Pur Autre Vie

I'm not wrong, I'm just an asshole

Monday, April 13, 2015

Contextualism

I want to respond to Dave's post on contextualism and skepticism.

I usually like to start these posts with some qualifications.  First, I have no qualifications.  As we will see, I have no familiarity with the relevant philosophical issues.  Second, I am drunk.  For reasons that I don't want to get into, I am a bit upset about things and drowning my sorrows to some extent.

I have no idea what contextualism means.  I don't particularly care to defend it.  But whenever I see arguments like the one that Dave advances, I want to take a step back and ask how several interrelated issues are being addressed - the most notable being, for our purposes, the definition of reality.

We all understand that truth involves some correspondence to reality.  But what is reality?  If you are sufficiently agnostic about what constitutes reality, then just about anything flies, and it becomes impossible to "know" anything.  This I take to be the core of the skeptical approach.  There could always be a demon manipulating your perceptions.  You could always be a brain in a vat.  There can always be a "true" reality underlying your "false" perceptions.

But this is unsatisfying, and there are any number of ways to push back against it.  After all, what is it that separates reality from illusion?  A persistent, predictable "illusion" might be reasonably treated as reality, however "illusory" it is on some level.  Hilary Putnam famously challenged metaphysical realism by questioning our ability to "refer" to the "underlying reality."  (Very briefly, it is difficult to articulate a theory of reference that would allow a "brain in a vat" to refer to the vat, and so a mind in that circumstance could not utter a truthful statement along the lines of, "I am a brain in a vat."  And if you can't truthfully say that you are a brain in a vat, then it's pretty clear that you are not a brain in a vat.)

But I think the real value of Putnam's approach is not its narrow victory over metaphysical realism (which is, as I may discuss in another post, somewhat tenuous).  The value consists in forcefully posing the question, "What good is inaccessible reality?"  In other words, if you know with absolute certainty that every one of your experiences will be dictated by a particular set of facts and rules, then what do you care whether those facts and rules are "illusory" or not?  If "reality" is inaccessible to you, and irrelevant to your life, then what exactly is its claim on your attention?  Shouldn't you pay more attention to the "illusion" that actually governs your life?

So to put it another way, there is a very strong argument that "reality" should be understood in terms of (and relative to) our experiences.  If certain pieces of bread are "really" the body of Christ, but they retain all of the physical characteristics of bread (calories, gluten content, etc.), while having none of the physical characteristics of human flesh, then shouldn't we say, "So much the worse for 'reality.'"?  For our purposes, the bread is bread, not human flesh.  (Of course it is a very different story if you take the afterlife seriously - in that case, I would strongly recommend paying very close attention to whether any particular piece of bread is the flesh of Christ.)  In other words, shouldn't we define "reality" relative to the things we care about?  I simply do not care if this burrito is "really" a hammer, so long as it has all of the physical characteristics of a burrito (and not a hammer).  If on some other level of reality, totally inaccessible and irrelevant to me, it is a hammer, this concerns me not at all.  I will eat any hammer in the world, so long as the consequences are identical to the consequences of eating a burrito.

I've spent more time than I intended on the question of what is reality.  But that's all right, because this is the most important question.  If you conclude that "reality" can be anything (so that the whole world could be an illusion concocted by a demon), then it is very hard to avoid skepticism (since we only have access to the physical world, and can therefore never rule out any metaphysical theory).  If you conclude that "reality" consists only of the world that matters to us - the empirically testable physical world that shapes our experiences - then skepticism has a much narrower appeal.  Skeptics are left to argue that even the physical world is resistant to human knowledge, for whatever reason (maybe Humean doubts about our ability to ascertain whether the future will resemble the past).

