Modern Monetary Theory - Fraud 2 - Debt

July 18th, 2012

This is the second part of a critique of some of the thoughts expressed by Warren Mosler in his booklet "Seven Deadly Innocent Frauds of Economic Policy"


"Deadly Innocent Fraud #2: With government deficits, we are leaving our debt burden to our children. Fact: Collectively, in real terms, there is no such burden possible. Debt or no debt, our children get to consume whatever they can produce."

The issue here goes back to the point about opportunity costs made in the prior section. Certainly the next generation will generally consume what they produce; the question is whether the production at that time will be more or less as a consequence of the debt burden acquired today and in the past.

There are two reasons for acquiring debt - to pay for current expenses or to make investment in capital to increase production in the future. The national debt is primarily used to pay current expenses, not make investments in future production; the consequence is that future production is less than it would be, and people are less well off.  As for capital investments, there are also distinctions about investment being more or less productive; the national debt crowds out private borrowing, which is far more certain to lead to increased production and therefore increased living standards, because it is based on priorities expressed by the actual behavior of real people.

There may not be such as thing as "giving up current-year output to the past" (p. 32), but there is certainly giving up current year output for the future. The reason our standard of living today is so much greater than that of yesteryear is that our ancestors saved for investment - they held back from consumption and put the remainder into capital improvement that increased labor productivity, with the result of vastly increased production surpassing even the simultaneous vastly increasing population.

The "savings" analogy to debt (p. 33) fails to acknowledge the difference between willing and unwilling participants in the exchange. If I purchase a debt security from a private party, I am taking on some risk that the seller will default at some point during the term of the loan. With Fed securities, the burden of such default falls on the population at large, mostly to be paid for by reduced purchasing power of the currency units they currently hold (because, of course, as Mosler makes clear, all the Fed need do is credit some accounts with another zero or two).

Another problem with this blase consideration of the consequence of debt is that debt makes one less resilient to shock. In other words, with fixed obligations to regular payment, it is very important how large those payments are with respect to income. The closer those terms are, the smaller shocks can be sustained and keep the system afloat. Of course the Fed is in the unique position of being able to increase the number of zeros in the accounts, which eliminates the problem in nominal terms, but at the cost of increased inflation which is socialized across the population (benefiting, of course, the private bond holders who are paid off first).

Equating debt to savings (e.g. again on p 35) fails to acknowledge the difference that savings provides the means to investment to increase production, while debt for current expenses simply postpones the payment and adds interest in the mean time. This equation also fails to acknowledge that the people who bear the costs are not the same as the beneficiaries of the arrangement - the people buying Treasury bonds accrue the advantage of negligible risk and are mostly large banks, while the general population pays the costs of servicing the debt. This does not negate the assertion that the Fed or US Treasury can eliminate that debt through account manipulation; my point is that these are fundamentally damaging consequences of the combination of fiat currency and debt financing.

One further point about debt in the corporate domain is that it is tax advantaged as compared with equity financing. Similar to how debt for personal residences is tax advantaged as a deduction on Form 1040 Schedule A, a likewise treatment of corporate debt makes firms trend more to over-leveraged positions. And lenders are willing to provide debt financing because they are the ones who get paid off by the government when the company gets into financial trouble. A good discussion of these points can be found here.

As a historical point, I challenge the notion (p 35) that World War II-era deficits got the US out of the Depression. A good statement of this reading of history is by Robert Higgs; for example see The Myth of US Prosperity during WW2, Regime Uncertainty, and Depression, War and Cold War.

As for "the problem is that people don’t have enough money to spend" (p 36), an alternative take is that 1) prices are still too high, with home prices in particular continuing to be propped up recently, and 2) many people have recognized the risk of having too high an individual debt load, and are putting some of their ready cash into debt reduction. Shadowstats has the overall unemployment rates, but of course the highest unemployment rates are for youth (8% different according to the STL FED data for youth, overall), people who have the least skills but also face the hurdle of minimum wage laws.  Meanwhile, the regulatory burden contributes to the inability of people to start and grow their own businesses, while simultaneously protecting the entrenched large businesses that are already in place (another perverse consequence of inteventionist attempts to fix the market). 

