Opinion

The Great Debate

The limits of the scientific method in economics and the world

By Roger Martin
The opinions expressed are his own.

This is part one of this essay. Read part two here.

As the economy teeters and the capital markets gyrate, I can’t get out of my mind the evening of May 19, 2009.  We were near the stock market nadir and fears were cresting that we were heading straight into the next Great Depression. I was invited to a dinner along with half a dozen tables of guests to hear a very prominent macroeconomist opine on the state of the economy and the path to recovery.

The economist held forth with a detailed, analytical account of what had caused the economic meltdown in the second half of 2008 and the path that he predicted recovery would take. I was struck by how scientific he was, spewing myriad statistics, employing technical terms by the boatload, and praising his econometric model. It was ‘very sophisticated’.  Given the nods and encouraged looks in the room, it seemed as though he had provided great comfort to the guests; they could go to bed confident that thanks to his science, they could trust that this man knew where we were headed.

I wasn’t quite so confident. Being the curious sort, before coming to dinner I had checked his forecast from a year earlier, mere months before the crash.  His spring 2008 forecast for the second half of 2008 was for modest positive economic growth for America.  This was not unusual; no credible economist predicted anything less rosy for the back half of 2008, although many now claim that they did.  I don’t blame or ridicule him for being cautiously optimistic mere months before the worst economic downturn in 80 years.  Economic forecasting is fraught with peril.

For me, the striking thing about the evening was that nothing changed about his models after they were shown to be hopelessly wide of the mark.  He just loaded up the equations, dumped in the latest numbers and started crunching away.  I asked him whether he had altered his models in the wake of his dreadful forecast of 2008; stunningly, he hadn’t thought of the question.

It struck me then and still does that this dinner is illustrative of a fundamental blind spot in modern science.  It has ventured far afield of its natural limits and is both creating problems and inhibiting progress.

Don’t overestimate Afghanistan pessimism

This is a response to Rory Stewart’s book excerpt “My uphill battle against the Afghanistan intervention.” David Rohde’s response can be read here and Anne-Marie Slaughter’s response can be read here.

By James Dobbins
The views expressed are his own.

Rory Stewart maintains that it is “not simply difficult, but impossible” to build an Afghan state. Presumably, this is meant hyperbolically, since Afghanistan has been recognized as an independent state far longer than any of its northern or southern neighbors.

It is true that the Afghan state had almost no capacity a decade ago, after twenty years of civil war, and that it still struggles to deliver basic public services. Nevertheless, nothing in Stewart’s pessimistic assessment would lead one to realize that since 2001 Afghanistan’s licit GDP has risen by 300 percent, that tax collection as a percentage of GDP now exceeds that of Pakistan, that school attendance has risen eightfold, that the country’s literacy rate will triple in 10 years if these children are permitted to stay in school, that 80 percent of the population has access to basic health care faculties (albeit often distant and intermittent), that child mortality has dropped by one third as a result, and that despite the ongoing conflict longevity is increasing. Yet another striking statistic is that today almost half of Afghan households have telephones.

Where the Afghanistan effort broke down

This is a response to Rory Stewart’s book excerpt “My uphill battle against the Afghanistan intervention.” David Rohde’s response can be read here.

By Anne-Marie Slaughter
The views expressed are her own.

This fall I am teaching a big introductory course to the first-year Masters of Public Affairs students at the Woodrow Wilson School called Politics and Public Policy. The focus of the first lecture, delivered by one of my colleagues, as the necessary intersection of good policy, good politics, and good practice. In other words, the best policy in the world doesn’t make any difference if it is not politically feasible; conversely, what is politically feasible may not be worth doing if it is not at least better policy than the status quo. And even where good policy is politically feasible, it must also be implementable – not just in theory, but in practice.

