Translator: Ellen Maloney
Reviewer: Peter van de Ven Let me take you back
to the autumn of 2008, when the global financial system
almost collapsed. Back in March, Bear Stearns
had gone bankrupt, but people weren't really sure then
whether that was a one-off event, or whether it was foretelling
something worse. Then in July, IndyMac,
a huge mortgage bank, went under, and markets started to get nervous. By the middle of September,
they were in full panic. On September 15th,
Lehman Brothers collapsed. The very next day, AIG had to be bailed out
for 85 billion dollars. Then on September 29th,
the Dow fell 778 points. And so began a multiyear global depression
that we're only now getting out of. It sure is a good thing we have
15,000 economists in the United States. (Laughter) You might have thought they could have
let us know this was coming. You might have thought they could have given us some policies
for when it did arrive. But they didn't. Before the crisis, the greatest economists
in the world didn't see it. When the crisis came,
they bickered about what to do. Today, years later, they're still debating
the fundamental causes. No wonder we don't have good policies
in place for avoiding the next crisis. This represents a great failure
of social science. The social sciences are not working. Sociology, economics,
political science, history; we need good answers
from these disciplines. Imagine what we could accomplish if we were actually good
at social science. Imagine the crises we could avoid. Imagine the lives we could save. Today I want to talk to you
about some new ideas for fixing the foundations
of social science, for rebuilding them from the ground up. At the heart of this talk
is one simple point: There's a certain kind of question that we're not really asking
in the social sciences, something that we're largely overlooking. It's what I'll call
a "What is it?" question. These are questions we rarely ask,
and when we do bother to ask them, we tend to get the answers wrong. The reason is the social sciences
are largely in the Dark Ages, they're relying on old assumptions
and dogmas that we need to overturn. So let me start by distinguishing
two kinds of questions in the sciences: "What is it?" questions
and "How does it work?" questions. These questions are fairly familiar
in the physical sciences or natural sciences, like physics
and chemistry and biology. "What is it?" questions are questions
about structure or composition. Like, suppose you have a molecule of DNA. What is the structure of it?
What are it's building blocks? What is it? "How does it work?" questions are questions about
mechanisms or processes. Like, imagine that you have
a strand of DNA and some enzymes out of which
a protein is being built. What's the process
by which that's happening? What's the sequence of causes and effects? Scientists spend some of their time
answering the first kind of question and some of their time answering
the second kind of question. And importantly, those two questions
interact with one another. If you want to do a good job answering
"How does it work?" questions, it's a really good idea to do a good job
answering "What is it?" questions as well. The thing about the social sciences is we spend a lot of time
on "How does it work?" questions. But "What is it?" questions? We don't really do that. What is money? What is a company?
What is an institution? What's a social group? What are credit cards,
financial instruments, contracts? These are questions we really
don't ask in social sciences. Here's an interesting comparison: I had a research associate
look at two of the top journals. One in the natural sciences
and one in the social sciences, Nature and the American Economic Review. We looked at the 400 or so articles
that came out over the last year and coded them in terms of what kind
of questions they were addressing. Here are the results: The blue bars represent Nature,
and as you can see, about 16 per cent
of the articles in Nature are addressing purely
"What is it?" questions. Then another 12 per cent
are addressing a mix of questions. The American Economic Review
is very different. Out of the 242 articles we looked at, only two of them are addressing
purely "What is it?" questions. And only 13 were even addressing a mix. These are things we're not really
paying attention to. Why do the natural sciences spend
so much time addressing these questions? Let me tell you a story about what happens if you get your answers
to "What is it?" questions wrong. This is a story from biology,
from the 1860s. But as you'll see, the things
that were going wrong then are remarkably similar to the things that are going wrong
in the social sciences today. Here's a guy named Rudolf Virchow. Back in the 19th century,
he was a very prominent biologist arguing for the cell theory of organisms. Now it may be hard to believe,
but at the time, there were a lot of debates about
what organisms like us are made of. Some people thought that we're made
of some stuff called protoplasm, whatever that is, some people thought
that we're made of fluids with a vital life force
flowing up and down us. Virchow argued for
the cell theory of organisms, and here are a couple
of the principles he put forward. One is: All organisms are made
exclusively out of cells. A second is: Cells are the functional
and structural units of organisms. Cell theory really is very good. It's much better
than life-force fluid theory. (Laughter) But the problem is it's not quite true. Think about a body. There are lots of cells in the body, but lots of parts of the body
