Monthly Archives: February 2005

Social Security: The Big Lie

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I wish everyone would read Paul Romer’s “Preferences, Promise, and the Politics of Entitlement,” in Individual and Social Responsibility, edited by Victor Fuchs.

Romer tells the story of exactly how concerted and intentional is the deceptive rhetoric of Social Security. The ideas of SS as “insurance,” the payroll tax as “contributions,” and the “trust fund” were purposeful rhetorical ruses deployed to lock in political support for the program. The point was to create the illusion that a tax plus a regressive transfer from the young to the old (which could not have maintained political support) is instead a form of social insurance, which it manifestly is not. The illusion — the lie — has succeeded brilliant. Indeed, Romer’s paper suggests that Social Security may be the best example of purposefully deceptive framing for political gain in the history of the United States. (That’s the lesson I take from it, in any case.)

Unfortunately the paper is not exactly online, but you can probably make your way through it using the Amazon “Search Inside” function (link above).

Endogeneity and Justice

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For various reasons I have gotten pretty involved in the literature on endogenous preference change. My first push came from reading Rawls. As I see it, the key difference between Rawlsian contractarianism and Buchanan/Gauthier rational choice contractarianism is not just that Rawls posits a sense of justice, a capacity enabling agents to be motivated by considerations that nicely allow for the choice of non-Nash, Pareto-improving strategies (Gauthier’s “constrained maximization” gets you this, as does McClennan’s closely related “resolute choice”) but that Rawls has something of an account of endogenous preference change that accounts for the convergence of the right and the good and thus the stability of social ordered according to the principles of “justice as fairness.”

The trouble with theories of endogenous preference change is that they seem the ruination of neo-classical theories of efficiency. The usual Pareto or Kaldor-Hicks (or Marshallian, if you like),criteria for efficiency work only by holding preferences fixed or exogenous. We evaluate the desirability in changes by tracking their relation to people’s preferences. If a change makes someone better off and no one worse off, in terms of preference satisfaction, then it is worth doing. But if a change can modify individuals’ preference-profiles themselves, then our efficiency criterion becomes a moving target, and one becomes quickly mired in paradox.
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simulated persona = "Ayn Rand"

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Tim’s link to Andrej Bauer’s primer on Objectivism reminded me that the cartoon Rand of our zeitgest dreams was never put to better use than by the astounding artificially intelligent replicated personas of Forum 2000. Here AI Andrej discusses the axiom of identity with AI Ayn. Also try here, and here.

That Reason’s so-called Rand-O-Rama failed to acknowledge Forum 2000 shows the editorial staff to be so overoccupied with working obscure song lyrics into the titles of blog posts, outsider art, waxing lyrical about New Jersey, and generally kpeping nihilism fresh, that they neglected to touch on the ubiquity of Rand’s spirit in the bygone heyday of the information superhighway.

The Most Opposite Thing Ever

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This absolutely arbitrary and wonderful Observer article about indie guys who also happen to like football contains some gems. My favorite:

And what about the girls? Indie-rock girlfriends, who thought that when they started dating music boys they were leaving football Sunday behind forever, are pissed off to discover that they thought they were getting Joe Strummer but actually got Joe Buck. In fact, at the league-championship party in Bushwick, the host’s girlfriend took off during the game to do the most opposite thing ever—make a mix tape on the occasion of her friend’s little sister’s first period.

The most opposite thing ever!

The Larry White Privatization Plan

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I would enthusiastically endorse the Larry White plan if it was possible for the state to credibly commit to refusing benefits to people who fail to invest.

Here’s Larry’s idea:

Here’s how it works: we give Ms. Smith, a worker, the right to opt out of paying $100 in social security payroll taxes provided she also opts out of (say) $103 in future Social Security benefits. She can now save her $100 privately. She will consider herself better off opting out if she thinks she can earn a return of better than $103 for each $100 saved. Voila, who could object?

Maybe we can throw in a little benign paternalism, and have the payroll taxes automatically roll into some kind of investment account by default.

Anyway, nice idea.

Meta-atheism, Death by Accident, and the Mysteries of Religious Experience

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For some time I have been persuaded by Georges Rey’s account of meta-atheism. (Georges was one of my teachers at Maryland.) His claim is that many people who say they believe in God don’t really. It’s not that people are lying about what they really believe. It’s just that we’re often wrong about our own beliefs. (Our own beliefs are just another thing to have beliefs about, and we can get it wrong about our own beliefs just like we can get it wrong about anything else.)