Having set the stage in this way, let's consider how a more appealing contextualism might play out.  We will imagine at first that a Protestant has come across what appears to be a piece of bread.  His Catholic friend is urging him not to eat it, because it may not be bread at all - it may be human flesh.  (I apologize for any theological errors I am about to make.)  Catholics, you see, believe that bread can be "transubstantiated" into the flesh of Christ through particular procedures.  After transubstantiation, the object that was formerly bread is no longer bread.  (If it remained bread, while also becoming the flesh of Christ, this would be called consubstantiation, not transubstantiation.  Catholics believe in transubstantiation, while Anglicans believe in consubstantiation.  Or so I have been led to believe.)  So you might say that every Catholic is skeptical about every piece of bread, unless the Catholic has monitored the bread continuously since it came out of the oven and can therefore be assured that it has not been transubstantiated by a priest into the flesh of Christ (at which point it would no longer be bread).

Now I think it's fair for the Protestant to say (in a contextualist manner):  "Look, my friend, this piece of bread may not be a piece of bread to you, but whether or not it has been transubstantiated into the flesh of Christ according to your belief system, it remains a piece of bread to me.  Its suitability for making a peanut butter-and-jelly sandwich for my lunch simply doesn't turn on whether it is human flesh, according to your views.  If it were actually human flesh, of course I would recoil in terror, and I wouldn't even consider making a peanut butter-and-jelly sandwich with it.  But look at it - it doesn't resemble human flesh at all.  It is extremely bread-like in its physical manifestation."

And I think Dave would say, "Very well.  Protestants don't adhere to a belief system that acknowledges the particular metaphysical reality that Catholics believe in.  But this is a matter of terminology.  Within the Catholic discourse, the use of the term 'bread' to refer to the object would make no sense.  It's just the French/English example all over again."

But I think Dave would be wrong.  It's easy to see how even Catholics, communicating among themselves, might refer to the object as a piece of bread.  After all, it has all the physical characteristics of bread.  It will provide nutrients to most people, but will sicken a celiac.  It is suitable for vegetarians (unless they have a moral objection to eating meat in the form of Christ's flesh - but it is not as though Christ's flesh is produced on a factory farm).  Its nutritional and caloric content, in other words, have absolutely nothing to do with whether or not it is bread, on the one hand, or the flesh of Christ, on the other.  If a Catholic who is a celiac asks whether there is bread in a recipe, another Catholic would be extremely foolish to reply that there is no bread, on the grounds that all of the bread has been transubstantiated into the flesh of Christ.  (Catholics believe that even when bread has been transubstantiated, it retains all of the physical characteristics of bread, including its gluten content.)  In context, the celiac should be informed that there is bread in the recipe, even though no devout Catholic believes that there is any bread in the recipe.  This seems crazy!  How can we explain it?  Well, "bread" can't be understood in some absolute, context-free sense.  What is judged to be "reality" is context-dependent.  When someone's intestinal lining is at stake, you've got to communicate the physical "truth" about the food even if you are lying about its metaphysical "reality."  There are no atheists in foxholes, and there are no metaphysical realists when it comes to allergy labeling.

So if contextualism is another word for "judging truth according to the reality that has been accepted as relevant for the situation," then I think contextualism is eminently defensible, and it "defeats" skepticism to the same extent that anti-metaphysical-realism defeats skepticism more generally.  It's quite possible I've misunderstood contextualism, but it seems to me that there isn't much point in drawing fine lines here.  These discussions all tend to circle back to the same questions about what constitutes reality.  There are any number of ways to restate these arguments, but fundamentally I don't think skepticism (in the "metaphysical realism" sense) deserves the deference it has traditionally been given.  If you take that crap seriously, then it is trivially true that knowledge is impossible.  Since that is a pretty pointless conclusion, we try to redefine knowledge to encompass the "reality" that is relevant to us.  Whether we do this through the Putnam channel, or the "contextualist" channel, or the pragmatist channel, it seems to me that the results are basically the same.  These issues should be dealt with comprehensively and not piecemeal, as the tendency in philosophy seems to be.

Saturday, March 21, 2015

I Wrote a Poem Once Again

"About Coffee"

The dark-roasted beans are glossy and sleek,
The light ones are small and matte.
And I wonder as I mix them:
Does coffee have something deep to tell us
About the world, about ourselves?
Or is it just a pleasant psychoactive drink?

