A follow-up on college and signaling

The other day I wrote a Bloomberg post about the fad of describing all communication and information extraction as "signaling" even when a Spence-style signaling model doesn't apply.

Some people have been telling me that this Garett Jones tweet is a reply to my piece. Garett writes:

Emoteconomist: One who is sure competition would eliminate inefficient diploma discrimination, but not inefficient gender discrimination.

Personally, I would apply the term "emoteconomist" to a much wider array of economists, but that's beside the point. I highly doubt this tweet is aimed at me or my piece. Garett knows that I have often written in support of Gary Becker's idea that economic competition decreases inefficient gender discrimination. He also of course knows the difference between preference-based discrimination (as in a Becker model) and signaling (as in a Spence model). So Garett's tweet is almost certainly not directed at my piece.

However, this Bryan Caplan post most certainly is a reply to my piece. At first I intended to rest my case, but Bryan has decided to delay our Bloggingheads debate two years (to coincide with the planned release of his book on the topic), so I might as well make some short reply.

Bryan does agree with a few of my points. For example, he agrees that college is unlikely to be important as an intelligence signal. But he disagrees strongly with my contention that college is not needed as a signal of working ability and temperament. In my piece I wrote:

So is college a way to signal conscientiousness and willingness to work? Maybe. But an even better way to signal that would be to actually work at a job for four years. One would think that if young people needed to do some hard work to signal their work ethics, some companies would spring up that gave young people real productive work to do, and provided evidence of their performance. Instead of paying through the nose to send a signal of your industriousness, you could get paid. But we don't see this happening.

Bryan replies:

Like most economists, Noah needs to be more sociological.  In a cultural vacuum, working four years might be a great signal of work ethic.  But no human being lives in a cultural vacuum.  We live in societies thick with norms and expectations. And in our society, people with strong work ethics go to college and people with bad work ethics don't.   

Disagree?  Just picture how your parents would react if you told them, "I'm not going to college.  I'm just going to get a job."  In our society, your parents definitely wouldn't respond, "That makes sense, because you're such a hard worker."  Why not?  Because in our society, most hard-workers choose college.  If a hard-working kid refuses to copy their behavior, people - including employers - understandably treat him as if he's lazy.  Because lazy is how he looks.

Actually, when I think about the college-as-signaling hypothesis, I do often think sociologically. But, as so often, the society I think of is not the United States - it's Japan. In Japan, it is taken as a given that college students don't work hard at their studies. College is even nicknamed "moratorium". Japanese college kids are expected to enjoy themselves and not work hard - in fact, when I ask Japanese young people why they don't consider going to America for college, they usually tell me that American students work too hard. And yet, top Japanese employers all require a college education (usually a Japanese college education) as a precondition for hiring.

But to be honest, Bryan is right that I don't think very sociologically. I don't really know much about sociology. Does he? Perhaps we should call in a sociologist. I will do so on Twitter.

Anyway, Bryan then writes:

Noah overlooks another key trait that education signals: sheer conformity to social norms.  In our society, you're supposed to go to college, and you're supposed to finish.  If you don't, the labor market sensibly questions your willingness to be a submissive worker bee. 

I agree that college, in America and also in Japan, is a hallowed cultural institution, and that there is a lot of social pressure on people to do it. But this seems like part of college's consumption value, not its value as a costly, Spence-style signal.

Next, Bryan quotes this part of my post:

There are many other reasons to doubt the signaling theory of college. A more likely explanation for college's enduring importance is that it provides a large number of benefits that are very hard to measure -- building social networks, broadening people's perspective, giving young people practice learning difficult new mental tasks and so forth. 

He replies:

I'm glad to hear this.  Noah inadvertently grants one of my key points: Most of education's labor market payoff is unrelated to the material your professors explicitly teach you.  Once you accept this heresy, you're stuck with some combination of my multidimensional signaling story, and Noah's amorphous, evasive "large number of benefits that are very hard to measure" story.  If that's the choice, my story will end up with the lions' share of the mix.  Noah is welcome to the leftovers.

