Monday, September 19, 2016

Anti-string crackpots being emulated by a critic of macroeconomics

While only a few thousand people in the world – about one part per million – have some decent idea about what string theory is, the term "string theory" has undoubtedly penetrated the mass culture. The technical name of the theory of everything is being used to promote concerts, "string theory" is used in the title of books about tennis, and visual arts have lots of "string theory" in them, too.

But the penetration is so deep that even the self-evidently marginal figures such as the anti-string crackpots have inspired some followers in totally different parts of the human activity. In particular, five days ago, a man named Paul Romer wrote a 26-page-long rant named
The Trouble With Macroeconomics
See also and Power Line Blog for third parties' perspective.

If you think that the title is surprisingly similar to the title of a book against physics, "The Trouble With Physics", well, you are right. It's no coincidence. Building on the example of the notorious anti-physics jihadist named Lee Smolin, Paul Romer attacks most of macroeconomics and what it's been doing since the 1970s.

To be sure, Paul Romer is a spoiled brat from the family of a left-wing Colorado governor. Probably because he grew into just another economist who always and "flawlessly" advocates the distortion of the markets by the governments and international organizations as well as unlimited loose monetary policies, he was named the chief economist of the World Bank two months ago.

Clearly, the opinion that macroeconomics is a "post-real" pile of šit is clearly not a problem for a pseudo-intellectual with the "desired" ideology who wants to be chosen as the chief economist of a world bank, in fact, The World Bank.

Now, I think that Paul Romer is pretty much a spherical aßhole – it's an aßhole who looks like that regardless of the direction from which you observe it. He is absolutely deluded about physical sciences and I happen to think that he is largely deluded about economics, too.

But unlike him, and I think it's even more important than that, most of this "spherical shape" is a coincidence. There exists no law of Nature that would guarantee that someone who is deluded about physical sciences must be deluded about economics, too – or vice versa. The correlation between the two is probably positive – because obnoxiously stupid people tend to be wrong about almost everything – but macroeconomics and particle physics are sufficiently far enough.

Does he really believe that he can find legitimate arguments about macroeconomics by basically copying a book about particle physics, especially when it is a crackpot's popular book? Even if he tried to be inspired by the best physics research out there, it would probably be impossible to use it in any substantially positive way to advance economics.

The abstract of Romer's paper leaves no doubt that the chief economist of the World Bank is proud to be a small piece of an excrement attached to the appendix of crackpot Lee Smolin:
For more than three decades, macroeconomics has gone backwards. The treatment of identification now is no more credible than in the early 1970s but escapes challenge because it is so much more opaque. Macroeconomic theorists dismiss mere facts by feigning an obtuse ignorance about such simple assertions as "tight monetary policy can cause a recession." Their models attribute fluctuations in aggregate variables to imaginary causal forces that are not influenced by the action that any person takes. A parallel with string theory from physics hints at a general failure mode of science that is triggered when respect for highly regarded leaders evolves into a deference to authority that displaces objective fact from its position as the ultimate determinant of scientific truth.
Concerning the first sentence, the idea that all of macroeconomics has gone "backwards" for over 30 years is laughable. There are many people doing macroeconomics and they may be more right and less right. But there exist good ones – even though there can't be a consensus who these people are – who focus on the papers of other good people and they obviously know that this set of good macroeconomists know everything important that was known 30+ years ago plus something more.

Be sure that my opinion about the value and reliability of economics and macroeconomics is much less enthusiastic than the opinions about physics and high-energy physics but at some very general level, these two cases undoubtedly are analogous. The available empirical dataset is more extensive than 30+ years ago, the mathematical and computational methods are richer, a longer time has been available to collect and compare competing hypotheses. Clearly, what is the actual source of Romer's "trouble with macroeconomics" is that it is often producing scholarly work that disagrees with his predetermined – and largely ideologically predetermined – prejudices. But it's not the purpose of science – not even economics – to confirm someone's prejudices.