The latter seems more likely, but
Maybe that says more about me
Than it does about coffee.

Tuesday, March 10, 2015

Moderate Consumption of Alcohol

A while ago I had a Twitter exchange about this...  I don't know, blog post, article, column, whatever, by Stanton Peele.  I didn't handle it very gracefully at the time, but now I'll try to explain where I'm coming from.

My basic problem with the piece is that the writer is whistling past the graveyard in any number of ways.  To write so blithely about the benefits of alcohol reminds me of the classic What If? in which Randall Munroe walks through the many advantages of the sun going out, before finally noting the major downside:  "We would all freeze and die."

It's really the tone that gets me, the trolling, tendentious, college-debate-style dickishness.  Why doesn't our society do more to trumpet the health benefits of alcohol?  I don't know, Stanton Peele, it's a real fucking mystery!

Peele starts by recounting the death of Bob Welch, a teetotaler, at the age of 57.  Peele then suggests that the evidence is that the cause of Welch's premature death was his abstention from alcohol, and asks why we are so reluctant to draw this conclusion when the evidence is so strong.

Now look, I have no problem with publicizing the positive health effects of alcohol.  But there's something odd about Peele's piece.  Before we get there, though, let's pull a couple of passages from Wikipedia.  First, from the page on Jason Molina (citations and links removed):
On September 19, 2011, a message from the musician's family was posted on the Secretly Canadian Records website, titled "Where Is Jason Molina?", which said that over the past two years, Molina had visited rehab facilities and hospitals in England, Chicago, Indianapolis, and New Orleans for an unnamed condition. His family wrote that at the time, he was "currently working on a farm in West Virginia raising goats and chickens for the next year or so, and is looking forward to making great music again." The note also stated that the last several years had been "a very trying time for Jason, his friends, and his family. Although no one can be sure what the future holds, we feel very encouraged by the recent steps Jason has taken on the road towards becoming healthy and productive once again." The post ended by asking fans to donate to a PayPal account that would fund Molina's recuperation.
On May 5, 2012, a post titled "a note from jason" was posted on the Magnolia Electric Co. website, explaining certain aspects of his situation for the first time. Saying that it had been "a long hospital year", Molina expressed gratitude and appreciation for the monetary and emotional support he had received from fans and friends. He gave a brief update on his condition, saying, "Treatment is good, getting to deal with a lot of things that even the music didn't want to. I have not given up because you, my friends have not given up on me." The note concludes on an optimistic tone, saying that there were a few music projects on the "distant radar screen."
 . . . .

Molina died on March 16, 2013, in Indianapolis as a result of alcohol abuse-related organ failure. He was 39. Henry Owings, a friend of the musician, published an article on his online music magazine Chunklet that said Molina had struggled with alcoholism for most of the decade leading up to his death. Owings also wrote that Molina had "cashed out on Saturday night in Indianapolis with nothing but a cell phone in his pocket."
And from the page on Townes Van Zandt (again, I've removed citations and links - and note that this passage picks up after Van Zandt has injured himself falling down a flight of stairs):

Determined to finish the album that he had scheduled to record with Shelley and Two Dollar Guitar, Van Zandt arrived at the Memphis studio being pushed in a wheelchair by road manager Harold Eggers. Shelley canceled the sessions due to the songwriter's erratic behavior and drunkenness. Van Zandt finally agreed to hospitalization, but not before returning to Nashville. By the time he had consented to receive medical care, eight days passed since the injury. On December 31, X-rays revealed that Van Zandt had an impacted left femoral neck fracture in his hip, and several corrective surgeries were performed. Jeanene informed the surgeon that one of Townes' previous rehab doctors had told her detoxing could kill him. The medical staff tried to explain to her that detoxing a "late-term alcoholic" at home would be ill-advised, but he would have a better chance at recovering under hospital supervision. She did not heed these warnings, and instead checked Townes out of the hospital against medical advice. Understanding that he would most likely drink immediately after leaving the hospital, the physicians refused to prescribe him any painkillers.

