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Economists researching psychological topics, again January 4, 2016

Posted by larry in economics, Game Theory, Psychology.
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Susan Webber aka Yves Smith makes a trenchant critique of this research undertaken by economists. If you look at the early work of Tversky and Kahneman, you find that, essentially, people are classed as being irrational if they fail to follow the Kolmogorov axioms (of probability) first set out in 1938. Game theorists tend to view people as irrational if they fail to maximize their utilities, whatever these might be. Gerd Gigerenzer has shown fairly conclusively in a number of studies that people, even medics, do not understand probabilities if presented to them in the standard way. But do understand them if presented in what he calls standard frequencies, for instance, asking people what the odds are for people like X to be (or have) Y. Behavioral economics, except as practiced by a few exceptional researchers, is almost unremittingly awful.

This research is another example of discipline overreach. Physicists do it. Biologists do it. Social scientists tend not to. But perhaps not for the best reasons. In this particular case, the researchers are investigating what makes for a “team player”, what leads to social cooperation, and the like.


The author of this piece is a personnel economist. WTF is that?

Another example is economists researching into happiness. They are completely missing the point. Psychologists have shown that what makes people happy is all over the place, but what they wish to avoid is much more circumscribed. And these researchers, in addition, think contentment may be a more tractable research topic than happiness. Another example of economists not doing their reading. This could be the title of a book: Economists, Why Don’t They Read?.

On Phil Pilkington’s question concerning whether there could be an economic induced psychosis August 14, 2014

Posted by larry in Culture, economics, Mind, Philosophy, Psychology, Science.
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Link to Phil’s post: http://fixingtheeconomists.wordpress.com/2014/08/11/is-there-such-thing-as-an-economics-based-psychotic-delusion/#comment-7078

I take Phil’s question to be an important, though unusual, one. But in order to approach an answer, we need to set up our framework. First, we need to define what a psychosis is. And I think it reasonable to define a psychotic state as one where the individual suffers from neurological malfunctioning of the brain that results in them seeing and/or hearing things that are not there, that is, that do not exist.

Second, we need to distinguish between the mind and the brain. We could go into great detail but for our purposes here it should be sufficient to use the term ‘brain’ to refer to the neural connections and activity of this organ’s neurons. (For anyone who has difficulty with this, I recommend a look at Gordon Shepherd’s Foundations of the Neuron Doctrine (1991), and the term ‘mind’ to refer to what we ordinarily consider to be mental activity and conceptions. There is an entire literature on this in both psychology and philosophy.

Third, we need to divide economics into two, possibly overlapping, spheres. One would be economics qua conceptual construct (or idea or belief or the like). The other would be economics qua economic activity. The first is a mental construct, while the second is a behavioral activity. They are naturally related, though any causal link could go in either direction.

We now have two related questions before us. 1) Can having a particular economic idea or conceptual construct drive a person into having a psychotic delusion? 2) Can engaging in a particular kind of economic activity drive a person into having a psychotic delusion? The film, Gaslight, involves both, as the husband places ideas in his wife’s head while simultaneously engaging in certain kinds of behavior, all designed to drive her into having a psychotic delusion, in terms of the film, the delusion that she is insane whereas there is, in fact, nothing wrong with her. In the terms which we have set, she does not exhibit either the types of behavior typical of someone who does have a psychosis or have a malfunctioning brain in the sense defined above.

Now Phil has rightly raised the specter of certain religious notions. Would we want to claim that someone, perhaps an entire group of people, even an entire society, was psychotically deluded because they have a belief in a god of some sort? Are they psychotic because they indulge in a communal ritual of communion, which, in principle, involves the doctrine of transubstantiation?

Let us leave religion and consider the Nazis. We assume, for which there is evidence, that there existed true believers. One of their beliefs was that there was such a thing as a pure Aryan race. Another was that there was a Jewish conspiracy to destroy Germany qua its racial essence. Is anyone who holds such beliefs or even virtually an entire society holding such beliefs and engaging in the activities indicated as being appropriate by the beliefs in the grip of a psychotic delusion?

