Questioning the Methodology of Data: Inductive vs. Deductive; Economics vs. Natural Science

“Correlation does not necessarily mean causation”,

a saying that is often mentioned in the world of academia- denotes the rational school of thinking. Empirical/inductive reasoning takes correlations and makes conclusions/evaluations from them; this process often conflicts with the statement above. Deductive/rational reasoning is one that uses premises to reach a logical conclusion.

The rationalist philosophy can be easily represented mathematically. Say we want to find some correlation between X and Y (this could be anything e.g. the temperature and the seasons, the number of people in a city and the amount of traffic in the city, the force of gravity and its distance, etc) through inductive reasoning. So first we must gather data.
Data of X and Y

From the data we have, we can make an infinite amount of conclusions/correlations. The following three functions are an example of what conclusions could be made.

Infinite Conclusions

In reality, however, these data points are prone to error. Often in statistics, we include error bars to represent the margins of error. This allows us to justify approximations. When doing approximations, however, one must make a judgment on whether the function will be sinusoidal, linear, exponential, quadratic, etc. Which still leaves us with an infinite number of options. Here are two examples of such approximations:

Approximations

Thus any correlations made in any set of data points is hard to justify. Simple statements about proportionality or inverse proportionality cannot be justified by inductive means. True justification would require a infinite amount of data points (where each point is “touching” the next). Thus it is the rationalist view that inductive means are not as reliable.

It is a common misconception that social sciences are always less accurate than the natural sciences. I argue so because even physics is the prey of inductive reasoning. The values of all universal constants [vacuum permittivity (epsilon zero), the gravitational constant, planck’s constant, etc] are the results of inductive conclusions. The proportionality between
voltage and current (Ohm’s law: V=IR) is a result data.
VC_wire

Deductive thinking is probably most prevalent not in the natural sciences but in economics. There are, without a doubt, branches of economics that bases itself on inductive reasoning such as econometrics. The branches of economics based on deductive reasoning (the Ricardian vice), however, hold a distinctive advantage over the natural science; that being the ability to define its own premises. The natural science must rely on inductive reasoning because we are trying to understand something that can only be observed. Economics however is an analysis of the economy- our creation. Thus it is easier to understand how money works because money is what we define it to be. Thus economics can be rational from top to bottom as opposed to the sciences which will always rely on an inductive premise. Thus the view that expresses a contempt for economics as a valid science is in my opinion somewhat skewed and should be reconsidered.

I would also like to add that any means of acquiring knowledge through an inductive method is as valid as the natural sciences. The Global Consciousness Project (GCP), which compares the data between physical and conscious systems, is just as valid (in the sense of empiricism) despite the popular pseudo-science label that it has aquired. It finds correlations between different sets of data and makes conclusions; they conclude that the conscious can affect the physical. It may not necessarily be true or accurate, but the natural sciences are prone to the same error as they rely on the same methodology.

“Correlation does not necessarily mean causation”.

-Kai Matsuda

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The Freedoms of Market Socialism

Living in America, the Conservative accusation that progressive policies impede their freedom is commonly heard within the political sphere. Conservatives are typically in favor of deregulating the government and reducing its presence from their daily lives, the assumption being that structural regulations are inherently coercive and restricting. However, I argue that progressive policies provide more freedom, while neoliberal policies indirectly create coercive forces that impede our entitled freedoms. To clarify, I am specifically supporting policies found within a strong welfare state (safety nets, unemployment benefits, universal health care, high taxation, etc.) over neoliberal policies of unregulated competition. Also keep in mind that this is an argument more concerned with the theoretical and ethical implications of each system to our freedom, not one about the superiority of each economic model in terms of its efficiency or other social problems found within neoliberalism, both of which will be left for another day.

 The neoliberal doctrine of laissez-faire is arguably rooted in the legacy of the Protestant Work Ethic. This idea, coined by Max Weber, claims that success is an indicator of both hard work and moral superiority. Thus, the rich are rich because God has deemed them worthy through their hard work, while the poor are poor because they are immoral and lazy. While I doubt many people still believe in the theological basis of the Protestant Ethic, its underlying premises are still the foundations of neoliberalism. That is, the idea that hard work alone can overcome environmental and genetic barriers and that failure to work hard will condemn you to poverty. And since your poverty is your fault, the prosperous don’t have a duty to help you. In fact, providing social support will harm the poor, for it removes the incentive to work hard.

