Economists vs. Scientists on Long-Term Growth

March 4, 2018

Economists vs. Scientists on Long-Term Growth

Artificial intelligence researchers and conventional economists may have very different views about the impact of new technologies. But right now, and forgetting the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.

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CAMBRIDGE – Most economic forecasters have largely shrugged off recent advances in artificial intelligence (for example, the quantum leap demonstrated by DeepMind’s self-learning chess program last December), seeing little impact on longer-term trend growth. Such pessimism is surely one of the reasons why real (inflation-adjusted) interest rates remain extremely low, even if the bellwether US ten-year bond rate has ticked up half a percentage point in the last few months. If supply-side pessimism is appropriate, the recent massive tax and spending packages in the United States will likely do much more to raise inflation than to boost investment.

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It is hard to know who is right: neither economists nor scientists have a great track record when it comes to making long-term predictions. But right now, and leaving aside the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.–

There are plenty of reasons to object to recent US fiscal policy, even if lowering the corporate-tax rate made sense (albeit not by the amount enacted). Above all, we live in an era of rising inequality and falling income shares for labor relative to capital. Governments need to do more, not less, to redistribute income and wealth.

It is hard to know what US President Donald Trump is thinking when he boasts that his policies will deliver up to 6% growth (unless he is talking about prices, not output!). But if inflationary pressures do indeed materialize, current growth might last significantly longer than forecasters and markets believe.

In any case, the focus of economists’ pessimism is long-term growth. Their stance is underpinned by the belief that advanced economies cannot hope to repeat the dynamism that the US enjoyed from 1995-2005 (and other advanced economies a bit later), much less the salad days of the 1950s and 1960s.

But the doubters ought to consider the fact that many scientists, across many disciplines, see things differently. Young researchers, in particular, believe that advances in basic knowledge are coming as fast as ever, even if practical applications are taking a long time to develop. Indeed, a small but influential cult touts the Hungarian-American mathematician John von Neumann’s “singularity” theory. Someday, thinking machines will become so sophisticated that they will be able to invent other machines without any human intervention, and suddenly technology will advance exponentially.

If so, perhaps we should be far more worried about the ethical and social implications of material growth that is faster than humans can spiritually absorb. The angst over AI mostly focuses on inequality and the future of work. But as science fiction writers have long warned us, the potential threats arising from the birth of silicon-based “life” forms are truly frightening.

It is hard to know who is right: neither economists nor scientists have a great track record when it comes to making long-term predictions. But right now, and leaving aside the possibility of an existential battle between man and machine, it seems quite plausible to expect a significant pickup in productivity growth over the next five years.

Consider that the main components of economic growth are increases in the labor force, increases in investment (both public and private), and “productivity,” namely the output than can be produced with a given amount of inputs, thanks to new ideas. Over the past 10-15 years, all three have been dismally low in the advanced economies.

Labor force growth has slowed sharply, owing to declining birth rates, with immigration failing to compensate even in pre-Trump America. The influx of women into the labor force played a major role in boosting growth in the latter part of the twentieth century. But now that has largely played out, although governments could do more to support female labor force participation and pay equity.

Similarly, global investment has collapsed since the 2008 financial crisis (though not in China), lowering potential growth. And measured productivity growth has declined everywhere, falling roughly by half in the US since the tech boom of the mid-1990s. No wonder global real interest rates are so low, with high post-crisis savings chasing a smaller supply of investment opportunities.

Still, the best bet is that AI and other new technologies will eventually come to have a much larger impact on growth than they have up to now. It is well known that it can take a very long time for businesses to reimagine productive processes to exploit new technologies: railroads and electricity are two leading examples. The pickup in global growth is likely to be a catalyst for change, creating incentives for firms to invest and introduce new technologies, some of which will substitute for labor, offsetting the slowdown in the growth of the workforce.

With the after-effects of the financial crisis fading, and AI perhaps starting to gain traction, trend US output growth can easily stay strong for the next several years (though, of course, a recession is also possible). The likely corresponding rise in real global interest rates will be tricky for central bankers to navigate. In the best case, they will be able to “ride the wave,” as Alan Greenspan famously did in the 1990s, though more inflation is likely this time.

