Month: January 2017

The Soul of the World: Interview with Roger Scruton

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This is part of the DR Book Collection.

Image result for the soul of the worldI’ve been a fan of British philosopher Roger Scruton ever since I stumbled on his BBC documentary Why Beauty Matters as an undergrad. I picked up his Oxford-published Beauty at the UNT library soon after. I found Scruton’s ideas to be powerful and provocative, even if the writing was at times difficult or lackluster compared to the concepts.

I felt the same way about his Princeton-published The Soul of the World. As The Wall Street Journal summarizes,

Viewed through the lens of scientific reductionism, all existence is fundamentally the bouncing around of various material particles, some arranged in the form of gene-perpetuating machines we call humans. Mr. Scruton almost agrees—we are, in fact, gene-perpetuating machines, and the finer, higher aspects of human existence emerge from, and rest upon, biological machinery. As he points out, though, it’s a long jump from this acknowledgment to the assertion that “this is all there is.” The jump, according to Mr. Scruton, lands us in “a completely different world, and one in which we humans are not truly at home.” A truly human outlook involves the intuition of intangible realities that find no place in even our most sensitive systems of biology, chemistry or physics.

For Scruton, this reductionism “overlook[s] the aspect of our mental states that is most important to us, and through which we understand and act upon each other’s motives, namely, their intentionality or “aboutness”” (pg. 4). The theism presented by Scruton is a kind of general classical theism, one that could be embraced by someone outside a specific religious tradition. His last few chapters discussing art, music, and the faces of others are especially enlightening. Just as no one would reduce the Mona Lisa to mere pixels on a canvas or the music of Bach to random sounds, to reduce humans and nature to their mechanical functions is to misunderstand reality and suppress our own daily experiences of the world. Thought-provoking stuff.

You can hear a brief snippet of an interview with Roger Scruton below.

Is Entrepreneurship Predetermined?

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How much is entrepreneurship predetermined by family background? According to a new study,

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Parent Role-Modelling

recent papers have collectively suggested that entrepreneurship might be more predetermined than previously thought – entrepreneurship education has been proven to be effective in primary school (Huber et al 2014) and, to a lesser extent, in secondary school (Elert et al 2015), but not at all when individuals are older, that is, students (Oosterbeek et al 2010) or adults (Fairlie et al 2015). Moreover, strong intergenerational associations in entrepreneurship have attracted considerable attention. While part of this relationship has been shown to be genetic (Nicolaou et al 2008), parental role-modelling appears to be the main driver of the intergenerational association in entrepreneurship (Lindquist et al. 2015). Additionally, exposure to a dense entrepreneurial environment during formative years also increases the likelihood of entry into entrepreneurship (Guiso et al. 2015).

So the policy-relevant questions arise: To what extent is entrepreneurship predetermined? Have we spent (public) funds wisely by implementing policy measures and education aimed at changing the behaviour of adult people?

In a recent paper, we assess the predetermination of entrepreneurship outcomes by calculating and analysing sibling correlations (Lindquist et al 2016). We argue that sibling correlations are more complete and precise measures of predetermination, including the importance of genes, family background, and neighbourhood effects as determinants of entrepreneurship. Sibling correlations have been used before to study outcomes other than entrepreneurship and provide much broader measures of the importance of family background and neighbourhood effects than intergenerational associations (Solon 1999). Their interpretation is also straightforward – the higher the sibling correlation, the larger the importance of family background.

Their results?:

  • 25% of the variance in individuals’ decisions to become self-employed is explained by family background and community influences;
  • For incorporation, this is close to 35%;
  • These percentages are slightly higher when we consider measures of successful entrepreneurship such as above median years of self-employment and incorporation;
  • Brother correlations are always larger than sister correlations;
  • The largest correlation is for males with above median years of incorporation, which is close to 50%;
  • Mixed sibling correlations are consistently smaller than same-sex correlations.
  • Parental entrepreneurship status is quite important;
  • Parental education and income matter much less; and,
  • Family structure and immigrant status do not matter.
  • Parental self-employment is a prime explanatory force in individual self-employment, but not incorporation; and
  • Parental incorporation explains individual incorporation best, but not self-employment.
  • Between 56–78% of the sibling correlations in self-employment; and
  • Between 38–46% of the sibling correlations in incorporation.

The researchers conclude “that parental entrepreneurship and genes are the two most important factors generating sibling similarities in entrepreneurship.” Policy wise, the authors explain that “children appear to be able to learn about entrepreneurship through their family and community environment, which implies that it may be possible to teach entrepreneurship to young people.”

Check it out.

Density and Productivity

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A new study finds evidence that denser populations are more productive:

Is it selection, or the sorting of talents (Behrens et al. 2014) that leads only the most productive firms to locate in denser areas? Or do agglomeration economies explain why firms located in less dense environments are less productive?  Empirical evidence suggests that the main driver of differences in productivity is not selection (i.e. tougher competition inducing less productive firms to exit the market) but agglomeration economies (Combes et al. 2012). The usual suspects are the higher availability of services, better infrastructure, sharing of public goods, a denser labour market allowing for better matching, and technology spillovers (Duranton and Puga 2004). Using firm-level data for France, we confirm in a recent study that misallocation has a spatial dimension: resource allocation and the associated effect on productivity are related not only to firms’ characteristics, but also to the environment in which they operate (Fontagné and Santoni 2016). Denser commuting zones seem to offer a better match between employers and employees.

It’s a bit technical, but interesting nonetheless. Check it out.

