Monthly Archives: April 2008

Tales of the Morally Backward

Posted on by

Although I know some people really do think there is no moral distinction between central banking and chattel slavery, or that John C. Calhoun was superior to Milton Friedman as an advocate for human liberation, I cannot help feeling flabbergasted when they emerge in the light of day and actually unleash these opinions without a hint of shame. From my comments:

… slavery was eventually abolished, but the central bank is still arouond and it has made slaves of us all. There is no difference, in fact, the bank is worse because it is slowly bleeding the country to death and no one is seriously talking about getting rid of it.

I prefer to believe this kind of thing is malicious trolling, but I’ve seen enough of this to not suspect the worst. It shouldn’t need saying, but here’s 2000 words:

A Victim of Inflation?

I suppose the gold standard was a real consolation.

Jobs and Votes

Posted on by

Andrew Gelman posts these fascinating graphs showing the trend in Republican voting in several occupational categories compared to the national average.

Clearly, running a business makes you a Republican. What if everyone had to do quarterly estimated taxes? But Republicans have made big gains with both skilled and non-skilled wage-earners too. But nothing compares to the professionals — doctors, lawyers, etc. — rush to the Democrats. What explains that?

What’s interesting is that there has been such a big difference in the trend for different kinds of relatively wealthy people. I suspect it has something to do with differences in which compensation, regulation and taxation are experienced. (Do doctors, lawyers, etc. feel more like they’re collecting rents at levels relatively detached from the application of effort?) Or maybe some kind of personality variable that predicts conservatism vs. liberalism is increasingly predicting occupational choice. Can we learn more about this, please?

Catallaxy: Frankly, It's Unnatural

Posted on by

Here’s Yale psychologist Paul Bloom talking with UNC experimental philosopher Joshua Knobe about the evidence for our native bias toward theism. (Don’t worry! The clip’s just 3 minutes.) Everything he says could just as well be applied to folk ideas about planned economies versus spontaneous orders:

Knobe goes on to mention that people seem to revert back to a childlike penchant for intention-based agentive explanation when we become old. Maybe we need to put an age limit on policymakers.

How Manufacturing and Immigration Creates Tolerance and Democrats

Posted on by

Googling around it looks to me that this paper by Ed Glaeser and Bryce Ward, “Myths and Realities of American Political Geography,” got only cursory attention on the blogs, which is really too bad, because it’s just terrifically illuminating. If you’ve been following this type of thing, you know interesting tidbits like: church attendance predicts voting Republican better than income these days; rich people in rich states tend to vote Democratic and rich people in poor states tend to vote Republican. But I did not know this:

Industrialization 85 years ago is an astonishingly good predictor of social and cultural attitudes today across states and a good predictor of support for the Democratic Party at both the state and county levels. As the share of the workforce in 1920 in manufacturing increases by one percentage point, the share of respondents today believing that AIDS is punishment declines by .28 percentage points, the share believing that military strength is the best way to peace declines by .16 percentage points, and the share supporting John Kerry at the state level increased by .42 percentage points.

Religious and political attitudes are better predicted by industrialization and immigration 100 years ago, than by the history of slavery and religion.

Glaeser and Ward hypothesize that the ethnic and religious heterogeneity of a largely immigrant workforce packed into densely-populated urban manufacturing centers created a strong incentive for the emergence of ideologies that minimized conflict by creating a climate of tolerance.

[I]f different religious or ethnic groups are prevented from using the power of the state to disenfranchise, enslave or kill each other, and if there exists a powerful group that benefits from eliminating conflict [i.e, the capitalists employing immigrant labor], then diversity can eventually lead to a watering down of core religious tenets or ethnic animosities.

That’s right. Industrial capitalism civilized religion, moderated tribalism, and created a moral and political culture in which Democratic politics thrives. Places far from manufacturing centers, or places that industrialized later, are more likely to now be home to more socially conservative evangelical Christians and Republicans. Glaeser and Ward argue that the middle of the 20th Century, in which economic issues took precedence over social issues in determining party affiliation, was an anomaly and we have lately returned to form.

Glaeser, together with Jesse Shapiro and Giacomo Ponzetto, has come up with a theory for predicting when we’ll see median-voter defying political extremism. Basically, if you can signal to a large constituency relatively radical intentions you can excite them and get an advantage in turnout. But you need to be sure that you’re inspiring your base more than arousing the opposition, so your communication needs a way to be narrowcast to the target group. If such a group is large enough (but less than half the population), its views can largely determine the main divide in electoral politics. Evangelical churches seem to serve this function for Republicans. And Glaeser and Ward suggest labor unions may have once done the same for Democrats, which may have pushed issues of economic distribution to the forefront of electoral politics. But as union membership has receded, so too have the electoral rewards of narrowcasting relatively extreme economically left-wing views to them.

