Thursday, January 31, 2008

30/1/2008 “THE UNDERCOVER ECONOMIST” by Tim Harford

This was a new style of book for the Monthly Book Group, which, while attracting mixed reviews, inspired a particularly spirited discussion.

Introducing the book, the proposer said he had chosen it because his wife was buying a book for a rail journey, and, as there was a two for one offer at the station, he chose this. No, despite the analysis of railway station coffee outlets in Harford’s opening chapter, he had not also succumbed to the temptation to buy an expensive coffee. (He had been brought up to believe that food and drink was something to be consumed at home, not purchased at inflated prices outside the home, a view of continuing disappointment to his wife).

The book had intrigued him, being an interesting and enlightening review of a wide range of subjects, even if it rather skimmed over some of them. Despite his business background it had shed new light on a range of commercial practices. It was amazing that a cheaper HP printer was the more expensive one slowed down (and another member of the group with an electronics background could confirm a similar example of pricing practice for calculators with almost identical circuitry).

All agreed it was written in engaging and eminently readable prose - with many entertaining anecdotes - despite dealing with a wide range of complex subjects. Most had enjoyed and welcomed the attempts to simplify economics, and found it persuasive on non-political microeconomic matters such as retail practice. It was also a pleasant change that here was an economist who offered firm views, rather than the normal “On the one hand, on the other hand”.

However – as with attempts to write popular science books – it proved very difficult to treat complex issues satisfactorily in a simplistic, easy-reading style. And it was the big issues tackled in the second half of the book – political issues such as health care, failing countries in Africa, climate change, road pricing, and the need for more free markets – that proved red rags to some of our bulls.

Or, more precisely, blue rags, to those brought up in the twentieth century Scottish tradition of distrusting the free market. What about the need for regulation of the free market – why did he not bring that out more strongly? Didn’t the book lack balance – no mention here of Union Carbide in Bhopal! Was the cult of the free market not passing its zenith, as demonstrated by the current meltdown in the financial markets?

Yet, for others, Harford’s recommendations were uncontroversial. The points he was making about the role of the market in encouraging the more efficient use of resources and economic growth were widely accepted by economists. Climate change and excess traffic were indeed better tackled, in the main, by economic instruments, with regulation only forming a small part of the policy mix, as the recent UK Stern report on climate change had concluded.

The difficulty was in persuading democratic governments and legislators of this, and it did not seem likely that Harford’s book was going to make it any easier. His dumbed-down versions of the theory of comparative advantage, of Ricardo on rent, of supply and demand, and of marginal decision-making were not going to make people leap to accept his later analyses of a random set of big policy issues.

Indeed, it turned out that no member of the group had changed their mind about any of the political issues he discussed as a result of reading his book. Perhaps a rather less dumbed-down version – making more of use of graphs and numbers - would have had more impact. (And many big issues in economics – such as monetarism and supply side economics – were not touched on at all). But maybe we had all such fixed views on political issues that we were impervious to other opinions. “Freakonomics”, the similar book by Steven Levitt, was less political, more original, and perhaps more successful in making you look at issues differently.

Yet for everyone who disliked a particular chapter, it turned out that someone else really liked it. His analysis of why China had succeeded where Cameroon had failed annoyed several – for example because he had not brought out fully that China’s was a planned capitalist economy, or explored the one child policy, or acknowledged the scale of investment that might be needed in Cameroon. Yet others were big fans of this section of the book, including a recent visitor to the failing economy of Burma who could recognise most of what Harford had found in Cameroon. Some thought his analysis of the health sector and insurance issues impeccable, while others strongly disputed it, and so on.

Most found something intriguing in the book – such as the discussion of game theory – but what was new for one was old hat for another. And at times it seemed that we had been reading different books – some felt he failed to bring out the importance of the rule of law for allowing capitalism to work effectively, whereas others felt he brought it out particularly well.

An oddity that everyone noticed was his tendency to write at some times as if he were American and addressing an American audience, and at some times as if he were British and addressing a British audience. This might reflect his own career background and the markets he hoped to sell in, but it produced a disconcertingly schizophrenic effect. How many Tim Harfords were there? And it aggravated the feelings of those who felt he was already overly pro-American in his policy prescriptions – no mention, for example, of the indifference of the US Government to that country’s massive impact on climate change.

But, reader, do not assume from the above that we had a calm, rational and well-structured discussion. The reality was a pinball-machine discussion, ricocheting violently between the price of tomatoes and democracies’ ability to tackle climate change, luridly illuminating Civil Service corruption and the failure of Russian capitalism, and then crashing from irrational packaging taxes to the Rangers/Hearts semi-final via education in India. Occasional efforts to refocus the discussion on the book were brushed aside as we plunged into highways and byways, and as serial shoppers revealed that their supermarket loyalties were of even greater importance than their loyalties to capitalism or socialism.

Finally, however, we did reach two points of consensus. One was that structuring governments around legislatures – whether in Scotland, the UK, or the EU – produced an insatiable and undesirable urge to legislate and regulate.

