Thursday, August 05, 2004

Learning the Lessons

My hometown of Davenport, Iowa was blessed today by two presidential candidates, immediately accompanied by three bank robberies. Some think these robberies were planned to coincide with the campaigning because the police would be so busy with security.

It’s so appropriate that these robberies took place a couple of days after I repeated Glen Whitman’s two principles of economics (incentives matter and there’s no such thing as a free lunch) because even here, economics can be learned. People not versed in Glen’s first principle might be surprised to learn that initial reports suggest these robberies were independent from one another. In fact, Police Chief Bladel doesn’t think two of the robberies were planned. Individuals, acting on personal knowledge to achieve a given ends, pursued an activity they thought would yield the best results. What a novel idea. Considering the robberies had a 66% success rate thus far (one suspect was captured), they did a pretty good job. As the costs fall, the amount of the activity increases. Incentives matter.

But the second rule is more interesting. According to Lt. Don Gano the extra security measures did not interfere with police coverage because, among other reasons, officers worked overtime. I don’t know what magical world Lt. Gano lives in but when you have fewer police on patrol, the coverage worsens. When you have officers pulling extra shifts to pick up the slack, the quality of each shift inevitably goes down. The police are less alert, less reactive, possibly annoyed and taking frequent breaks for caffeine jumps. While these deficiencies may be a minor problem, when you’re looking for a suspicious-looking vehicle/person or there’s an APB with nothing but a vague description as a lead, that minor problem can make all the difference in the world. Of all people I would think that a police officer would understand that. There’s no such thing as a free lunch.


Anonymous said...

Paradigms are funny.

I used to know someone who was desperately into the theory of philotics-- the notion that, if there's something that isn't physical that allows us consciousness, and there's a physical part of us (the brain) that does thinking, something has to chat between them.

Philotes, which are small particles that are either both physical/nonphysical or can interact with both, move instantly. Not speed-of-light. They are simultaneously possibly everywhere at once. Electrons on a grand scale, if you will.

He put everything in terms of philotics, obsessively and without regard for other things. He picked up on what someone's thinking? Philotics; not physical clues. You said something at the same time as someone else? Not coincidence; philotics. People listen to a charismatic speaker on stage and do what they say? Philotics-- the speaker was manipulating the philotes of the entire audience, twining them into a sort of particulate slave-circuit.

Things can be viewed through the lens of a paradigm. It puts things in perspective. One man's terrorist is another man's freedom fighter. One man's magic is another man's advanced technology. One man's philotics is another person's unconscious observation ability.

But it's dangerous to put everything in one paradigm, regardless of other perspectives, because it leads to an incomplete understanding of a situation.

There's no such thing as a free lunch? Fine, a good economic principle. It's reiterated, however, in the law of conservation of mass-- and again, in laws of cause in effect-- and again, in shinto philosophy-- and again, in the American work ethic.

The same with "incentives matter". People need reasons, even unconscious reasons, to act. Every effect has a cause.

I would say that this particular incidence of robberies is reactive-- all three robbers were reacting, clearly, to a stimulus-- but the same reaction on the same day is probably coincidence and possibly philotics. 3 data points isn't a statistical universe, moreover, and none of the robbers knew that statistic before attempting their robberies. If, the next day, we had 5 robberies, and after that 6, and after that 9, and after that 11... then it would be a cost/benefit analysis, fairly clearly.

Sometimes, an APB is magic.


David said...

Gordon, let's be careful. Economic principles are derived from countless real examples. It's not philotics. It doesn't ignore laws of physics. It's not a discipline without justification. Such junk science is easily abused because its boundaries are poorly defined. Economists don't pretend that they can explain anything, at least not the good ones.

Economics is the study of choice, a very common phemonomen. That's why its two things are so common. But they also hold special meaning that physics and shinto philosophy lacks: opportunity costs.

When we say that there's no such thing as a free lunch, we not only say that someone has to pay for lunch, but that person can't pay for something else because they are paying for lunch. An opportunity is lost. Physists don't care where the energy could have gone; they care about the reaction. In fact, in most cases, energy can't go other places. Choice doesn't have a lot to do with physics.

Same thing with incentives. The sun doesn't produce heat and light because it wants to. It does it because that's how the universe works. And for the people that need a reason to do stuff, well, that's choice. That's economics.

Does economics overlap with other disciplines? Of course it does. All disiciplines overlap with others. Chemistry is basically physics. Physics is basically math. But does that mean that using an economic paradigm to help explain the world is fundamentally flawed? Of course not. People make decisions and economics is one way (and a really good way) to understand why people choose certarin actions.

To equate an economic paradigm with a philote paradigm is just silly. The universe is unfair; some paradigms are just better than others.