are non-cellular as well. Think, for an instance, about the eye. There are lots of cells in the retina
or cells in the optic nerve, but most of the eye is non-cellular;
the cornea has almost no cells, the lens. Most of the eye, is the vitreous humor
and that also has almost no cells. The eye is an amazing structural
and functional device, and yet it's not made out of cells. The same is true for lots
of other parts of the body as well. The bones, 15 per cent of the body. The hair, the teeth,
all the fluids in the body. Virchow got the answer
to the "What is it?" question about the body wrong. It was too simple. It was too uniform. One more point about this: Suppose you want to use Virchow's answer
to "What is it?" questions to then answer
"How does it work?" questions. For instance, suppose you want
to construct a simulation, and in the simulation of the body
as a whole, you only simulate the cells. And you ignore, overlook,
all the non-cellular stuff. This will not be a good
simulation of the body. You might simulate a few things well. You might simulate the muscles well,
or you might simulate the organs well. But as a simulation of the body
as a whole, it will be terrible. You can probably predict
what's going to happen. (Laughter) With a bad answer
to "What is it?" questions, we don't have a prayer
of giving a good answer to "How does it work?" questions. There's an assumption that's deeply built
into the social sciences today, which is that the social world
is built exclusively out of people. What's an economy? It's a bunch of people
interacting with one another. What's a company? It's a bunch of people
interacting with one another. Let me give you three examples of cutting-edge social science
to illustrate this: Here's a picture I took from a recent book
on simulating corporations. As you can see, what they've done
in terms of organizing a simulation is to take people and then to cluster them
into hierarchies or groups. If you followed their instructions
for simulating a corporation, you are going to simulate the people. Nothing more. Here's an example
of a field of social science that's getting an enormous amount
of attention: social network theory. In this diagram, you can see
that a society as a whole is represented as a graph, with people at the nodes
and relations between people as the lines between the nodes. The society as a whole is represented
by people and their relationships, nothing more. Or general equilibrium
theory in economics. This is the workhorse of economic theory, it's what macro-economists
spend much of their time doing. These models are slightly more complicated
in terms of their building blocks than the ones I just showed you, but not much more,
they're still very simple. They start with a group of people,
or what they call "A cohort of agents," then they add just
a few more building blocks. They add some resources, they add some firms
which are basically understood as "black boxes that take inputs
and transform them into outputs," and then they sometimes will add
a government or some bonds. A little more complicated
but still very simple. I was talking to an economist
the other day, and he was like: "Sure, society is built out of people, and these are the building blocks
of our model, but what else is there? Are you suggesting that there's some sort
of dark matter in the social world that we're not really representing? Some invisible stuff we can't see?" Now I've gotten this reaction quite a bit, but whenever I get it,
I'm always kind of puzzled because there is no dark matter. All we need to do is look around us. Look around you right now. Sure you see some people,
but there's a lot more than people. Or look in your company.
Or look in your university. Or in your living room, or your car, or look at your wallet,
at the bills and cards in your wallet. Each one of these things is built
on a complex hierarchy of parts. To see this vividly, think about the building blocks
of an economy. Or maybe that's too complicated. Think about the building blocks
of a single company. Or less complicated, think about the building blocks
of the company's balance sheet. Or even one account. Or even simpler,
think about my bank account. As you can see from this ATM receipt,
I have a $78 balance in my bank account. (Laughter) This is what you get for going to academia
instead of Silicon Valley. (Laughter) So what are the building blocks of that? Well partly, it's actions
by me, a person - my deposits and my withdrawals, maybe interacting
with tellers and machines - but there's a lot more
behind it than just that. For instance, in order for me
to have that bank balance, Bank of America needs to be
a depository institution, it has to be able to take deposits. And that depends on an enormous
hierarchy of complicated stuff. It partly depends on their employees, but it also depends
on things like licenses, which have lots of complicated
terms and conditions, and those conditions
have their own dependencies. Then there are things like bank capital, and relationships with other banks
like the Federal Reserve, which then has it's own dependencies. And there's more. For instance, the Bank of America
needs to be solvent. For it to be solvent, depends
on it's capital and on its loan portfolio, and deposits and other stuff. Or if it's not solvent, then there's the FDIC,
which has its own dependencies. The point is not the details
of this particular example. The point is that what looks like
a very simple fact is actually built out of a complicated