The intersection of these three circles came to mind as I read Rory Stewart’s achingly honest and thoughtful account of his experience in Afghanistan. For a long time I was convinced that the NATO intervention in Afghanistan could be successful at building a functioning Afghan government that would provide basic services to its citizens. My views were largely shaped by my regular conversations with my long-time friend Sarah Chayes, who lived in Kandahar for much of past decade running first a dairy cooperative and then a soap and fragrance business with Afghans. We were failing, in her view, because of the high NATO tolerance for the cancerous corruption that was sucking the life out of the country, starting at the top. Her book Punishment of Virtue tells the tale, describing how Afghans genuinely committed to rebuilding their country have been systematically driven out or killed by their compatriots who are profiting from the enormous in-flux of money and opportunity that inevitably accompanies large-scale Western intervention in a poor country. She thought, and I agreed, that the U.S. had had an opportunity to help rebuild a very different Afghanistan immediately after the invasion, and that it was still possible to empower the good guys if we were really willing to take on the bad guys profiting at the local, regional, and national level.

Creating a “light, long term footprint” in Afghanistan

By David Rohde
The views expressed are his own.

This is a response to Rory Stewart’s book excerpt, “My uphill battle against the Afghanistan intervention.”

The most important phrase in Stewart’s essay is his statement that a “light, long-term footprint” should be adopted in Afghanistan. I agree but he paints a dark picture of all Western efforts in the country.

While Stewart is correct in many of his arguments, he presents a seductively simplistic picture of abject failure. Unquestionably, Washington has focused too much on the military effort. And Stewart is right to argue against a policy of simply pouring in more foreign troops. Yet his portrait of foreigners achieving nothing in a decade stokes a dangerous isolationism gaining credence in both liberal and conservative circles in the West.

My uphill battle against the Afghanistan intervention

By Rory Stewart
The views expressed are his own.

I returned to Afghanistan (after spending a short time at Harvard) in 2005. And when I heard that the British government was about to send three thousand soldiers into Helmand, I was confident that there would soon be a widespread insurgency. I also predicted that the military would demand more troops, and would get dragged ever deeper.

It wasn’t that I had any particular skill in predicting the future. I failed to predict that Egypt’s President Hosni Mubarak would fall. I was wrong about Iraq. And my prediction for Helmand wasn’t based on any knowledge of Helmand. It was simply that I recognized the mindset and the actions of the NATO governments from Iraq. And I wasn’t alone in warning against the deployment. Many others predicted the same thing in Helmand. A military friend of mine had returned from a reconnaissance trip saying, “There isn’t an insurgency, but you can have one if you want one.” The Helmand surge continued regardless. The British government seemed to have a momentum, quite distinct from any individual politician or policy-maker. Troops were increased from two hundred U.S. Special Forces in 2005 to three thousand British soldiers in 2006.

At the time, senior officials reassured me that they understood the danger of being dragged in too deep. Two offered to sign a document saying that if the three thousand troops didn’t “establish governance, economic development, and security” within six months, they would admit the policy was a mistake, rather than claim that the problem had simply been strategy and resources. But I did not force them to sign. And when six months passed and the situation had worsened, the same officials supported the call to increase the number of troops to five thousand, and a few months later to seven thousand. I began writing and speaking publicly against the policy. I argued that what was needed was not a surge but a reduction to a light long-term footprint.

The middle-class meltdown

This is a response to Don Peck’s book excerpt, “How chronic joblessness affects us all.” Labor economist Gary Burtless also responded here.

By John Lloyd
The opinions expressed are his own.

“All that is solid melts into air,” wrote Karl Marx in the Communist Manifesto. He meant that the sheer, revolutionary power of capitalism had wrenched larger and larger parts of the world out of its feudal or tribal doze, and sent it running round the track of modernization, smashing down habits, customs, faiths as it went. The agents of this wrenching change: the middle classes, or as he would have it, the bourgeoisie, the new class which grew in the womb of feudalism, and then destroyed it. And they would, he prophesied, be destroyed in their turn.

Do you not fear, in anxious moments at dawn, that he was right, just a bit (163 years: the Manifesto came out in 1848) before his time? Do you feel the solid world melting? Do you tremble that we in the rich states are living, not just on borrowed money, but also on borrowed time – and that it is running out? That our way of life is being gnawed at from below?

Why the unemployed stay unemployed

This is a response to Don Peck’s book excerpt “How chronic joblessness affects us all.”