Ah, but wait! College most certainly does provide some direct and obvious skill-based human capital benefits: reading, writing, working in groups, communicating, arguing, doing math, programming computers, etc. My point about non-obvious forms of human capital - human networks, cognitive broadening, emotional growth, exposure to new career ideas, sexual maturity and marriage - was in addition to the obvious benefits of coursework and instruction. And a third big chunk of college's value is consumption, which Bryan basically ignores.

After those three big bites, it is Bryan's "conformity signaling" that is left to hunt for the table scraps!

Finally, Bryan mentions the "sheepskin effect":

Final challenge for Noah: If education's rewards stem from this "large number of benefits that are very hard to measure," why on earth would the payoff for graduation vastly exceed the payoff for a typical year of education?  My explanation, of course, is that given the vast social pressure to cross educational milestones, failure to graduate sends a very negative signal to the labor market, leading to discontinuous rewards.  What's Noah's alternative?  Do schools really delay "building social networks, broadening people's perspective, giving young people practice learning difficult new mental tasks and so forth" to senior year?

I have no ready explanation of sheepskin effects - perhaps they are used by employers to extract a signal of how well one actually learned things in one's college courses. But signal extraction does not imply Spence-style signaling. Spence-style signaling must be costly, and for students who have done enough to graduate, collecting that sheepskin is simply not costly.

So I don't need to explain the sheepskin effect in order to rule out Bryan's explanation. Bryan views the sheepskin effect as evidence of signaling, but since it implies that much of the college payoff comes without cost, I view it as clear evidence against the signaling model of college.

Anyway, I think that about takes care of Bryan's points. As a final note, Bryan wants me to be more sociological, but I think he should be more psychological! If college really is wasteful, costly signaling, as Bryan posits, then people who complete it should view it as a wasteful, unnecessary chore. It should be something they wish they didn't have to do. But I bet a substantial majority of college graduates, if you ask them, will speak quite highly of their time in college, and will not wish that they had been able to go directly into the workforce instead.


P.S. - If you don't understand that signal extraction does not imply signaling, just contemplate the following sentence: "Fire doesn't emit smoke in order to prove to observers that it's really a fire."

Guns don't kill people. Labor kills people.

Arthur Chu, Jeopardy champ extraordinaire, tweets:

"Capitalism made your iPhone" 

No, LABOR made your iPhone. Labor makes things under any -ism. The -isms just determine who gets paid

He's right that "-isms", in econ terms, are about distribution of resources (though he should broaden his definition of resources to include control, not just payment).

But is he right that "labor made your iPhone"?

Consider the following two situations:

A) I make fire by rubbing two sticks together.

B) I make fire by using a butane lighter.

In both of these situations, you can say "labor made the fire". But in the first situation, there was a lot more labor for the same amount of fire. Saying only that "labor made the fire" leaves out this important fact.

Now suppose I want to make fire with no tools. No matter how much labor I apply - the labor of millions of people over millions of years - I will not be able to make fire. 

So saying that "labor makes fire" also leaves out this important point - the necessity of having tools.

Labor is a necessary input into producing an iPhone. But there are other necessary inputs - machines, buildings, land, natural resources, vehicles, tools, etc. And labor is not a sufficient input for making an iPhone - without the right tools and the right organizational system, no amount of labor will get the job done.

But didn't labor "make" the machines, buildings, etc.? Since labor is necessary to create any intentionally produced good, you can say "Labor is what makes everything" if you want to. But you know what else is necessary to create those goods? Electromagnetism, gravity, and the strong and weak nuclear forces. So I could reply to Arthur Chu by saying "Labor didn't make your iPhone. Physics made your iPhone." Now who's right?

The basic point here is that our language, and our intuitive way of thinking about causation, views everything as perfect substitutes. A + B = C. If A + B = C, then you can determine how much of C is due to A, and how much is due to B.

But in reality, things are only partial substitutes. You more often have stuff like
(A^a)(B^b) = C. When you have complementarity, it doesn't make sense to ask how much of C is due to A, and how much is due to B. But we always do it anyway. Arthur Chu's tweet is one example. The slogan "Guns don't kill people, people kill people" is another example. A third example is the perennial debate over whether humans have "free will."

Our intuitive concept of causal attribution is simply wrong and useless in most cases.