By the time Van Zandt was checked out of the hospital early the next morning, he had begun to show signs of DTs. Jeanene rushed him to her car, where she gave him a flask of vodka to ward off the withdrawal delirium. She would later report that after getting back to his home in Smyrna, Tennessee, and giving him alcohol, he was "lucid, in a real good mood, calling his friends on the phone." Jim Calvin shared a marijuana joint with him, and he was also given about four Tylenol PM tablets.

While Jeanene was on the phone with Susanna Clark, their son Will noticed that Townes had stopped breathing and "looked dead." He alerted his mother, who attempted to perform CPR, "screaming his name between breaths."
Now I want to be clear, Peele didn't suggest that alcohol is always and everywhere a healthy thing to consume.  For instance, women with the BRCA 1 or 2 mutations (which are related to breast cancer), or who are otherwise at heightened risk for breast cancer, might reasonably abstain from alcohol.  Also, "Frequent, heavy binge drinking is unhealthy. But then you knew that already, didn't you? If you don't distinguish binge drinking from daily moderate drinking, that would be due to America's addiction-phobia, which causes them to interpret any daily drinking as addictive."

Maybe.  Maybe "addition-phobia" is the reason for our failure to distinguish between moderate drinking and binge drinking.  But I can't help pointing out that it is precisely the inability of many people to do one without the other that causes alcohol to be such a destructive force in their lives.

I understand that Peele is a polemicist, and as such doesn't have to concern himself with questions like, "On net, does alcohol consumption in the United States contribute to or detract from public health?"  Or:  "What is the actual stopping place for people who drink more than the ideal amount?"  In this connection, note that alcohol consumption forms a hockey-stick pattern, with the top decile consuming on average 73.85 drinks per week, vastly more than the other 90% combined.  The idea that public policy might be oriented toward keeping people out of that decile, rather than pushing them up to the eighth decile (6.25 drinks per week on average), apparently hasn't occurred to Peele.

Again, I don't have a problem with what you might say are his "literal" claims.  People absolutely should consider drinking in moderation if they can handle it, and should take into account genetic factors like BRCA 1 and 2 (and the genes related to "Asian flush," which Peele doesn't mention).  But this suggestion that alcohol consumption is a "health behavior," that when teetotalers die young we should call them out for their bad health decisions, that it makes sense to discuss the pros and cons of alcohol while barely mentioning alcoholism...  this is repugnant to me.  Probably the most telling thing about the piece is something that Peele mentions but doesn't dwell on, which is that Bob Welch, the teetotaler who died at the age of 57 (5 years older than Townes Van Zandt and 18 years older than Jason Molina), abstained from alcohol because he felt that he had a "disease."  So in other words, Welch diagnosed himself with alcoholism and successfully quit drinking, a path that neither Molina nor Van Zandt was able to follow.  And this—Welch's sobriety!—is the behavior that Peele thinks should be labeled "unhealthy."  This is what Peele chose to use as a cautionary tale.  Presumably if Molina and Van Zandt had gotten sober, Peele would have used them as cautionary tales, too.

Fuck Stanton Peele.

Sunday, March 01, 2015

Economics: Projects for Future Benefit

This is part of a series of posts on economics.  Unlike my typical posts, these posts are dynamic—I'm going to come back and edit them as my thoughts develop.  I am basically "thinking out loud."  I am trying to fit things together in a modular way, so that each piece stands on its own analytically.  But no promises.