By Gary Burtless
The opinions expressed are his own.

First, from a labor economics perspective Peck’s analysis is basically correct.  In modern capitalist labor markets, long-term unemployment tends to feed on itself via the mechanism that Peck describes.  It gets increasingly difficult for the unemployed to get re-employed the longer their unemployment lasts.  (There are some hard statistics showing this is true, and that it is true regardless of the state of the economy.)  The impact of this phenomenon on the overall unemployment rate became clear in 1980s Western Europe. Countries like France, Germany, Denmark, and Italy that had enjoyed unemployment rates below those in the U.S. for much of the previous three decades found themselves with jobless rates higher than those in the U.S.  More worryingly, their unemployment rates stayed above the U.S. rate for a very long time.

It became clear than much of the difference was the gap between the two continents in long-term unemployment (that is, joblessness that lasts longer than 6 months or a year).   Europeans who remained in unemployment longer than 6 or 12 months tended to stay unemployed, sometimes up until the age they qualified for an old-age pension.  Even when the European job market improved, these unfortunates stayed unemployed.  Employers hired from the ranks of already-employed workers (i.e., those who were on other employers’ payrolls) or from new graduates.  They tended to shun the long-term unemployed.

How chronic joblessness affects us all

This is an excerpt from “Pinched: How the Great Recession Has Narrowed Our Futures and What We Can Do About It.”

By Don Peck
The opinions expressed are his own.
Last summer, the phone maker Sony Ericsson announced that it was looking to hire 180 new workers in the vicinity of Atlanta, Georgia. But the good news was tempered. An ad for one of the jobs, placed on the recruiting website the People Place, noted the following restriction, in all caps: “NO UNEMPLOYED CANDIDATES WILL BE CONSIDERED AT ALL.”

Ads like this one have been popping up more frequently over the past year or so; sometimes the ads disappear once the media calls attention to them (a spokesperson for Sony Ericsson said its ad was a mistake). But new ones continue to appear.

Brill versus Winerip, continued

The debate around Steven Brill’s new book “Class Warfare” continues to swirl. A review/essay in Monday’s New York Times by Michael Winerip accused Brill of largely ignoring the views and experiences of teachers. Like some other Brill critics, Winerip accused the book of overstating the success of charter schools, and overallocating blame for failed schools to teachers’ unions where other factors–such as poverty–may be at work.

Brill felt Winerip’s criticism was misguided and had a bit of a personal attack in it. He attempted to post a response Sunday night to the Times‘s Web site. When, Monday morning, that response remained unposted (despite more than a dozen later comments going up), Reuters.com published it. He said it felt “almost as if [Winerip had] been waiting to unload on me for years,” and in turn accused Winerip of not using proper data to understand charter school performance in Harlem.

Then, later Monday morning, the Times site, got around to publishing Brill’s response, and about an hour later, Winerip replied to the reply. You can read that exchange in full here.

Steven Brill responds to Michael Winerip

This is a response to Michael Winerip’s review of “Class Warfare” in Monday’s New York Times.

I appreciate that Mr. Winerip thinks I have “seen the light” at the end of the book. What he doesn’t realize, though not for lack of my trying to explain it to him, is that I was simply reporting what I found over two years. I was not trying to render, let alone reconcile, a verdict for or against his (anti-reform) point of view.

However, despite his distinguished prior career as a reporter, I am not surprised by the apparent anger in Mr. Winerip’s opinion column, let alone his decision to distort my book by ignoring all in it that describes teachers (and even teachers’ union leaders) in a positive light and strains to explain, and depict from the classroom, how difficult efffective teaching is. When he talked with me, it was almost as if he’d been waiting to unload on me for years. He freely cast epithets, some profane, at many of the men and women portrayed in the book, and refused to consider that his reporting about alleged “skimming” of the best students at the Harlem Success charter network might be based on faulty data. (Though he did, I guess in attempt to humor me, chuckle when I tweaked him for ignoring in a prior article that I was the product of Queens, New York elementary and middle public schools, before winning a full scholarship to go to a prep school – whereupon he repeated this revelation in this article.)

  •