Most people would probably answer No to the former case and Yes to the latter. But what is the difference between them? Both involve engaging in activities and entertaining conceptions for which there is no empirical evidence that would justify either and, indeed, there is (and was) abundant evidence to the contrary. Both cases involve people believing falsehoods and acting on them, blatant or otherwise. Surely, we would not wish to contend that anyone in the grip of a false belief is ipso facto in the grip of a psychotic delusion.

The answer, it seems to me, lies in our original definition of ‘psychosis’. With respect to either case, is it reasonable to ‘believe’ that an entire society, that is, its members, could be more or less simultaneously experiencing a particular brain malfunction? We need another term, I think, to describe what is going on in cases such as these.

The case that Phil really has in mind is the neoclassical economic paradigm, which has true believers and for which there is abundant contrary evidence. Are followers of this ‘false’ paradigm in the grip of a psychotic delusion? I honestly do not know the answer, but it is possible that Phil has asked the wrong question. And the answer concerning what question he ought to have asked instead depends on what term we replace ‘psychosis’ with. And to that conundrum, I have no real answer at the present time.

Definition of the Situation April 24, 2014

Posted by larry in Culture, Frame Analysis, Philosophy, Psychology.
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The concept of the definition of the situation originates with William Isaac Thomas, possibly in Thomas and Florian Znaniecki’sThe Polish Peasant in Europe and America (1918-1920).  The concept was given new vigor and poignancy in the fifties by Erving Goffman in his study of roles in face-to-face social interaction in Presentation of Self in Everyday Life (1957).  Goffman agreed to a significant extent with what has become known as the Thomas theorem (1928): “If men define things as real, they are real in their consequences”.

Most situations bring their histories along with them.  To do well in a situation, it pays to know something of its history.  And to successfully redefine a situation, it may be essential to know that situation’s history.  Sometimes the history can be daunting and intimidating thereby rendering the situation daunting and intimidating.


The concept of the definition of the situation is closely related to frame analysis, although this relationship is not always explored, to the detriment of both approaches, I think.

Varoufakis on game theoretic analysis of asymmetric expectations among the powerful & the powerless March 22, 2014

Posted by larry in economics, Game Theory, Psychology, social justice.
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This is for those who have some experience, knowledge or interest in game theoretic analyses of social interaction. Varoufakis is a political economist who is intimately familiar with game theory, having written a book about it with Hargreaves Heap some years ago. Nevertheless, economically, this research falls within the domain of what has become known as microeconomics, as distinct from macroeconomics. But this research focuses on social group expectations, not the processes of the economic system as a whole.

There are links in the paper to more detailed and mathematical discussions of the issues. I don’t think that the PowerPoint slides are self-explanatory, as they assume more understanding of the mathematics underlying game theory than is perhaps possessed by the general population. But the conclusions Varoufakis reaches require no math to understand. They are:


There are a number of books and articles dealing with applications of game theory to biological situations, one famous one by the late John Maynard Smith, Evolution and the Theory of Games, mentioned by Varoufakis. I think I should point out that Richard Lewontin, the population geneticist, has written that he thought that the appropriation of game theory to evolutionary contexts altered the character of the theory to such an extent that it ought to be called something other than “evolutionary game theory”. History and social convention have made the decision for him. The appellation has stuck.

To be fair to Varoufakis, he doesn’t think that these results are extraordinarily original, though they would seem to be unknown to mainstream economists, whose theoretical paradigm Varoufakis is concerned to attack. And he feels that one of the best ways of doing this is from within, as it were, a tactic utilized successfully by logicians for centuries to attack positions they don’t (didn’t) like. (Have a look at the way Socrates, as set out by Plato, operates.)