The discussion surrounding paying off China (p.37-40) is not remarkable on it's face. The issue returns on the one hand to how large is the underlying debt balance, and whether that balance will be eventually paid off by taxes or by inflation, and on the other to direction of spending and the structure of production in terms of satisfying human needs. The final sentence is ironic and tragically misguided:

"We make do with less than what we can produce, and sustain high levels of unemployment (and all the associated crime, family issues, and medical issues) while our children are deprived of the real investments that would have been made on their behalf if we knew how to keep our human resources fully employed and productive."

Mosler bemoans our making do with less than we can produce and sustaining high unemployment, but it is the crowding out of private investment that is consequent to the high debt burden, and the high taxes consequent to unwillingness to control spending, that together reduce production and employment alternatives in the market.


For more of this discussion, see the following posts concerning the other frauds


1 - Government Spending

2 - Debt

3 - Budget deficits

4 - Social Security

5 - Trade deficits

6 - Investment and savings

7 - Future effects


Modern Monetary Theory - Fraud 1 - Government Spending

July 16th, 2012

This is the first part of a critique of some of the thoughts expressed by Warren Mosler in his booklet "Seven Deadly Innocent Frauds of Economic Policy"


"Deadly Innocent Fraud #1 - The federal government must raise funds through taxation or borrowing in order to spend. In other words, government spending is limited by its ability to tax or borrow. Fact: Federal government spending is in no case operationally constrained by revenues, meaning that there is no “solvency risk.” In other words, the federal government can always make any and all payments in its own currency, no matter how large the deficit is, or how few taxes it collects."

Political rhetoric aside, I'm not sure who actually questions whether the federal government is "operationally constrained" in this way - after all, there are lots of people who voice concern about the federal government propensity to print money. I could point out that the Federal Reserve Bank is the organization that ends up doing the accounting tricks in the current scheme, not congress, but of course the Fed is subservient to political forces so that quibble is "operationally" moot. As it relates to to making up any difference between spending and borrowing and taxes, the "operational" question is not whether we can, but whether we should increase currency accounts in this way, and if so by how much. For by this logic taken to the limit, there is no reason for any taxes or borrowing - the government need only increase the number of units in the accounts of those it wants to pay.

As for whether we should, the problem with doing so is that simply increasing the number of currency units (CU) in account does not increase the supply of goods and services, so it does not make the community better off. In addition there are serious problems that arise as a result of the CU distribution. The first recipients of these new CU are able to use them to bid up prices, which effect on the rest of the community is higher prices as the value of existing CU are diluted. Those who are more downstream in the new CU distribution pay the higher prices with CU that are worth less. In addition, the steadily decreasing CU value discourages savings, encourages taking on debt, rewards the people who are savvy enough to recognize these connections rather than those who produce things that people value, and seriously damages the welfare of people on fixed incomes.

At least Mosler acknowledges that there's a down side - that increasing the accounts may "cause prices to go up" (p.17) , but his car example (p. 34) is a rare acknowledgement of the damaging effects of sustained inflation at even relatively moderate levels. Other than this, his discussion mostly fails to consider those consequences. He even states that high inflation is "something I’ve never seen in the U.S. in my 60-year lifetime" (p. 113), which makes me wonder what he was doing in the 1970's, from when even I recall the futility of Gerald Ford's "Whip Inflation Now" buttons.

I should acknowledge that there is not wholesale agreement on the best definition for inflation, whether it be the wholesale increase in price levels (and here) or the increase in money supply that drives those price increases.  One particular commodity or another may from time to time experience large or small shocks to the relative supply or demand, which in the cases of increasing demand or decreasing supply can cause those commodity prices to increase - oil during the 1970's embargo (for which subsequent US price controls was exactly the wrong response), and the occasional bad year in agricultural commodities are typical examples.  Such changes can flow into price changes in other goods and services, causing a spike in such prices as the effects of the shock are experienced and then mitigated by people making substitutions or economizing or finding new sources of supply.  However, such commodity- or industry-driven price level changes cannot explain the economy-wide long term price increases that typify inflation.  In an economy with increasing production - an increasing amount of consumer goods and services, a fixed amount of money can only result in steadily decreasing prices; increasing the money supply is then the cause of inflation.   The later definition is also the historical one, linking to the debasement by the king of coined money.