Steve Williamson is right that I am confused

In a post for Bloomberg View, I wrote about the history of the sticky-price revolution of the late 1990s and early 2000s:

In 1994, economists Greg Mankiw and Lawrence Ball wrote an essay for the National Bureau of Economic Research entitled “A Sticky-Price Manifesto.”...[T]he essay heralded the beginning of a macroeconomics mini-revolution. It was a direct threat to the line of research that had been dominant in the 1980s, which tried to explain recessions without sticky prices... 

The economic establishment reacted harshly to the upstarts. “Why do I have to read this?" fumed Robert Lucas, the dean of macroeconomics. "This paper contributes nothing.” He went on to accuse the sticky-pricers of being opposed to science and progress. 

But Lucas fumed in vain. During the following decade, the sticky-price models went from strength to strength. New math was developed to make them easier to use. Possible reasons for price stickiness were investigated -- for example, “menu costs,” in which the seemingly trivial costs of changing prices add up to a big problem across the broader economy. 

Even more telling, sticky-price theorists proved that you didn’t need a lot of price stickiness to mess up the smooth working of the economy. Even the tiniest dash of stickiness would turn all kinds of theories on their heads. Economists Susanto Basu, John Fernald, and my doctoral adviser Miles Kimball, for example, showed that when prices are even a little sticky, bursts of technological progress actually hurt the economy for a short while, by causing a burst of deflation, before eventually boosting growth. Over time, the addition of various other economic mechanisms, like labor search, has further reduced the amount of price stickiness required to cause major recessions. 

Sticky-price models have become the dominant models used at central banks. The smoothly adjusting, flexible-price models of the 1980s are basically not used anywhere, by anyone, for anything. 

Even some of the biggest skeptics of sticky prices are coming around. In 2004, economists Mark Bils and Peter Klenow looked at how businesses changed prices, and found that the changes were too frequent to be consistent with the sticky-price story. But in 2014, they reversed their stance, looking at evidence on the adjustment of markets in recessions and concluding that “sticky prices...deserve a central place in business cycle research.” Meanwhile...Patrick Kehoe...long-time [opponent] of the mainstream sticky-price models, nevertheless wrote a paper in 2010 entitled “Prices are Sticky After All.”... 

The moral of the story is that if you just keep pounding away with theory and evidence, even the toughest orthodoxy in a mean, confrontational field like macroeconomics will eventually have to give you some respect.

Steve Williamson wrote a response to my post, and for the life of me I can't tell what he's trying to say. He calls me "confused". Well, after reading his post, I am confused.

Williamson takes some potshots at Ball and Mankiw:

The "Sticky Price Manifesto" is in part a survey of the menu cost literature, but it reads like a religious polemic... 

Why should we care what Ball and Mankiw think is going on in the minds of their staw-men opponents, or in the classrooms of those straw-men? Why should we care what Ball and Mankiw "believe?"... 

Noah seems to think that Lucas was being unduly harsh [in his response to Ball and Mankiw], and that he was somehow feeling threatened by these "upstarts." It's pretty clear, actually, that Lucas just thinks it's a bad paper - religion, not science - and that Ball and Mankiw could do a lot better...

He then asserts that New Keynesian models don't have anything to do with the stuff Ball and Mankiw were writing about:

Noah is more than a little confused about the genesis of sticky-price New Keynesian (NK) models. In particular, he thinks that Ball and Mankiw's "Sticky Price Manifesto" was a watershed in the NK revolution. Far from it... 

Where did NK come from? Which of the three threads in post-macro revolution Keynesian economics - coordination failures, sunspots, menu costs - morphs into Woodfordian NK models? To a first approximation, none of them. Perhaps NK owes a little to the menu cost approach, but it's really a direct offshoot of real business cycle theory. Take a Kydland and Prescott (1982) RBC model, eliminate some bells and whistles, add Dixit-Stiglitz monopolistic competition, and you have Rotemberg and Woodford's chapter from "Frontiers of Business Cycle Research." Add some price stickiness, and you have NK. So, NK basically leapfrogs most of the "Keynesian" literature from the 1980s. It's much more about RBC than about Ball and Mankiw.

(For a brief intro to Mankiw's contribution to the New Keynesian research program, see the Wikipedia page for New Keynesian economics. See also the Wikipedia page for Steve Williamson.)