The following sentence makes the true motive of Romer's jihad rather transparent:
Macroeconomic theorists dismiss mere facts by feigning an obtuse ignorance about such simple assertions as "tight monetary policy can cause a recession."
You don't need a PhD to see that what he would actually like would be to ban any research in economics that disputes the dogma that "monetary policy should never be tight". But as every sane economist knows, there are damn good reasons for the monetary policy of a central bank to tighten as a certain point.

The Federal Reserve is rather likely to continue its tightening in the coming year – and not necessarily just by the smallest 0.25% steps – and the main reason is clear: Inflation began to re-emerge in the U.S. Also, a healthy economy simply does lead to the companies' and people's desire to borrow which must be or may be responded to by increasing the interest rates – either centrally, which is a sensible policy, or at the commercial level, which reflects the lenders' desire to be profitable. After all, millions of people did feel that the very low or zero or negative rates were a sign of something unhealthy and the return to the safely positive territory may be good news for the sentiment of those folks. In Europe, something like that will surely happen at some point, perhaps a year after the U.S. An economist who thinks that "loose is good" and "tight is bad" is simply an unbalanced ideologue who must have misunderstood something very important.

And there are reasons why numerous macroeconomics papers dispute even the weaker dogma that "a tight monetary policy can cause a recession". Just to be sure, if you define recession in the standard way – as two quarters of a negative growth, measured in the usual ways – or something close to it, I do believe that loose monetary policy generally reduces the probability of a recession in coming quarters.

But a loose monetary policy always involves some deformation of the market and whenever it's the case, the GDP numbers – measured in the straightforward ways – can no longer be uncritically trusted as a reliable source of the health of the economy and of the people's well-being. These are subtle things. Economists may also have very good reasons not to be afraid of a few years of mild deflation etc. Most of the Western economies saw deflation in recent two years or so and I think that almost everyone sees that those seemed like healthy, sometimes wonderfully healthy, economic conditions. A very low inflation is great because you feel that for the same money, you will be always able to buy the same things – but you are likely to have more money in the future. It makes the optimistic planning for the future much more transparent. The idea that all people are eager to go to a shopping spree whenever inflation becomes substantial – because they feel very well – is at least oversimplified.

So Romer really wants to ban any support for "tight monetary policies" and he is only inventing illogical slurs to make their advocates look bad. He is analogous to Lee Smolin who is inventing illogical slurs, adjectives, and stories against those who want to do and who do high-energy physics right, with the help of the state-of-the-art mathematical and physical methods.

As we can see in the bulk of Romer's paper, he is mainly fighting against theories that certain changes of the economy were ignited by what he calls "imaginary shocks":
Their models attribute fluctuations in aggregate variables to imaginary causal forces that are not influenced by the action that any person takes.
If I simplify just a little bit, his belief – repeated often in the paper – is that the economy is a completely deterministic system that only depends on people's (and he really means powerful people's) decisions. But that is at least sometimes not the case. It's extremely important for economists – and macroeconomists – to consider various hypotheses that describe the observations. Some of the causes according to some of the theories may look "imaginary" to advocates of others. But that doesn't mean that they are wrong. The whole philosophies may be different (compare with natural and man-made climate change) and it's just wrong to pick the winner before the research is (and careful, impartial comparisons are) actually done.

There may be random events, random changes of the mood etc. that are the actual reasons of many things. One doesn't want his theory to be all about some arbitrary, unpredictable, almost supernatural causes. On the other hand, the assumption that all causes in economics are absolutely controllable, measurable, and predictable is rubbish. So a sane economist simply needs to operate somewhere in between. Hardly predictable events sometimes play the role but within some error margin, a big part of the economic events is predictable and a good economist simply has to master the causal forces.

I am convinced that every sane economist – and thinker – would agree with me. One wants to make the economic theories as "deterministic" or physics-like as possible; but they cannot be made entirely "deterministic", especially because the individual people's – and collective – behavior often depends on quirks, changes of the mood, emotions etc. After all, even physics – the most "clean" discipline of sciences about the world around us – has known that the phenomena aren't really deterministic, not even at the fundamental level, since 1925.