 The restricting component of this system is its championing of hard work over leisure; it forces people to perpetually work for some infinite higher end instead of taking time to appreciate the present. However, if someone wishes to pursue more leisure activities, they are punished by the system, either by their employers or by other competitors. This is why in the US, employees get comparatively fewer vacation days, and even if they have some, many choose not to use all of them in fear of being punished (http://abcnews.go.com/Travel/americans-refuse-vacation-days-lag-rest-world/story?id=11361600#.UN30wW-Cm6M).

 The argument supporting this model would be something along the lines of letting people choose how much value they place in the rewards. That is, if someone wants to work 12 hours a day for 10$ an hour, that is their choice. If more people do that, then the wage will reduce due to higher demand, but again it is people’s choice to continue working for a lower pay. The inherent flaw in this logic is it that it assumes that people are completely free-acting agents, when in fact many people are forced to work these long hours for low pay. For example, if many people choose to pursue leisure for a while, those who remain in the game can build up a monopoly and prevent those who took a break from reentering. Perhaps this is “fair” for those who remained in the game, but using a societal perspective, it is harmful. Therefore, due to the risk of being marginalized, people are afraid to take a break, which essentially raises competition further and further until it becomes destructive, both to themselves and to the environment In a sense, it is the Prisoner’s Dilemma: everyone can coordinate work hours and job demand so that everyone makes a good standard of living with long leisure time, but instead they all defect.

 The neoliberal model seems to advocate a mechanized version of humanity, in which we should optimize our productivity in order to gain monetary rewards. This is dehumanizing, for being human is more than being self-interested individuals (thank you Ayn Rand…), but it is also about being part of the broad society that is called humanity; it is about more than just satisfying our material wants, but about satisfying our humanistic wants as well. Unfortunately, the neoliberal model tends to hide the opportunity cost that is humanistic development from us.

 Progressive policies can change this. By providing social nets and benefits, it frees up time to pursue tasks other than money-making. Consider this example. You can live within two systems: give 50% or give 5% of your salary to taxes. Intuitively, you may prefer the 5% because you worked hard for your money, so why should you be forced surrender 50% of your salary? However, by paying so little, you can’t benefit from social support, so you take constant overtime so that you can pay your health insurance, your children’s $40k-a-year college tuition, and the rising interests from the debts you had taken. In the end, both you and your wife are working over 40 hours a week (as 85% of Americans do http://20somethingfinance.com/american-hours-worked-productivity-vacation/), spending no time with your kids, and living in a perpetual state of stress and work. And forget about looking forward to the relief of a vacation, because American employers aren’t legally required to provide paid leave (http://voices.washingtonpost.com/ezra-klein/novacationnation.jpg). Then bam! You have another child, but neither you nor your wife is able to take off work to care for that baby (since America doesn’t provide paid-maternity leave) and you can’t afford an expensive day-care. A possible way out of this would be to increase your salary, but to do so would require more education and training – a luxury you neither have the time nor the money for. So here you are, working all day every day and spending no time with your family or doing the things you love. Is this really being free? Directly perhaps (with regards to what you directly own), but not holistically.

 That example may be extreme, but the fact that there are thousands of people in America who face this strife should be enough to oppose the truly neoliberal system.

Now we come to the rich and the question, is it fair to take away some of their wealth to provide support for the poor? After all, the previous scenario doesn’t really apply to the wealthy, for they won’t directly benefit from social welfare since they can pay for everything they need. Perhaps in terms of fairness it may not be fair because agreeably we are taking away their “property.” But then we have to ask, is it more immoral to take away a percent of someone’s property or to allow people to suffer because of the exploitation (or hoarding) of the rich? Personally, the latter seems worst.

 The alternative to all of this is the welfare state. By providing large social welfare, the humanistic elements of our lives are upheld against the mechanized system. Take Scandinavia, where some countries have as much as 30 days of paid vacation a year, in addition to paid sick days and paid maternity leave. These Scandinavians are not only able to take vacation, but they don’t have to worry about the monetary opportunity costs they are incurring, especially since they don’t have to worry about paying for health and education. And even if they have an inclination to work longer, strict overtime restrictions prevent that (in fact, in Germany almost no one is allowed to work on Sundays). This may seem like it is impeding freedom, but as the first scenario outlined, that’s only a shortsighted view, because in the long-term, it is freeing. Take a lesson from a Volvo executive, who when asked if he would rather live in the relatively low-taxing America, replied, “Yes, of course, I would have a lot more money in my pocket. But I would also almost never get home before 7 o’clock and I certainly would not have the vacations everyone has a right to here… and you know what else, I would have to spend a lot more money on insurance, college for my kids, and travel back home to my family. In the end, I’m not really sure I would be any better off” (Steinmo).

