*The Islamic Enlightenment* | A critical review

De Bellaigue, Christopher. (2017) The Islamic Enlightenment: The Struggle Between Faith and Reason 1798 to Modern Times. Liveright Publishing Corporation (Norton & Company) New York, London.

In 1798, in view of the Pyramids, a French expeditionary force defeated the strange caste of slave-soldiers, the Mamlukes, who had been ruling Egypt for several centuries. The Mamlukes charged the French infantry squares on horseback, ending their charge with the throwing of javelins. The Mamlukes were thus eliminated from history. The French lost 29 soldiers. In the conventional narrative, the battle woke up the whole Muslim world from its long and haughty slumber. The defeat, the pro-active reforms of Napoleon’s short-lived occupancy, and the direct influence of the French scholars he had brought with him lit the wick of the candle of reform or, possibly, of enlightenment throughout the Islamic world.

De Bellaigue picks up this conventional narrative and follows it to the beginning of the 20th century with a dazzling richness of details. This is an imperfect yet welcome thick book on a subject seldom well covered.

This book has, first, the merit of existing. Many people of culture, well-read people with an interest in Islam – Islam the sociological phenomenon, rather than the religion – know little of the travails of its attempted modernization. Moreover, under current conditions of political correctness the very subject smells a little of sulfur: What if we looked at Muslim societies more closely and we found in them some sort of intrinsic inferiority? I mean by this, an inferiority that could not easily be blamed on the interference of Western, Christian or formerly Christian, capitalist societies. Of course, such a finding could only be subjective but still, many would not like it, and not only Muslims.

Second, and mostly unintentionally, possibly inadvertently, the book casts a light, an indirect light to be sure, on Islamist (fundamentalist) terrorism. It’s simple: Enlightened individuals of any religious background are not likely to be also fanatics willing to massacre perfect strangers. Incidentally, I examine this issue myself in a fairly parochial vein, in an essay in the libertarian publication Liberty Unbound: “Religious Bric-à-Brac and Tolerance of Violent Jihad” (January 2015). With his broader perspective, with his depth of knowledge, De Bellaigue could have done a much better job of this than I could ever do. Unfortunately he ignored the subject almost entirely. It wasn’t his topic, some will say. It was not his period of history. Maybe. Continue reading

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BC’s weekend reads

  1. Holy shit! (great news)
  2. Hayek’s rapid rise to stardom | misunderstanding Hayek
  3. great write-up on Catalonia | a philosophical case for secession
  4. if colonialism was the apocalypse, what comes next? | should UNM replace its seal?
  5. do trees fall in cyberspace? | how to use Facebook better
  6. a pretty shallow deep throat | vulvæ in pornography and culture

(Unofficial) IHS Graduate Student Facebook Group

I’ve created an (unofficial) facebook group for graduate students who are part of the IHS crowd so that we can organize appropriate conference meet ups, look for potential hotel sharing buddies, and other hijinks. Several NoL writers and readers have gone through IHS so I figured I’d share the link.

I may or may not be using the group as a way to find future NoL writers.

https://www.facebook.com/groups/1958211444500599/

#mini-microblog

Can you manage what you can’t measure?

Disclaimer: I’m not a macroeconomist, but I play one in Principles classes. Feel free to point out my errors in the comments.

Economics is filled with imperfect measures of important concepts. GDP, unemployment rates, and price indices all have significant flaws. Measures of entrepreneurship are even worse.

The Chicago Booth IGM Experts’ Panel recently posted an interesting result about the problems with unemployment:

IGMChicago_EmploymentandtheUSEconomy

The question is: “The concept of “maximum sustainable employment” is well defined enough to be used beneficially in economic policymaking.”

That’s 42 economists asked, 34 with an opinion (including “uncertain”), and about half of the sentiment is positive. And that sounds about right to me. I read this question as “can we engage in macroeconomic policy that doesn’t do long-run harm?” And if I were to describe my opinion probabilistic, it would look like these results. We could probably do “good policy” with a low degree of precision (i.e. useful enough for severe situations) if 1) we magically didn’t have to deal with political squabbling and 2) explicitly limited our goals to the short run.