and heterogeneous set of building blocks. And that is just one guy's bank account. Think about a company. Think about an economy. The idea that these things are built
exclusively out of people is crazy. What do we do when we encounter
something like the financial crisis? We want to understand what happened,
we want to understand how it works. But to understand that, we need to understand
the mechanisms behind the parts of that. And in order to understand that, we need to understand
what those parts are. This is something
we have to take seriously, at least as seriously as we take DNA
in the natural sciences. It's not that social scientists are blind. They can look around them and see
that the world is a complicated place. But what they're doing is they think that society is made
exclusively out of people, and so it interacts
with the other parts of the world. So you come up with this clean separation
of society and people here, and resources here
and firms here, and so on. But if you just take one glance
at this complicated hierarchy, it's clear that
couldn't possibly be right. There is no way of pulling out
and separating the people in our models. Our approach to the social world overall
is too centered on people; it's too people-centric,
too anthropocentric. 500 years ago, Copernicus argued against
anthropocentrism, about the solar system. Before Copernicus, astronomers
couldn't imagine a universe where people weren't right at the center. Those astronomers, of course,
were proven wrong. We are part of the universe, but we are not at the center
of the universe. Amazingly, 500 years later, the social sciences are still relying
on a similar kind of assumption. But this is not the way it has to be. We don't have to labor under the dogmas
of an earlier generation. All we need to do is take
the "What is it?" questions even half as seriously in social science
as we do in the natural sciences, and we have the potential
to make some real progress. Here's some steps we can take. First: We have to recognize the problem. There's no way that we are going
to improve this stuff until we see that "What is it?" questions are important
and that we are not addressing them well. Also, critical, is to go beyond
just thinking about psychology. Lots of people are thinking about
how to fix the social sciences, but by large the way they are doing it is by improving our models
of the human psyche. For instance, the biggest trend, by far,
in the social sciences today is taking account of the fact
that people are not always rational. Sometimes we are irrational. Now, this is something
we've known for a very long time, but people are starting to systematically
incorporate it into their models. This is a good thing. It's a good thing for people to do. But we have to understand that even if we got
the human psyche perfect, we're still only addressing
a small fraction of the social world. Second: We need to experiment. We need to try things out
in a variety of places, this is not a task for big science
to try to do a moonshot. It's a task for a lot of us
to experiment and build on things. We're very much at the beginning of understanding the nature
of the social world. A lot of different people and disciplines
need to start contributing to it. And thirdly: We need to build out
our intellectual infrastructure, and we need to build out
our modelling infrastructure. I come from philosophy, and in recent years,
we've made some huge strides in cracking some of these problems
about the social world. But still, we're only just starting. And of course, philosophy's just one place
where this needs to happen. It needs to happen in the social sciences. Modelling infrastructure needs to be built
in computer science and in mathematics, and examples need to be drawn
from business and from the humanities. Let me conclude by saying
that this is not something that we are going to solve
in a day or a week or a month. It's an ongoing project in social science,
just as it is in natural science. But even if we can make
small strides, little by little, it can have an enormous impact. The stakes are huge
in the social sciences. And if we can start making improvements, we just might find that after years
and years and years of effort, that we can finally draw
on the social sciences to solve some of the most
pressing problems of our time. Thank you. (Applause)
I'd like more examples of his proposed version of social sciences; what kind of "what is it" questions would he like them to ask? Surely we understand what a bank consists of, etc.?
I respectfully have to say that I think this is a weak premise supported by even weaker arguments and examples.
Surely, the fact that his bank has to adhere to certain standards, that it must have certificates, that it consists of different groups of people, and that it must be solvent are of no interest to his particular situation. These conditions are met a priori to his being there, and only if they're not all met do the specifics become interesting. Why did the bank crash? Why did the stock market take a hit? When looking at situations like these, it's rather useful to find the direct cause which is often found by looking through the detailed specifics of an organization or environment. But as far as him having a balance of 78 dollars in his account goes; they don't matter. His account is just a depository, and the process by which his 78 dollars got onto his account are governed almost exclusively by his own actions and those of other people - i.e. people/people interactions, which happens to be precisely the thing he criticizes.