Biased Regulators

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In their book Nudge, authors Richard Thaler and Cass Sunstein advocate what they call “libertarian paternalism”: a kind of governmental choice architecture that seeks to influence the choices choosers make. This restructuring tends to rely on small tweaks to the system, recognizing that people are often biased and irrational in their decision-making.

However, a new study shines light on an overlooked aspect of bias and policy. Economist and paper author David Hirshleifer explains,

What if the choice architects are subject to psychological bias? This could come from biases of regulators, politicians, or even economists. It can also come from the psychological biases of the voters who hire and fire political agents.

Teoh and I argue that important features of financial and accounting rules and regulation are shaped by psychological bias on the part of the architects, rather than as a useful remedy for the biases of the decision makers being acted upon.  Typically the resulting regulation is far from libertarian, as well.

We call the approach to understanding regulation as coming from smart and benevolent architects `Good Rules for Bad Users.’ (Libertarian paternalism is slightly different: `Good Suggestions for Bad Users.’) We feel the other side of the coin has been neglected, that the architects themselves may be biased, resulting simply in `Bad Rules.’ (This is not to say that all regulation is bad, but it does say that bad rules will sometimes be approved.)  We call this perspective the psychological attraction approach to financial and accounting regulation.

Specifically, we argue that some forms of regulatory ideas are good at ensnaring the attention, emotions, and cognitive biases of regulators and the public. Such regulations do not necessarily help others, on the whole, and indeed may have highly perverse effects. But people are attracted to certain rules because they are superficially appealing. This point applies even to accounting rules, which have evolved over centuries through the interactions of different users. Rules concerning what firms have to expense, what they can capitalize, whether they are required to be conservative in reporting their performance—all, we argue, have been influenced by heuristic intuitions, not just economic efficiency.

The biases of regulators have been addressed before by other researchers. It’s a glaring oversight among “nudge” advocates that needs to be continually studied.

Improving American Schools

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“The latest results [of the PISA exam],” reports The New York Times,

…reveal the United States to be treading water in the middle of the pool. In math, American teenagers performed slightly worse than they usually do on the PISA — below average for the developed world, which means they scored worse than nearly three dozen countries. They did about the same as always in science and reading, which is to say average for the developed world.

But that scoreboard is the least interesting part of the findings. More intriguing is what the PISA has revealed about which conditions seem to make smart countries smart. In that realm, the news was not all bad for American teenagers.

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Vertical: Math ranking; Horizontal: Spending, ages 6-15

The good news is that–although “the United States had not raised its average scores”–its

measures of equity…had improved. One in every three disadvantaged American teenagers beat the odds in science, achieving results in the top quarter of students from similar backgrounds worldwide.

This is a major accomplishment, despite America’s lackluster performance over all. In 2006, socioeconomic status had explained 17 percent of the variance in Americans’ science scores; in 2015, it explained only 11 percent, which is slightly better than average for the developed world. No other country showed as much progress on this metric. (By contrast, socioeconomic background explained 20 percent of score differences in France — and only 8 percent in Estonia.)

But what countries had the best outcomes overall?

Generally speaking, the smartest countries tend to be those that have acted to make teaching more prestigious and selective; directed more resources to their neediest children; enrolled most children in high-quality preschools; helped schools establish cultures of constant improvement; and applied rigorous, consistent standards across all classrooms.

Of all those lessons learned, the United States has employed only one at scale: A majority of states recently adopted more consistent and challenging learning goals, known as the Common Core State Standards, for reading and math. These standards were in place for only a year in many states, so Mr. Schleicher did not expect them to boost America’s PISA scores just yet. (In addition, America’s PISA sample included students living in states that have declined to adopt the new standards altogether.)…Standards like the Common Core exist in almost every high-performing education nation, from Poland to South Korea.

Check it out.

The Home Is Our Peculiarity

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Hancock homestead, July 23, 1910 (Public Domain)

This post is part of the General Conference Odyssey.

With the Sunday afternoon session of the October 1974 General Conference, we’ve come to the end of our eighth general conference. It’s hard to believe that we started this Odyssey way back in December 2015. There were several talks that I really liked from this session, but the one I’m writing about is President Spencer W. Kimball’s Ocean Currents and Family Influences.

The central metaphor is right in the title: “Currents have much more power to control its course than the surface winds.” President Kimball urges us to develop powerful currents in our homes:

I have sometimes seen children of good families rebel, resist, stray, sin, and even actually fight God. In this they bring sorrow to their parents, who have done their best to set in movement a current and to teach and live as examples. But I have repeatedly seen many of these same children, after years of wandering, mellow, realize what they have been missing, repent, and make great contribution to the spiritual life of their community. The reason I believe this can take place is that, despite all the adverse winds to which these people have been subjected, they have been influenced still more, and much more than they realized, by the current of life in the homes in which they were reared. When, in later years, they feel a longing to recreate in their own families the same atmosphere they enjoyed as children, they are likely to turn to the faith that gave meaning to their parents’ lives.

But here’s the line that stood out to me the most:

My brothers and sisters, the home is our peculiarity—the home, the family, is our base…family life, home life, children and parents loving each other and dependent upon each other. That’s the way the Lord has planned for us to live.

It connected two different themes: the family and being a peculiar people. In addition to President Kimball’s talk, President Hinckley’s talk (A City Set Upon a Hill) and Elder Victor L. Brown’s talk (The Blessings of Peace) also talked about being “a peculiar people.” In what sense are we becoming a peculiar people? Well, as the world goes in one direction, the Church will refuse to go along. And, apparently, a central point of divergence will be the family.

Something to keep in mind in coming years.

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Check out the other posts from the General Conference Odyssey this week and join our Facebook group to follow along!