Here is the link to a non-technical discussion of this topic, including links mentioned.



Getting back to my simple example of being able to breathe, we know that the presence of oxygen is a necessary though not sufficient for breathing. We also know that the presence of CO2 is a necessary but not sufficient condition for breathing.

So, here we have two necessary conditions for breathing. For B for breathing, O for oxygen, and C for CO2, we have (if B, then O) and (if B, then C). Since we know that they must occur together for a person being able to breathe, we have (if B, then C & O).

Realizing that the system under discussion is more complex than this discussion, can we nevertheless go on to contend that the presence of oxygen and CO2 are individually necessary and jointly sufficient for breathing? That is, that B iff C & O? How should we then interpret this equivalence? As a kind of “law of breathing”, a kind of scientific regularity, or as a definition of the conditions of being able to breathe?

This question may seem to be a triviality, but it arises in the discipline of macroeconomics all the time. When is a statement to be interpreted as a substantive assertion that has a truth-value or as a definition of terms, which has no truth-value but is only useful or not? Too many economic discussions are not at all clear about this issue. And it can make a difference to how you treat what they are saying.

Mass Obsessive-Compulsive Psychosis & the Austerity program April 24, 2013

Posted by larry in economics, Psychology, social policy.
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Portugal vs the Joffrey Baratheon of economic policies

Revealed: George Osborne’s secret veto on fraud inquiries

For those of you who might just have missed this news. The corruption runs deep, in both the UK and in Europe. The austerity train just continues to run, irrespective of how many it runs over that get in the way in the process. The answer to Cui bono? is no longer going to go deep enough to get to the bottom of this. It is more than a matter of vested interests. What this type of thinking resembles most is a kind of mass obsessive-compulsive psychosis.

If the defining characteristic of a psychosis is a belief with a dramatic dislocation from reality, the truth is that we come across people who harbor one or another belief that has absolutely no relationship to reality every week if not every day. I don’t just mean the entertaining of a false belief. We all entertain one virtually every day, whatever we ourselves may think. I mean a belief that not only has no empirical evidence for it but that clearly has none and can be seen by a detached observer to have none.

Austerity programs initiated in the past have been shown empirically not to work. The current austerity program has been shown empirically not only not to work but to have contra-predictive effects, that is, it is inducing the opposite effect it was predicted to bring about. As a consequence, it is difficult if not impossible not to conclude that the thinking underlying austerity appears to involve a kind of psychotic dislocation from reality with a strongly attached obsessive-compulsive component.

The question now is, if this is what we are dealing with, how do we dislodge it? The standard solution, sequestration in an asylum, will not suffice for a mass induced psychotic belief. Direct confrontation has not worked and can be seen not to have worked. This is common with psychotic belief systems. Because they have no connection with reality, confrontation with reality will not dislodge them. The only other option open to those who wish to dislodge this particular belief system, which is having such a devastating effect on so many, is a kind of flanking movement, involving I would suggest the fundamental presuppositions underlying the belief system that is helping to keep this program alive. This is a lot easier to say than to do, partly because core political functions are inextricably involved.

I may be wrong and it may be simply a matter of vested social interests. If that is so, then the solution is relatively straightforward. But if it isn’t that, there is no easy solution. The consequence of the latter is that we let capitalism “cure” itself by allowing it to bring the debt down, in its own inimitable way, which may take another 20 years and leave incredible damage in its wake, including increasingly grotesque inequalities.

Addendum: I have ignored a dimension in the discussion above. This is partly because it involves only a subset of the people who are advocating austerity. The people I have left out are the psychopaths or sociopaths (I have defined them differently in posts previously.) who are in positions of authority. The behavior of sociopaths can be altered by altering the reward-punishment pathways. The behavior of (true) psychopaths, on the other hand, can never truly be altered other than incidentally and temporarily. They have to be physically or functionally removed from whatever positions they hold in order to eliminate the deleterious effect they continually have on those around them. Before they can be removed, of course, they have to be recognized for what they are. While this is difficult to do, it is not impossible. Outside assistance, from say a properly trained industrial psychologist, is one way. The reason I left these people out of this discussion is that they are not psychotic in any way. They know exactly what they are doing. They may entertain false beliefs like the rest of us, but if anyone is finely tuned to reality, especially the psychological states of others, it is the psychopath.