Paul Romer boasts about his view that everything is entirely deterministic – except that he obviously doesn't have any theory that could actually make such fully deterministic predictions. Instead of such a theory, he offers six slurs for those macroeconomists whom he dislikes:
  • A general type of phlogiston that increases the quantity of consumption goods
    produced by given inputs
  • An "investment-specific" type of phlogiston that increases the quantity of
    capital goods produced by given inputs
  • A troll who makes random changes to the wages paid to all workers
  • A gremlin who makes random changes to the price of output
  • Aether, which increases the risk preference of investors
  • Caloric, which makes people want less leisure
So his "knowledge" of physics amounts to six mostly physics-based words – namely phlogiston 1, phlogiston 2, a troll, a gremlin, aether, and caloric – which he uses as insults. Be sure that I could also offer 6 different colorful slurs for Romer but unlike him, I don't think that such slurs may represent the beef of a legitimate argument. The alternative theories also have some causes and we could call these causes "Gargamel" or "Rumpeltiltskin" but listeners above 6 years of age and 100 points of IQ sort of know why this is no true evidence in one way or another. Note that even if some economic changes are explained as consequences of particular people's decisions, that still usually fails to explain why the people made the decisions. Some uncertainty at least about some causes will always be present in social sciences – including quantitative social sciences such as economics.

Like Lee Smolin, what he's doing is just insulting people and inventing unflattering slogans – whose correlation with the truth is basically non-existent. The following pages are full of aether, phlogiston, trolls, and gremlins while claiming to decide about the fate of numerous serious papers on economics. Even those there are probably some memorable well-defined piece of šit with sharp edges over there, I don't plan to swim in that particular cesspool.

There are way too many things – mostly deep misconceptions – on those 26 pages of Romer's paper. Some of them are the same as those that I have been debunking over the years – both in the socio-philosophical blog posts as well as the physics-philosophical ones. But let me only pick a few examples.

On Page 5, Romer attacks Milton Friedman's F-twist. Romer just doesn't like this important idea that I described and defended back in 2009 (click at the previous sentence).
In response to the observation that the shocks are imaginary, a standard defense invokes Milton Friedman’s (1953) methodological assertion from unnamed authority that "the more significant the theory, the more unrealistic the assumptions (p.14)."
By the way, is Milton Friedman himself an "unnamed" authority?

But this Friedman's point simply is true and important – and it's supported by quite some explanations, not by any "authority". When we do anything like science, the initial assumptions may be arbitrarily "crazy" according to some pre-existing prejudices and expectations and the only thing that determines the rating of the theories is the agreement of the final predictions with the observations.

And in fact, the more shocking, prejudices-breaking the assumptions are, Friedman said, and the less likely the agreement could have looked a priori, the more important the advance is and the more seriously we should treat it when the predictions happen to agree with the observations. That's also why sane physicists consider relativity and quantum mechanics to be true foundations of modern physics. They build on assumptions that may be said to be a priori bizarre. But when things are done carefully, the theories work extremely well, and this combination is what makes the theories even more important.

People like Romer and Smolin don't like this principle because they don't want to rate theories accoring to their predictions and achievements but according to the agreement of their assumptions with these mediocre apes' medieval, childish prejudices. Isn't the spacetime created out of a classical wooden LEGO? So Lee Smolin will dislike it. Isn't some economic development explained as a consequence of some decision of a wise global banker? Romer will identify the explanation with gremlins, trolls, phlogiston, and aether – even though, I am sure, he doesn't really know what the words mean, why they were considered, and why they are wrong.

The name of Lee Smolin appears 8 times in Romer's "paper". And in all cases, he quotes the crackpot completely uncritically, as if he were a top intellectual. Sorry, Mr Romer, even if you are just an economist, it is still true that if you can't solve the homework problem that asks you to explain why a vast majority of Lee Smolin's book is cr*p, then you are dumb as a doorknob.