The bottom line is that neither policymakers nor markets should be betting on the slow growth of the past decade carrying over to the next. But that might not be entirely welcome news. If the scientists are right, we may come to regret the growth we get.


Enlightenment Now: A Manifesto for Science, Reason, Humanism and Progress by Stephen Pinker –Review

February 27, 2018

Enlightenment Now: A Manifesto for Science, Reason, Humanism and Progress by Stephen Pinker –Review

On economic matters, and especially the question of inequality, he comes perilously close to defending the status quo

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Manifestos are meant to be short and punchy. The first edition of The Communist Manifesto ran to just 23 pages. Martin Luther’s Ninety-five Theses were thin enough to be nailed to the door of the castle church in Wittenberg. So Steven Pinker is stretching the genre with his 450-page doorstopper Enlightenment Now: A Manifesto for Science, Reason, Humanism and Progress.

A respected linguist and cognitive scientist, Pinker has emerged in recent years as prominent defender of the West and allied scientific values, blending rhetoric and data like Christopher Hitchens with a PhD. His 2011 book The Better Angels of Our Nature is a bible of the New Optimists movement, a loose coalition of academics and tech-heads who think the public is far too negative about current affairs.

The first half of Englightenment Now develops that theme further. A barrage of statistics, graphs and listicles shows how life is improving under numerous headings. There are fewer wars, improved living standards and more freedoms. What’s more, a lot of the problems we complain about are symptoms of progress, eg life expectancy has risen by about 10 years in half a century (so, the implication is, stop whining about the pensions “time bomb”).

If Pinker went into politics his slogan would be along the lines of: Keep the recovery going

The stats are persuasive and quite sobering for a journalist. The media comes in for stinging and justified criticism, although Pinker makes clear negativity runs deeper in society.

A little experiment: Imagine all the good things that could happen to you today, and you’d come up with a modest list. Now, think of all the bad things; “it’s endless”, Pinker sighs. “The English language has far more words for negative emotions than positive ones”, and there is a much greater market for curmudgeons than the sort of experts Michael Gove famously disparaged in the Brexit campaign. “Experiments have shown that a critic who pans a book is perceived as more competent than a critic who praises it, and the same may be true of critics of society.”

On major world challenges, like climate change, the threat of nuclear war and the march of the robots, Pinker advocates “radical incrementalism” rather than blind faith in progress. Rejecting the doom-mongers whom he believes are paralysing the public with fear, he steals a line from Swedish academic Hans Rosling to declare: “I am not an optimist. I’m a very serious possibilist.”

That said, on economic matters, and especially the question of inequality, he comes perilously close to defending the status quo. Some may be alarmed to hear that Microsoft founder Bill Gates has described Englightenment Now as his “new favourite book of all time” (having got an advance copy from the author). [] And if Pinker went into politics his slogan would be along the lines of: “Keep the recovery going”. Or as he puts it, in a concluding remark on financial justice: “In some ways the world has become less equal, but in more ways the world’s people have become better off.”

Perhaps it has escaped Pinker’s attention that one of the world’s most prominent critics of relativism today is Pope Francis

Had Pinker finished the book at page 345 he would have got five stars from this reviewer but, in the last section he embarks on a proselytising mission to proclaim “humanism” as the only legitimate moral framework. Pinker concedes that by humanism he means utilitarianism, and thus ignores vast swathes of secular moral theory. He then goes on to blame Friedrich Nietzsche for the emergence of both relativism (the idea that truth is whatever you want it to be) and the Nazis – committing the kind of jump in logic that he’d be quick to criticise in others. Pinker is right to highlight the “liberal” left’s infatuation with Nietzsche but his treatment of the subject is superficial compared, for example, to Richard Wolin’s excellent The Seduction of Unreason (2004).

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Another black mark against Pinker is his claim that theistic morality is an “enemy of humanism”, a bit of rhetoric that he doesn’t back up with convincing evidence. Perhaps it has escaped Pinker’s attention that one of the world’s most prominent critics of relativism today is Pope Francis, a religious leader who has also spoken positively about humanism and the value of the secular state.