This weekend, I had a thought which is a version of Georges’s point (6) in favor of meta-atheism. Here’s point (6):

(6) Betrayal by Reactions and Behavior People’s reactions and behavior (e.g. grief, mourning) do not seem seriously affected by their supposed “belief” in a Hereafter. Imagine a young “believing” couple. He is dying from a painful disease. Would she really rejoice at the prospect of his going to heaven, and of joining him herself when she dies, as though he’d just gone off for a great –eternal!- cure in a luxurious resort in Miami? I betcha she’d grieve and mourn “the loss” like anyone else. (Note that most all religious music and rituals surrounding death are deeply sad -seldom, if ever, joyous).

In a related vein, if people really believe in the efficacy of prayer, they should be willing to have the National Institute of Health do a controlled study of the effects of prayer, just as they would if they believed that soy beans cured cancer. (And why does no one expect prayer to cure wooden legs?)

Let it not be said that Georges is an ideal diplomat to the theistic community. Nevertheless, I believe his observations are sound.

In a fit of Beckerite rational choice reasoning, I decided that theists ought to have higher rates of death by accident. If I believe that heaven is infinite bliss, then I should be quite eager to join my maker. Suicide is a disqualification for paradise, but dying in a car accident isn’t. So, one should expect that theists who believe in perpetual Miami would take more risks than those who do not so believe, and that thus, death-by-accident ought to be higher among believer than non-believers.

My guess is that there is no difference in rates of death-by-accident among believers and non-believers. If my guess is correct, then there’s another reason to believe that many people don’t really believe in God, even though they think they do. Or, at least, there’s a reason for rational choice economists to believe meta-atheism.

All this was stimulated by a Ross Douthat post that touches on Orwell’s attitude toward a character in a Graham Greene novel. Orwell:

Scobie is incredible because the two halves of him do not fit together. If he were capable of getting into the kind of mess that is described, he would have got into it years earlier. If he really felt that adultery is mortal sin, he would stop committing it; if he persisted in it, his sense of sin would weaken. If he believed in hell, he would not risk going there merely to spare the feelings of a couple of neurotic women . . .

Douthat:

If he really felt that adultery is a mortal sin, he would stop committing it. This is astonishingly obtuse, and something that could only be written by the most bloodless and Puritanical of Christians — or by a devout atheist like Orwell. For him, I suspect (and perhaps for Hitchens?), the always-upright Christian is fairly comprehensible: he has his dogmas and he lives by them, with the same lack of nuance, backsliding, and self-doubt that Orwell brought to his staunch unbelief. Whereas understanding the tormented Christian, the questing agnostic, the atheist who takes a gamble on God and the Catholic who commits suicide — the stock-in-trade of Greene’s great novels, in other words — requires an imaginative leap into religious experience that an atheistic critic is often ill-equipped to make.

The Orwell’s astonishing bit of obtuseness (“obtusity”?) is the core of Georges’ point (6) and my little Beckerite addendum. Is Georges obtuse on this point? Am I? Well, let’s concede the possibility of weakness of will. Discount rates won’t help here because no matter how sharply you discount infinite bliss, it’s still infinite. But if I truly believe the hype about my celestial reward, or my infernal punishment, how can I fail so utterly to align my actions with my incentives. Ross’s point makes it sound like it is obtuse to question the coherence of a character who truly and hosetly loves life, but flings himself from a rooftop anyway.

I submit that meta-atheism is the key to understanding the “nuance, backsliding, and self-doubt” that Ross sets out as central to the religious experience. Many of us believe that we believe because the social and psychological benefits of appearing to be a believer seem to us greater than the costs, and the most compelling way to appear a believer, but to avoid the behavioral costs of actual belief, is to earnestly but falsely believe that one believes.

Our “faith” is shaken when we find we cannot stop cheating on our wife, or whatever our transgression may be, because, on some level, we know that if we really believed what we believe we believed, cheating on our wife would be psychologically impossible — like peeling the skin off your screaming baby out of sheer boredom. Yet the general value of our self-deception is so high that we cast about looking to preserve it. If our religion is a good one, well-adapted to survive in the forbidding habitat of a human psyche, it will tell us that we are fundamentally and irremediably broken, flawed, and unsuited to virtue. And THAT explains why we can be so abjectly and arbitrarily irrational. So grateful are we for the explanation of the possibility of our misbehavior, and thus the possibility of retaining the deep benefits of religious conviction and a religious form of life, we redouble our faith in our faith, and our religion tightens it’s embrace on us we tighten our embrace on it.