A major example. Half of Page 15 of Romer's "paper" is copying some of those slurs by Smolin from Chapter 16. String theorists were said to suffer from:
  1. Tremendous self-confidence
  2. An unusually monolithic community
  3. A sense of identification with the group akin to identification with a religious
    faith or political platform
  4. A strong sense of the boundary between the group and other experts
  5. A disregard for and disinterest in ideas, opinions, and work of experts who are
    not part of the group
  6. A tendency to interpret evidence optimistically, to believe exaggerated or
    incomplete statements of results, and to disregard the possibility that the theory
    might be wrong
  7. A lack of appreciation for the extent to which a research program ought to
    involve risk
These are just insults or accusations and it's spectacularly obvious that all of them apply much more accurately to Romer and Smolin than to and string theorists – and, I am a bit less certain here, than to the macroeconomists who disagree with Romer.

First of all, almost all string theorists are extremely humble and usually shy people – which is the actual reason why many of them have had quite some problems to get jobs. The accusation #1 is self-evident rubbish.

The accusation #2 is nonsense, too. The string theory community has many overlapping subfields (phenomenology including its competing braneworld/heterotic/F-theory/G2 sub-subfields, formal, mathematically motivated, applications of AdS/CFT), significant differences about many issues – the anthropic principle and the existence and describability of the black hole interior are two major examples in the last 2 decades. It's a giant amount of intellectual diversity if you realize that there are less than 1,000 "currently paid professional" string theorists in the world. Less than 1 person among 7 million is a professional string theorist. On the other hand, there is some agreement about issues that can be seemingly reliably if not rigorously demonstrated. So science simply never has the "anything goes" postmodern attitude. But to single out string theorists (and I think that also macroeconomists) as examples of a "monolithic community" is just silly.

In the item #3, he talks about a fanatical religious identification with the community. People who know me a little bit – and who know that I almost certainly belong among the world's top 10 most individualistic and independent people – know quite some counterexample. But the identification is silly, too. Many string theorists also tend to identify with very different types of folks. And even the political diversity among the string theorists is a bit higher than in the general Academia. At least you know that I am not really left-wing, to put it mildly. But there are other, somewhat less spectacular, examples.

Concerning #4, it is true that there's a strong sense of a boundary between string theorists and non-string theorists. But this "sense" exists because the very sharp boundary indeed exists. String theory – and the expertise needed to understand and investigate it – is similar to a skyscraper with many floors. One really needs quite some talent and patience to get to build all of them (by the floors, I mean the general "physics subjects" that depend on each other; string theory is the "last one") and get to the roof. Once he's on the roof, he sees the difference between the skyscraper and the nearby valleys really sharply. The higher the skyscraper is, the more it differs from the lowland that surrounds it. String theory is the highest skyscraper in all of science so the "sense" of the boundary between it and the surrounding lowlands is naturally the strongest one, indeed.

Top string experts are generally uninterested in the work of non-members, as #5 says, because they can see that those just don't work. They are igloos – sometimes demolished igloos – that simply look like minor structures on the background from the viewpoint of the skyscraper's roof. A Romer or a Smolin may scream that it's politically incorrect to point out that string theory is more coherent and string theorists are smarter and have learned many more things that depend on each other etc. etc. – except that whether or not these things are politically incorrect, they're true – and this truth is as self-evident to the string theorists as the fact that you're pretty high if you're on the roof of the Empire State Building. String theorists usually don't emphasize those things – after all, I believe that I am the only person in the world who systematically does so – but what annoys people like Smolin and Romer is that these things are true and because these true facts imply that neither Smolin nor Romer are anywhere close to the smartest people on Earth, they attack string theorists because of this fact. But this fact isn't string theorists' fault.