Respondents agreeing emphasize that it’s “good enough.” But what does that mean? What level of precision and control are we looking at here?

Here’s the basic situation: given the underlying economic reality (everyone’s individual preferences, capabilities, knowledge, etc.) it makes sense to have some limited number of unemployed people at any given time. Unemployment rate is a measure of “how far are we from 0,” not, “how far are we from the ideal level?” That raises the following questions:

  • How accurately can we know what’s going on in the world?
  • How accurately can we know what’s supposed to be going on in the world?
  • How precisely can we affect the world?

The aggregate macroeconomic theory and empirics of the 1960’s were seriously imprecise. Trying to target macroeconomic policy would be like doing eye surgery with a hand grenade. In that sort of world, your best medicine is probably chicken soup and bed rest.

Here in the present we have much better data and computation. And it’s going to get better. Facebook already has data precise enough to track the exact effects of policy down to the individual level.

But think about a precise outcome and imagine what sort of policy would be required to get there. Let’s say our outcome is “get Rick to buy a new car.” Some mix of low interest rates, the right set of subsidies, and ideal circumstances might move things in that direction. But that sort of surgical outcome is just never going to be possible through legitimate macroeconomic policy (and definitely not monetary policy*). The size of the problem just means that Butterfly Effect problems will prevent macroeconomic policy from having household-level precision, even if the data could (in principle) measure the effect.

Less precise outcomes seem plausible (e.g. “get middle class households in the north east to buy 30-60,000 new cars”), but not without making a lot of second order problems. It’s not so much a “middle of the road leads to socialism” situation as a multiplier effect from a convergent series. Push a billion over there, create big distortions, follow those up with medium distortions, and finally let small remaining problems fizzle out on their own. Throw in public choice issues and it seems obvious that the efficiency cost of precise interventions won’t scale up nicely.

We’re now in a world where our theoretical and empirical tools are more precise than our implementation tools. We’re no longer trying to do surgery with a hand grenade. But that doesn’t mean we’ve got a laser scalpel either. It’s more like we’ve got we’ve got laser-like measuring tools but our implementation tools are blunt objects. If we aren’t careful, we’ll spend our time swatting flies with sledge hammers.

All told, it seems possible that we could engage in fairly targeted macroeconomic policy. But as the scale increases, the marginal cost will rise rapidly (maybe less so with the right institutions). Better timing might increase the effectiveness of each dollar spent*, but overall, it seems like things have to be really bad before the government should consider anything too ambitious.

Manage an economy’s economic health using imperfect measures like unemployment rate is about like trying to manage your physical health using heart rate and body mass index figures. Can we do “good enough”? Only to a limited extent. We could stop eating garbage and get some exercise. But there isn’t some magic combination of vitamins and crystals that will stop cancer. Anyone who tells you otherwise is a) trying to sell you something and b) trying to convince themselves they’re in control of the uncontrollable.

In terms of macroeconomic policy, we should start by caring about fundamentals (i.e. long run economic development) and be skeptical of people promising to control the business cycle.


*And let’s face it, we aren’t likely to get decent macroeconomic policy (in terms of efficiency, timing, and appropriateness of policy to circumstances) out of Congress until there’s a serious cultural shift.

Towards a genuinely Inclusive, Liberal, and Open Global Agenda

The recent past has been witness to the increasing rise of ‘economic-nationalism’, anti-immigration policies, and increasing xenophobia. Countries which in the past have welcomed immigrants, and have been protagonists of Free Trade and open borders, while immensely benefiting from the same, are becoming more and more insular. While this point got strongly reiterated by the election of Donald Trump. Apart from the US and UK, many of the EU member states and Australia are also becoming more and more inward looking.