The other was that more of us were now looking for own brand bargains on the bottom shelf of supermarkets. Not perhaps as world-changing an outcome as Tim Harford was hoping for from “The Undercover Economist”, but a more tangible product than from some other books…

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Friday, January 25, 2008

28/11/2007 “CANDIDE” by VOLTAIRE

“Candide” was the first book the proposer read in French, and he went on to study French literature at university and specialise on eighteenth century writers such as the “philosophes” Rousseau, Diderot and Voltaire.

Voltaire lived from 1694-1778. He wrote a massive amount of other work, including an epic poem based on the Odyssey, and tragedies in Shakespearean mode, which were more original than those of Corneille and Racine. He was a true polymath, and it was remarkable that he was only really now remembered for the “Candide”. Even other “contes” in similar vein, such as “Zadig”, have been forgotten.

Voltaire saw himself as a satirical poet, and as a result of his satire was frequently in trouble with the authorities. He was a very destructive critic in his writings – he preached tolerance, but did not practise it. In 1717 he was imprisoned for a year in the Bastille for a satire on the government, and in 1726 he went in exile for 3 years to England. Here he was influenced by the ideas of Locke, Newton, and Shaftesbury, and he met Swift (who published “Gulliver’s Travels” in 1726), Gay, Pope and Berkeley.

On his return from England he wrote his ““Lettres Philosophiques” praising English customs and institutions. This was interpreted as further criticism of the French Government, and led to a further exile, this time in the French countryside with his friend the Marquise du Chatelet.

In 1749, after her death, he moved to Prussia at the invitation of Frederick the Great, who wished to be his friend. Voltaire had been upset by Frederick’s invasion of Silesia, and very much wished to influence a despot to become an enlightened despot. (“The best government is a benevolent tyranny tempered by an occasional assassination”). However, he found there were too many others at the court, and he was upset to overhear Frederick comparing him to an orange – he would put up with Voltaire for a year, suck all that was useful out of him, then spit him out. In 1753 he returned to France.

By the time he published “Candide ou l’Optimisme” in 1759, Europe was 3 years into the Seven Years War. It was also 3 years after the Lisbon earthquake, and 2 years after Admiral John Byng had been executed by the British for failing to “do his utmost” at the Battle of Minorca – “pour encourager les autres”, in Voltaire’s phrase. All these events are reflected in the book.

The Eighteenth century in France was the century of the “philosophes”, a group of philosophers who believed in reason and tolerance. Many were critical of organised religion, although they tended to be theists or deists (like Voltaire) rather than atheists (Diderot was an exception as an atheist). A deist derives the existence of God from reason and personal experience, rather than from divine revelation or holy books. Some believed in a watchmaker type god – an incomprehensibly intelligent being who created the universe and then left it to its own devices.

One issue posed by Pierre Bayle (1647-1706) had been how you accounted for evil in a world created by God. Did man have free will or was there was an evil being in the Universe? If there were an evil being, why did God not destroy it if he were omnipotent? Or was the evil of nearly equal power – the Manichean heresy?

Against this background, the German philosopher Liebniz (1646-1716) had tried to justify the imperfections of the world by saying it was the optimal among all possible worlds. It must be the best possible and most balanced world, because it was created by a perfect God. This is the view parodied in “Candide” by having Pangloss repeat endlessly that “we live in the best of all possible worlds” in the face of endless evidence to the contrary. However, Voltaire had distorted Liebniz’ philosophy for his satirical purposes – the facile optimism attacked was more that of Alexander Pope. (We noted that – given that Liebniz had been brilliant enough to discover calculus independently of Newton, to discover the binary system and anticipate a whole host of scientific discoveries – it would have been pretty strange if he had held views as simplistic as those of Pangloss).

What then did we make of the book as a book? It had a very modern, timeless feel – the timelessness of a fable. And themes such as the corruption of the clergy were very contemporary.

It displayed a very modern, deadpan sense of humour – and some found it wickedly funny, although others only moderately so. The book was like an amalgam of a philosophical text and “Private Eye”, with potshots being taken at everyone. There was no real flow to the plot, and the characters did not develop: they were types or caricatures rather than individuals, as in a political cartoon. Indeed much of it was written in the sort of sound-bites that would suit a cartoon.

Much of the humour was bawdy, of a “nudge, nudge” kind – such as the wonderful scene where Cunegonde spots

“Dr Pangloss in the thickets giving a lesson in experimental physics to her mother’s chambermaid, a very pretty and very docile little brunette”

Although the critics tended not to focus on the bawdiness, it must be one of the reasons for the book retaining its popularity.

Another was the simplicity of the language, which added to its charm, and the speed at which the story moved. He included a lot in a very small compass. In a number of ways Voltaire had been influenced by the satires of Swift, but a quick comparison one member had made with “A Modest Proposal” showed that Voltaire’s lapidary and economical use of language was quite distinct.

It was intriguing to reflect that a world journey today similar to that of Candide’s could encounter just as many shocks and horrors, such as visiting Iraq and Afghanistan, or Sudan, where a teacher had just been imprisoned for calling a teddy bear Mohammed.