‘Logic’ of Sociopathy April 3, 2013

Posted by larry in Philosophy, Psychology.
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In a previous post, I briefly discussed and distinguished between true psychopathy and sociopathy. I will assume here that the concept of psychopathy is understood and concentrate on the concept of sociopathy, particularly as I define the term differently from Hare.

Hare defines “sociopathy” as behavior associated with a social group that is considered to be anti-social by a more inclusive group, which may consist of the entire society.

Although Hare does not explicitly mention social groups in his definition of psychopathy, the term could be defined as behavior considered to be extremely anti-social by the entire society, no matter what social role the individual is playing or what situation he is in. (Most of them are male.) According to my definition of sociopathy, sociopathic behavior is anti-social behavior carried out only in certain situations, such as work environments, or when the individual is playing certain roles, such as the role of the CEO.  No essential reference is made to any social group.

According to both our definitions, there are more sociopaths than true psychopaths. Hare estimates that around 2% of the US population is psychopathic. There is evidence to suggest that true psychopathic behavior involves neurological alterations in the brain of the psychopath not found in the normal brain. Sociopathic behavior need involve no such neurological functionality. It may be completely situationally determined, or influenced. If the latter is the case, there will be a significant cultural component involved in bringing out sociopathic behavior in certain people (e.g., general ideas or particular beliefs concerning what is appropriate).

Experiments comparing so-called normal people with those diagnosed as psychopathic show distinct differences in reactions to emotional words. Certain kinds of cruel behavior has also been found in the teenage behavior of those diagnosed as being psychopathic. I will mention again that in order to properly diagnose someone as being a true psychopath, you need an immense amount of clinical and behavioral data over a number of years. This is often available for those who have been imprisoned. It is not so easily available for the organized psychopath who is not violent. Nevertheless, it can and has been acquired. For detailed, authoritative accounts, see Babiak and Hare, Snakes in Suits: When Psychopaths Go to Work (2007) and Bakan, The Corporation: The Pathological Pursuit of Profit and Power (2005).

Sociopathic Behavior & the Economic Crisis April 3, 2013

Posted by larry in economics, Psychology.
As the new Eurostat data shows, unemployment in the EU17 has risen again. Mitchell contends in his recent post, and I agree, that this is policy induced and can, therefore, be avoided only by certain policy changes. One such change, of course, would be to backtrack on austerity.

Mitchell characterizes the policy makers or their advisers as sociopaths. I thought it would be good to distinguish between psychopathy and sociopathy. I should warn you that these definitions are slightly different than those provided by Robert Hare, a leading expert of psychopathic behavior and designer of the Psychopathy Checklist used by law enforcement agencies around the world. It needs also to be pointed out that the kind of psychopaths that are under discussion are organized and non-violent physically. The damage they cause is emotional, which can be just as destructive as physical damage if not sometimes more so.  Here is a slide that makes the requisite distinctions for a talk I gave a while ago (apologies if it is fuzzy – due to WordPress).
       Hare does not agree with Bakan that a corporation can be psychopathic; in his view, only individuals can be psychopathic. One could, however, look at Bakan’s usage as a metaphorical extension of the term. It then becomes a further question whether such an extension is useful. Having said that, Hare contends that corporations and like organizations have become more psychopath friendly.
       It needs to be noted that psychopathy (and sociopathy) is a syndrome, hence, in order to classify an individual as being psychopathic, they must exhibit a number of the traits in the list on the right, not just one or two. For example, narcissism is often mistaken for psychopathy, and this is because narcissistic behavior is a component of true psychopathic behavior patterns. Determining whether an individual is truly psychopathic, however, is quite difficult to do clinically. A lot of information about the individual’s behavior over time is necessary in order to reach this kind of diagnosis. Having said that, under my definitions, there are more sociopathic individuals than there are true psychopaths. Hare reckons that around 2% of the American population are true psychopaths, that is, exhibit psychopathic behavior patterns in every aspect of their lives and in every social role they play. This is unlike sociopaths, who are psychopathic only part of the time, usually only in certain situations or when playing certain roles. Although not truly psychopathic, they do leave a good deal of emotional damage in their wake.
       You undoubtedly know or have known or worked with someone who is either psychopathic or sociopathic. I have, more than once, and these were not pleasant experiences. [Display problems with WordPress in this post.]