I will have to treat separately the tragedies of faster than general inflation increases in the cost of education and health care.  The fact that these are two very highly regulated segments of our economy is a correlation that ought to at least allow consideration of a causal connection. I have written on this before and will do so again.

Looking deeper into Mosler's family currency analogy (p.18) also exposes the problems with his notion that money should have no commodity value and that the government should just credit accounts as payments. The root of the problem is that it fails to recognize what makes people better off, represented by the availability of goods and services that people actually value. If the purpose of these coupons is only to pay taxes, then the exchange is simply a trick to get the "children" to perform work for the "adults". If the coupons are to have any other usefulness, then they must be exchangeable for other goods and services that the "children" desire - toys or snacks or baseball games or whatever - after a time the coupons will be traded on that basis.

The coupons have no original value except to avoid being punished for not paying a fraction of them back in taxes. If the "adults" then double the number of coupons in circulation, or even in their recorded accounts, that has done nothing to the quantity or quality of available goods and services. The children, now having more spendable coupons and assuming their value scale has not changed, will bid up the prices of those toys and snacks and ball games so that the result is all those things now cost twice as many coupons to obtain. The children are not any better off in their material well-being, but are worse off for the wasted effort expended on finding out what the new exchange rate should be. If the "adults" preferentially bestow additional coupons on one of the children, that child has the advantage of more spendable coupons and can bid up prices beyond what the other children can sustain, clearly benefiting the one over the others. Any non-uniform distribution of coupons leads to a transfer of wealth to the people who get the coupons first from those that get them later.

Increasing account balances do not make things better in the community at large, nor do the problems with account manipulation go away if the new CU are distributed equally. Aside from the operational challenge of actually managing such a distribution, the new account levels cause people to waste energy trying to figure out what the new price levels should be. That uniform distribution has been called the "helicopter drop", made famous recently by Ben Bernake, but earlier expressed by Milton Friedman.

In the real world, the process has the same outcome whether or not the factors of production are all working to capacity. In the first place, inflation represents the relative valuation on the part of consumers of the currency unit with respect to goods and services; if there are more currency units with the same amount of goods and services then prices are going to rise (it even happens in gold-based money, as seen in gold mine communities during a gold rush). In the second place, the ultimate aim of production is consumer goods, so to achieve sustainable economic growth the overall structure of the factors of production must expand in a more or less compatible way that increases production for consumers. Even if a given factor has unused capacity, it does no good to create twice as many nails or blue tarps or tomato plants or carburetors (for example) if the consumer demand for those goods doesn't reach those levels, or if those products do not fit into the production structure leading to other consumer goods.

Mosler imagines a new country that creates a currency from scratch (p. 19), but ignores what it was that the people previously used to conduct trade, i.e. that which was separate from the requirement to pay the taxes that the government of this new country suddenly proclaims as necessary. Money started in trade as recognizable, divisible, durable, scarce, and useful; the value in exchange was because people placed independent value on the underlying commodity. Even now, gold continues to have industrial and aesthetic value. Based on this long history, the United States once had specie money, defined as a weight of gold or silver, so one could obtain specie for those dollars on demand. In an instant, the state under FDR in 1933 effectively confiscated personally held gold and compelled all debts previously denominated in gold to be payable in terms of paper, which constituted a wholesale theft from everyone in the community. Consequently, it is misleading to claim that "We need the federal government’s spending to get the funds we need to pay our taxes" (p. 21) - legal tender laws, a relatively recent development, compel us to pay taxes and make all other monetary exchange using the sanctioned monetary unit. The funds did not appear because of government spending; they appeared by the forced conversion of gold-denominated contracts.

The British "hut tax" story is revealing (p.26); the people in Africa were evidently satisfied with their way of life when the British started to tax them - no doubt it was the white man's burden to compel this servitude.

The explanation of taxes as a limit on aggregate demand (p. 27) might be more plausible if the federal government simply reduced the size of the currency accounts in accordance with the tax receipts, but that is not what happens. All those taxed dollars (and more) are immediately spent by the government to purchase goods and services. The aggregate does not change in magnitude, only in direction - away from things that might be desired by the people individually and towards things that are desired by the people with political power.