We are not going to develop a very detailed model of the market for goods and services.  As we have noted, people get utility from consuming goods and services, which is reason enough to buy them.  But people can also buy goods and services for reasons that are less directly related to utility.  We've already briefly discussed this topic, but let's look at it in a little more depth.  There are various projects that can be undertaken with the following feature:  resources are spent at time t = 0 and then there is some benefit that accrues at time t = n (the benefit may also be spread out over several periods).  Examples include things like adding more machines to a factory to expand its production capacity, or buying a microwave so that you can easily heat food in your kitchen.  These examples are different in that one is an investment in capital, while the other is investment in a consumer item, but we are not going to make very much of this distinction.  In both cases you must spend money at time t = 0 in anticipation of benefiting in the future.  The main differences between the factory and the microwave that will interest us are when and for how long those future benefits will accrue, and what risks attach to the project (for instance, maybe the microwave has a 5% chance of breaking down each year, and its warranty lasts only a year).  There is not a sharp distinction between immediate consumption and a consumption project that lasts several time periods — there is a continuum from 100% of the utility being gained at t = 0 to 100% of the utility being derived far in the future.

We are not going to look very closely at these projects, except to note a few features that we will assume.  First, the anticipated value of a project is dependent on circumstances.  If you are going to build an ice cream factory, your expected profits depend on your view of the market for ice cream in the future, when the factory starts producing ice cream.  If there is a health craze, or if refrigeration becomes much more expensive, then the demand for ice cream may be depressed and your investment may prove unprofitable.  Or it may be that milk and sugar will be more expensive in the future, reducing profits even if demand remains steady.  Another important aspect (which we will examine more closely in a separate post) is the interest rate and the risk premium available in the market.  If the ice cream factory yields a return of 15% and the market interest rate is 20%, then the ice cream factory may be a bad investment even if it is profitable as an accounting matter.  In other words, the ice cream factory may earn enough profits to more than pay back the original investment, but the investor might still have done better by loaning the money to someone else.

Second, we are going to assume (somewhat unrealistically) that when someone spends money on consumption or on a project for future benefit (such as the ones we have been discussing), the expenditure involves using scarce resources.  So for instance, if I invest in machines for my factory, those machines will be unavailable for anyone else.  If they are custom-made, then the materials and labor that go into making them are unavailable for anyone else to use.  This is realistic for many goods and services, but it's not universally true.  When an individual buys software, or pays to stream a movie over the internet, there is no reduction in resources available for other people to use (or the reduction is minor, such as the use of bandwidth on the internet, which represents a small part of the price of the movie).  We are going to ignore these non-rival goods and services.

We are also going to ignore non-market use of resources.  Technically, if someone operates an orchard, she may be using carbon dioxide, without which she couldn't produce any fruit.  But there is no market for carbon dioxide, and realistically her use of carbon dioxide is trivial.  The same would be true of a facility that concentrates argon from the atmosphere and then sells it.  Technically, in addition to the market goods and services that are used (machines, electricity), the facility also removes argon from the atmosphere.  This is not what we mean when we talk about using up resources.  And we are going to ignore other cases in which people use up society's resources in a more material way without paying for them (as when a farmer removes water from an aquifer that extends beyond his land).  This may be economically significant, but it is not a project for future benefit for our purposes because the farmer doesn't spend anything for the water at time t = 0.  If she has to buy a pump to get the water, on the other hand, then that would count as a project for our purposes.

So in conclusion, projects for future benefit require spending at time t = 0, they use up scarce resources, and their profitability depends on external circumstances such as market demand for the particular good in question, as well as the market rate of interest and the risk premium that attaches to financial products.

Monday, February 23, 2015

Economics: The Logic of the Financial Markets

This is part of a series of posts on economics.  Unlike my typical posts, these posts are dynamic—I'm going to come back and edit them as my thoughts develop.  I am basically "thinking out loud."  I am trying to fit things together in a modular way, so that each piece stands on its own analytically.  But no promises.

Now I want to take a closer look at the logic behind the financial markets.  Remember that we have individuals who want to maximize their utility, which they achieve by consuming goods and services.  And recall that many (maybe all) people experience diminishing marginal utility from consumption, meaning that the first dollar the person spends in any time period is more valuable than the second dollar, and so on.  This has two implications:  first, it means that people can sometimes increase their utility by shifting their consumption over time, and second, it means that people have different levels of tolerance for risk.  People with sharply diminishing marginal utility are more risk-averse than others.

Moreover, people discount future consumption using their consumption discount rate, which varies from person to person.  Finally, let's assume that people's wages are not constant over time.  People are sometimes unemployed, and almost everyone wants to retire at some point.