Germany and Canada have tried to develop an alternative narrative while being open to immigrants, and opening their doors to refugees. Justin Trudeau in Canada, like Angela Merkel, deserves immense credit for exhibiting courage and conviction and not capitulating before populist and ultra nationalist sentiments.

Both Trudeau and Merkel have opened their doors to refugees, with Trudeau opening his country’s doors to nearly 40,000 Syrian refugees. After the US imposed a ban on immigrants from certain Muslim countries, he tweeted:

“To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith. Diversity is our strength #WelcomeToCanada.”

Angela Merkel, Chancellor of Germany, in spite of scathing criticism for her decision to admit over 1 Million refugees, since 2015, from Syria, Iran, and Afghanistan, has stuck to her guns. In an interview, the German Chancellor stated:

“It was an extraordinary situation and I made my decision based on what I thought was right from a political and humanitarian standpoint.”

The rise of the extreme right AfD, which emerged as the third largest political outfit, and which Merkel managed to beat by a lesser margin than usual, has been attributed to Merkel’s open door policy.

Along with Macron and Trudeau, one more leader who is trying to offer an alternative narrative is the Mayor of London, Sadiq Khan, who has started a campaign, ‘London is Open’. Said Khan in his message:

…Many people from all over the globe live and work here, contributing to every aspect of life in our city. We now need to make sure that people across London, and the globe, hear that #LondonIsOpen… 

Not restricted to any ideology or country

It would be pertinent to point out that while the rise of right-wing leaders like Trump and AFD in Germany is cited as one of the reasons for this growing insularity, even left leaning leaders have been equally inward looking, when it comes to economic and trade policies. One thing which was common between Trump and Bernie Sanders was their economic policies, which found resonance with the working class.

Not just Trump

While Trump has emerged as the mascot of ‘insularity’ and economic nationalism, it must be pointed out that not just the US, but other countries which have benefited from immigration, to have tended to look inwards on important issues.

Australia, which has opposed Trump’s withdrawal from the Trans Pacific Partnership TPP and has repeatedly spoken in favour of an ‘open’ Indo-Pacific, has brought in some tough laws to oppose immigration. This includes the abolition of the 457 Visa (for skilled migrants), replacing it with a new visa program which is far more stringent, and will make it tougher for workers from other countries.

Commenting on the abolition of the Visa, Australian Prime Minister Malcolm Turnbull stated:

“The migration program should only operate in our national interest. This is all about Australia’s interest.”

The second point to bear in mind is that some countries have spoken vociferously in favour of trade agreements, and open borders, but have played it safe on important human rights issues and immigration. This includes not just Syrian refugees, but more recently the Rohingya Issue. If one were to take the case of ASEAN for instance, a number of member states including the Chair for 2018, Singapore, have argued in favour of economic openness, and were critical of the US approach towards TPP. Yet, they have been cautious on the Rohingya Issue, not wanting to rub Aung San Suu Kyi the wrong way.

Conclusion

In conclusion, there can  not be a selective approach, countries which seek to benefit from globalization, need to be open to immigrants and at times shoulder onerous responsibilities. After all, it is not just immigrants who benefit economically, but countries which they have migrated too also benefit from their skills and productivity.

Secondly, an enlightened, liberal agenda cannot just be restricted to economic issues, important human rights issues, can not be obliterated and must get the attention they deserve.

Third, it is pointless, to blame any one country or ideology for insularity, everyone shares collective responsibility for the same.

The Dictator’s Handbook

I recently pointed you towards a book that has turned out to be a compelling and interesting read.

At the end of the day, it’s a straightforward application of public choice theory and evolutionary thinking to questions of power. Easy to understand theory is bundled with data and anecdotes* to elucidate the incentives facing dictators, democrats, executives, and public administrators. The differences between them are not discrete: they all face the same basic problem of compelling others’ behavior while facing some threat of replacement.