This theory then provides us with two hypotheses for the changing importance of economic and social issues in American politics and for the realignments throughout the 20th century. One candidate is the rise and fall of unionization in America. At the beginning of the century, unions were a small part of the population. Only in small areas of the population did they provide an opportunity for targeting a significant fraction of the population. In mid-century, they rose to over 30 percent of all workers and today they are back down to 12 percent (Troy 1965, www.laborresearch.org).

The rise and fall of unionization corresponds reasonably with the connection between income and Republicanism shown in Figure 10. The middle decades of the 20th century were the high point of unionism and they were also the high point of the correlation between income and Republicanism. During this time period, the Democratic Party had access to the labor unions and this created an incentive for Democrats to move to the left on economic issues to get support in this important base. The rise and decline of unions provides at least one possible reason why economic issues rose and then fell in importance.

So de-unionization may play a role in explaining why rich people, especially those living in the tolerant milieu of the historical seats of heavy industry, are increasingly Democrat-leaning these days.

This is truly fascinating. All I can say about it is that Paul Krugman says something a lot different, so this must be wrong.

Bartels Manzi-handled

Posted on by

Jim Manzi’s post on the much-discussed Bartels correlation is extremely illuminating:

Bartels’s thesis is primarily the statistical artifact of the combination of two very simple observations: (A) there has been a higher proportion of Republican presidential years during the period 1980 – 2005 than the period 1948 – 1979 (64% vs. 48%), and (B) starting in 1979, US income inequality began to rise dramatically after a post-WW II period of relative wage equality. Accepting these two statements of fact does not imply accepting Bartels’s thesis that A caused B, and his academic paper on the subject provides no compelling evidence of causality.

It also turns out that Bartels’ result depends heavily on his choice to give presidents credit for ONE year after their term. If you credit them for just the actual years of their term, or for two years after their term, the result all-but-vanishes. There is a lot more in Jim’s post, all of it excellent, so do check it out.

Philosophy Is Sexy

Posted on by

Commenter glory points me to this NYT piece from a few days ago on the vogue in studying philosophy:

Once scoffed at as a luxury major, philosophy is being embraced at Rutgers and other universities by a new generation of college students who are drawing modern-day lessons from the age-old discipline as they try to make sense of their world, from the morality of the war in Iraq to the latest political scandal. The economic downturn has done little, if anything, to dampen this enthusiasm among students, who say that what they learn in class can translate into practical skills and careers. On many campuses, debate over modern issues like war and technology is emphasized over the study of classic ancient texts.

Philosophy is the one field in which you really learn to reason, and not just about one thing. Formal logic helps you see the structure in natural language arguments. Studying great texts helps you learn to recognize argumentative patterns that arise again and again in public deliberation about all sorts of issues. And the naturalistic turn has made philosophy training more useful and directly applicable. It is possible to study philosophy of x as a truly useful complement to the study of x. The best student I ever had as a TA was interested in philosophy of mind and went on to study medicine — she hoped eventually brains — at Hopkins. Of course, there is a great deal of substantive wisdom that helps life seem both richer and more comprehensible.

Of course, there is also this:

Jenna Schaal-O’Connor, a 20-year-old sophomore who is majoring in cognitive science and linguistics, said philosophy had other perks. She said she found many male philosophy majors interesting and sensitive.

“That whole deep existential torment,” she said. “It’s good for getting girlfriends.”

Interesting, sensitive, deep existential torment. Irresistible. It works for ladies, too. I remember how excited I was when I first met Kerry by the fact that she’d been a philosophy major.

To the Slow and Steady and Smartest Goes the Race

Posted on by

So, this is going around:

I have to say this makes me feel pretty swell as an art major with a grad degree in philosophy. But money doesn’t make you happy, guys!

Of course, this is just starting salary. And it is well known among people who go to grad school in philosophy that would-be philosophers destroy all others in the verbal and analytic sections and only lag the math-heavy disciplines in quant. Philosophy majors frankly embarrass economics majors when it comes to the LSAT, I’m sorry to report. And since we all know that there are rising economic rewards to brainpower and facility with abstraction, these philosophy majors will soon enough get their just financial desserts. You know how much philosophy majors pull in their first year as junior associates? A lot! So don’t hesitate to major in philosophy on account of this silly chart, young uns. You can always ruin your life by becoming a lawyer.

To my fellow art majors… stay strong.

An Endless Sea of Perfect Shining Robots

Posted on by

George Borjas points us to this Reuters article that illustrates Japan’s preference for machines over migrants:

Robots could fill the jobs of 3.5 million people in graying Japan by 2025, a thinktank says, helping to avert worker shortages as the country’s population shrinks.