Putting these things together, it's easy to see that there will be demand for at least three things that can be provided by the financial markets.  First, sometimes people will benefit by borrowing money at one point in time and repaying it at a later point in time with interest.  This could be done for many reasons.  Someone who anticipates higher wealth in the future might want to "shift consumption back in time" in order to take advantage of the higher marginal utility of consumption in the present.  Someone with a high consumption discount rate might want to do the same thing, but this time in order to take advantage of the lower discount applied to present consumption than the one applied to future consumption.  Finally, someone might have an investment opportunity—a good or service in the non-financial markets that will yield a rate of return more than sufficient to repay the interest on the loan.  (An example would be borrowing to buy equipment for your business, which will hopefully generate enough income in the future to repay the loan with money to spare.  Another example—hopefully!—would be a student loan.)

The second demand that can be satisfied by the financial markets is the desire to shift money in the other direction—to save money today in order to consume it (plus interest) tomorrow.  This is just the reverse of the situation in the previous paragraph.  Of course, when you shift consumption into the future, you are always pushing against the consumption discount rate (no one discounts present consumption more than future consumption).  But if the interest rate is higher than your discount rate, then you could shift consumption to the future to take advantage of the disparity.

It could also be advantageous to shift spending power to the future if the individual has enough to consume today and wants to make sure she will have enough to consume in the future.  This is especially true if she anticipates the possibility of unemployment or retirement.  Just note that this would not be true if the individual did not experience diminishing marginal utility of consumption—in that case, the inability to consume in the future would not matter, because the individual could obtain the same (or higher) aggregate utility by consuming today.

The third and final demand that can be satisfied by the financial markets is the demand to shift risk among individuals.  A risk-averse individual can improve her utility by entering into insurance-like contracts that are "statistically unfair."  To see how this works, imagine an individual who owns an asset that will, at time t = 1, be worth either $1,000 or $0, with equal probability.  Imagine that this individual has a marginal utility of consumption of 1/2, meaning that this person's utility from consumption follows this function:

U = C1/2

For the sake of simplicity, assume that this individual does not discount future income at all (this is just so that we can leave out some math).  And finally, assume that the individual's only source of wealth at time t = 1 will be the asset.  She will sell the asset (if it is worth anything) and consume the proceeds.

What is her expected utility?  It is:

U = (0.5)($0)1/2 + (0.5)($1,000)1/2

That is, there is a 1/2 probability that she will have a utility of 0 and a 1/2 probability that she will have a utility of (1,000)1/2 or ~31.62, for an expected utility of ~15.81.

Now what if someone offers to pay her $400 at time t = 1 in exchange for the proceeds of the asset (regardless of its value)?  (We will assume this is a credible promise—she can rely on receiving $400 if she takes the deal.  We might address counterparty risk later.)  This is a statistically unfair exchange because the expected monetary value of the asset is $500.  But should she take the offer?  Well, here is her expected utility:

U = ($400)1/2 = 20

So if she keeps the asset, her expected utility is about 15.81, but if she takes the $400 instead, her expected utility is 20.  Of course in reality she should try to get a higher price, but any price above $250 will increase her utility relative to no deal at all.

All right, so, if the financial markets are working properly, what should we observe?  We should see people with higher consumption discount rates borrowing from people with lower consumption discount rates.  We should see people with high current incomes saving money in anticipation of unemployment or retirement.  We should see anyone with a real-world (non-financial) investment opportunity borrowing money to finance it, as long as the interest rate is below the rate of return on the project.  On the other hand, we should not observe anyone investing in a project if a higher rate of return is available in the financial markets (taking risk into account).  We should see risk-averse people buying insurance (whether or not it is formally labeled "insurance") from people or institutions that are less risk-averse.

Sunday, February 22, 2015

Economics: Modeling Individuals

This is part of a series of posts on economics.  Unlike my typical posts, these posts are dynamic—I'm going to come back and edit them as my thoughts develop.  I am basically "thinking out loud."  I am trying to fit things together in a modular way, so that each piece stands on its own analytically.  But no promises.

