the "proper" direction of history. It is particularly grand if it involves wholesale reconstruction of what currently exists.

By contrast, commerce generates no inherent tendency to care about grand morality, but operates in the realm of everyday morality. (Despite perennial claims to the contrary, market integration is actually generally a moral positive, fostering social cooperation.) Even the charity commerce finances is typically everyday morality writ somewhat larger.

Alas, commerce's indifference is, in many ways, the worst possible insult to the proponents of self-evidently-so-important grand morality. While the dynamism of commerce threatens the inherently static nature of Virtue orders (with none being more static than income equality). Hence the millennia long disdain by "virtuous" intellectuals for "grubby" commerce.

Grounding purpose
But it is not only a delusion that adding morality is automatically a social positive, though a very useful delusion for status-building and seizing social power. There is a more basic problem--norms may have to operate as ends-in-themselves but they are not as fundamental as they present.

The point of the normative sense is to permit social cooperation in an expanded social order. Morality is not the most important thing in the world: having something to be moral about is more important.

Yes, morality is necessary to have a social order of any size or complexity—but everyday morality (don't kill, steal, assault, etc). Grand morality (or righteousness) is often about over-riding everyday morality. In claiming to fulfil the "true" normative purpose, it often damages, limits or abolishes normative protections. In its trumping of ends, it corrupts means.

The core of morality is not about purposes, not even grand purposes, but about constraining the means we use to achieve whatever purposes we have. For our ends may never be achieved but the means we choose affect others very directly. Hence the problem with grand morality—it uses its trumping grand purpose to justifying brushing aside normative constraints: it subverts the core of morality in the name of morality.  As C S Lewis noted:
Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.
No, adding more morality is not an automatic social gain. Indeed, it can be very much a matter of grave harm and profound social loss.


[Cross posted at Skepticlawyer.]

Saturday, January 9, 2016

Against Austrian business cycle theory

Former Austrian school economist Bryan Caplan recently won a bet against Austrian school economist Bob Murphy on the path of US inflation. Caplan won by betting with the key market indicator (TIPS), Murphy lost by betting against it.

At first glance, that the ex-Austrian won by following the market while the Austrian lost by not doing so might seem strange, but it instances why I am deeply unpersuaded by Austrian Business Cycle theory--that it is an analysis from a tradition that very strongly favours taking markets seriously (particularly their information revealing qualities) yet strikingly stops doing so to get a congenial theoretical outcome.

Austrian Business Cycle Theory (ABCT) is a theory of the unsustainable boom. It notes that capital is highly varied (or, economist say, is heterogeneous)--in particular, has a range of durations until completion. Interest rates coordinate current expenditure versus future income expectations.

If the central bank, in order to foster economic expansion, sets the key interest rate "too low"--that is, below the level that will create a stable level of successful capital projects--then entrepreneurs are led to over-invest in projects because capital is cheaper than its actual long-term prospects justify. So, there is misallocation of capital--the profile of created capital does not fit actual expenditure patterns. This is what Austrian theory calls malinvestment. The result is a surge in failed business projects, consequently of failed or distressed firms, leading to income and expenditure cuts, leading to that transactions crash we call "recession" or, if sufficiently severe, depression.

My objections to the theory are twofold: it doesn't fit the evidence and it is implausible even in theory.

Not fitting the evidence

The theory suggests that the long-term economic pattern should be one of a surge in economic output above trend (the unsustainable boom) and then a crash below it. This is not the pattern we see: on the contrary, what we see conforms much more to Milton Friedman's "plucking model" (pdf)--that is, there is a long term growth trend that recessions and depressions "pluck" the economy away from (pdf). A pattern which suggests the economy is pushed (temporarily) off its growth path by various shocks. Despite attempts to claim otherwise, I am unpersuaded that ABCT can be re-construed to fit the evidence.

Particularly as the theory also suggests that the crash should be correlated with the preceding boom--the further the capital overshoot, the worse the resulting crash. Again, this is not what we see (pdf). Recessions and depressions are not correlated with the preceding expansions, but are correlated with the subsequent expansions (pdf).  A result which led Friedman to propose his "plucking model". Again, this conforms far better with the economy being shocked off its growth path before returning to it.