Nobody rules alone, so staying in power means keeping the right people happy and/or afraid. All leaders are constrained by their underlings. These underlings are necessary to get anything done, but they’re also potential rivals. For Bueno de Mesquita and Smith the crucial facts of a political order are a) how big a coalition (how many underlings) the ruler is beholden too and b) how replaceable the members of that coalition are.

The difference between liberal and illiberal orders boil down to differences in those two parameters. In democracies with a larger coalition and less replaceable coalition members, rulers behave better.

 

I got a Calculus of Consent flavor from Dictator’s Handbook. At the end of the day, collective decision making will reflect some version of “the will of the people… who matter.” But when we ask about the number of people who matter, we run into C of C thinking. Calling for bigger coalitions is another way of calling for an approach to an effective unanimity rule (at least at the constitutional stage).

In C of C the question of the optimal voting rule (majority vs. super majority vs. unanimity) boils down to a tradeoff between the costs of organizing and the costs of externalities imposed by the ruling coalition. On the graph below (from C of C) we’re comparing organization costs (J) against externality costs (I) (the net costs of the winning coalition’s inefficient policies). The idea is that a unanimity rule would prevent tyranny of the majority (i.e. I is downward sloping), but that doesn’t mean unanimity is the optimal voting rule.

Figure 18.  Click to open in new window.

But instead of asking “what’s efficient” let’s think think about what we can afford out of society’s production, then ask who makes what decisions. In a loose sense, we can think of a horizontal line on the graph above representing our level of wealth. If we** aren’t wealthy enough to organize, then the elites rule and maximize rent extraction. We can’t get far up J, so whichever coalition is able to rule imposes external costs at a high level on I.

But I‘s height is a function of rent extraction. Rulers face the classic conundrum of whether to take a smaller piece of a larger pie.

The book confirms what we already know: when one group can make decisions about what other groups can or must do, expect a negative sum game. But by throwing in evolutionary thinking it shed light on why we see neither an inexorable march of progress nor universal tyranny and misery.

As you travel back in time, people (on average) tend to look more ignorant, cruel, and superstitious. The “default state” of humanity is poverty and ignorance. The key to understanding economics is realizing that we’ve bootstrapped ourselves out of that position and we aren’t done yet.

The Dictator’s Handbook helped me realize that I’d been forgetting that the “default state” of political power is rule by force. The liberalization we’ve seen over the last 500 years has been just the first part of a bootstrapping process.

Understanding the starting point makes it clear that more inclusive systems use ideas, institutions, capital, and technology to abstract upward to more complex levels. Something like martial honor scales up the exercise of power from the tribe (who can The Chief beat up) to the fiefdom (now the Chief has sub-chiefs). Ideology and identity can tie fiefdoms into nation-states (now we’ve got a king and nobility). Wealth plus new ideologies create more inclusive and democratic political orders (now we’ve got a president and political parties). But each stage is built on the foundation set before. We stand on the shoulders of giants, but those giants were propped up by the non-giants around them.

Our world was built by backwards savages. The good news is that we can use the flimsier parts of the social structure we inherited as scaffolding for something better (while maintaining the really good stuff). What exactly this means is the tricky question. Which rules, traditions, organizations, and processes are worth keeping? How do we maintain those? How/when do we replace the rest? And what does “we” even mean?

Changing the world involves uncertainty. There are complex interrelations between every part of reality. And the knowledge society needs is scattered through many different minds. To make society better, we need buy-in from our neighbors (nobody rules alone). And we need to realize that the force we exert will be countered by an equal and opposite force some plural, imperfectly identifiable, maybe-but-probably-not equal, and only-mostly-opposite forces. There are complex and constantly shifting balances between different coalitions vying for power and the non-coalitions that might suddenly spring into action if conditions are right. Understanding the forces at play helps us see the constraints to political change.

And there’s good news: it is possible to create a ruling coalition that is more inclusive. The conditions have to be right. But at least some of those conditions are malleable. If we can sell people on the right ideas, we can push the world in the right direction. But we have to work at it, because there are plenty of people pitching ideas that will concentrate power and create illiberal outcomes.