Japan faces a 16 percent slide in the size of its workforce by 2030 while the number of elderly will mushroom, the government estimates, raising worries about who will do the work in a country unused to, and unwilling to contemplate, large-scale immigration.

The thinktank, the Machine Industry Memorial Foundation, says robots could help fill the gaps, ranging from microsized capsules that detect lesions to high-tech vacuum cleaners.

Here’s the question Borjas wants to ask:

Which path is most beneficial for the pre-existing population of the country? Importing low-skill immigrants? Or building robots? And is the difference in the economic benefits between the two alternative policies big enough that one should pay more careful attention to this choice?

Yes! And which path is most beneficial to people who own stock in robot companies? (Can we at least make the robots look like immigrants?)

Another angle on the Japan story is this. Suppose you basically treat your country like a big club with a racist admissions policy, like the Japanese do, and you therefore let almost no one in. But your club members are not having enough children to replace themselves, as the Japanese aren’t. Can you get robots to give you steady per club member income growth even as total membership and absolute economic output shrinks? Or, if the robots are good enough, and numerous enough, maybe absolute GDP doesn’t shrink at all, and you get ever-fewer people dividing an ever-growing pie. Imagine the last Japanese family (declared endangered by the Institute for Human Biodiversity), hundreds of years hence, possessing the entire growth-compounded GDP of Japan. It could happen!

Or…


In The Know: Are We Giving The Robots That Run Our Society Too Much Power?

More Money, More Happy, Again

Posted on by

Here’s Betsey Stevenson and Justin Wolfers’ new paper [pdf] on happiness and economic growth. The bottom line:

The accumulation of more recent data (and a re-analysis of earlier data) suggests that the case for a link between economic development and happiness is quite robust. Moreover, we establish that the relationship between happiness and income within a country is similar to the relationship between happiness and national income across countries. Finally, we show that the within country relationship between economic growth and happiness is similar across countries.

And this effect shows up despite all the reasons — scale renorming, unbounded income scale vs. bounded happiness scale — that you would expect to flatten the trend. Taking the methodological considerations about surveys into account, the most reasonable conclusion is that these findings set the lower bound on the contribution of income to happiness.

The paper has all sorts of interesting findings from the Gallup World Poll that I have not seen. For example:

We next turn to a series of well-being questions contained in the Gallup World Poll. Respondents are asked to report whether they experienced “the following feeling during a lot of the day yesterday?” including enjoyment, physical pain, worry, sadness, boredom, depression, anger, and love. The middle panel of Table 4 shows that, among the positive emotions, the enjoyment-income gradient is positive and similar for both the between- and within-country estimates. More income is clearly associated with more people having enjoyment in their day. Love is less clearly related to income, although within-countries more income is associated with being more likely to experience love. Among the negative emotions, physical pain, boredom, depression, and anger all fall with rises in income, at both the national and individual level.

Beatles fans and headline writers please note relationship between income and love.

The final regressions analyze the relationship between income and some more specific experiences in people’s lives, such as feeling respected, smiling, doing interesting activities, feeling proud, and learning. Most of these assessments are related to one’s income in the within-country estimates. Fewer show signs of a similar sized effect when examining the relationship between countries. However, there are some notable exceptions. Wealthier people are more likely to say that felt that they were treated with respect yesterday and as countries get wealthier more people feel respected. Wealthier countries have people who report smiling more. This last measure is particularly interesting as smiling has been shown to be correlated with reported levels of happiness or life satisfaction. Indeed, in the data people who report smiling more, also report higher levels of life satisfaction. Finally, as countries get wealthier more people report having been able to eat good tasting food the previous day and the magnitude of the relationship is similar to that seen within countries.

All told, these alternative measures of well-being point to a robust relationship between rising
income and improvements in societal welfare.

MONEY IS GOOD FOR PEOPLE. I will continue to wait with bated breathe for conventional wisdom to catch up.

[HT: Zubin Jelvah]

More Reasons Jamie-Lynn Is a Bad Example

Posted on by

I had forgotten about this Steven Landsburg column reporting on an innovative paper by Amalia Miller that finds, as Landsburg reports:

On average, Miller has found in a new paper, a woman in her 20s will increase her lifetime earnings by 10 percent if she delays the birth of her first child by a year. Part of that is because she’ll earn higher wages—about 3 percent higher—for the rest of her life; the rest is because she’ll work longer hours. For college-educated women, the effects are even bigger. For professional women, the effects are bigger yet—for these women, the wage hike is not 3 percent, but 4.7 percent.