Given that industries systematically vary by both the scale and duration of their capital creation, the theory also implies that the crash should hit in sequence and to varying degrees--the shortest capital duration industries hit first, the longest capital duration industries hit later; the lower scale capital industries hit least, the bigger scale capital industries hit most. These factors are, to a significant extent, contra-indicated--i.e. short duration capital projects also tend to be low scale capital industries while long duration capital projects tend to be high scale capital industries.

Even so, there should a capital-profile sequence to industry downturns. Again, this is not what we see: transaction crashes tend to hit all industries simultaneously. Such transaction crashes are most plausible assigned to the demand side (i.e. monetary factors) as, in a monetised economy, money is the thing which is one half of all transactions in all industries. Even when there are supply shocks, (1) monetary policy can counter-balance the effects and (2) such shocks are generally a specific shock to the economy, not rolling capital project failures.

One might counter by arguing that particular projects are engaged in a rolling fashion. But that reduces the industry sequencing issue at the cost of undermining the systematic distortion effect.

The theory also assumes that central banks are biased in one direction only--in an inflationary one. Yet the historical record shows that, while there is certainly a general inflationary trend for fiat money, there was no such trend by central banks under gold standards. And ABCT was originally devised in a gold standard world. Attempts to redefine "inflation" to mean "monetary/credit expansion" simply beg the question--an alleged cause being conflated into the presumed effect.

Moreover, the historical record also shows that, in the right circumstances, central banks can be biased in a contractionary direction. This was most dramatically true in 1928-32 but also true from 2008 onwards: on both occasions, the contractionary bias was because central banks prioritised policy credibility (commitment to the gold standard; commitment to low inflation) over economic activity. In doing so, contractionary central banks created the most severe economic downturns of the C20th[last 100 years]. A business cycle theory that is so dramatically wrong about the two worst economic downturns of the C20th[last 100 years]--central bank policy in the opposite direction as predicted and economies consequently being shocked off their growth path--is not much of a business cycle theory.

Implausible in theory

So, there are severe evidentiary problems with the theory as any sort of general business cycle explanation. Even saying "but it is just a theory of the unsustainable boom" suffers from the lack of instances it accurately describes.

There are also some serious theoretical problem with the theory. The first is, ironically, not taking heterogeneity of capital seriously enough. Heterogeneity of labour and of capital leads to heterogeneity of debt and debt/equity profiles. How can there be a key single, natural or otherwise, rate which can distort the entire structure of investment?  Including across its varying time frames, across which interest rates also vary.

What we are looking at is a schedule of interest rates varying by time and asset. It can be argued that the central bank policy rate (the interest rate used to signal policy) effectively anchors the entire schedule, as the central bank is the monopoly supplier of the monetary base. Its policy rate is really an indicator about the future path of monetary policy, and an indicator which is a function of it being said monopoly supplier and its policy credibility. But an indicator which has far more direct effects on nominal interest rates rather than real interest rates.

But to put so much emphasis on interest rates in investment decisions looks perilously like reasoning from a price change. The central bank has signalled, by cutting its policy interest rate, a more expansive path in monetary policy. But that is, for the economy, a general tendency: entrepreneurs still have to make assessments about particular assets and particular production decisions. As the localised nature of the housing market booms and busts in the US have demonstrated, housing markets experiencing the very same monetary policy can have very different dynamics.

The claim that entrepreneurs will be sufficiently homogeneous in their responses, across very heterogeneous asset and production markets, to create the bust looks suspiciously like only embracing complexity when it is convenient. (Noting that to claim more decisions to invest will be made is not the same as claiming that the structure of production will be distorted.)

More seriously, the claim runs into an information problem--as others have noted, Austrian theory apparently has access to information than none of the market participants do. The central bank knows enough to inflate the economy but none of the market participants have the knowledge to work out what the central bank is doing and the consequences thereof. There is a serious consistent expectations (i.e. rational expectations, but consistent expectations is a more accurate term) problem here.