The question of direction is that of the structure of production and consumption, a point often overlooked by analyses of economic aggregates. Distortions in the structure of production is part of the explanation for the current and previous recessions, which Mosler expresses as when "total spending isn’t enough to make sure everything in the store gets sold" (p.27).What is really happening is that some things are not getting sold at the price levels the current owners might wish, while they would be sold if those owners chose to lower those prices to the market clearing level.  The owners might realize a loss in that circumstance, or they might instead think that prices will rise in the near future and so they can afford to withhold goods from the market at their current prices.

An alternative explanation for the recession starts with looking at the causes of the preceding boom, to explain why it is that there might be more in the store than can be profitably sold. In other words, we have to explain why has the entrepreneur paid for factors of production at prices above which she can profitably sell the end product.  This requires investigation of credit and interest rates, corruption of which (e.g. making more available through mechanisms such as fractional reserve banking and subsidized interest rates) causes false signals to spread through savers and investors about the actual demand and availability of financial capital, which leads the one to spend more and the other to invest more than is sustainable. More discussion of this in the section on deadly innocent fraud number 6.

Meanwhile, this discussion says nothing about how prices are always in fluctuation to clear the market, and how the attempts by government policy to hold up prices contributes to lengthening the duration of the inevitable correction after a boom.

Mosler does get it right when he says "The real “costs” of running the government are the real goods and services it consumes" (p. 28) - in all cases the cost of something is most accurately expressed as what it is we renounce in order to claim whatever is our choice - the foregone opportunity of the next best thing we could have done instead. The dollars in the exchange serve as a means of calculating that cost, but we should not confuse the dollars for what it is we give up.

But I don't think that Mosler sees this connection. Nor does he see how this relates to the question of changing the number of CU in circulation (which, again, does nothing to change the amount or quality of goods and services, and therefore does not make the community any better off).

Mosler further falls short when he asserts that the size of government can be set to the right level based on the real costs and benefits (p 28). The problem with this statement is not the importance of understanding what are those costs and benefits, but rather the fundamental impossibility of objectively determining those costs and benefits as an aggregate for the society, particularly for conditions where the price system has been completely subverted by political machinations. This is impossible because we can not equate the costs and benefits among the various people in the community, a point which can be seen by looking at the basis of any trade made between consenting adults - both exchange something they like less for something they prefer. The things in exchange are necessarily of unequal value in the views of the parties involved - in fact their perception of costs and benefits are in opposition. In the political domain, the costs and benefits are impossible to ascertain because the people involved have no real choice over what costs shall be incurred and what benefits are to be sought.

As for the recent flurry of attention to the US debt ceiling, the historical developments have been ones that set two forces in opposition - the people who think the government should be able to spend any amount of money, and those that do not but who don't have the political will to actually restrict the spending (especially on behalf of their own favored interests). It is indeed a farce, but one for which I am happier that the conflict at least causes the issue to be discussed.


For more of this discussion, see the following posts concerning the other frauds


1 - Government Spending

2 - Debt

3 - Budget deficits

4 - Social Security

5 - Trade deficits

6 - Investment and savings

7 - Future effects



Modern Monetary Theory - Introduction

July 14th, 2012


This multi-part essay discusses Warren Mosler's booklet entitled "SEVEN DEADLY INNOCENT FRAUDS OF ECONOMIC POLICY".  It took me far longer to complete this essay than I originally anticipated, a result of procrastination, other obligations, and then a naive notion of figuring out how to do a side-by-side commentary in web format without copying the entire content of Mosler's essay.  In the middle of that investigation into web page formats and cascading style sheets, I came to find that Taylor Conant at Economic Policy Journal undertook a far more exhaustive discussion of the material, so rather than sort out the vagaries of web formatting I have elected to present this work in a form with embedded quotations of relevant source material.  I also split this up into sections to facilitate editing and posting the result.  The result will be posted over a period of days.