Williamson then tries to claim ownership of New Keynesian models for Chicago/Robert Lucas/RBC/His Majesty the King of Spain/I'm not sure:

[I]t's worth noting that Mike Woodford, the key player in NK macro, was at the University of Chicago from 1986 to 1992, the latter 3 years in the Department of Economics with - guess who - Bob Lucas. Indeed, they wrote a paper together. It's about - guess what - a kind of sticky price model with non-neutralities of money. Later on, Lucas wrote about sticky prices with Mike Golosov. So, I think we could make the case that the influence of Lucas on NK is huge, and that of Ball and Mankiw is tiny.

He then goes off on a long tangent about how central bankers might use sticky-price models to think about financial stability (which, apparently, he thinks is now the main priority for central banks).

It's kind of funny to see Williamson trying to wrest historical credit for New Keynesian models from Mankiw & co., since just in his previous post he had this to say:

Mike Woodford can correct me on this, but my impression is that he came out of graduate school with a specific goal in mind, which was creating a version of Keynesian economics that would fit into modern macro. Ed Prescott's project left central bankers scratching their heads about what they were supposed to be doing, and Woodford and others stepped into the void. Interest and Prices is, I think, intended as a handbook for central bankers. There was a lot of effort put into marketing the whole NK project to the world's central banks. This is ongoing, and has been institutionalized[.]

So NK was reverse-engineering of Keynesian ideas. But actually it was just RBC. But it succeeded because it was promoted via a slick marketing campaign. But actually Lucas was one of its founders.

Also, microfoundations are important. But Mankiw's efforts to microfound sticky prices with menu costs was totally unimportant to the creation of sticky-price macro models.

Got that?

Damn, I guess I am confused.

Did macro theory fail us in the crisis?

David Andolfatto and Mark Thoma have posts defending macro theory from (some of) the people who say it failed us in the crisis. Both are good posts, and you should read both.

Anyway, here's a quick (and probably incomplete) taxonomy of criticisms people make about macro with regards to the crisis:

1. "Macro models failed to predict the crisis, therefore DSGE sucks."

This is the criticism that Andolfatto and Thoma reject. I basically agree. There are no other models out there that did forecast the crisis. Nor are expert predictions any better.

Personally I think DSGE techniques haven't  reaped dramatic benefits (yet). But what other alternative is better? When I ask angry "heterodox" people "what better alternative models are there?", they usually either mention some models but fail to provide links and then quickly change the subject, or they link me to reports that are basically just chartblogging. Yeah, sure, if you put out hand-wavey reports saying "capitalism sux, there's gonna be a crash!" every year or two, you're eventually going to be able to say "see, I told you so". But that's no replacement for real modeling.


2. "Macroeconomists were too confident before the crisis, and that gave policymakers false confidence."

It is pretty obvious to anyone who has ever interacted with macroeconomists that most of them take their models way too seriously (this is even more true of the "heterodox", to the degree that they even have models). It's a common disease of academics in general - you have to spend so much effort pushing your theories that overconfidence is selected for.

Did this confidence leak over into the policymaking sphere? I don't have evidence here, but I doubt it. Most of the Fed people are a LOT less confident than academics. And they were being advised by a lot more than just the academic crowd - they had a big stable of chartbloggers, hand-wavers, etc. to draw upon. Plus they themselves had Old Keynesian models in their bag of tricks. As for politicians, it's not clear they even know that academic macroeconomics exists.

If the Fed people were overconfident in 2005-6, I suspect it was mostly due to natural cognitive biases - "Everything seems like it's been going OK for a couple decades, I guess we're doing something right" - rather than the overconfidence of the academics they interacted with.

But I could be wrong.


3. "Macroeconomists weren't focusing on finance enough before the crisis."

Thoma says that this is a valid criticism, and I agree. There are a bazillion models out there. But just having models out there isn't enough; if you're going to give policymakers real advice, you're going to have to choose which model - or which basket of models - to base your advice on. Macroeconomists weren't very worried about finance before the crisis - you didn't see a lot of people waving copies of Geanakoplos (2003) and saying we could be courting disaster.

Belief in the Great Moderation, and in the Fed's ability to stabilize the economy, was too strong. The central problem of depression prevention had not, in fact, been solved. But an awful lot of top macroeconomists - not just Lucas, but the New Keynesians too - thought it had. Their favorite models didn't have any finance in them, with the possible lone exception of the Bernanke-Gertler "financial accelerator" models.