In his (losing) bet with Bryan Caplan, Bob Murphy was being very "Austrian" in assuming his theory gave him information hidden from market participants--Austrian theory really, really believing in markets until it suddenly really, really doesn't. Bryan Caplan was being much more consistent (dare one say rationally consistent) in his expectations by going with the market indicator.

What is more plausible--that there is enormously-important-for-future-income information lying around being ignored by everyone except by clever Austrian school folk or that economies are shocked off their growth path: an economic shock being an unanticipated change?

Austrian school, meet the Australian economy
These theoretical and empirical problems come together in the record expansion of the Australian economy since 1991. That is, Australia has not had an economic recession (in the sense of two quarters of [negative] economic growth) since 1991. It still has a business cycle, just a very flat one.

What is more plausible--that the Reserve Bank of Australia (RBA) got its policy interest rate essentially correct for 23 years straight, so that Australian entrepreneurs got their capital projects (on balance) continually right? Or that the RBA sufficiently anchored inflation and income expectations that the Australian economy has not been shocked enough off its growth path since RBA introduced its policy of aiming for a 2-3%pa inflation rate on average over the business cycle ?

Surely, the second option is much more plausible.

So, I do not agree with the Austrian School business cycle theory. In particular, I am very unsurprised that an Austrian economist lost by betting against the key market indicator. The Austrian Business Cycle theory presumes special knowledge against market agents and the indicators they generate: a presumption which is not a strength. Still less a reason to accept the theory.


[Cross-posted at Skepticlawyer.]

Tuesday, January 5, 2016

Most Muslims are non-violent

It is true: most Muslims are non-violent (in the straightforward sense that, outside defence of themselves and their immediate family, they do not engage in violence). In fact, as far as I am aware, that has true across the history of Islam, especially as Muslims includes women and children. But even if we just consider men, most Muslim men are non-violent. Again, as far as I am aware, that has also been true across the history of Islam (apart from its earliest years).

It is also irrelevant. Sadly, across the breadth of human societies through time, it is the violent who have been wildly disproportionately important in determining the trends and patterns of human history. So, with Islamic history, the key issues have far less to do with what connection it has to the non-violent majority, but what sort of connection it has to the direction, forms and patterns of violence (and violence-laden aggression) among any violent minority.

There the news is less good. We can observe among the Muslim minority (pdf) in France--including those born and raised in France, and given a secular state education--the same patterns of persecution of minority kafir as we do in Muslim majority countries.

Recurring patterns
What is striking about Islamic history is how powerful the recurring patterns are. While we currently observe violent movements claiming to purify Islam and return it to its original vision, such started not long after the death of Mohammad, with the Khwarij, and continued in medieval Islam, with the Almoravids and Almohads being perhaps the most notable examples.

In modern times, the Mahdiyya movement in Sudan, the Wahhabis of Arabia, the Deobandi of South Asia and the Salafist movements are all examples of this reformist (in the sense of returning to the origin and getting rid of later accretions) urge in Islam.  So is the Islamist movement, though it has a modernising element in its operational techniques while overlapping greatly with the aforementioned movements. Though Salafism in particular has a strong quietist stream, violent revivalism has been a notable feature of these movements.

Proselytising violence by non-state actors also has a long history in Islam, though the successful examples usually turn themselves into states. The Assassins are a colourful example of the non-state version, while the Almoravids, Almohads, Safavids, Mahdists and Wahhabis are examples of non-state actors founding states. Thus both Al-Qaeda and the Islamic State have plenty of precedents in Islamic history. That Sharia is not state-based law, but is the law of Allah, the sovereign of the universe, aids and encourages the operation of non-state actors while providing the means for relatively easy evolution into states.

Modernisers and traditionalists
Just as the reformist urge is a recurring pattern within Islam, so is the modernising urge--seeking to incorporate within Islam useful thinking by non-Muslims. Again, this was an early manifestation in Islam, notably with the Mu'tazila movement.

