Book review: Reasons and Persons by Derek Parfit.
This book does a very good job of pointing out inconsistencies in common moral intuitions, and does a very mixed job of analyzing how to resolve them.
The largest section of the book deals with personal identity, using a bit of neuroscience plus scenarios such as a Star Trek transporter to show that nonreductionsist approaches produce conclusions which are strange enough to disturb most people. I suspect this analysis was fairly original when it was written, but I’ve seen most of the ideas elsewhere. His analysis is more compelling than most other versions, but it’s not concise enough for many to read it.
The most valuable part of the book is the last section, weighing conflicts of interest between actual people and people who could potentially exist in the future. His description of the mere addition paradox convinced me that it’s harder than I thought to specify plausible beliefs which don’t lead to the Repugnant Conclusion (i.e. that some very large number of people with lives barely worth living can be a morally better result than some smaller number of very happy people). He ends by concluding he hasn’t found a way resolve the conflicts between the principles he thinks morality ought to satisfy.
It appears that if he had applied the critical analysis that makes up most of the book to the principle of impersonal ethics, he would see signs that his dilemma results from trying to satisfy incompatible intuitions. Human desire for ethical rules that are more impersonal is widespread when the changes are close to Pareto improvements, but human intuition seems to be generally incompatible with impersonal ethical rules that are as far from Pareto improvements as the Repugnant Conclusion appears to be. Thus it appears Parfit could only resolve the dilemma by finding a source of morality that transcends human intuition and logical consistency (he wisely avoids looking for non-human sources of morality, but intuition doesn’t seem quite the right way to find a human source) or by resolving the conflicting intuitions people seem to have about impersonal ethics.
The most disappointing part of the book is the argument that consequentialism is self-defeating. The critical part of his argument involves a scenario where a mother must choose between saving her child and saving two strangers. His conclusion depends on an assumption about the special relationship between parent and child which consequentialists have no obvious obligation to agree with. He isn’t clear enough about what that assumption is for me to figure out why we disagree.
I find it especially annoying that the book’s index only covers names, since it’s a long book whose subjects aren’t simple enough for me to fully remember.
Archive for July, 2007
Parfit’s Reasons and Persons
Tuesday, July 31st, 2007
Business Fairy Tales
Wednesday, July 25th, 2007Book review: Business Fairy Tales by Cecil W. Jackson.
This book provides a better analysis of financial accounting problems than you can find in the news media. But it’s not thoughtful enough for me to recommend it. The author sounds like an academic who has little experience as an investor.
The book provides little perspective on which mistakes did the most harm. I can’t tell whether the author sees any difference in seriousness of Enron’s inconsistent reports to the SEC about when it adopted mark-to-market accounting and the absence of market prices to guide its so-called mark-to-market accounting (it seems obvious to me that the former is trivial and the latter is outrageous, but I wouldn’t have learned that from reading this book).
I’m also disappointed that the book never takes the perspective of the villains to ask why they thought they could get away with bad accounting. Were they all confident that perpetually rising stock prices would ensure that investors would never complain? Could they have have thought they would make enough money before getting caught to profit even if they were punished? In some cases I can guess why the answer might have been yes to one of these, but in most cases I’m as puzzled as I was before reading the book.
The book suggests a number of signals that investors might look for to detect fraud. But none of them are valuable enough to change the way I read financial reports. A few, such as sales growth not meeting expectations or rising inventory / sales ratios, are valuable signs of an overrated company even though they rarely indicate accounting problems. Most of the signals the book recommends involve things like increases in receivables where there’s no obvious way to distinguish routine fluctuations from changes that indicate problems, so I suspect the number of false alarms would make these signals useless.
I suspect that avoiding the stock market during bubbles is a more practical and effective way of avoiding harm from accounting fraud than trying to follow this book’s advice. I’d guess that 10% of investors will learn to avoid bubbles if they try, but I doubt more than 1% will succeed at identifying fraud. If you do try to identify fraud, pay more attention to people such as Jim Chanos who have found ongoing frauds than to books such as this that only do post-mortem analysis.
The book claims that a benefit of Sarbanes-Oxley is that it restored investor confidence in corporate financial statements. This seems misguided. The stock market decline that prompted Sarbanes-Oxley was largely due to mistaken extrapolations of real trends in internet-related profits. Many investors prefer to exaggerate the role played by fraud because it distracts attention from the mistakes they made at the peak of the bubble. It’s unclear whether increased investor confidence is desirable. Accounting fraud is most common at peaks of bubbles because investor confidence makes it temporarily easier to avoid questions about suspicious accounting practices. Stock markets appear to function best with moderate amounts of suspicion among investors to help keep corporate reports honest.
Gourmet Fast Food
Monday, July 23rd, 2007Restaurants almost universally try to bundle cheap food with cheap service and expensive food with expensive service. Often this makes sense. But when I just want food, expensive service can be slow enough to be less desirable than McDonald’s style service. But that doesn’t mean I want cheap food.
A few weeks ago I ate at the Mobil station in Lee Vining (just outside of Yosemite) with some fellow backpackers just before heading to the mountains. We each paid more than $25 a person for our dinner, and got food that looked and tasted like I would expect from a $25+ meal at a moderately fancy restaurant, yet the service was fairly close to fast food service – we ordered at a cash register, and picked our food up at a counter (although it probably took 3 or 4 minutes longer than McDonald’s does).
Why haven’t I seen any other restaurants that imitate this style? It appears to work there (it was crowded, but since that was a holiday weekend, I can’t tell how typical that was). If there were such restaurants near my home, I’d expect to eat at them more than once a month.
Black Rednecks
Saturday, July 14th, 2007Book review: Black Rednecks And White Liberals by Thomas Sowell.
Thomas Sowell is a pretty smart guy. It’s unfortunate that he wastes his skills on reinforcing peoples’ existing political opinions. Much of what he says in this book is right, but the new ideas it offers don’t seem like they ought to change the political opinions of anyone who has thought much about racial politics. And the old but wise arguments are written in a style that seems designed to turn off anyone who isn’t already a fan of Sowell’s ideas.
He presents interesting evidence that the culture of black ghettos came from parts of Britain that were uncivilized at the time its bearers moved to the southern U.S. This is the kind of subject where it’s virtually impossible for most readers to tell whether he’s being objective or selecting evidence to fit his biases. More importantly, it’s hard to tell why it matters. Some people pay lip service to the authenticity of black culture, but I find it hard to believe that the origins of the culture several centuries ago plays an important role in peoples’ choice to adopt the culture.
One interesting aspect of Sowell’s story is that the large migration from the rural south to the urban north after WWII did not result in the usual assimilation of the migrants into the culture of the area they moved to. How much of that was due to the number of migrants, to their culture, or to their race? Sowell ignores this subject.
Sowell’s argument that western civilization was responsible for the nearly worldwide abolition of slavery seems mostly right, but I’m disturbed by his exaggerations. He misleads readers into thinking that the first abolitionists were western, but a quick web search told me that Cyrus the Great wanted to abolish slavery worldwide two millennia earlier.
There are several places in the book where he makes confident, unsupported assertions as if they were certain, when I doubt anyone has enough evidence to make anything better than a rough guess. For instance, he thinks George Washington couldn’t have gotten a prohibition on slavery into the constitution without driving the south out of the union (plausible, but it depends on hard-to-verify assumptions about his powers of persuasion), and that slavery would have lasted longer without the union (a controversial enough claim that abolitionists such as William Lloyd Garrison seemed to reject it, claiming the north would be a better haven for runaway slaves if it seceded and repealed the Fugitive Slave Law). There are probably some leftists who unfairly attack Washington for failing to accomplish more than he could possibly accomplish, but I don’t see signs that they get respect from anyone who would listen to Sowell.
I’m quite suspicious of Sowell’s claim that Hitler’s pretenses of having been provoked into military action were intended only to fool people in Germany. Even if people in other countries had enough information to know Hitler was lying, it’s easy to imagine that a fair number of them were looking for a way to rationalize neutrality, and that Hitler was helping them to fool themselves.