Religions have endured because they are stubbornly adaptive and tend to accommodate scientific truths after a time lag. If Pinker wants the revolution in reason to come about – and God knows we all need it – he and other New Enlightenment champions need to build alliances. Progress depends on talking to people outside one’s own peer group.

Tech and Higher Education

February 21, 2018

Tech and Higher Education

Universities pride themselves on producing creative ideas that disrupt the rest of society, yet higher-education teaching techniques continue to evolve at a glacial pace. Given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education?

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CAMBRIDGE – In the early 1990s, at the dawn of the Internet era, an explosion in academic productivity seemed to be around the corner. But the corner never appeared. Instead, teaching techniques at colleges and universities, which pride themselves on spewing out creative ideas that disrupt the rest of society, have continued to evolve at a glacial pace.

Sure, PowerPoint presentations have displaced chalkboards, enrollments in “massive open online courses” often exceed 100,000 (though the number of engaged students tends to be much smaller), and “flipped classrooms” replace homework with watching taped lectures, while class time is spent discussing homework exercises. But, given education’s centrality to raising productivity, shouldn’t efforts to reinvigorate today’s sclerotic Western economies focus on how to reinvent higher education?

One can understand why change is slow to take root at the primary and secondary school level, where the social and political obstacles are massive. But colleges and universities have far more capacity to experiment; indeed, in many ways, that is their raison d’être.

For example, what sense does it make for each college in the United States to offer its own highly idiosyncratic lectures on core topics like freshman calculus, economics, and US history, often with classes of 500 students or more? Sometimes these giant classes are great, but anyone who has gone to college can tell you that is not the norm.

At least for large-scale introductory courses, why not let students everywhere watch highly produced recordings by the world’s best professors and lecturers, much as we do with music, sports, and entertainment? This does not mean a one-size-fits-all scenario: there could be a competitive market, as there already is for textbooks, with perhaps a dozen people dominating much of the market.

And videos could be used in modules, so a school could choose to use, say, one package to teach the first part of a course, and a completely different package to teach the second part. Professors could still mix in live lectures on their favorite topics, but as a treat, not as a boring routine.

A shift to recorded lectures is only one example. The potential for developing specialized software and apps to advance higher education is endless. There is already some experimentation with using software to help understand individual students’ challenges and deficiencies in ways that guide teachers on how to give the most constructive feedback. But so far, such initiatives are very limited.

Perhaps change in tertiary education is so glacial because the learning is deeply interpersonal, making human teachers essential. But wouldn’t it make more sense for the bulk of faculty teaching time to be devoted to helping students engage in active learning through discussion and exercises, rather than to sometimes hundredth-best lecture performances?3

Yes, outside of traditional brick-and-mortar universities, there has been some remarkable innovation. The Khan Academy has produced a treasure trove of lectures on a variety of topics, and it is particularly strong in teaching basic mathematics. Although the main target audience is advanced high school students, there is a lot of material that college students (or anyone) would find useful.

Moreover, there are some great websites, including Crash Course and Ted-Ed, that contain short general education videos on a huge variety of subjects, from philosophy to biology to history. But while a small number of innovative professors are using such methods to reinvent their courses, the tremendous resistance they face from other faculty holds down the size of the market and makes it hard to justify the investments needed to produce more rapid change.

Let’s face it, college faculty are no keener to see technology cut into their jobs than any other group. And, unlike most factory workers, university faculty members have enormous power over the administration. Any university president that tries to run roughshod over them will usually lose her job long before any faculty member does.

Of course, change will eventually come, and when it does, the potential effect on economic growth and social welfare will be enormous. It is difficult to suggest an exact monetary figure, because, like many things in the modern tech world, money spent on education does not capture the full social impact. But even the most conservative estimates suggest the vast potential. In the US, tertiary education accounts for over 2.5% of GDP (roughly $500 billion), and yet much of this is spent quite inefficiently. The real cost, though, is not the squandered tax money, but the fact that today’s youth could be learning so much more than they do.

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Universities and colleges are pivotal to the future of our societies. But, given impressive and ongoing advances in technology and artificial intelligence, it is hard to see how they can continue playing this role without reinventing themselves over the next two decades. Education innovation will disrupt academic employment, but the benefits to jobs everywhere else could be enormous. If there were more disruption within the ivory tower, economies just might become more resilient to disruption outside it.