I started reading the booklet in April 2011, and began taking notes as I got deeper in to the story. For the booklet in toto, 117 pages takes a while to read, longer to think about, and longer still to attempt a reasoned analysis of the content, and this was not my only occupation; I only completed my first pass reading the paper in August 2011, from which point I completed most of the material up through fraud number 4.  Thence followed above-mentioned period of procrastination, finally returning to the details in May 2012.   So you can see that the following has taken many months to compose and publish. In the course of this activity I discovered Mosler among the proponents of Modern Monetary Theory, which developed from theoretical precedents in "chartalism".

I would not have spent this time if I simply agreed with all the points in his essay - had it been entirely consistent with my observations of how people interact with one another it would have been easy to say "right on" and leave it there. The fact of the matter was not so simple - Mosler makes some blunt statements about the underlying nature of fiat currency that may appear shocking by their obvious truth upon a little reflection - the world's reserve currency really can, "operationally", erase any debt by simply adjusting the electronic account balances. But I think Mosler does not correctly address some of the ramifications of this, ramifications that make fiat currency operate in opposition to the general welfare; the following focuses mostly upon those ramifications.

I broke this essay into sections corresponding to the seven points in the original essay, but the points are interrelated so the following includes cross-references for recurring themes about what constitutes wealth, and the causes of inflation and recession.  Each section starts with a quotation of the claim.  The following links will not all work until this essay is fully published.


1 - Government Spending

2 - Debt

3 - Budget deficits

4 - Social Security

5 - Trade deficits

6 - Investment and savings

7 - Future effects


technology on econtalk

July 3rd, 2012

The premise of the author in this interview is that in the large space of technological development, there are growing areas of autonomy that react to the environment independently of direct human interaction, although the discussion touches many related points.  This sort of emergent behavior has application to parts of my day job these days.

Some of what is new technology is developed to mitigate or resolve problems that arose with old technology;  increasing wealth allows better solutions.  Old technology lives on after the advancement of new technology - products from the old Montgomery Ward catalog can still be found today being made new, leading to the suggestion that simply banning undesirable technology will not succeed in that end. 

I remain skeptical as to the usefulness of extending the word "want" to this application, since it implies a conscious volition that technology in its current form simply does not have.  This is not to say that there are not complex interactions at work in the operation of these technologies on their own and with human intermediation, and those interactions can have the appearance of conscious direction that we should think about when setting up the rules under which the technology operates.  The technology no more "wants" an outcome than do individual birds "want" to create the huge flocks that can arise from their individually simple decision logic.

Is it true that technology is neither good nor bad? on balance it may be a (perhaps quite) small good because it creates space for new choices, which aggregate over time to what we call progress.   The discussion here also references a prior interview of Kelly with Robert Krulwich on Radio Lab.

Technology and What Technology Wants (11/29/2010) - Kevin Kelly argues that technology is best understood as an emergent system subject to the natural forces underpinning all emergent systems. He argues that any technology creates benefits and costs but that the benefits typically outweigh the costs (perhaps by a small amount) leading to human progress. This is a wide-ranging conversation that includes discussion of the Unabomber, the Amish, the survival of human knowledge, and the seeming inevitability of the advancement of knowledge. The conversation closes with a discussion of the potential for technology to make an enormous leap in self-organization.

bitcoin on econtalk

June 27th, 2012

And now for something completely different, an interview with one of the people working up a fully digital currency that is completely independent of commodity basis and of national boundaries. 

An intriguing discussion of what it takes to be a medium of exchange - namely acceptance, in this instance - with the challenge of reaching that point without the benefit of an original commodity value, nor the forced acceptance through legal tender laws of fiat currency.

Here is a chart showing the historical values of bitcoin; April 2011 happened to be a time just before bitcoin experienced a large price spike, since which trading is quite a bit lower  (so to speak), although still 10x what it was when this interview was recorded.