That was a big mistake, especially since the Great Depression and crises in other countries (e.g. Japan) should have suggested that financial crashes were a big deal. To their credit, though, mainstream macroeconomists have been hastening to correct the mistake. Certainly they're going to pay more attention to finance for at least a few more decades.


4. "Macroeconomists don't do enough to kill their models off."

This is something I hear surprisingly few people say, given that I think it's the best of the criticisms out there. If you let a million flowers bloom but don't cut any of the flowers, you get a big warehouse full of flowers. OK, so that metaphor went nowhere, but you get the point. Macroeconomists, when they get defensive, tend to say something along the lines of "We got models for everythin'!" But is that a good thing??

I feel like if you have models for everything, you don't actually have any models at all. Without a way of choosing between models, your near-infinite stable of models turns into one big giant mega-model that can give anyone any results he wants. Worried about a financial crisis? Pull out a model that tells you a financial crisis could be looming. Worried about inflation? Pull out a model where inflation is a big danger. And so on.

Now, technically, you could choose between models based on the plausibility of the assumptions. But three things make this impossible in practice. First, the need for tractability means that the assumptions in almost any modern macro model will be utterly implausible to anyone who has not spent decades in a monastery high in the Himalayas training himself in the art of self-deception. Second, the assumptions are so stylized that it takes a huge amount of talent just to figure out what they are - in fact, we're starting to see the emergence of top macro people, like Matt Rognlie, who specialize in figuring out what the heck models are actually saying. And third, with a near-infinite catalog of models to comb through, there's just no way to compare any significant number of them all at once.

If you ever want macro models to actually be useful, it's not enough to just wave your hands and say "all models are wrong". It's not enough to treat models as ways to "organize our thinking". You've got to have a way to take them to data and decide if you should keep them around, send them back to the shop for alterations, or burn them in a fire.


5. "The crisis exposed the fact that macroeconomics doesn't work."

Well, sure. But it also showed that we need to keep trying to make it work. And macroeconomists, as a whole, don't absorb a significant fraction of our GDP, so I'm not incredibly worried.



Updates

Bumped from the comments, by an anonymous commenter:

[D]on't focus on macro *theory*. It's macro empirics I'd worry about. theory ahead of measurement etc. The difference post crisis is you see greater prominence of macro papers using micro data (e.g. mian sufi or autor/dorn/hanson/acemoglu).

Great point.

Fixed mindsets

Carol Dweck is one of America's most important public intellectuals, and I believe that her idea, the Growth Mindset, is one of the most good and useful in America today. She's also a hedgehog. Meaning, of course, that she applies her One Big Idea to everything and anything, and tends to exaggerate its power and the evidence in favor of it. That's OK. Most promoters of big good ideas are hedgehogs. There are plenty of hedgehogs in the econ blogosphere - Scott Sumner, Paul Krugman, Steve Williamson. It's no big deal. I think that as a society we've gotten good at recognizing hedgehogs and mentally correcting for the hedgehogginess.

So because Dweck is a hedgehog, I won't totally lambaste Scott Alexander for attacking a straw man in his latest 10,000-word essay. Part of Scott's confusion and misdirection comes from Dweck's over-selling of her idea.

But only part. The rest is derp.

Scott gives a pretty good definition of the growth mindset idea:

[G]rowth mindset is the belief that people who believe ability doesn’t matter and only effort determines success are more resilient, skillful, hard-working, perseverant in the face of failure, and better-in-a-bunch-of-other-ways than people who emphasize the importance of ability. Therefore, we can make everyone better off by telling them ability doesn’t matter and only hard work does. 

This is similar to how Dweck herself would describe the idea. However, Scott does not differentiate between the following two statements:

1. Natural ability doesn't matter; only effort matters.

2. Natural ability doesn't matter on the margin, but the marginal effect of effort is large.

I guess economics just makes me automatically think about whether an effect is an average effect o a marginal effect (or an average marginal effect, if we're running regressions!).

Now, in her book, Dweck makes it clear many times that natural ability does, in fact, matter. She states that among people of similar natural ability, having a growth mindset makes a big difference. What she is saying is that the marginal effect of the growth mindset on performance is large for most people, even though natural ability matters a lot in the average.