He says in #6 that "evidence is interpreted optimistically". This whole term "optimistically" reflects Romer's complete misunderstanding how cutting-edge physics works. Physical sciences – like mathematics – work hard to separate statements to right and wrong, not pessimistic and optimistic. There's no canonical way to attach the label "optimistic" and "pessimistic" to scientific statements. If someone says that there exists a set of arguments that will be found that will invalidate string theory and explain the world using some alternative theory with a unique vacuum etc., Romer may call it a "pessimistic" for string theorists. Except that string theorists would be thrilled if this were possible. So making such a prediction would be immensely optimistic even according to almost all string theorists. The problem with this assertion is that it is almost certainly wrong. There doesn't exist a tiny glimpse of evidence that something like that is possible. String theorists would love to see some groundbreaking progress that totally changes the situation of the field except that changes of the most radical magnitude don't take place too often and when someone talks about those revolutions, it isn't the same as actually igniting such a revolution. So without something that totally disrupts the balance, string theorists – i.e. theoretical physicists who carefully study the foundations of physics beyond quantum field theory – continue to have the beliefs they have extracted from the evidence that has actually been presented. Of course that string theory's being the only "game in town" when it comes to the description of Nature including QFTs and gravity is one of these conclusions that the experts have drawn.

The point #7 says that string theorists don't appreciate the importance of risk. This is just an absolutely incredible lie, the converse of the truth. Throughout the 1970s, there was just a dozen of string theorists who did those spectacular things with the risk that they will die of hunger. This existential risk may have gone away in the 1980s and 1990s but it's largely back. Young ingenious people are studying string theory while being completely ignorant whether they will be able to feed themselves for another year. Some of them have worked – and hopefully are working at this moment, when I am typing this sentence – on some very ambitious projects. It's really the same ambition that Romer and Smolin criticize elsewhere – another reason to say that they're logically inconsistent cranks.

Surprisingly, the words "testable" and "falsifiable" haven't appeared in Romer's text. Well, those were favorite demagogic buzzwords of Mr Peter Woit, the world's second most notorious anti-string crackpot. But Smolin has said similar things himself, too. The final thing I want to say is that it's very ironic for Romer to celebrate this anti-physics demagogy which often complained about the absence of "falsifiability". Why?

Romer's most well-known contribution before he became a bureaucrat was his being one of a dozen of economists who advocated the endogenous growth theory, the statement that the growth arises from within, from investment to the human capital etc., not from external forces (Romer did those things around 1986). Great, to some extent it is obvious, it's hard to immediately see what they really proposed or discovered.

But it's funny to look at the criticisms of this endogenous theory. There are some "technical" complaints that it incorrectly accounts for the convergence or divergence of incomes in various countries. However, what's particularly amusing is the final paragraph:
Paul Krugman criticized endogenous growth theory as nearly impossible to check by empirical evidence; “too much of it involved making assumptions about how unmeasurable things affected other unmeasurable things.”
Just to be sure, I am in no way endorsing Krugman here. But you may see that Krugman has made the claim that "Romer's theory is unfalsifiable" using words that are basically identical to those used by the anti-string critics against string theory. However, for some reasons, Romer has 100% identified himself with the anti-string critics. We may also say that Krugman basically criticizes Romer for using "imaginary causes" – the very same criticism that Romer directs against others! You know, the truth is that every important enough theory contains some causes that may look imaginary to skeptics or those who haven't internalized or embraced the theory.

As I have emphasized for more than a decade, all the people who trust Smolin's or Woit's criticisms as criticisms that are particularly apt for string theory are brainwashed simpletons. Whenever there is some criticism that may be relevant for somebody, it's always spectacularly clear to any person with at least some observational skills and intelligence that the criticism applies much more accurately to the likes of Smolin, Woit, and indeed, Romer themselves, than it does to string theorists.

Smolins, Woits, and Romers don't do any meaningful research today and they know that they couldn't become influential using this kind of work. So they want to be leaders in the amount of slurs and accusations that they emit and throw at actual active researchers – even if these accusations actually describe themselves much more than they describe anyone else. The world is full of worthless parasites such as Smolin, Woit, and Romer who endorse each other across the fields – plus millions of f*cked-up gullible imbeciles who are inclined to take these offensive lies seriously. Because the amount of stupidity in the world is this overwhelming, one actually needs some love for risk to simply point these things out.

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