Andresen on BitCoin and Virtual Currency (4/4/2011) - Gavin Andresen, Principal of the BitCoin Virtual Currency Project, talks with EconTalk host Russ Roberts about BitCoin, an innovative attempt to create a decentralized electronic currency. Andresen explains the origins of BitCoin, how new currency gets created, how you can acquire BitCoins and the prospects for BitCoin's future. Can it compete with government-sanctioned money? How can users trust it? What threatens BitCoin and how might it thrive?

pseudoscience on econtalk

June 22nd, 2012

I was aware of the scandal surrounding Andrew Wakefield fraudulently claiming research linking autism with vaccination.  Interview subject Deer was the person primarily responsible for exposing Wakefield, so the discussion relates his account of originally taking the assignment, his starting to crack it open and attempts to silence him.

This post is about deliberate fraud and the failure of a scientific journal to promptly deal with the problem.  It goes along with a couple others that address different and related problems in how science is conducted, and potential improvements:  challenges in study replication, and this more general piece.

Autism, Vaccination, and Scientific Fraud (1/31/2011) - Investigative journalist Brian Deer talks about his seven years of reporting and legal issues surrounding the 1998 article in The Lancet claiming that the MMR vaccine causes autism and bowel problems. Deer's dogged pursuit of the truth led to the discovery that the 1998 article was fraudulent and that the lead author had hidden payments he received from lawyers to finance the original study. In this podcast, Deer describes how he uncovered the truth and the legal consequences that followed. The conversation closes with a discussion of the elusiveness of truth in science and medicine.

stimulus on econtalk

June 20th, 2012

Fazzari supports the stimulus program, which adds interest to the discussion of how we know what we know in economics - how would we know if things would have been worse without the stimulus, versus that the stimulus didn't work or made things worse. 

Further discussion treats distinctions between aggregate quantities and the intricate details of what it actually takes in human interactions to produce the "stuff" that people want. 

Fazzari has been interviewed a couple times on the podcast.

Stimulus and Keynes (1/24/2011) - Steve Fazzari of Washington University in St. Louis talks about the economics of Keynesian stimulus. They discuss the stimulus package passed in February 2009 and whether it improved the economy and created jobs. How should claims about its impact be evaluated? What can we know as economists about causal relationships in a complex world? The conversation includes a discussion of the underlying logic of Keynesian stimulus and the effect of the financial crisis on economic research and teaching.

prohibition on econtalk

June 16th, 2012

I have a long standing interest in the subject of alcohol and drug prohibition;  this podcast episode (linked below) explores the notion of "bootleggers and baptists" in the direct relevance of the US "noble experiment" with alcohol prohibition. I found it difficult to locate completely clear-cut historical statistics.  Different sources agree that at the peak in 1830, the average American drank 7 gallons annually, the equivalent of 90 fifths of 80-proof liquor, nearly two bottles a week, per person over 15 (in 1845 that quantity had fallen 75%, and subsequent years have remained much lower, at least according to this, see also here).

At any rate, to say there was (and is) no problem with alcohol would be naive, and women faced particular challenges in this environment, having no legal or property rights to speak of (women's suffrage and Prohibition entered the Constitution within 1919-20).  Even so there was not the broad popular support that might be implied by passing a constitutional amendment, because legislatures at the time were disproportionately weighted to the rural areas rather than the cities, those rural populations being much more in favor of prohibition than were city dwellers.

In the run up to full prohibition were class-motivated restrictions on saloons that limited alcohol sales to restaurants and hotels - places that served food and had beds, which should not be surprising to find be shortly represented by saltines and prostitutes. ....  there is so much more to this story, but a broad reading boils down to how well meaning people who want to improve society through one or another political initiative, end up in alliance with others who see that initiative as a way to promote their individual financial interests, and who typically end up in control of the implementation of that policy.  Strange bedfellows, indeed.

Good historical perspective with recurring relevance, that also brings out the pietism and anti-catholic, anti-immigrant motivations of prohibition promoters.

In the context of this history with alcohol prohibition we have the recent situation with drug policy in Portugal, which in 2001 decriminalized all drug use and since experienced a significant reduction in drug abuse.  With only a few exceptions (e.g. Time in 2009, Reason in 2012), this result is completely ignored by US news media.