What does sociology or psychology stand to benefit from incorporating inanimate things into its models beyond what it already does with regards to these? We know what a bank is, and we also know that this knowledge has very little bearing on how you're going to act. People are not going to act differently if they learn the bank's hierarchy, business requirements or the like. All things considered, it just sounds like a fancy idea without much substance that's being thrown out there to intellectually intimidate others into nodding along and thinking "yes, yes, see, more nuance and complexity is always a good thing so this man must be right". I'm not buying it, especially not given the contents of this presentation.
This was legitimately the worst TED talk I've ever seen. Not a single thing he said here made any sense. Economists know there are more than just people, but they simplify to reduce complexity. We do the same in biology, and Neuro. No one simulates neural function from the standpoint of DNA, because that would be ridiculous. Unless he has ideas about how to solve NP hard problems or rapidly increase the level computational power, I don't understand what his contribution is.
I would love to see a definition of money, gender, contracts, trade, banking, government, activism, or any other topic discussed by the social sciences that doesn't require referring to "how does it work."
To start with money, for example, money is literally defined by its use. If it isn't able to be used, it ceases to be money.
I admit I'm a lowly undergraduate anthropology student, but I'm failing to see what kind of answer you could possibly give to the question of "what is money" that isn't either a single sentence or something that goes into detail about how money works. In fact, defending a certain assertion about what money is seems also to require describing how it works.
These things in the social sciences aren't physical objects, but processes. In many cases, the question of what it is and how it works are the same thing.
As for the physical elements of society, people have been talking about modes of production and environmental factors for a long time. There are whole books on how people are affected by their physical environments, what they have or don't have, whether they do physical labor or sit at a desk, and so on. There is so much work on this in anthropology.
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The presenter seems to be totally ignorant about the substance of modern economics, which I think is really sad. Of course there are many, many things which don't appear in economists' models of banking. Every feature adds complexity and each feature needs to be identified empirically.
There are two issues there. The first is theoretical: What mileage are you going to get in the results out of adding a model feature that captures the fact that the bank needs some permission from some government agency to operate? (This is an example on one of his slides.) Probably nothing, though I don't rule out there being a paper on this subject somewhere - the literature is enormous. In that case, given that every (non-trivial) feature you add increases the difficulty of solving the model, there isn't a good argument for adding things like this which aren't really that important in a practical sense: real people don't have deposits with banks which don't have permission to operate.
The second problem is a data issue or, more precisely, a model-data connection issue: you want to say something about the importance of the "permission to operate" feature that you've added, given some empirical data you have on banks. Ok - so you are probably going to need to observe some "banks which don't have permission to operate". You probably can't say anything about this addition to the model, given that you aren't going to observe any banks in the data which lack this feature. (And not observing banks without it doesn't tell you how important it is!)
I think this is a problem with a lot of philosophers of economics. A lot of them are really, really uninformed about the discipline. (Dan Hausman is a notable exception.) I think the situation in philosophy of economics is a real contrast to the philosophy of biology or physics. David Malament has published in physics journals, for example. There are philosophers of mathematics who publish in actual mathematics journals. (Hilary Putnam, Tim Bays, eg.) Most philosophers of science seem pretty informed about the science they work on.
Philosophy of economics is an exception and I don't know why. Most of these guys seem to read a brief history of the discipline, maybe follow Paul Krugman's blog and then consider themselves qualified to bash everything that goes on in macro. How many philosophers of economics have at least an MA in the subject or have done grad-level work in the field? Should you consider yourself qualified to comment on philosophical issues in physics with a BA or less? (In my opinion: no!)
If there's a qualified philosopher of economics out there who can tell me why phil of economics seems to have much lower standards than philosophy of physics or math, then I'd be really interested in the explanation. I think a lot of economics could really benefit from some careful attention from philosophers who know the philosophy and the economics. But so far I haven't come across much.
While his idea personally interests me, the example he used made very little sense in backing up his hypothesis. I mean, to me, so much of the examples he used helped to explain how a bank works, not what a bank is. I don't know...he seemed to be so focused on using the phrase, "what is it", probably to simplify things for his audience, that he seemed to try and make it all about that question to the point of not really making that much sense. It just seemed like a fairly weak argument even though I felt like there was a shred of truth in there somewhere.
Stopped watching as soon as he said that "the reason is mostly because the social sciences are in the dark ages". Just too gimmicky to me.
Why am I not surprised?