The IMF, psychopaths, and the Greek fascists October 10, 2012

Posted by larry in economics, Psychology.
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James Kwak in his blog has mentioned a recent paper dealing with inequities in the distribution of wealth and the consequent instabilities that can be caused by this. It is “Instability and Concentration in the Distribution of Wealth” by Fernholz and Fernholz — http://www.ricardofernholz.com/Redistribution.pdf.

I think this model has something to recommend it. It shows, as Kwak himself says, that wealth accumulation has very little to do with skill and more to do with luck. But more importantly, it shows I think that unless a society actively prevents this sort of accumulation, it will inevitably occur if society is arranged in the way this model assumes. I think it is clear from considerations such as this, among other things, that certain societies have not just facilitated this accumulation process but have encouraged it and indeed enhanced it. While this is an obvious triviality empirically, it is nice to see a model supporting it however obliquely. Since I am uncertain whether our politicians know what they are actually doing, I can’t say whether they have arranged this deliberately. They bullshit so much that it is impossible to tell.
      I would like to comment on something Bill Mitchell said about IMF staff. While I agree with him in respect to the staff of the organization in general, indeed for most organizations, I think it is necessary to distinguish between the top staff and those lower down. Some psychological research tends to show that an unfortunately large proportion of CEOs are sociopathic. As I define this, distinctly from Robert Hare, this means that such people will act psychopathically in certain social roles or in certain situations. This is distinct from what could be called a true psychopath who acts psychopathically in all situations and in every social role. Most sociopaths are what is known as ordered psychopaths. Physical violence is not what they do; they engage in what could be reasonably described as emotional violence, which of course can destroy people’s lives. Bullying does not quite cover the phenomenon.
      More than one bank CEO was certainly psychopathic at work. How they acted outside the work environment I don’t know, therefore can’t say whether they are true psychopaths. And it really doesn’t matter for our analytic purposes. Sociopathic individuals are just as destructive as true psychopaths, in those situations where they act out their psychopathologies. Working with some of them was apparently a nightmare. For one, morning meetings were known as ‘morning beatings’ (mentioned on Newsnight). Perhaps people like this should be locked up but the law doesn’t quite know what to do with people who inflict only emotional trauma that is unaccompanied by physical violence. The onus is on the person being treated badly to deal with it either by leaving the situation (in most cases like this, the job) or engage in some other action, such as lodge a complaint, which usually is counterproductive — the sociopath is not dislodged and the complainer may be fired or demoted.
      What is extraordinary is how so many people are unwilling to accept that someone they know, who is known to act badly, unless they act as badly as some have bee known to, is sociopathic or psychopathic. All kinds of excuses are employed in order to excuse the sociopath’s behavior. Even by people who have nothing to lose. Hare believes that most corporations, and this must now include I think other institutions, like universities, have become increasingly psychopath friendly. So, instead of being sidelined or fired, they are promoted. Bureaucracies don’t seem to be able to distinguish between charismatic leadership attributes and psychopathic charm — successful sociopaths, indeed some violent psychopaths, are often quite charming. And unless you know them well or investigate them closely, it is difficult to tell the difference unless you are deliberately looking for them.
      Another thought, this time about the fascists in Greece. It seems to me that they are acting as an elementary welfare organization, handing out food and the like. The US Democratic party, during the thirties, forties, and part of the fifties, did the same. If as a young man, say, you went down to Democratic party headquarters and said you needed a job, they would check out to see whether your family was democratic and assess your affiliation. If all went well, they would find you a job. They expected loyalty in return, in particular, you voting democratic in the next and subsequent elections. As the fifties wore on, this function disappeared. Mostly for two reasons. The democrats were co opted into the neoliberal mindset and the welfare state worked well and was seen to be working well, though the state’s activity in this regard was not seen in this light.
       Implementing an elementary welfare operation is a brilliant tactic on the part of the Greek fascists. It is only working at all because the welfare operations of the Greek state have become virtually impossible to implement due to the austerity imposed by the Troika. Since I think it can be fairly assumed that the Troika do not wish to bring about the resurgence of fascism, and since it is unlikely that they are all idiots, the program they are implementing is probably a mixture of snobbery, bad ideas, and incompetence.