But what Dweck does not clarify is whether the optimal growth mindset is itself a belief about average or marginal effects of effort on performance! In other words, to get the effect, do I have to believe that natural ability doesn't matter? Or does it work if I believe that although natural ability matters, effort can have a big effect?

If it's the former, we have trouble. If the only way to get the positive effect of the growth mindset is to convince people that natural ability doesn't matter - i.e., a fiction - then eventually they will realize that the fiction is a fiction, and the growth mindset will go away.

But I don't think that's what the growth mindset is. I think that very few if any people, including the people Dweck describes as having strong growth mindsets, actually do believe that effort could make them as good a basketball player as Michael Jordan, as good a mathematician as Terence Tao, or as good a blogger as Noah Smith (cue hearty laughter).

I am betting that the growth mindset is a belief about marginal effects ("if I work hard I will get better") rather than average effects ("anyone can do anything if they work hard"). Scott Alexander, on the other hand, seems convinced that it is the latter.

One reason I would make that bet is the nature of the experiments that have tested the power of the growth mindset. Scott runs through a couple of the experiments in his post. Basically, these are priming experiments. It would be incredibly weird if a priming task could change people's bedrock beliefs.

Scott sees this and concludes (paraphrasing): "Since the growth mindset is a belief about average effects, and a priming task couldn't change people's beliefs about something as big as average effects, there must be something wrong with this research, and therefore with Dweck's thesis."

I look at the same facts and conclude: "Since a priming task can't change beliefs about something as big as average effects, the growth mindset must be a belief in marginal effects."

I find it highly likely that a priming task could change someone's belief about marginal effects. Marginal effects are local, average effects are global. Going from thinking "Trying harder won't help" to "Trying harder will help" is a lot easier than going from thinking "Natural ability matters" to "Natural ability doesn't matter at all."

(I'm going to stop explaining the difference between average and marginal now, since if you haven't gotten it yet, you just need to give up and be a janitor go back and try harder.)

Anyway, Scott goes on to discuss some other studies that might or might not support mindset theory. With a little rewording, most of his post - the substantive part, the part about research and evidence - could actually have been a post in support of Dweck's idea.

But it is not. It is a post criticizing Dweck's idea. And here is where the derp comes in.

At the beginning of his post, Scott - who is rightly renowned as being an intellectually honest person - states his priors:

I’ll admit it: I have a huge bias against growth mindset... 

I can sometimes be contrarian, and growth mindset is pretty much the only idea from social psychology that is universally beloved... 

Which brings me to the second reason I’m biased against it. Good research shows that inborn ability (including but not limited to IQ) matters a lot, and that the popular prejudice that people who fail just weren’t trying hard enough is both wrong and harmful... 

Which brings me to the third reason I’m biased against it. It is right smack in the middle of a bunch of fields that have all started seeming a little dubious recently. Most of the growth mindset experiments have used priming to get people in an effort-focused or an ability-focused state of mind, but recent priming experiments have famously failed to replicate and cast doubt on the entire field. And growth mindset has an obvious relationship to stereotype threat, which has also started seeming very shaky recently.

Scott is a big believer in the importance of inborn ability. He thinks social psych and related fields have been captured by people who want to deny that fact. He thinks these fields have been using junk science to push their nurture-over-nature agenda. And this biases him against Dweck's ideas, and biases him toward skepticism with regards to research results that support Dweck's ideas.

Remember, derp is not confirmation bias. It is more rational than that. Derp is just repeating your strong priors over and over. That's what Scott's post is.

He cites some research in favor of the growth mindset idea, and expresses skepticism of the results. He restates his priors.

He then cites some research that might or might not favor it, and expresses no skepticism of the results. He again restates his priors.

He then cites some research that shows some stuff that might or might not suggest alternative explanations for the results that support the growth mindset, and expresses no skepticism of the results. He again restates his priors.

Then he restates his priors once more in the concluding section. Derp!