*I read the audiobook, so I’m basically unable to vouch for the data analysis. Everything they said matched the arguments they were making, but without seeing it laid out on the page I couldn’t tell you whether what they left out was reasonable.

**Whatever that means…

What classes are worth subsidizing?

A friend of mine has a great phrase that captures what’s wrong with about 1/3 of the population. They’re “people who would make good Nazis.” These are the obedient people who are ready to follow orders without thinking without having sufficiently high standards for whose orders they’ll follow.

My question is “what can I do to help my students not fall into this category?” The trouble is that these folks aren’t drawn to intellectual arguments. I need to get them in a more visceral way. I think the answer is art. These kids need to be watching TV shows and movies/shows like Donnie Darko and The Handmaid’s Tale (tell me your favorites in the comments!). They need something that will grab them by the lapels, shake them, and shout “question authority!”

Pragmatic folks (the sort of people who are normally excited to hear what a libertarian economist has to say) would usually think that schools should focus on pragmatic things. It’s certainly a good idea for kids to leave school with some ideas about how to manage their personal finances and research important issues. But the economic justification for subsidies rarely favors such pragmatic topics. Petroleum engineers don’t need their schooling subsidized because they’ll end up getting paid enough to pay off their student loans.

I like to think of myself as a pragmatic person*, but I’m increasingly coming around to the idea that art is worth subsidizing. Even (perhaps) if that means giving money to ridiculous people who argue incoherently against freedom.

Bildergebnis für ned flanders parents

As subsidies go, art is cheap. You don’t need to build anything as complicated as a particle accelerator. You just need to grab some kid out of the nearest Starbucks and give them a few bucks to make something.

You’ll end up paying for a lot of garbage, but life is full of waste (I’d bet good money that any good project involves a good amount of unrealized potential savings that are only obvious after the fact). For that matter, you’ll almost certainly do some degree of harm. If we threw money at art departments (the way we did with STEM departments during the cold war) the money spent on Che shirts could easily fuel the western hemisphere by attaching a generator to Guevara’s spinning corpse.

And the benefits will be vague and arguable. I’m not in the business of selling bonafide snake oil; this idea isn’t a magical cure-all.

In fact, the more you try to measure the benefits, the less benefit you might get. If we could measure important but intangible things like decency and thoughtfulness, we’d already have those things. But when we try to come up with proxies for important things, those proxies quickly become bad proxies. All the more so if we try to reward people for measurable achieving our goals. Funding should be unconditional (and focused on production rather than selection) if we want to avoid funding propaganda. We almost certainly will be funding propaganda, but if humanity is really worth saving, it’s a baby/bathwater tradeoff.

I’ve just spent three paragraphs convincing you that this might be a terrible idea. But I still think the net benefits could justify the cost. Imagine some imperfect estimate of the impact and an even more imperfect measure of the value created. What will we get out of this (on average)? In a word: more. More novels, web comics, paintings, podcasts, and films.

And with more art, there’s more cream to rise to the top. The best art typically encourages thoughtfulness and empathy. This is a “let a thousand flowers bloom” approach that would (at relatively low cost) saturate the public sphere with enough semi-thoughtful stuff to force usually-thoughtless people to think more clearly about the world around them.

If** we can subsidize free thought, this is how we’ll do it. And if it’s possible, it’s worth doing in a world where we clearly have too many people who would make good Nazis.


*If that was really true I’d work in a bank.

**Do I really think this would work? I’m not remotely sure. But I think it’s an idea worth discussing. I teach economics because I hope the marginal return (in terms of improving the “civic quality” of my students) is high. But it feels Sisyphusian at times, and some students are clearly not ready to get it. I worry that they’ll go out into the world ready to follow any maniac’s orders. In terms of the stability of a free and peaceful society, doing something about those people seems important.