Mahathir Mohamad’s return shows the sorry state of Malaysian politics

July 3, 2017


Mahathir Mohamad’s return shows the sorry state of Malaysian politics

The former Prime Minister is reinventing himself as a leader of the Opposition

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The Doctor seeks a Return to the House

WHEN Mahathir Mohamad spent a week in hospital last year, at the age of 91, talk naturally turned to his legacy as Malaysia’s longest-serving former Prime Minister. How naive. Dr Mahathir may have stepped down in 2003 after 22 years in office, but he has hardly been retiring in retirement. His constant sniping helped topple his immediate successor, Abdullah Badawi, who lasted until 2009.

Now the old warhorse is picking a fight with Najib Razak, the Prime Minister since then and now leader of Dr Mahathir’s former party, the United Malays National Organisation (UMNO), which has run Malaysia for the past 60 years. Dr Mahathir has registered a new political party and persuaded Pakatan Harapan, the fractious coalition that forms Malaysia’s main opposition, to admit it as a member. Now Pakatan is debating whether to make Dr Mahathir the chairman of their coalition—and, perhaps, their candidate for Prime Minister at elections which must be held within 13 months. Having long said that he would not be returning to Parliament, Dr Mahathir has lately been hinting that he would consider another stint in the top job.

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In Politics there are no permanent friends, only permanent interests

It is difficult to imagine a more unlikely turn of events. The original incarnation of the coalition Dr Mahathir might soon be running was formed in the late 1990s to oppose his own interminable rule. Its founder, Anwar Ibrahim, was Dr Mahathir’s deputy until the latter sacked him during a power struggle; he was later jailed on sham charges of corruption and sodomy. The current government’s methods are copied directly from Dr Mahathir’s playbook. Since 2015 Mr Anwar has been back in prison following a second sodomy conviction, this one just as dubious as the first. The reversal of the authoritarian turn Malaysia took under Dr Mahathir is one of Pakatan’s main objectives.

What makes all this even tougher to stomach is that Dr Mahathir’s conversion to the Opposition’s cause looks disturbingly incomplete. Though he is hobnobbing with former enemies, the old codger still finds it difficult to apologise for the excesses of his tenure. Many of his views remain wacky: in May he told the Financial Times that he still thinks the American or Israeli governments might have arranged the attacks of September 11th 2001. Can Malaysia’s opposition really find no more palatable leader?

These are desperate times, retort Dr Mahathir’s supporters. Since 2015 news about the looting of 1MDB, a government-owned investment firm from which at least $4.5bn has disappeared, has dragged Malaysia’s reputation through the muck. American government investigators say that 1MDB’s money was spent on jewellery, mansions, precious artworks and a yacht, and that nearly $700m of it went to the prime minister. Mr Najib says he has not received any money from 1MDB, and that $681m deposited into his personal accounts was a gift from a Saudi Royal (now returned). He has kept his job, but only after replacing the Deputy Prime Minister and the Attorney-General.

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The Prognosis is that Najib Razak is likely to win GE-14

One might expect this scandal to propel Pakatan into power at the coming election, but instead the opposition looks likely to lose ground, perhaps even handing back to UMNO and its allies the two-thirds majority required to amend the constitution. This bizarre reversal has much to do with Malaysia’s regrettable racial politics: the Malay-Muslim majority largely favours the government and the big ethnic-Chinese and -Indian minorities tend to vote against it. Mr Najib has baited an Islamist party into renewing calls for more flogging for moral lapses, forcing them to leave Pakatan. The split in the opposition will lead to lots of three-candidate races, in which UMNO will romp home.

Put in this context, Dr Mahathir’s reappearance is a godsend. It stands to transform Pakatan’s chances by granting access to a broad swathe of rural constituencies that they had previously thought unwinnable. Many Malays have fond memories of the booming economy of Dr Mahathir’s era (they overlook its crony capitalism and his intolerance for dissent); in their eyes, he put Malaysia on the map. As coalition chairman, Dr Mahathir might also bring some order to Pakatan’s noisy council meetings. His backing could be invaluable after a narrow victory or in a hung parliament, when UMNO’s creatures in the bureaucracy might be expected to put up a fight.