Pinker on violence is barely treading water in the shallow end October 20, 2011

Posted by larry in Psychology.
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This is a response to a post by Steve Clarke in Practical Ethics. It is my critical response to Pinker’s violence thesis, which I consider deeply flawed and largely wrong, indeed even misleading.

Gray is right that Pinker’s thesis is rubbish even if his own argument needs a bit more support (http://www.prospectmagazine.co.uk/2011/09/john-gray-steven-pinker-violence-review/). The graph that Theo (a commenter to Clarke’s blog who is familiar with the Yanomamo) points to is, of course, complete rubbish (the graph he is referring to is this one: http://www.psychologytoday.com/blog/sex-dawn/201103/steven-pinkers-stinker-the-origins-war). These tribes are special cases and hence not a representative selection. The Yanomamo are an example of this. In fact, there is an American anthropologist, Napoleon Chagnon, who married one of their women, a kind of princess, who finds them and their society to possess advantages the West does not. They take their children back to her tribe every year. She finds Western society incredibly superficial and shallow. I don’t think we can say she is wrong.

And the graph that Pinker has which “corrects” for deaths over the centuries by adjusting for the total world population is deeply flawed. Another instance of this kind of crap from scientists with no real understanding of the social science literature is an example provided by E O Wilson in his Sociobiology. There he discusses an instance where Moses, in conquering another competing group, orders the killing of all pregnant women and young boys &c. Wilson then claims that this is analogous to gibbon behavior, which confers a selective genetic advantage on the predatory group. These are not at all comparable. Moses is not having these people killed for any genetic advantage, unconsciously or otherwise. He is having them killed in order to prevent an internecine civil war in the near future when the conquered group might organize resistance to the rule of his group. His slaughter is an attempt to preempt this.

There is a lot of violence that does not take place on a battlefield. Domestic violence, for example. This has been underreported for years, and unnoticed before that. And what about the psychopaths in our midst, not all of whom are violent? The ordered intelligent psychopath doesn’t need to engage in physical violence. He (the majority are men) are able to achieve their ends without the need for physical violence, but the emotional wreckage they leave behind is extensive. This is itself a kind of violence, though not the kind Pinker is concerned with.

And then there is the distinct possibility that physical violence by groups of the sort Pinker concentrates on is in the slow process of being replaced by more insidious kinds as a consequence of technological innovation, even if it is, as yet, rarely used.

The conclusion it seems to me has to be that Pinker has entered an arena where he needs to better inform himself.

Culture & Consciousness – the theory of Julian Jaynes June 12, 2009

Posted by larry in Culture, Mind, Psychology.
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Jaynes’ theory was set out in his The Origin of Consciousness in the Breakdown of the Bicameral Mind.

In prep.

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