The pattern so far in Islamic history is clear--the modernisers lose. Accepting the technology of the infidel is acceptable (with some resistance: the Ottoman Empire's reaction to the printing press was to ban it for believers and then license a single printing press during the C18th), but not much more than that. Seriously new thinking in Islam has tended to either give rise to minorities regarded as dubiously Muslim by the majority (e.g. Ismailis, Ahmadis, Alawites, Alevis) or to movement out of Islam (Druze, Bahai).

Which leaves traditional Islam as the dominant stream--the Islam inherited from one generation to another, taking on local accretions on the way through. A stream that nevertheless produces reformist and modernising outbreaks.

Migration to the West tends to disrupt traditional Islam by taking it out of its traditional cultural context and constraints, leaving members of Muslim communities open to the reformist or modernising urges. Unfortunately, the reformist urge has billions of Saudi petrodollars behind it. It also has the appeal of the heroic sacrifice of jihadism--to which the Islamic State has managed to add psychopathic sex-tourism (pdf).

Built for imperialism
That the adherents of traditional Islam are relatively passive and non-violent is far from meaning that mainstream Islam is unproblematic.

Generally speaking, imperialism is what states do. States are mechanisms for dominance and expropriation and tend to expand that dominance and expropriation up to when some constraint sets in (either a rival state or the benefit/cost ratio is not worth it). Latin-Christendom-cum-Western civilisation became so successfully imperialist because it evolved extremely effective states. So much more effective than anyone else's states that they came to dominate most of the planet.

Conquests under Muhammad, the early Caliphs and the Umayyad Caliphs.
Of the existing human civilisations, only one is actually structured for imperialism, and that is Islam, and it was so structured from its calendrical origins, Mohammad's flight to (and then taking control of) Medina. It is not some weird accident, some historical absent-mindedness, that Muhammad's companions, and the Umayyad and Abbasid caliphates that followed them, presided over the largest surge in religious conquest in history. Nor was it some weird accident that, over a thousand years after the Mohammad's death, the largest Muslim state was still trying to advance into the heart of Europe using religious justifications and structures that had been used, in various forms, to aggress against every culture Islam came up against during those thousand years.

From 634 to 1683, the level and scale of Muslim aggression against Christendom hugely outweighed the reverse. Christian offensive efforts were counter-aggression, attempts to regain lands previously lost to Islam; the ultimately failed Crusades--or, as Muslim writers called them, the Franj wars--and the successful Reconquista.

Muslim aggression against Zoroastrian, Buddhist and Brahmin lands also hugely outweighed the reverse. Nor did Islam stop aggressing because of some change in basic ideas: it came up against the better predators the European targets of its aggression had evolved into while itself failing to adapt successfully to the increasing competition.

The features which structured Islam to aggression are:
  1. The concept of Sharia as the law of the Sovereign of the universe, to which everyone is rightfully subject to and to whose rule everyone should rightfully submit to.
  2. The centrality of the acceptance of the revelations of Mohammad to one's moral status: in particular, that those who accept said revelations should rightfully rule those who do not, could rightfully fight to impose such rule and, in the interim, raid and enslave non-believers in lands that had not yet accepted Sharia rule. Hence the classic Islamic concept of martyrdom was do die in battle against unbelievers.
  3. The endorsement of both polygyny (creating a wife shortage among low status male believers) and sex slavery (sanctifying the normal response to [pdf] polygyny--raiding of outgroups and seizing their women).
In other words, Islam created an encompassing moral-and-religious identity that could unite people across lineages (and later, after the Abbasid Revolution, ethnic groups) while sanctifying and motivating violence, particularly proselytising violence, against those outside the identity, or its rule. The separateness of this identity can be readily extended to admonitions that believers should not be friends with non-believers and strong resistance to taking the side of a non-believer against a believer.

Zealots past and present
It is worth noting that Muslim clerics have few incentives to soften the package. They have interests in having the moral and social authority of being gatekeepers of righteousness. Restricting the moral realm to revelation that they have the knowledge of, and skill in interpreting, and emphasising the difference between believers and non-believers, increases the salience of their role as gatekeepers of righteousness.

