Interpreting Statistics

by Gene Callahan

There is always a temptation to think of a statistic as a simple, straight-forward fact: Numbers don’t lie. Consider this statement from Newsweek from an article on structural unemployment in the US:

‘Another theory is that Americans are less willing to move to take jobs. The McKinsey study reports that, in the 1950s, one in five Americans moved every year; now it’s one in 10. “Work is more mobile than workers,” says Camden.’

What could be clearer? Workers are less willing to move. Just look at the numbers!

But let me suggest that things are not so simple as they appear.

Against Magical Thinking

by Roger Koppl

The term “magical thinking” has different meanings, most of them involving something like extrasensory perception or the efficacy of spells.  Here I define it as an argument, one of whose steps requires something impossible.  (Larry White helped me with this definition, but gets no blame for it or anything I say here.)  It is not magic thinking if your argument has an unexplained piece.  Darwin knew didn’t have anything like Mendelevian genetics as a mechanism.  That was a hole in his theory, eventually filled by others.  No magic there.  Magical thinking exists when one fills the gap with something that is logically or physically impossible.

If you can show I have engaged in magical thinking, you have overturned my argument.  

Geertz

by Gene Callahan

I’ve been reading the anthropologist Clifford Geertz‘s book, The Interpretation of Cultures, this week. I had read a little Geertz when doing my master’s at LSE, and liked him then, and I like him even more now. For instance, Hayek, Oakeshott, Polanyi, Wittgenstein, MacIntyre and others have all noted how the Enlightenment goal of freeing reason from all allegiance to traditions, customs, habits and so on is not an ideal we should approach as closely as possible but an impossibility, and an impossibility that, if held as a goal, only creates mischief. Here is Geertz making much the same point:

‘Undirected by culture patterns — organized systems of significant symbols — man’s behavior would be virtually ungovernable, a mere chaos of pointless acts and exploding emotions, his experience virtually shapeless’ (46).

Geertz also drew on the work of some of my favorite philosophers, including Whitehead, Cassirer, and Langer.

The Blackened Swan

by Gene Callahan

I am now on my second review of Nicholas Nassim Taleb’s The Black Swan, the first of which will appear in The Review of Austrian Economics soon, and the second of which, an essay length review, is due out in a forthcoming issue of Critical Review. I have very mixed feelings about this book — Taleb is very good in his areas of expertise, but apparently feels that his skill in those domains makes him emminently qualified to propound on any damned thing that comes into his head. I wanted to share with ThinkMarkets readers a little excerpt from my upcoming CR review: