Thoughts on Academic Research

Many disparate sources of information are pointing to a crisis in higher education research, but strangely different disciplines are reacting in different ways. Now the crisis I am talking about is related to research, not the many other crises in higher education such as access, exorbitant prices and spending on athletics and administration. No, I worry more about how the model of scientific structure for the last 50 years or more, where professors at universities limited mostly by their own curiosity pushed the frontiers of human knowledge, is breaking down.

First, let me touch on how the other higher education crises are feeding in here. The lack of public funding of research institutions and the misallocation of resources (into athletics, amenities and administration) has two major implications on research: PhDs outnumbering academic positions by a staggering amount and a commercialization of ALL scientific research.

The first implication affects the status of science as meritocratic with the cream rising to the top and it does so at many levels. Right now people are still getting PhDs (and the sciences are only a bit better) in increasing numbers despite the deteriorating job opportunities. However, that will not persist as the economy improves and the opportunity cost of getting a PhD increases. Who says the best and brightest are going to stick around under these conditions?

Then there is the fight over who actually gets academic spots. The increasing alignment of college status and socioeconomic status means those of relatively more affluent families are stocking the halls of the best schools in the nation. The relative paucity of academic positions means that the top tier of schools graduates enough people to fill all available positions, a fact true in practice as well. However, the journey to tenure is an increasingly long one; you are looking at multiple postdocs and an average age of around 35 before you get your first tenure track position. So you are underpaid (or go into debt) for graduate school only to continue to be underpaid as a postdoc (along with moving all the time) for a handful of years for the uncertain payoff of the beginnings of an academic position.

Now some might argue that this is a trial-by-fire that cleanses those unfit for research. This is true at some level, but I have to question if it is selecting the right traits. This process mostly encourages conscientiousness, an important trait for sure but not the only one vital for scientific research. I worry we might be breeding creativity out of our scientists by this arduous process. Furthermore, are there unintended consequences on which research paths to pursue? All of this uncertainty before you hit tenure track and even after, may encourage a more conservative research agenda proven to get publications and results while neglecting riskier research areas that are potentially more fruitful for science as a collective endeavor. This is particularly worrisome once you throw in the cutthroat competition for research money. You could have the fortitude and courage to try your hand at unproven fields and yet still be stymied by lack of funds.

This brings me to the second implication of the altering landscape of school funding and spending: the increasing commercialization of research. This is most apparent in the life sciences since the lines of inquiry in that field are so obviously profitable compared to lets say the Higgs Boson. You see more professional misconduct in those fields than any other, from fudging or fabricating data to just being so sloppy nobody can replicate.
Just as worryingly you see scientists hiding information or patenting “their” inventions, which I find antithetical to the scientific endeavor. This isn’t exclusive to life sciences; I saw very dubious growth model paper in economics where the authors hid much of their methods because they expected to use it for investment purposes. This enrages me because these people are all funded by the government at some level and to steal a phrase “stand on the shoulder of giants.” I already find it abhorrent how pharmaceutical companies have profited off basic research, but to see professors hobbling science by hiding information to make money is doubly disappointing. In my own field a lot of money and effort have been poured into analyzing the D-Wave quantum computer because as a commercial product it’s essentially a black box. Maybe those resources will be well spent as we understand better what makes something a quantum computer, but I suspect it would have been a lot cheaper if the D-Wave people had released their internal data.

A more subtle problem is how the change in funding is reorienting fields. For instance, sociology is in a theory crisis. The hot topic is narrow experimental studies that have popular appeal. Nobody wants to take a broad look across sociology to construct theoretical models that will only be read by a small group of peers. I find this crazy as to me the essence of science is synthesizing data to create models, but that may be the physicist in me talking.  In any case, theory is devalued because it “cannot be marketed, “Gladwellized” or sensationalized in the same way as empirically oriented books.”

Economics has the opposite problem because so many outside groups are invested in the field. Every economist is prompted to give their opinion on macroeconomics, either because of political allegiance or inducement from some organization. Of course, many of them prove to be unqualified to talk about macro, but do it anyway and continue to do so even after being proven wrong. Economics does not seem to be an evidence based discipline. As Upton Sinclair said, “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” In fact, economics is one of the most profitable academic disciplines to enter because it has so many commercial prospects. Once again, one must wonder if this monetary influence is hurting the profession; maybe too much emphasis on finance or on models that justify some particular business interest or ideology.

Even in my field of physics you see an alignment of funding with commercial payoff. By far the biggest field in physics is condensed matter (think semiconductors and superconductors). Maybe that is for the best, semiconductors are after all why I am even able to type this, but you see the effect in more insidious ways. Every grant proposal is enhanced by an appeal to utility. Quantum computers would have little funding if they didn’t have such obvious consequences for national defense. Similarly, I have nothing against astrophysics (in fact I want to study that field when I was younger) or particle physics, but a large part of their funding success is that they have managed to capture popular appeal.

These considerations don’t seem the best way to allocate resources in science, but it will continue down this road as public funding for universities and basic research stalls. As resources become scarce it is only natural to find other sources or to insist that research have immediate application. However, this is short-sighted as nobody can predict the path of scientific breakthroughs.

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Don’t Overcomplicate Moles

They are these deeply enigmatic things to many people and the few interlocutors of Mexican Cuisine are not always doing much to roll back the mystery.  For instance Diana Kennedy’s cookbooks have progressively become less friendly to Americans cooking in America.  She presents an illusion of great variability by including at least six black moles in her book Oaxaca Al Gusto as if each region had a distinct take on black mole.  In reality I am sure there is as much variation in how grandmas in a region make mole as there is across regions.  It seems hardly worth recording that some make a black mole with pepitas or walnuts (oh my!) or vary the dried fruit used to sweeten the dish.  In fact the variegated nuts in the most complex moles seem to venture into the territory of unneeded.  In something as complicated as mole, I find it hard to believe anyone will notice the proportions of five different nuts.  I find myself a bit more drawn to the simpler moles that have at most two nuts, where the characteristics of each contribute more to the final dish.

Apart from drawing nearly nonexistent distinctions between regional variations on mole, I often find the description of the process of making mole unnecessarily tedious.  Often it is a laborious process of toasting or frying chiles, nuts, and spices and then frying other things or making pastes and then frying them.  Apart from frying so many things separately, you fry a long time because they add so much liquid that you have to evaporate before you actually start frying things.

You can take shortcuts and I can guarantee it will be at least 95% as good.  I see no need to double fry any ingredients.  Toasting chiles, nuts and spices and then frying them as a paste is equivalent (it works for Thai curries after all).  If you have a stick blender you can fry aromatics and other produce together, throw chile/nut/spice paste in and then fry it and finally blend in the pot.  It wont be as smooth as a high powered blender, but it is much simpler and you don’t need as much liquid which means it doesn’t take as long to fry to a nice dark color.  You might sacrifice the quality a very tiny bit, but we aren’t all women in a rural village with nothing but domestic duties that allows them to putter around in the kitchen for hours.  Again mole is so complex that small differences in preparation aren’t going to be readily apparent.

 

The final part of this post I want to talk about the distinctions between moles.

Red Mole or Mole Poblano – This is the most common kind of mole noted for its unique combination of nuts, chiles and chocolate.  Some try to draw a distinction between Red and Poblano, but there really isn’t, though mole poblano certainly sounds tastier.  There are however two classes of red mole.  One is more complex with more nuts and a wider variety of spices like anise or allspice.  That said, red moles run the gamut between the two classes as well.  Mole Teloloapan and other mole also fall into this category.

Black Mole – Black mole is red mole with charred things added.  Period.  I am not sure why it has become so elevated, I think it is because Bayless won Top Chef Masters with it.  You can even see that it bifurcates into simpler and more complex along the same lines as red mole.

Coloradito – This mole is similar to a simple red mole but contains no chocolate, and little to no fruit or nuts.  In its simplest incarnation it is redolent of a good Texas chile con carne.  That said, some are much closer to a red mole than their spicy Texan cousin.

Xico – A complex red mole with more fruit added resulting in a sweeter taste.

Manchamanteles – This is also a really wide category.  I think it is safe to characterize it by the heavy use of pineapple.  Otherwise I have seen variations that run from fruity coloradito to almost xico levels of complexity.  I don’t really understand the name of this one (“tablecloth stainer”) since there is nothing inherently more stainworthy in it than any other mole.

That covers the red moles.  There is also a yellow mole (Amarillo) and two styles of green mole, one characterized by pepitas and the other more of an herbaceous verde.

The Economics of Power

Krugman recently had an editorial in the NYT talking about the decision by Walmart to raise wages above the legislatively mandated minimum wage.  He took this as a signal that raising the minimum wage is not as devastating or intractable as many would have you believe.  His arguments are roughly that the literature for the most part shows no disemployment effects from raising the minimum wage, that there are efficiency benefits from raising wages (Walmart actually claims this as the reason for the wage hike) and finally that Walmart’s move shows that forces beyond typical supply and demand from market competition are determining wages.  That is, Walmart could obviously pay their workers more and did not do so for numerous reasons, mostly due to a choice open to them due their enormous economic power.  He claims that though the labor market is tight, it doesn’t appear to be tight enough to force Walmart’s hand.

Many conservative economists are mocking this piece, though in my mind it feels more like schoolyard jeering; “There goes Kruggie again boys, with his wild theories” rather than careful rebuttals.  Some claim the literature does show disemployment effects, which may be true though doesn’t square with my readings.  Some go as far as to quote Krugman’s own textbook that talks about the minimum wage reducing employment as if there is no difference between an intro textbook, a NYT editorial for mass consumption and economic reality.  Finally others are like “herp derp if you did that for everyone then there would be no effect except inflation” nevermind that most people are not earning minimum wage.  Furthermore, while classical analysis obviously shows that it reduces employment, on a macro level in a liquidity trap things might be different.  One person’s wages are demands for another person’s labor after all.

Now, when Krugman talks about supply and demand I believe he means the naive view that supply and demand are somehow exogenous variables and together they set an inviolate price.  You could take a more encompassing view, that I believe Krugman actually holds based on his writing, that supply and demand include social and political factors.  However, once you admit that you have to start dealing with all these social and political factors and can’t justify the market price as some divine price not to be questioned.  Walmart is so large that it can shift the demand curve for labor in its favor and many workers are so close to poverty that they supply more labor than they might otherwise do at some wage level.  Economic power is a real thing that affects supply and demand and ignoring it makes your analysis irrelevant.

The fact that corporations have any profits is explicit evidence that something other than pure competitive market forces is at play, that somehow economic power is allowing companies to extract rents.  Pharmaceutical companies make money off the ability to convince governments to enforce patents for them.  Defense companies do the same by making sure congresspeople feel the need to purchase the latest and greatest military technology.  Capitalism is crony capitalism and that is pretty much impossible to escape from because most markets wouldn’t exist without the government and regulation and cronyism is an immediate byproduct of such things. Maybe the problem is government.  However, the Silk Road story suggests that libertarian utopias are impossible and markets require some kind of social contract/government to function.

On an individual level, CEO pay is not, as classical economics assumes, equal to marginal product, just as it isn’t for the assembly line worker.  CEOs get paid more because they have convinced people that managerial talent is rare and worth a lot.  The worker’s wages might be depressed by technological change or a government biased against unions (the workers attempt at accruing economic power to counterbalance that of businesses’).  Are we really going to argue that Dan Brown or Kim Kardashian or Honey Boo Boo are exceptionally talented people whose output is of superior quality justifying making so much more than other “artists?”  Or is it because they are Adler Superstars, their value determined by social forces?  Experimental evidence suggest profound sociological effects on prices.  This feeds into the myth that education can save all of us from inequality.  Education inequality is not correlated with income inequality  and there are many stories of important inventors and artists that never manage to capture the value of their product.

As I pointed out in my post on Rawlsian social justice, marginal product as determining wages is an idea that seems to be around merely to justify draining all economic power from workers while allowing those lucky enough to be on top to rationalize their good fortune.  We need to accept luck and economic power and myriad other social and political forces as important variables in supply and demand and stop treating market prices as anything but a convenient indicator of all the complex processes that determine it.

 

The Value of Financial Advice

One of the consistent conclusions drawn from the recent recession and financial crisis is that finance has gotten too large.  Consider that the economic role for finance is shuttling capital into useful projects.  Finance in itself doesn’t create value, it merely allocates capital more efficiently and it’s hard to believe that it does so at a rate justifying 8% of GDP.  I have heard grumbling from businesses that dealings with banks were increasingly expensive, but I haven’t seen any studies on that side and it’s hard to separate that from businesses grumbling about anything that costs them money.  But on the individual side we have lots of evidence that financial advice is at best useless and at worst harmful.

If you don’t know this already, you should be investing in an index fund and the lower the management fees the better.  Other considerations are far less important.  Sadly, most people and pension funds and other institutions don’t know this.  Unless you are managing unimaginable amounts of money (like Harvard, say) you can’t afford the expertise needed to beat the market consistently.  Even most professionals can’t beat the market and they spend their entire working lives on the problem of how to beat the market.  Paying someone to manage your money just means that they have to beat the market by even more for you to make more money.  Many studies show that this pretty much never happens.  If you are actively trading it is almost guaranteed you are doing it wrong.  It is much better to lock in the near guaranteed and often higher returns of an index fund than to trade yourself or pay higher management fees.

Even rich people who have a lot more at stake and can afford better financial advice often fall victim to this.  Studies have shown that they mostly want an adviser that confirms their already chosen strategy.  Furthermore, it’s really easy to see the illusion of skill in fund managers.  There is a lot of variability in fund performance so that a manager might get a few years of great returns, accruing an aura of mastery, before falling below average.  This is the typical human failing of apophenia, seeing patterns in random chance.  In actuality they will fail to beat the market for you in the long run, especially after he takes his management fee.  In reality, picking a good manager has the same or worse odds than picking a good stock.

Finally, money managers have different incentives than you.  They often get paid well whether they beat the market or not.  One study found that insurance brokers matched their clients to insurance policies worse than if the client had purchased their own policy directly.  I have seen similar studies on real estate brokers.  Maybe that suggests aligning incentives better, but if that were easy I don’t think the underperformance of brokers would persist.  The bottomline is that they are making money for themselves, not for you.  It may make sense for them to assuage your ego with bad advice than actually provide good advice if it keeps you as a client.

In conclusion, I reiterate the benefits of an index fund: low management fees, low risk due to diversification, known exposures and higher returns in many cases.