All these benefits could probably be obtained without offering to make Dr Mahathir the Prime Minister. But he may be the only front man upon whom most of the coalition can agree. That role had previously fallen to Mr Anwar, but it has become clear to all but a few holdouts that he cannot continue to manage the quarrelsome coalition from his cell. Voters are not sure whether to believe Pakatan when it says that, should it win, it will find some way to catapult Mr Anwar out of his chains and into the country’s top job. Nor are they much inspired by the notion of accepting a seat-warmer to run the country while this tricky manoeuvre takes place.

It could be worse

This is a depressing mess, even by Malaysia’s dismal standards. The opposition bears no blame for the dirty tricks which, over several shameful decades, the government has used to hobble Mr Anwar and many others. But by failing to nurture—or even to agree upon—the next generation of leaders, they have played straight into UMNO’s hands.

It is possible that the thought of hoisting Dr Mahathir into the top job will at last force the coalition to thrust a younger leader to the fore (some suspect that this is the outcome that Dr Mahathir, a shrewd strategist, has always had in mind). But it is also possible that, facing only uncomfortable options, they will end up making no decision at all. Some in Pakatan seem happy to barrel into the next election without telling voters who will lead Malaysia should they win. That might seem like pragmatism, but it is really just defeatism.

This article appeared in the Asia section of the print edition under the headline “Doctor on call”

The Truth of Karl Popper–A Discourse

April 17, 2017

The Truth of Karl Popper–A Discourse

 by Paul Levinson and reply by Jonathan Lieberson

In response to:

The Romantic Rationalist from the December 2, 1982 issue

To the Editors:

Despite Jonathan Lieberson’s unsubstantiated summary of my In Pursuit of Truth (a Festschrift in honor of Karl Popper’s 80th birthday) as a series of “sugary and obsequious expressions of praise” in your December 2 issue, I found this and the first part of Mr. Lieberson’s two-part essay on Karl Popper’s philosophy to be a generally fair and reasonable attempt to explicate Popper’s work. Lieberson’s achievement, however, is unfortunately marred and nearly nullified by a conclusion that seriously misunderstands one of the central aspects of Popper’s philosophy.

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Lieberson begins with an essentially accurate description of how Popper’s method of “falsification” or conjectures and refutations seeks to improve upon the traditional Baconian scientific method of induction or absorption of knowledge from mere repeated experience. As Hume and even Sextus Empiricus before him had seen, no amount of induction or positive repeated experience can ever verify or even support a general theory (for all of our repeated observations may merely be at the tip of an iceberg that runs counter to our general theory); but even one negative or counter experience can, as Popper emphasizes, serve to logically falsify or refute a general theory. Thus, no amount of repeated observations of white polar bears can prove or strengthen a theory that all polar bears are white (for we may from then on encounter nothing but black polar bears), but observation of even one black polar bear—assuming it is indeed a black polar bear—means our theory that all polar bears are white cannot be right.

Lieberson then correctly points out, however, that Popper’s fallibilism is so pervasive as to lead Popper to assert that even observations of black or white polar bears are theory-impregnated (we identify the black object that we see as a polar bear rather than, say, a crow, because of theories that we hold about what polar bears look like, the constancies of species, etc.), and thus conjectural, uncertain, and eminently unprovable. How, then, Lieberson asks, may conjectures-and-refutations and its uncertainty be considered an improvement over induction and its problems? And why, recognizing the inconclusiveness of both, should we reject induction and rejoice in falsification? Since conclusive knowledge is not possible through Popper’s method of conjectures and refutations, Lieberson concludes that Popper’s hope for a non-inductive growth of knowledge is an impossible and thus misleading and dangerous ideal, a romantic “wild-goose chase.”