Actually, maybe I'm being too generous to Scott. Looking for flaws in studies that contradict your priors, while not looking for flaws in studies that agree with your priors, is confirmation bias. It is not Bayesian-rational. It appears to be what Scott does in this post. So calling Scott's post "derp", rather than "confirmation bias", is giving him the benefit of the doubt! :-)

Anyway, when discussing the growth mindset idea, I think we all need to keep the following things in mind:

1. Hedgehogs gonna hog (and not hedge). We should remember that Carol Dweck, like most promoters of big ideas, overstates her case. That doesn't mean her idea is not a good and useful one.

2. Average is not marginal. Belief in the average effect of natural ability and belief in the marginal effect of effort are two very different things.

3. Science is really hard. Even in physics and chem it's insanely hard to get robust, reliable, definitive conclusions. In psych it's much harder. That doesn't mean we should ignore big ideas in psych.


Update

Someone asked me how my post squares with the following part of Scott's post:

Likewise, mindset theory suggests that believing intelligence to be mostly malleable has lots of useful benefits. That doesn’t mean intelligence really is mostly malleable. Consider, if you will, my horrible graph: 

Suppose this is one of Dweck’s experiments on three children. Each has a different level of innate talent, represented by point 1. After they get a growth mindset and have the right attitude and practice a lot, they make it to point 2. 

Two things are simultaneously true of this model. First, all of Dweck’s experiments will come out exactly as they did in the real world. Children who adopt a growth mindset and try hard and practice will do better than children who don’t. If many of them are aggregated into groups, the growth mindset group will on average do better than the ability-focused group. Intelligence is flexible, and if you don’t bother practicing than you fail to realize your full potential.

Scott seems to think that his graph, if true, contradicts Dweck's idea. But I think that his graph is exactly Dweck's idea.

Scott also seems to think that in order to realize the benefit of a growth mindset, it is necessary to convince children of a fiction (i.e. that the overall effect of natural ability is 0). But Dweck doesn't think that. That seems unlikely to me. My guess is that you just need to convince kids of the truth - i.e., that effort matters a lot on the margin for most people. No fantasies required.


Update 2

Scott has a follow-up post.

When reading this discussion, it is important to remember that the following three things are different:

1. Dweck et al.'s belief about the effect of the growth mindset on performance

2. The belief of a person with the growth mindset about the effects of effort and ability on performance

3. Dweck et al.'s belief about the effects of effort and ability on performance

Bond bubbles

Apparently, I convinced Brad DeLong that the idea of a "bond bubble", though a slight misnomer, is not insane. Brad's explanation of the idea is a little convoluted, so let me see if I can boil it down to essentials.

Why can't a government borrow and spend infinite amounts of money? Well, interest payments might get too high, forcing the government to default. But what if interest rates keep getting lower and lower? As nominal interest rates go to 0, interest payments go to 0, so the govt. will always be able to make interest payments no matter how big the debt gets.

So all the govt. has to do in order to be able to borrow and spend infinite amounts of money is to get the central bank to keep interest rates at 0 forever, which the central bank can do by - basically - printing money and buying bonds from people and banks.

But what if people and companies stop buying the government bonds in the first place? Well, the central bank can just print money and buy the bonds directly from the government. (We call this "the full MMT." It is almost certainly the route Japan will have to take.)

So is this a free lunch? What's the danger? The danger is that all that money-printing will eventually result in a big inflation. A big inflation will also raise nominal interest rates, overwhelming the central bank's ability to keep them down. That will cause a government default.

So is this a danger for advanced countries right now? Well, markets have very low expectations for future inflation, and for future interest rates, for most rich countries. If you believe markets are efficient, this means that it's likely that governments can keep borrowing money, and central banks can keep printing money, without causing inflation - at least for now.

BUT, if markets are not efficient, then people could be underestimating the risk of a rise in inflation and interest rates. That is what people are afraid of when they talk about a "bond bubble." No, it's not a speculative bubble, but whatever. This is what I pointed out to Brad DeLong.

Note, btw, that a bond bubble isn't the only reason to take low inflation expectations with a grain of salt. Those low expectations could be based on people's predictions that governments and central banks won't engage in infinite-borrow-and-infinite-print policies. If governments surprise people by trying those policies, the markets could quickly adjust their expectations. You don't need a bond bubble to be afraid of a run on the currency - you just need Goodhart's Law.