Prohibition and His Book, Last Call (6/7/2010) - Daniel Okent, author of Last Call: The Rise and Fall of Prohibition, talks about how the 18th Amendment banning the manufacture, sale, and transport of intoxicating beverages came to pass in 1920, what life was like while it was in force, and how the Amendment came to be repealed in 1934. Okrent discusses how Prohibition became entangled with the suffrage movement, the establishment of the income tax, and anti-immigration sentiment. They also discuss the political economy of prohibition, enforcement, and repeal--the quintessential example of bootleggers and baptists.

new weight loss scheme

June 14th, 2012

It might have been at work where I first saw mention of this story in Gizmag, describing how Evgeny Katz and fellow researchers at Clarkson University have implanted a snail with an enzyme-based biofuel reactor, allowing said snail to generate electrical power though something like the normal digestive process.  Here is the JACS article that forms the basis for the story.

Before long my brain was buring a few calories thinking about how this sort of technology will revolutionize weight loss programs, when people learn how to embed such systems in our own bodies and use them to power all sorts of personal bio-electronics from telescopic vision to wide-band communication.   We may even be wanting to increase our consumption of sugary fluids as the number and power of such devices increases.

This work follows similar research with cockroaches, and Gizmag reports that lobsters are next for Katz and company.  Can humans be far behind?

A little more recently I came upon this story in Technology Review, which describes a team at Autodesk led by Christian Holz who reported implanting macro-sized devices into a cadaver - a button, LED, and touch sensor with Bluetooth communication and wireless charging.

Notwithstanding handwringing by TR and New Scientist over our cyborg future, whatever these devices turn out to be in terms of function, I advise you be able to get an upgrade when the new versions come out.

science, replication, and journalism on econtalk

June 13th, 2012

This was one of a series of interviews with economist Russ Roberts, whose podcast subjects range broadly through the human enterprise, around how and why people do what they do, and what happens as a result.  A recurring theme has been to question how we know what we know - how much is "science" and how much is story telling.  

This interview focused on that question with science writer Ed Yong, who blogs at Discover magazine

A large part of this interview discussed what has apparently become an open topic among psychology researchers, on the lack of replication in many studies, with poor documentation of experimental protocol.  Additionally is the tendency of science journals to avoid publishing negative results (that might refute earlier results) and in other cases avoid publishing confirmatory studies (which reduces the incentive of researchers to even try replication).  Yong even cites cases where independent researchers don't believe their own refuting results, discounting their own work by thinking instead that they are not sufficiently observant in comparison to the original researchers.  Yong's work in this area is the subject of an article in Nature, and subsequent response by one of the researchers whose work could not be replicated in subsequent research.

While physics and chemistry and the like are not immune to this problem, the social sciences have it worse inasmuch as the researchers are themselves subject to the behavior under study, and to their own biases that are hard to eliminate even when trying to do so.  Roberts, as an economist, is well aware of the tendencies of researchers in his own profession to find data that conveniently aligns with their political beliefs.  

Compared with hard science, measurements are much more subjective in the social sciences, while both are additionally subject to the challenges of correctly dealing with statistics.  Adding to that difficulty is the need to show statistical significance in the results, a publication criteria, which leads people to hunt the data looking for correlations after the fact.  This is a point which I didn't fully understand when I was first exposed to that principle because it was explained in terms of findings that had been repeatedly shown many many times through the centuries; my head at the time did not appreciate how easy it is for us to fool ourselves about correlations that look significant because our brains are good at pattern matching.

All this provides good cause for skepticism, especially toward social science research.  And to be clear, I don't want it said that I am skeptical of science - far from it, as I believe that the scientific process is one of the greatest achievements of mankind.  However, I will argue that there is room for improvement to that process, including that far more information be published on the experimental protocols, that negative results be given greater prominence, that all the source data be published to allow independent analysis, and that refuting papers be linked to the earlier works so that future researchers can more clearly see where a prior result was determined to be invalid.

Perhaps this topic is in the zeitgeist, but for whatever reason, a recent episode of "On the Media" (which I also listen to on podcast) has three related segments: a piece about how cultural norms in Britain to expect less criticism in science journalism get transposed to the States with the same news stories, one about the increasing number of retractions made in science journals, and a story about the people who run a web site devoted to keeping track of such retractions.  RetractionWatch is the name of that site, which gives brief explanations, mundane and scandalous, for retractions from science journals (and a few others).