 And so I leave you with this xkcd comic, to show that life is about more than material rewards: http://imgs.xkcd.com/comics/graduation.jpg

Sources:

Steinmo, Sven. 2001. “Bucking the Trend? The Welfare State and Global Economy: The Swedish Case Up Close.” University of Colorado, December 18.      

The Gay Marriage Debate: A Third Option

As same-sex marriage opponents argue, allowing homosexuals to marry would destroy the institution of marriage and corrupt the minds of our youth. On the other hand, proponents of gay marriage consider the conservative view based on outdated or misinterpreted religious teachings, for as research shows, same-sex families are not any more dysfunctional than traditional ones. The back-and-forth debate seems to have no end in sight, especially since religious opponents are unlikely to surrender their convictions, while supporters of gay marriage will continue to fight for what they consider the moral right of homosexuals. However, there is a third option in the marriage debate: marriage privatization.

One of the reasons same-sex marriage is so controversial is that opponents associate the state-approval of marriage with their religious views of marriage. They do this because of the cultural significance that is inherent in the word “marriage,” for to many, marriage is not merely a legal contract, but a symbolic, spiritual, and societal affirmation of love. However, why are state-approvals necessary in affirming a couple’s love? Symbolically and socially, a marriage’s significance should be done on a personal level, for marriage is an arbitrary social construct to begin with. This approach is more romantic at least, since in theory it means that a couple is getting married for sincere love rather than societal approval, which should have been abandoned after the conception of romantic love. Spiritually, marriage should be legitimized through private ceremonies based on personal ideologies. That is, a Christian can have a Christian marriage, a Jew can have a Jewish marriage, and a Muslim can have an Islamic marriage. To the religions, this all that matters anyway, for marriage is a spiritual unification, and thus the approval of God, through a ritual, is what legitimizes a marriage, not the state; after all, “render unto Caesar what is Caesar’s, and unto God what is God’s.” In this system, opposition towards homosexual marriages would be reduced since a homosexual marriage wouldn’t be perceived as intruding on the personal forms of marriage of conservatives (or at least eventually over time).

The cultural significance of marriage extends past the same-sex marriage debate. Many feminists argue that marriage upholds a patriarchal hierarchy, and academic studies support their claim, such as the University of Michigan study that claims women gain up to seven hours of housework once they are married (http://michigantoday.umich.edu/2008/apr/husband.php). Of course, abolishing state-marriage won’t remove sexist elements in marriage since people will still associate traditional stereotypes with their personal marriage form, but it will reduce them by removing the historical and cultural legacy of the “domestic sphere,” thus allowing women to further explore new roles outside the household.

Furthermore, since marriage is a sociocultural institution, couples feel pressure to get married even if they don’t want to; doing certain things while not married is taboo, such as having kids. By abolishing state-marriages, marriage as a universal societal institution will be challenged, which will reduce its cultural significance as a “necessary act.” This development might lead people to fear a decline in the permanence of the marriage contract, but high divorce rates and the development of no-fault divorces in America indicate that marriage already lost its strength of unity.

One of the problems of abolishing state-sanctioned marriages is that a legal safety net is removed. Without the legal contract of marriages, couples may run into financial disputes during divorces. This problem can be solved with personal contracts, which is more ideal since each contract could be drafted with the personal needs of a couple in mind. If a couple doesn’t want to go through the trouble of creating a personalized contract however, then they can use a one-size-fit-all contract similar to the one already used for state-sanctioned marriages.

The question then becomes, does the state even have a stake in marriage? The most common answer is that state-sanctioned marriages uphold social stability since it creates a semi-communal atmosphere and allows spouses to legally rely on each other. However, many of these social nets can be replicated on a national scale in which the whole nation is treated as a cohesive community, rather than a web of individual families. This can be achieved through social policies such as instituting universal healthcare for all people instead of using joint healthcare between spouses. Incidentally, federal marriage benefits aren’t as widespread as people assume; writers Jessica Bennett and Jesse Ellison argue that, “federal law favors unmarried taxpayers in almost every case—only those whose incomes are wildly unequal get a real tax break—and under President Obama’s new health plan, low-earning single people get better subsidies to buy insurance.”

If one of the intentions of state-sanctioned marriages is the state’s investment in children, then again, national social programs would better serve the country than benefits for married couples. This is because not all married couples have children, so the state could better allocate its funds by supporting all parental couples or single parents with their children rather than married couples without children. And contrary to popular belief, a traditional marriage isn’t necessary for raising “proper” children. Studies after studies refute the idea that progressive families such as homosexual ones create a hostile environment for children. In fact, in Scandinavia, where a majority of children are born out of wedlock, kids spend more time with their parents than American kids do (http://www.weeklystandard.com/Content/Public/Articles/000/000/003/660zypwj.asp). Though this may partially be a product of Scandinavian culture, it shows that functional families can exist in untraditional forms.