The Hugo Award silliness

I will freely admit that I haven't been very enthused by the Hugo Awards in recent years. Looking back through 2007, they were a very good guide to stuff that I would like. For example, through 2007, I liked about 3 out of 4 Hugo nominees and winners for Best Novel. But since then, I've only really liked one of the Hugo winners - Paolo Bacigalupi's The Windup Girl, and fewer of the nominees than before. In fact, many of my favorite SF novels that have come out since 2007 - Ernest Cline's Ready Player One, Hannu Rajaniemi's The Quantum Thief, Ramez Naam's Nexus - didn't even get nominated.

What's going on? I don't know. Maybe nothing. Maybe just statistical noise.

The thought had crossed my mind that maybe sci-fi fandom had shrunk, migrating to video games or anime or YouPorn or whatever, leaving a core of sci-fi writers who care more about literary writing quality than neat ideas. I enjoy literary quality, of course - I love me some Alice Munro or George Saunders or Russell Banks. One of the best literary writers I've ever read, Margaret Atwood, is also one of the best sci-fi writers I've ever read (Oryx and Crake is the best sci-fi book written since the turn of the millennium, dammit; the fact that it also didn't get a Hugo nomination may have been the beginning of the downward trend). But what writers like in sci-fi and what I like in sci-fi tend to be different, which is why I only tend to like about a third of the Nebula Award winners.

But anyway, this same thought appeared to have crossed the mind of sci-fi writer Brad Torgersen, who organized what he thought was a campaign to take back the Hugos. Joining together with another author named Larry Correia, he has been nominating a slate of authors called "Sad Puppies", which he claims represents a return to consumerism and fun.

If Sad Puppies really had been that, it might have been interesting or even a positive force. Unfortunately, Correia and other Sad Puppies followers had their own ideas of where the problem lay. They decided it was all about right-left politics, and that recent Hugos had been chosen as affirmative action picks. The solution, according to these Puppies, was to nominate a bunch of authors with rightist political beliefs.

Things got really bad when a troll named Theodore Beale, who calls himself Vox Day (presumably because if he called himself "Vox Dei" he wouldn't come up first in Google searches), one-upped the Sad Puppies by creating an aptly named "Rabid Puppies" list of even more right-wing authors. By gaming the rules for fan voting and by recruiting outside voters from GamerGate, the various "puppies" managed to grab most of the nominations for this year's Hugos.

By far the biggest beneficiary of the puppies' putsch was a man named John C. Wright, who writes very disrespectful things about gays and other such people who never did him any harm. He also writes science fiction (as an aside, I think his novels are unreadable, though I really liked this short story; but that is irrelevant to the point of this post). There just aren't many rightist sci-fi authors out there, so Wright became an army of one, grabbing six total nominations, including three in the Best Novella category.

This is basically an experiment in politics-based affirmative action, similar to what Jonathan Haidt wants to inflict upon American universities, but more extreme. My instinct says that it will produce a deluge of craptastic crap. It's not that being a right-winger is incompatible with being a good science fiction writer - I like Starship Troopers and Ender's Game. It's that whenever you select people based on their political beliefs, you select people along a dimension that is at an angle to actual quality. Since the pool of rightist sci-fi authors is small and the number of puppies nominations is large, I expect that the effect will be far more severe than for race- and gender-based affirmative action.

Of course, the puppies also did seem to follow Torgersen's wishes to some degree, picking some works based on fun rather than on Vox Day's right-wing politics. For example, I see a Jim Butcher novel in this year's nominations. Jim Butcher is great, and very fun. The rest of the Best Novel nominations look all right. For the other categories, the only right-wing nominee whose works I have actually read is Wright, and he did once write a story that I liked, so maybe some of these other stories by him are good, despite the fact that he himself is a bit of an orc.

So maybe the puppies won't utterly ruin the Hugos. But they can't have helped. And it's another step in the negative trend of the politicization of geekdom that began with GamerGate. I expect to see a counterattack by SJWs at the next Hugos, and further retaliation by the puppies. When rightists and leftists fight, no one wins. That was true in 1930s Europe, and it's equally true in modern geek fandom.


Update: George R.R. Martin has a great post rebutting the arguments of the puppies.

Update 2: John C. Wright appears to have taken down the disrespectful post that I referenced, and I commend him for doing so.