Saturday, January 17, 2009

Behavioral Therapy

It's been a while since we've taken a run at -- or hell, bothered to read -- our old buddy Bobo, but he rarely fails to disappoint. Here he attempts to circumscribe theoretical behavior of theoretical actors in a theoretical world. It's almost charming to watch.

Markets tend toward efficiency. People respond in pretty straightforward ways to incentives. The invisible hand forms a spontaneous, dynamic order. Economic behavior can be accurately predicted through elegant models.

This view explains a lot, but not the current financial crisis — how so many people could be so stupid, incompetent and self-destructive all at once. The crisis has delivered a blow to classical economics and taken a body of psychological work that was at the edge of public policy thought and brought it front and center.

In this new body of thought, you get a very different picture of human nature. Reason is not like a rider atop a horse. Instead, each person’s mind contains a panoply of instincts, strategies, intuitions, emotions, memories and habits, which vie for supremacy. An irregular, idiosyncratic and largely unconscious process determines which of these internal players gets to control behavior at any instant. Context — which stimulus triggers which response — matters a lot.

This mental chaos explains how people can respond so quickly and intuitively to so many different circumstances. But it also entails a decision-making process that is more complicated and messy than previously thought.

Nothing like overthinking the obvious. All these airy-fairy sentiments about "market efficiency" and "rational actors" and all that shit, it all goes out the window the second the players realize that if and when they screw the pooch, they can make everyone else pay for it. If that's not incentive enough to be completely reckless and dishonest, I don't know what is.

Put more precisely, there is no disincentive to bad behavior -- worst case scenario, a couple of Bernie Madoff types lose most of their pelf, do a couple years in a tennis-court "prison", and come out and recoup a few mil in speaking fees, pretending to have come to Jeebus, à la Michael Milken. Gee, we should all be penalized so heavily for our misbehavior.

I think we're looking at an unforeseen end stage of globalization, personally. Mobilization of capital is one thing -- was the prospective strength of the globalization movement, in fact -- but where it affects America specifically is that bailout economics necessitates that the mobility of now largely nonexistent, mostly overseas capital must be preserved at the direct expense of keeping our manufacturing base outsourced.

The capital has been exposed as fictitious and baseless, yet the means of producing real capital have not been reinstituted, because it has been deemed more important to preserve the baroque pseudo-system of "producing" the fictitious version. I can't even make a lame joke about it; that is simply not the behavior of a rational market with rational actors, that's a casino. You don't have to be Adam Smith to figure that one out.

We cannot simply continue to do each other's laundry, as the saying goes, if we can no longer afford to pay for the service. For example, if, say, the New York Times finally figures out it can train a chimp to come up with Bobo's inanities, why would it continue to pay Bobo for the privilege? Why do you think Billy Kristol is going? Shit, Bill Keller could flip quarters at random street-corner crackheads and get at least as much accuracy.

I realize these people actually get paid to thumb their dicks in print, which must be pretty cool, but Christ they can be thick.


woodguy said...

The verbal diarrhea Bobo exhibits in this kind of crap-"how so many people could be so stupid, incompetent and self-destructive all at once"-pretty much sums it up for me. But the fact that such a description vividly describes the author, while leaving him bereft of any self realization that he and his cohorts are a big part of the problem, allows him to rationalize his myopia and absolves him of any associated guilt. Good work if you can get it. Woody Allen said, "Don't knock masturbation, it's sex with someone I love." Bobo in a nutshell.

Personally, I think time is running out on this whole house of cards, and quickly. To think otherwise defies all logic. The whole system is racing at breakneck speed toward a total collapse. The days of producing nothing of value but a bunch of increasingly nebulous profit statements and drivel not so cleverly disguised as "opinion" is over.

How 'bout we get back to producing
something of value for a living?
Increasingly many people in this country (amoung others, I can only speak to what I've observed) live their whole lives without producing anything of real value. If push comes to shove many people will be unable and unprepared to produce the three basic necessities of life (food, shelter and clothing) even if their lives depend on it, as I believe they will in the very near future.

"The foundations of society were never yet shaken as they are at this day. It is not that men are ill fed, but that they have no pleasure in the work by which they make their bread, and therefore look to wealth as the only means of pleasure. It is not that men are pained by the scorn of the upper classes, but they cannot endure their own; for they feel that the kind of labour to which they are condemned is verily a degrading one, and makes them less than men."

--John Ruskin, Time and Tide

And oh...Happy New Year, Heywood

woodguy said...

Sorry--John Ruskin, " The Stones of Venice"

Marius said...

Charmingly, Bobo's article contains its own refutation -- for the "dynamic" order he speaks of is actually shorthand for "short-to-medium periods of total chaos and utter cluelessness interspersed along relatively smooth sailing." Which is, arguably, one of the things we see happening now.

Then, a few paragraphs later, he blithely discovers an insight that Hume already had, at the time when Adam Smith was penning his book -- that, to use David's own words, "reason is but the slave of passion"; the relevant passions being here, of course, greed and narcissism. In fact, even Adam Smith knew this, although of course Bobo, ever the sub-literate moron, ignores this fact. For Smith knew that people aren't "rational" by nature, but must first be trained to become so by long moral discipline. That's why Smith's first book was not The Wealth of Nations, but a propaedeutic on moral education, The Theory of Moral Sentiments.

One should ask the pink-shirted dimwit: now that you've discovered that your free-markets-and-rational-actors bullshit is just that, shouldn't you send back your party member card, and come over to the Democrats' side?

The Vile Scribbler said...

This is weird - I've heard Brooks referred to as "Bobo" countless times, but for some reason, this time it brought back a memory I thought I had successfully buried years ago. I saw this video exactly once back in '93 and I still wake in a cold sweat occasionally because of it.

So thanks, guys. I really appreciate it.

Marius said...

Hey, man, at least nobody here linked to a video of DJ Bobo. Things could always be worse, y'know... ;-)