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The problem that Lieberson raises—the conjectural nature of falsifying observations—is indeed profound, and one that most intelligent people almost always bring up on their first reading of Popper. Indeed, had Lieberson come upon his knowledge of Popper a priori, or from some casual discussion in a classroom, then the conclusions that Lieberson draws from the fallibility of falsifications would be entirely understandable. But the fact of the matter is that Popper himself has continuously raised, addressed, and dealt with this problem throughout his writings, going back to his first published work on scientific method, Logik der Forschung of 1935; and, I am obliged to add, this problem is similarly raised and dispatched with in at least four of the “sugary” essays in my volume. The situation is actually quite simple. We indeed must begin, as Popper does, with the recognition that all observations—whether used to falsify or “verify”—are themselves conjectural, and of no firmer epistemic import than the wildest, concocted abstract theory. We are then faced with a choice: do we use these uncertain, problematic observations to build knowledge inductively, or via a process of conjectures and refutations as suggested by Popper?

Our decision might take into account the fact that induction is, quite independently of the uncertainty of all observations, logically untenable (as Hume had shown, there is no logical warrant that allows us to jump from even a huge number of specifics to a general theory), but that falsification, or the negation of generalities by specifics, is (as Popper and others have shown) quite logically acceptable as a process, even though the contents of that process (the observations) may be forever uncertain. Our choice would thus seem to amount to this: use conjectural, uncertain tools in an illogical process (induction), or use conjectural, uncertain tools in a logical process (falsification). Granting the obvious fact that neither choice can yield perfect or certain knowledge, which one would you choose, Mr. Lieberson?

But if we opt for conjectures and refutations as at least being logically possible, does not the uncertainty of the observations used as refutations condemn us to stagnate in our knowledge, to wallow in a perpetual state of conjecture? Is Lieberson’s characterization of Popperian method as a wild-goose chase appropriate after all? It is not—as a careful reading of Popper and, again, any one of a number of the contributions to my own In Pursuit of Truth makes clear. Indeed, discussions of how knowledge can progress and even flourish despite the endemic uncertainty of our cognition predate Popper by many years, and in Peirce we even find an implication that knowledge grows precisely because it is uncertain (see, for example, the Collected Papers of Charles Sanders Peirce, vol. 1, paragraphs 135-149; for extended discussions of Peirce on certainty and fallibilism, see any of Peter Skagestad’s recent writings).

From among the many arguments for the growth of knowledge in an uncertain world that Popper provides, let us look at but one—the biological or evolutionary analogy central to the field of “evolutionary epistemology,” which is where my own interest in Popper most lies. Assuming the general accuracy of the Darwinian model (but of course alert to its inevitable flaws), we notice three aspects of evolution that have pertinence to the possible growth of uncertain knowledge: (a) all organisms and organic adaptations are imperfect relative to their environments (i.e., they don’t always survive or succeed); (b) all organisms and adaptations appear to develop via a series of trial and error encounters with the environment, with organic characteristics initially generated or “proposed” independently of the environment, and then either eliminated or not by the environment; (c) on the basis of the first two processes, evolution or progressive change does indeed seem to occur, e.g., organisms seem to have developed from simple to complex, from non-intelligent to intelligent, etc., across time.

Now to the extent that the trial-and-error evolution of organisms seems descriptive of the conjectures-and-refutations growth of human ideas—and despite some obvious differences (for example, the important role of intentional rationality in the development of human knowledge), the two processes do seem to have much in common—we have in biological evolution an example of how progress can occur in a world utterly pervaded by, indeed constituted of, imperfection or uncertainty. In other words, if we accept the biological evolution of imperfect organisms as real, the growth of uncertain human knowledge through non-inductive conjectures and refutations seems possible: the nihilism that Lieberson imputes to Popper’s thoroughly conjectural method is unwarranted.

Of course, Darwin’s theory of evolution and for that matter the living world itself may be a chimera; reality and all our perceptions of it may be false or even non-existent. Popper’s philosophy does hold open such disturbing possibilities. But Popper’s philosophy also allows, more, encourages us to choose an alternative to the despair of nihilism and the illogic of inductivism, an alternative which seeks to parlay our uncertainty into a genuine, hard-won, painfully groping growth of knowledge. Granted that such a choice is something less than rational—I elsewhere call it “pre-rational”—but a choice and possibility it nonetheless is. It is just this golden egg of opportunity that Lieberson’s banishment of Popper’s wild geese would destroy.