We will model people as economic agents who engage in the following market activities:  working (selling labor in the labor market), consuming (buying goods and services), borrowing or saving (either buying or selling financial products), and investing (that is, spending money in anticipation of generating future wealth, but doing so outside the financial markets).  The difference between saving and investing can be illustrated with this example:  a saver might take $1,000 and put it in a bank account for future consumption, while an investor might take $1,000 and buy a solar panel so that he can enjoy cheaper electricity in the future.  Both are spending money to increase future consumption, but only one is doing so through the financial markets.  This is a non-standard use of the term "investing," and so I will try to be careful to make myself clear when using the term.

We are going to model people as though they are motivated to maximize their consumption over time.  However, we will be open to the possibility that people care more about present consumption than about future consumption, and more about near-future consumption than distant-future consumption.  We'll call this the consumption discount rate:  the rate at which future consumption is discounted in the individual's utility function.  We'll allow people to have different consumption discount rates.  We will also distinguish between the consumption discount rate and the effective discount rate, which may take into account other factors such as the market interest rate and the rate of inflation or deflation.  That will be a topic for another segment.  The consumption discount rate will vary between 0 and 1, with 0 indicating no preference for present spending, and 1 indicating no expected utility from future consumption.  You can determine the utility from a unit of consumption in the future by multiplying it by:

(1-d)n

where d is the consumption discount rate and n is the number of time periods between now and when the consumption occurs.  (For current consumption, n = 0 and so consumption is not discounted at all.)

We will also allow for the possibility that people experience diminishing marginal utility from consumption at any given time.  This is reflected in a variable that on the high end approaches 1 and on the low end asymptotically approaches 0, as in the following equation:

U = Cm

where U represents utility, C represents consumption, and m represents the marginal utility variable.

So for instance, imagine that a person has $1,000 at time 0 and no expectation of working in the future.  This person might seek to transmit some of her spending power to the future (by saving or investing), even though future consumption is (other things being equal) less valuable than present consumption.  This is because (for instance) two instances of $500 consumption are collectively worth more utility than one instance of $1,000 consumption (although you would have to discount the second $500 round of consumption if she has a nonzero consumption discount rate).

In the example I've just given, the diminishing marginal utility of consumption is pushing in one direction (saving rather than consuming, so as to shift consumption to a time when its level is lower and its marginal value is therefore higher), while the consumption discount rate is pushing in the other (consuming rather than saving because present consumption is more valuable than future consumption).  It is also possible that both factors will push in the same direction:  for instance, an individual might borrow money and spend it today in the anticipation that she will be wealthier in the future.  In that case the person is increasing utility by shifting consumption toward the present and by shifting consumption toward a time when its level is low and therefore its marginal utility is high.

We will assume that work is unpleasant and people experience disutility from working (or utility from leisure time), so that people have to be paid wages to induce them to work.

Finally we will assume (or really just note) that people will seek the most advantageous means of shifting consumption/spending power from time period to time period.  So when they shift spending power to the future, they will look for financial products or investment opportunities that offer a high expected rate of return, and when they borrow they will look for a low rate of interest.  People who have diminishing marginal utility from consumption are risk-averse and they will also seek a certain degree of safety when saving or investing.  (In other words, someone who gets diminishing marginal utility from consumption is not indifferent between a certain $500 and a 1/2 probability of $1,000, because the first $500 of consumption is more valuable than the second $500.  Someone with no diminishing marginal utility from consumption is risk-neutral and would not generally have a preference between a certain $500 and a 1/2 probability of $1,000.)  So in other words people maximize their utility from borrowing, saving, or investing taking into account both the rate of return (or rate of interest) and the level of riskiness.

Friday, February 06, 2015

Ein Klein Whining

Yesterday Elisa Gabbert tweeted:
I basically agree with this sentiment, but I also agree with the sentiment expressed by Catherine Nichols (e.g. here) that creepiness is a word used to describe unwanted male attention, and it's just a fact of life that male attention is more likely to be unwanted when it's coming from an unattractive man.