State-sanctioned marriage has become a cultural and social nuisance; its function as a legal framework died when feminism and secularism rose. Now, spouses are not officially required to conform to their established roles as “husband” and “wife,” while the metaphysical justification of marriage, thanks to separation of church and state, has no place in government. It may seem intuitive to us that official and socially-approved marriages are better, but this view is arbitrary and only a construct of our culture. As an evolving society, we shouldn’t adhere to outdated customs, but progress forward. We have idealized marriage as an institution of perfect love, which differs from the reality. As a consequence, our relationships with our loved ones, as they fail the expectations of our romantic imaginings, are declining. Abolishing state-marriages is not only an issue of practicality, but an issue of love. It is a way to abolish the arbitrary meanings we put in an arbitrary institution, a way to abolish the necessity of marriage to those who don’t wish it, a way to uphold individual and free love, and a way to spread equality by refusing to define what is sexually “appropriate” between adults in love through state-sanctioning.

The Economics of Politics and the Arguments Against the Political Pendulum

The political pendulum is a subject that is generally accepted amongst historians and political scientists; it is to my belief, however, that such terminology can be confusing and also somewhat misleading.
A pendulum seems to suggest an equilibrium. For those that have studied physics know that a pendulum can be graphically/mathematically represented by a sine curve.
Political Pendulum
Where, p* represents the equilibrium point. It is the theoretical moderate point of view that society tends to fluctuate around.
Political Pendulum w: Approx
If we make a linear approximation of the following (represented by the dotted red line), we can make the conclusion that in the long run, there are no changes to society’s political preferences.

However, contrary to the static universe that is perceived, scientific and philosophical data seems to prove other wise. The universe, for example, is one that will continue to expand as opposed to expanding than contracting (which a “static-ist” may suggest). Hegel’s dialectic does not suggest an “unresolvebility” of conflicting ideals, but rather suggests that conflicting ideals can give birth to new ideas that transcend the previous. Progress is a result of conflict.

Hegelian Dialectic
It is important to note that a linear approximation of the Hegelian view suggests a dynamic long run, as opposed to a static one. Many of us in the field of economics will recognize and interpret this function as the business cycle. An economy expands in the long run (the dotted red line), but it is a tendency of all things in the world to fluctuate while doing so.
The political ideals of a society, I thus argue, is more a factor of dialectics. It is not a pendulum. Yes, in some sense it is cyclical, but it is not static as a pendulum would seem to suggest.

Political Dialectic
The Short Run Poltical (SRP) Curve is derived straight from the Hegelian dialectic/business cycle. It is important to note p*, the “theoretical” moderate point of view that society fluctuates around, is no longer constant but changing. In the long run (LRP), society tends toward some sort of progress (which I argue is liberal). I say liberal not to denote democrat vs. republican, but I use it loosely, rather to denote greater distribution of power (via the enlightenment ideals).

However politics is not just about political ideals, as it is about political parties. The distribution of votes/power amongst political parties can indeed be a “pendulum” if political parties can adjust accordingly.
Pendulum of Political Parties
If there were to be such a pendulum between parties, there must be long run “static-ity”. Meaning that votes in the long run (v*) fluctuate around a certain vote count. For this to be true the following must be true:
Equation,
where ∆PP denotes the change in party policy. If p*, the “theoretical” political ideal in which society fluctuates around is not constant, then the parties must change accordingly to keep the powers between the parties (v*) constant.

Yet, to believe that parties are perfectly “liquifiable” is a far fetched premise in itself. Like wages, party policies are sticky because there are administrative barriers in changing them. Thus, ∆PP < ∆p* such that:

Sticky Party Policies

If changes in party policy are slower than the changes in society’s political ideals than the distribution of power amongst the parties in a democratic system will change. It is important to note that v* the distribution of power between the parties will be a function of the difference between societal (p*) and party ideals (PP).
If the following points:

  • All parties are equally sticky
  • p* and ∆PP are in the same direction

apply, then we will end up with a dialectic representation of the distribution of power between the two parties.

Dialectic of Politial PArties

where SRV represents the short run distribution of votes/power.

It is important to note that there are several economic assumptions that are being made in this argument which I should point out:

  • Individuals, and thus society, are rational
    • They will vote for the party that represents their political ideals
  • There are no rigs to the democratic system

“Nothing is truly static in a dynamic universe”.

-Kai Matsuda