Happy Rand Day!

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Today is Ayn Rand’s 100th birthday. Bryan Caplan, who is smarter than you are, defends Rand’s legacy at the EconLog. I especially like this bit:

Yes, many of her philosophical arguments are question-begging. Shocking… unless you’ve read the work of Descartes, Locke, Kant, or Mill. They all make plenty of embarrassingly bad arguments. If you don’t want to dismiss their whole subject matter, you’ve got to judge philosophers based on their best work and/or the novel questions they raise. And by that standard, Rand more than holds her own.

Right on. Bryan mentions that he wouldn’t be a professor if it wasn’t for Rand. I certainly wouldn’t have studied philosophy (and wouldn’t be working at Cato) if Rand hadn’t convinced me that philosophy really matters. But more than that, Rand more than anyone I can think of, makes philosophy seem downright romantic. John Galt’s the bomb not just because he solves the problem of energy scarcity, or engineers the collapse of a parasitic corporate welfare state, but because he’s a philosopher!

I think Tyler’s right about what you really learn from Rand, even if you’ve given up on most of her particular arguments:

The true take-away message is a reaffirmation of how the enormous productive powers of capitalism — the greatest force for human good ever achieved — rely on the driving human desire to be excellent. I don’t know of any better celebration of that combination of forces.

Rand teaches a deep-seated reverence for innovation and discovery, and a heightened sensitivity to the dark motives that often underlie appeals to the commonweal. After reading Rand, you cannot live in a capitalist order and fail to appreciate the great glorious gift of innovation driven by the self-interested pursuit of excellence and wealth. And you cannot live in DC, the town of ten thousand Mouches, and fail to see daily how the fuel of resentment, parasitic avarice, and powerlust blazes in the rhetoric of shared sacrifice and fires the black engines of the state.

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The Proper Pre-eminence of Immanence

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In the course of a fascinating post in which he discusses Geoff Pullum’s claim that there is a kind of third way between linguistic descriptivism and prescriptivism, Glen Whitman wonders about the relative merits of internal versus external normative critique of systems of social rules. In the process, he quotes the ubiquitous Uncle Fritz (from LLL, vol. II), and then comments:

If we are to make full use of all the experience which has been transmitted only in the form of traditional rules, all criticism and efforts at improvement of particular rules must proceed within a framework of given values which for the purpose in hand must be accepted as not requiring justification. We shall call ‘immanent criticism’ this sort of criticism that moves within a given system of rules and judges particular rules in terms of their consistency or compatibility with all other recognized rules in inducing the formation of a certain kind of order of actions.

Hayek’s argument hinges on two aspects of his thought – first, his severe doubts about the ability of human beings to fully comprehend the functionality of their social norms (an epistemological position); and second, his belief in an imperfect but usually beneficial process of cultural evolution. If one doubts either of these positions, external critique might seem more sensible.

I agree with Glen, but there’s more to the point of internal critique than just this, I think.

Hayekian immanent criticism bears a close resemblance to Rawlsian reflective equilibrium (RE). I believe the most overlooked aspect of Rawls account of RE is that the raw material for reflective moral deliberation flows from from the same capacity that accounts for moral motivation. If we use commitment A to criticize commitment B, and vice versa, and end up with a new commitment C, we can marshall the motivation associated with our initial commitments into the service of C. The problem with external criteria of the right is that they may have no connection to the commitments that govern our moral motivation. The external criterion may tell us that we ought to have commitment D. But there may be no plausible psychological path from here to there. So a system of rules constructed according to an external criterion (the principle of utility is an excellent example) will be regarded by actual people as alien and offensive to their moral sensibility, and will not gain their willing compliance. A system of rules arrived at through a process of reflective equilibrium or immanent criticism will generally have a connection to our prior tendencies of judgment and motivation, and will therefore be more likely to gain willing compliance, and will therefore more likely be stable and viable as a system of rules for real people.

Reliance on immanent criticism is, I believe, a hallmark of a genuinely liberal, non-utopian cast of mind. Because people don’t like to comply with rules generated by external criteria — because we don’t recognize them as binding — those committed to these criteria may get it in their heads that the little people need to be forced to follow the rules, or have their moral sensibility “re-educated.” For their own good, of course. In this respect Rawls and Hayek are very much on the same liberal team against socialists too much in the grip of an external theory about an optimal order.