I want to take a step back and consider the way the sexual match-making process works.  In the U.S., at present, the general expectation is that men will be the agenda-setters.  In other words, men initiate things by indicating interest in some way.  This is obviously not an absolute rule, but in general a man must take affirmative steps to get the ball rolling, and by the same token can dial things down simply by not doing anything.  A woman generally must wait for expressions of interest, and then must take affirmative steps to shut things down.  Again, I do not mean to say that this is how things should be, or how they are in every case, but I think this is the norm.

The dynamic I've described above is not great for women, obviously, but it's also a very unfortunate dynamic for socially awkward men.  I think here is (very roughly) how things play out.  Men express their interest in women with varying degrees of adroitness.  When this attention is welcome, women are happy.  (They may not express their pleasure directly—they may play hard-to-get or feign disinterest or whatever—but they certainly don't often label men "creepy" when the attention is welcome.)

When the attention is unwelcome, it puts women in an awkward position (even if it is otherwise appropriate).  Sometimes, of course, the woman can simply communicate her disinterest, and that's that.  But the less perceptive the man, the more he is apt to ignore the "easy outs" that women may be trying to provide him.  "What is needed," he may be thinking, "is more persistence!  I just haven't gotten my message through with enough vigor."  When in fact the target of his affections is trying very hard to get him to stop.

Now the unfortunate thing here is that you can see how unpleasant this is for the woman (and therefore how she might be tempted to label the man "creepy"), and yet how unfair it is to pathologize the man's behavior (assuming, again, that the behavior is appropriate but for the fact that it is unwelcome).  Both the man and the woman in this scenario are behaving in a way that is rational given the context.  (The man is being oblivious, but he is behaving reasonably given his limitations.)  The culture expects him to be aggressive; he doesn't have the option of passivity.  Or at least, not if he wants to have a decent chance of finding a sexual partner through the normal channels.

The woman, meanwhile, really wants to dissuade this kind of behavior, because it puts her in a very uncomfortable position.  It would be different if there were clear, unmistakable ways to signal lack of interest.  But there aren't.  (Remember, it's not good enough to be reasonably clear to the average person.  It needs to be a signal that is clear to a less-perceptive-than-average person who is highly motivated to err on the side of aggressiveness.)  A woman can't extricate herself from the situation simply by dropping the matter.  That is (in general) the man's prerogative.  The woman may also want to signal to other people just how little interest she has in the man (to emphasize, in other words, that she has not encouraged the attention of this loser she has on her hands).  And so she labels him "creepy."

Where I think this leaves us is in an unfortunate equilibrium, one that is very disadvantageous to awkward/unperceptive men (something I'm keenly aware of).  The word "creepy" is used to encompass both truly problematic behavior and behavior that is merely awkward or tone-deaf.  Socially awkward men, who are understandably horrified at being lumped together with predators, respond by withdrawing from the market.  Or they adopt a much more tentative approach, which often amounts to the same thing, since women respond poorly to ambiguity or signals indicating lack of confidence.  (Some of this may be biological rather than social.  In Sheila Heti's How Should a Person Be?, the narrator is greatly aroused by what is essentially asshole behavior—what is, in fact, quite creepy behavior, except for the fact that it is welcome.  Hence my dismay, expressed in the comments section of Elisa's blog post on the book.  The narrator's reaction definitely seems to validate the idea that creepiness is almost entirely a function of attractiveness—when an attractive man says even the creepiest things, it's not creepy.)

And so a certain proportion of men are intimidated into passivity, while single women wonder where all the men are (or so I assume, what do I know?).  It's a frustrating situation all around, worsened I think by the weakening of old institutional forms of match-making.  And worsened also, I think, by the unfortunate (though understandable) tendency to use the same word to describe very different behavior.

As a kind of coda, here is another tweet from Elisa:

Indeed.  In the world we live in, the non-awkward man is king.