We have been here before. The Hebrews were very unrestful subjects for the Roman Empire. Violent minorities therefrom would be periodically homicidally enraged that following God's law was subject to the constraints imposed by mere human law. Particularly the law of the pagan Romans, who tolerated all sorts of gender and sexual identities. The sicarii sub-group stabbed Romans and Roman sympathisers. Much of the violence of the said homicidally enraged fell on fellow Hebrews.

What we now think of as Judaism is essentially the rabbinical, the religious scholars', response to the dilemma of Roman rule--the dilemma being that they could not successfully revolt but, if they did not find a way of adjusting the deemed authority of God's law, the Romans were going to destroy them as a people. The Roman response to revolt being severe--massacres, enslavings, deportations, salutary crucifixions.

The rabbis were building on the experience of living in Mesopotamia, and in Alexandria (their largest urban community), as minorities in foreign lands. On the way through, they caveated into oblivion the Mosaic Law's penchant for capital punishment.

But the effect was to squeeze out--via external Roman slaughter and internal doctrinal adjustment--the homicidal opposition to human law (even non-believer human law) trumping God's law.

The same underlying dynamic of permanent minority status drives much of the difference between mainstream Islam and the various Muslim minorities--the latter have adjusted to permanent minority status and its implications. Conversely, the mainstream have had few reasons to make similar adjustments which are sufficiently persuasive across the entire body of scholars. Considering what it took to squeeze out the violent tendency in Hebrew religious conceptions, the prospects for an end to religious violence emanating from within Islam are not good. Especially not when organised and violent religious fervour can demonstrably create (Saudi Arabia, Islamic State) or seize (Islamic Republic of Iran) states.

Christianity has its own history of religious strife. But Christianity always accepted the validity of human law, did not take revelation to be the entire moral realm, generally accepted the world as the direction creation of God so trumping Scripture (the indirect creation of God). This allowed social bargaining to become entrenched in political institutions. Reaction against the slaughter and destruction of the religious wars could also lever off appeals to classical ideas, the impact of the Scientific Revolution and the expanded horizons of the Age of Discovery to make religious identity increasingly less salient, and other aspects of identity more so.

It was only the overwhelming success of the West which allowed broad notions of social bargaining to get anywhere in Islam (though Western imperial interests also intervened to periodically sabotage or undermine the same). But even with wide acceptance of the value of democracy by Muslims, Middle Eastern Islam in particular has great difficulties taking a broad view of who to bargain with. The continuing pattern being that, if one's ethno-religious group does not control the state, then you are oppressed. 

It just does not get us very far
The point is not that any given person of Muslim heritage endorses this whole package, or even that most do. The logic of belief is not necessarily the logic of any given believer.

The point is that Islamic identity is not one without content. Nor is it one with only congenial content. And the outlooks and ideas deeply embedded in Islam perennially motivate separation between believers and non-believers and aggression against non-believers. The contemporary foreign fighters people angst about are just ghazis with aeroplane tickets, and Islam has been producing ghazis regularly for its entire history.

So yes, most Muslims are non-violent. That is true, and beside the point.

What is much more to the point is that the experience of European countries, such as France (pdf), shows that the problematic patterns within Islam kick in at remarkably low proportions of the population--more than 2%, less than 10%. In that range, the combination of problematic ideas deeply embedded in Islam, plus the development of a motivated minority of sufficient size, generates problems for the host society folk would prefer not to have to deal with. Particularly for such vulnerable minorities as Jews and queer* folk. Islamic supremacism is deeply embedded.

There are problems which are simply specific to Muslim migration because Islam really is a distinctive civilisation, with distinctive presumptions and patterns.

So, it is not inherently irrational or prejudiced to be concerned about the level and scale of Muslim migration. Such concerns can be well-grounded in the content, history and contemporary experience of Islam.


* I really dislike the inelegance and elasticity of the GLBTI acronym, hence using queer.

[Cross-posted at Skepticlawyer.]