Paul Levinson, Bronx, New York

Jonathan Lieberson replies:

Paul Levinson claims that the conclusion of my pieces on Popper displays a serious “misunderstanding” of “one of the central aspects of Popper’s philosophy,” namely Popper’s views on the nature and status of “falsifying observations.” But he does not accurately report my thesis: I did not say that since falsifying observation statements (not “falsifying observations”) are “fallible” or “conjectural” Popper’s theory of science falls to the ground. Nor did I claim that “since conclusive knowledge is not possible through Popper’s method of conjectures and refutations, his views are unacceptable.

My difficulty, as I explicitly stated [NYR, December 2] was that a combination of views held by Popper render his alternative to inductionism (as contrasted with Baconian inductivism, which nearly all contemporary philosophers disagree with) a self-defeating and incoherent account of scientific inquiry and the growth of scientific knowledge. As such, I went on, it does not constitute a serious alternative to inductionism.

Thus, although I certainly discussed it, the problem of falsifying observation statements was not my main concern. I was aware that Popper has repeatedly discussed this problem, which Mr. Levinson believes is “one that most intelligent people almost always bring up on their first reading of Popper.” I was not aware, however, until I read Mr. Levinson’s letter, that it has been “dispatched with” in his collection of essays. Mr. Levinson claims that the “situation” with regard to falsifying observation statements is “actually quite simple”: all observations are conjectural, “of no firmer epistemic import than the wildest, concocted abstract theory.” Granting this point, he continues, we should clearly prefer the process of falsification to that of induction, which is “illogical.” I do not agree. While it is true that observation statements are, in a sense, “theory soaked” (as Popper says), not all the theories in which such statements are soaked are of equal merit, and not all observations are “of no firmer epistemic import than the wildest, concocted abstract theory.”

I wonder whether Mr. Levinson actually believes what he says; for my part, I have no difficulty in concluding that the claim that I am now seated before a typewriter is of far greater “epistemic import” than the abstract theory that the world is entirely made up of butter. I also hold, for reasons I set forth in my articles, that we do upon occasion possess perfectly good reasons for accepting such observation statements as true, a view Popper does not hold. Secondly, while we await an accurate codification of inductive practice—a task to which many philosophers, statisticians, and others have devoted their labors—I do not think that we can responsibly and without qualification claim that induction is “illogical.” That induction does not conform to the standards of deductive logic is obvious, but as I took pains to point out in my essay, there are no good reasons for regarding deductive standards of inference as establishing the standard of rationality in science.

In short, I think I can answer the portentous question Mr. Levinson poses: granting that observation statements are not infallible, and that neither the methods of induction or of falsification can yield perfect knowledge, I continue to hold that induction is an activity—a “method” if you will—that we can in some circumstances rely on. It turns out, accordingly, that my alleged “misunderstanding” of Popper is no such thing, only disagreement.

I must add that the force of the evolutionary tale Mr. Levinson tells toward the end of his letter eludes me. Presumably it is an argument that is intended to contribute toward showing that the “nihilism” I impute to Popper, the view that his account of science describes a wild-goose chase (with respect to the aim of discovering the truth), is unwarranted. But does it do so? First of all, the argument depends upon an analogy that is seriously imperfect: the example of “obvious differences” between the “growth” of conjectures and refutations and the trial-and-error evolution of organisms that Mr. Levinson mentions is only one of many that could be presented—another would be the lack of analogy between the truth of a scientific statement and the adaptation of an organism to an uncertain environment.

Moreover, it is not clear to me that, even if we grant the analogy, the claim that imperfect organisms can develop through trial-and-error encounters with the environment into increasingly complex entities damages any of the points I made. The key issue, it seems to me, concerns “progress,” which in the case of science means making some advance toward the aim of discovering the truth about the world. After all, the whole process of evolution might yet be a non-progressive affair, displaying only a temporary “progressive” character, as indeed some celebrated and dismal evolutionary speculations have suggested. As such, the analogy does not seem to me to support Mr. Levinson’s thesis that he has presented a good argument for “the growth of knowledge in an uncertain world.”