The book, which was published anonymously, must have been viewed as scandalous and outrageous at the time, for example with its endless attacks on the clergy. Even Pangloss’ pox, acquired from the docile brunette, was acquired by her from a Jesuit monk.

Every established institution was attacked. For some this was a disappointment – he knocked everything down, and seemed to have nothing positive to assert in its place. It was a deeply pessimistic book. His caustic nature must have made him an unpleasant companion to spend a long time with - it was not surprising that Frederick the Great wanted rid of him! When he wrote “Candide” he was feeling very bitter – he was living in exile, not having been to the French court for ten years.

Voltaire was often pursuing a personal agenda against specific people in his satire. Occasionally this became too apparent and the humour was lost – as for example with the passage about Lord Pococurante, the cynical critic. However, it was surprising that his story still read so well when all the topical targets had been forgotten – the same could not be said of many other satires, such as Pope’s tedious “The Dunciad”.

We focussed on two areas of the book where there was no critical consensus about their meaning - the Eldorado episode and the enigmatic ending (“il faut cultiver notre jardin”).

Why did Candide leave Eldorado– given that it seemed to be the best of all possible worlds? Ostensibly it was to pursue Cunegonde, but perhaps there were deeper reasons. Was it because – as David Byrne sang - “Heaven is a place where nothing ever happens”? Was boredom the real reason, and escaping boredom an even stronger motive than the greed that would be satisfied by staying? Was it therefore a hypothesis test – would you really like a perfect world? – and thus a satire of a “golden” age. After all, in Browning’s phrase, “man’s reach should exceed his grasp”. Boredom was a theme of importance to Voltaire – at the end in the garden scene, he talks of the three great evils of “boredom, vice and need”.

A more prosaic view was that Eldorado was introduced in imitation of Swift’s fictional lands in Gulliver, and that the main reason for Candide leaving was not to prove a philosophical point or reflect a deep psychological motive, but simply to move the plot on.

Eldorado did undoubtedly serve Voltaire’s satirical purposes, as it was a happy land without priests or lawyers. The people of Eldorado were deists like Voltaire himself (“I cannot imagine the clockwork of the world existing without a clockmaker”), believing in God but not having the apparatus of an established church, such as priests and monks. The story line about Candide after leaving Eldorado also demonstrated that wealth did not bring happiness, and gave Candide plenty of opportunities to demonstrate his gullible good faith as he gave away his wealth.

But what of the ending? We could reach no consensus here. Perhaps it was optimistic in a sense? Candide had committed a sin, but found peace in the end. Cunegonde might have become ugly, but her pastry was good!

Was “cultivating our garden” a selfish withdrawal from the world? Voltaire himself was inclined to withdraw to the country at moments of stress in his life.

Or alternatively did it mean that we must try to improve the world? Was he not still attacking the philosophy of the best of all possible worlds – which was a fatalistic philosophy of inaction? From this viewpoint cultivating your garden meant you must work harder at improving things.

Yet surely gardening was exactly a philosophy of inaction? Well, Voltaire was very keen on gardening! Though he was not suggesting we all take up horticulture - the question was what he meant by the image of the garden.

A different perspective was that it meant there was a need to compromise. He needed a punch line for his ending, and it was a diminution of aspiration. Perhaps it was advice to the young – settle for what you are in the end.

Or was it a mistake to put much significance on the ending, particularly if after 250 years nobody could agree what it meant – didn’t the story simply run out of steam, and he had to end it somehow? It was an easy way to end it – tranquil old age. Voltaire’s tale was essentially a work of satire rather than a work of philosophy. The philosophy it attacked was distorted to make it a better target. Leibniz’ philosophy may have been the piece of grit that caused the growth of the pearl, but Candide’s enduring value was as a piece of literature, not a work of philosophy, and that was how it should be assessed.

Reaching no agreement on gardening, this group of Edinburgh philosophes, no doubt stimulated by the sea breezes, moved on to weightier issues.

What about the woman who had her buttock cut off? And what about the two ladies with monkeys as lovers? Examples of him taking every possibility to be outrageous.

Why did he stress the monkeys’ similarities to humans? Did he reject the conventional eighteenth century “Great Chain of Being” in favour of some early version of evolution? Pass. But he did have an impact on evolutionary science in the naming of the “Panglossian Paradigm” – the belief until recently that every feature of humans was perfectly adapted to life on earth, as opposed to being a relic or the consequence of a different adaptation.

Precedents for the book? In English “Gulliver’s Travels”, most obviously, and possibly “The Pilgrim’s Progress”. The picaresque novel, which started in Spain at the end of the sixteenth century, had imitators across Europe, including Fielding and Smollet in Britain.

Modern equivalents? One member was strongly reminded of the “The Hitchhikers Guide to the Galaxy” – which also includes such elements as Eldorado, mice, and getting rid of lawyers. Another timeless fable was “Animal Farm”.

Any other book as short as this which had had an equivalent impact? “Hamlet” or “Macbeth”.

At this point, the group discussed the derivation of the names of the characters. As these alternated between the obscure and the obscene, your scribe chose this moment to close his book, and devote his attention to a fine French wine.

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