So, if you have your first child at 24 instead of 25, you’re giving up 10 percent of your lifetime earnings. The wage hit comes in two pieces. There’s an immediate drop, followed by a slower rate of growth—right up to the day you retire. So, a 34-year-old woman with a 10-year-old child will (again on average) get smaller percentage raises on a smaller base salary than an otherwise identical woman with a 9-year-old. Each year of delayed childbirth compounds these benefits, at least for women in their 20s. Once you’re in your 30s, there’s far less reward for continued delay. Surprisingly, it appears that none of these effects are mitigated by the passage of family-leave laws.

That is a BIG effect. I don’t think most women actually know how much they stand to gain by waiting until 30, or forever.

Difference Makes No Difference in the Difference Principle

Posted on by

To reinforce the point that even Rawls’ difference principle isn’t really concerned with inequality at all, look at this excerpt from Leif Wenar’s SEP entry.

The second part of the second principle is the difference principle. The difference principle requires that social institutions be arranged so that inequalities of wealth and income work to the advantage of those who will be worst off. Starting from an imagined baseline of equality, a greater total product can be generated by allowing inequalities in wages and salaries: higher wages can cover the costs of training and education, for example, and can provide incentives to fill jobs that are more in demand. The difference principle requires that inequalities which increase the total product be to everyone’s advantage, and specifically to the greatest advantage of those advantaged least.

Consider four hypothetical economic structures A-D, and the lifetime-average levels of income these would produce for representative members of three different groups:

Economy Least-Advantaged Group Middle Group Most-Advantaged Group
A 10,000 10,000 10,000
B 12,000 15,000 20,000
C 20,000 30,000 50,000
D 17,000 50,000 100,000

Here the difference principle selects Economy C, because it contains the distribution where the least-advantaged group does best. Inequalities in C are to everyone’s advantage relative to an equal division (Economy A), and a more equal division (Economy B). But the difference principle does not allow the rich to get richer at the expense of the poor (Economy D). The difference principle embodies equality-based reciprocity: from an egalitarian baseline it requires inequalities that are good for all, and particularly for the worst-off.

Pay special attention to Wenar’s illustration with the chart. To correctly apply the rule you never have to look at the last two columns. That’s because they are irrelevant to the actual underlying principle obscured by the equality-centric language of the difference principle. (The last two columns are very relevant when we start thinking about the strains of commitment and stability in a dynamic context, but that’s a different issue.) The idea of inequality here is an idle conceptual gear that catches on nothing and does no intellectual work. Rawls’ real rule, cleared of distracting superfluities, seems to be: find the system that leaves the least-advantaged best off and pick it.

Rawlsians: what say you?

The Rawls in Rawlsekianism

Posted on by

A few commenters looked at the post below and said, “Where’s the Rawls?” I was just making what I took to be a number of largely conceptual points about the economic patterns that emerge from social interaction — points mostly from Hayek and Nozick. That point is that the principles of social interaction are the primary subject of moral evaluation, not the patterns themselves.

This is Rawls’ view, too. Nozick’s criticisms notwithstanding, Rawls really isn’t concerned with patterns either. He’s worried about the principles of interaction, the terms of association. A just society is a scheme of cooperative mutuality. The basic rules of the game should benefit everyone. A good way to ensure a set of governing principles does benefit everyone is to pay special attention to how the least well-off fare under them. Rawls says: when choosing a set of principles, we should pick ones that leave the least advantaged class as well off as possible. I agree with this. This takes a comparative property of a pattern (the poor do better in this pattern than in alternative patterns) as a constraint on acceptable principles, but says nothing whatsoever about inequality. Indeed, Rawls offers what amounts to a powerful argument against fixating on inequality. Rawls says: fixate on the welfare of the least well off.

It’s also worth emphasizing that Rawls isn’t talking about the income distribution. He’s talking about primary goods. (“Distribution” in his sense is opposed to “allocation” and “distribution” is not about income.) Given a solid Hayekian understanding of the function of sound market institutions over time, it becomes easy to see that rising income inequality can and does often accompany innovation that leads to increasing equality in primary goods. But, again, Rawls isn’t even much concerned with equality in primary goods. He’s interested in maximizing the minimum.

It’s true that the difference principle is stated in terms of “conditions” social and economic inequalities must meet. I think this was a big, terribly confusing mistake, since it does no actual work. You could just ask: Are the poor doing better in this scheme than in alternatives? Now, this won’t satisfy pious Rawls purists, but Rawlsekianism does not try to hide the fact that it is a mongrel creed. For me, the main Rawlsian takeaway is that the mutuality at the heart of justice should lead us to put the welfare of the least-advantaged at the forefront of our deliberation over basic principles of association.