When scientists speak of the growth of knowledge, they do not mean, I take it, simply a gradual increase in the complexity of their guesswork, or the increasingly successful adaptation of guesses to still other guesses. A parlor game or the process of creating myths and fairy tales, spurred on by problems of internal consistency, might exhibit this character; but while science might be an uncertain affair, wouldn’t this be a grossly exaggerated and perverse description of this uncertainty?

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Fareed Zakaria from Davos, Switzerland

January 25, 2017

Fareed Zakaria from Davos, Switzerland

The World Economic Forum this year feels like an exercise in ritual self-flagellation, which — as with the old Christian practice of fasting and whipping one’s own body — is supposed to purify the sinful nature of man. The sin, of course, is globalization, which everyone now seems to agree has been lopsided, inequitable and dangerous. In fact, most of the flaws attributed to globalization are actually mistakes in national policy that can be corrected.

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It took a Chinese billionaire to speak frankly on this topic. Jack Ma, the founder of the e-commerce giant Alibaba, estimated that over the past three decades the U.S. government spent $14.2 trillion fighting 13 wars. That money could have been invested in America, building infrastructure and creating jobs. “You’re supposed to spend money on your own people,” he said. He pointed out that globalization produced massive profits for the U.S. economy but much of that money ended up on Wall Street. “And what happened? Year 2008. The financial crisis wiped out $19.2 trillion [in the] U.S.A. alone. . . . What if the money [had been] spent on the Midwest of the United States developing the industry there?” he asked. “It’s not [that] the other countries steal jobs from you guys — it is your strategy,” he concluded.

You don’t have to accept Ma’s specifics and statistics to recognize the validity of his general point. Globalization created huge opportunities for growth, many of which were taken by U.S. companies. The global economy is still dominated by large American firms; 134 of Fortune’s Global 500 are American. And if you look at those in cutting-edge industries, the vast majority are American. These companies have benefited enormously by having global supply chains that can source goods and services around the world, either to lower labor costs or to be close to the markets in which they sell. Since 95 percent of the world’s potential consumers live outside the United States, finding ways to sell to them will have to be a core strategy for growth, even for a country with a large domestic economy such as the United States.

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Jack Ma said “It’s not [that] the other countries steal jobs from you guys — it is your strategy”

Obviously globalization has large effects on national economies and societies, and it produces some significant problems. What complex phenomenon does not? But it also generates opportunities, innovation and wealth for nations that they can then use to address these problems through good national strategies. The solutions are easy to state in theory — education, skills-based training and retraining, infrastructure. But they are extremely expensive and hard to execute well.

It is much easier to rail against foreigners and promise to fight them with tariffs and fines. But the cost of addressing these problems at the global level is massive. The Economist reports, in a survey on globalization, that in 2009 the Obama administration punished China with a tariff on its tires. Two years later, the cost to U.S. consumers was $1.1 billion, or $900,000 for every job “saved.” The impact of such tariffs is usually felt disproportionately by the poor and middle class because they spend a larger share of their income on imported goods, such as food and clothing. That same Economist survey points to a study that calculated that, across 40 countries, if transnational trade ended, the wealthiest consumers would lose 28 percent of their purchasing power, but the poorest tenth would lose a staggering 63 percent.

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Keeping pace with technology change–Learn, Unlearn and Relearn

Perhaps most important, the key driver depressing wages and eliminating jobs in the industrialized world is technology, not globalization. For example, between 1990 and 2014, U.S. automotive production increased by 19 percent , but with 240,000 fewer workers.

Even when manufacturing comes back to the United States, it is high-end manufacturing. It’s not just new Intel plants that have few workers anymore. Adidas has set up a new shoe factory in Germany that is run almost entirely by robots. It will open a similar one near Atlanta later this year. And the few workers in these factories tend to be highly skilled technicians and software engineers.

You can’t turn off technological revolutions. Nor is there a quick fix to stop business from going to other countries. Tariffs on China will simply mean that production will come from some other developing country.

The best approach to the world we are living in is not denial but empowerment. Countries should recognize that the global economy and the technological revolution require large, sustained national efforts to equip workers with the skills, capital and infrastructure they need to succeed. Nations should embrace an open world, but only as long as they are properly armed to compete in it. And that requires smart, effective — and very expensive — national policies, not some grand reversal of globalization.