NB: the line between a highly refined and developed internal critique and an external one is fine indeed.

What Do You Deserve?

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Chris Dillow usefully collects a number of pertinent Hayek quotes regarding the debate about income and desert.

I think it’s useful to clearly reiterate what Hayek’s argument about the connection between distibution and overall moral desert really is. I think this is basically the argument:

The setup:

Gather the names of everyone inhabiting a certain social order (pretend that there is some non-arbitrary way to draw the boundaries between orders or societies). On the first list, List A, order the names according to some standard of overall moral virtue or praiseworthiness, from most virtuous to least. On the second list, List B, order the names according to last year’s income, from high to low.

Conclusion:

If you pick a name at random, there will not be an especially tight correlation between its place on List A and List B.

Reasoning:

Income is determined for the most part by the supply and demand for different forms of labor, and the supply and demand for capital (which determines rates of return for those with savings or investments), and an individual’s overall moral merit has almost nothing to do with the overall supply and demand for labor and other forms of capital. If computer programmers are in short supply, for example, they will command high wages, whether or not they are saints or sinners.

That’s the argument.

Now, Hayek’s larger argument about social justice is that it is incoherent to look at List B and criticize it for failing to map onto List A, or to map onto any other list ordered according to whatever normative standard you like as long as the general system of rules (both formal and informal) is desirable.

And we should

“. . . regard as the most desirable order of society one which we would choose if we knew that our initial position in it would be decided purely by chance.”

Or

“The Good Society is one in which the chances of anyone selected at random are likely to be as great as possible.” [LLL, vol. 2, p. 132]

Now, crucially, there is nothing in this argument that says that Gary (picking a name from list B) did not deserve $50,00 in 2004. The argument is that it is incoherent to say that Gary deserves his ranking on List B, which is determined by Gary’s income, which happens to be $50,000, and the number of people who brought in a greater income.

Suppose Gary inhabits a fairly Good Society in Hayek’s terms. Now it turns out that Gary entered into an agreement with the Institute for the Study of Distributive Justice that says that Gary will be paid $50,000 over the course of 2004 if he completes a number of tasks to the satisfaction of the ISDJ. And he did complete these tasks to the satisfaction of the ISDJ. So Gary straightforwardly deserves, has a genuine moral claim on, exactly $50,000 from the ISDJ.

And the ISDJ pays, as justice requires. Now, Gary’s $50,000 earns him a certain place on List B. Suppose Gary is on line 1000 of List B (it’s a very small society). Does he deserve to be on line 1000? Hayek’s argument tells us that this is an ill-formed question; it contains a category error. As Will Munny so wisely observed in a different context, “Deserve’s got nothin’ to do with it.”

If the winds of supply and demand throughout the economy had blown differently, Gary might have moved up or down List B, and this obviously has nothing to do with anything Gary can take credit for. So there is something pretty contingent and normatively arbitrary about his rank on List B. A butterfly spits in a pitcher of lemonade and he moves up to line 1001. Whatever. Nonetheless, Gary really and truly morally deserves $50,000. But not from society, which makes no sense. Gary has no claim against you and your sister. He has a claim against the ISDJ, with whom he entered into an agreement within the context of the rules of a pretty Good Society. They owe him, because that’s the amount they agreed on, and Gary came through. He has it — the agreed-upon amount — coming.

Obligatory The Arcade Fire Post

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Yes, Missy, I was there. And though I hate to perpetuate the conventional wisdom, it really was pretty great.

I still wish DC people weren’t so lame, and would dance or at least bop more, but I guess that can’t be helped.

I loudly booed that Owen wanker from Final Fantasy when he said that we should all love taxes, because “it makes us into a community” or some such frostback nonsense. I brayed my disapproval apparently alone, although the guys standing next to me gave me a smile and an approving nod meant to communicate solidarity, but which communicated only cowardice. Note to Republican hill staffers who like good music: you paid to hear good music, not a CBC editorial. Go ahead, let ‘em know you hate it. The hipsters are more afraid of you than you are of them and will not beat you. And, finally… Note to DC canuckophile “progressives”: Do it. Really. Go. Seriously. It really is better there. Go. Do it. It’s a glittering frosty wonderland of social justice. Live the dream! Go!

(Note: I get to say “frostback,” etc. because I am half Canadian … like if I was half black, I could make fun of black people, Chris Rock style. I am not, as it happens, half black, so I will never ever ever make fun of black people. But I do reserve the right to mock Canadians.)