Progress: questions and answers

Patrick Collison and Tyler Cowen say that we need to study how to achieve faster progress. But they seem to pre-suppose the answers.

the world would benefit from an organized effort to understand how we should identify and train brilliant young people, how the most effective small groups exchange and share ideas, which incentives should exist for all sorts of participants in innovative ecosystems (including scientists, entrepreneurs, managers, and engineers), how much different organizations differ in productivity (and the drivers of those differences), how scientists should be selected and funded, and many other related issues besides.

Implicitly, they assume that progress comes when the larger society

(1) creates opportunities for its “brilliant young people” to work in small groups to generate innovative ideas; and

(2) creates mechanisms to exploit and spread those ideas

Those might be the important factors. But other factors have occurred to students of progress: the competitive environment among states, including wars; demographics that skew toward youth (see this review of The Human Tide); cultural norms for assigning status (e.g., Deirdre McCloskey’s view that cultural support for commerce and innovation created the Industrial Revolution); key political actors, for better (Licklider at DARPA) or worse (the fifteenth-century Chinese emperors who forbid ocean exploration).

I don’t have a settled view on the sources of progress. In fact, the issue just screams “causal density,” making it difficult or impossible to rule out hypotheses or to confirm others.

But my inclination is to focus on broader cultural values. The enemies of progress are fear of novelty and envy of success. My thinking is that when those enemies hold sway, progress will be slow. When those enemies are weak, progress will be rapid.

Back to Collison-Cowen’s focus on scientists, perhaps this paper by Azoulay and others, is relevant. The policy implication is that we should enforce early retirement on eminent scientists.

Social security, annuities, and revealed preference

A commenter writes,

This seems like pretty strong evidence that Social Security benefits — a mandatory government annuity — are far too generous. If that weren’t so, then seniors would supplement Social Security by purchasing additional annuities from their savings. Apparently, the vast majority, if given the choice, would rather have less Social Security and keep the tax savings unannuitized.

If you believe that the annuities market works and that households are rational in choosing not to use them, then this analysis is correct. Instead, some economists believe that the annuity market fails because people have too much private information about their own longevity (of course, if that is true, then the life insurance market also should fail). And, as the original post pointed out, many economists believe that households only fail to annuitize because of irrationality. My views to the contrary are not widely shared.

Nationalism, conservatism, and libertarianism

Alberto Mingardi writes,

Chris [Christopher DeMuth] seems to believe that nationalism is sort of a “natural” loyalty of people, which is being jeopardized by international institutions. But is it? Historically nationalism has competed, sometimes ferociously, with other loyalties, beginning with religion and the family (the two main targets of one of the favorite policies of nationalism: a national education system). I won’t argue against the idea that human beings are gregarious and need to belong to something. But that something is more often than not a club, an association, a football team, or a municipality. The nation is quite a remote object: in some countries, it represents a very strong element of identity; in some, it doesn’t. It is more often than not a (political) manufacture, not a spontaneous offspring. In this case, it typically grows by crowding out other loyalties: most notably, indeed, religion.

I have watched several videos from the National Conservatism Conference that was held in DC last month. For me, the most provocative talks were:

Paulina Neuding on how immigration is affecting Sweden.
Mary Eberstadt on social conservatism.
J.D. Vance on libertarianism

Both Eberstadt and Vance scapegoat libertarianism for the opioid crisis. MY thoughts:

1. I would like to see this case made more carefully. Specifically, which libertarian-influenced policies can be shown to have caused the crisis?

2. This reminds me of the way that the left blames the financial crisis of 2008 on “an atmosphere of deregulation” or “neoliberalism,” a narrative that I find unpersuasive. In fact, in the decades prior to 2008, regulations were promulgated with the intention of tightening the safety and soundness of banks. Risk-based capital regulations were a particular tool. The fact that these regulations did not work, and in fact had perverse effects, is an indictment of regulation, not of de-regulation.

And of course, there is also a counter-narrative on the opioid crisis. Jeffrey Miron and others write,

We instead suggest that the opioid epidemic has resulted from too many restrictions on prescribing, not too few. Rather than decreasing opioid overdose deaths, restrictions push users from prescription opioids toward diverted or illicit opioids, which increases the risk of overdose because consumers cannot easily assess drug potency or quality in underground markets. The implication of this “more restrictions, more deaths” explanation is that the United States should scale back restrictions on opioid prescribing, perhaps to the point of legalization.

I am not here to argue for this view. That is not the point of this post.

3. I am surprised to hear that libertarianism has been such a powerful force in American politics and society. I think our record is one of few victories, many defeats. The biggest win was that when the country was fed up with the Vietnam War, we got the draft abolished (but even now there are mumblings about “national service”). We teamed with progressives to legalize marijuana and gay marriage, in the latter case with help from the courts. But when it comes to government spending, unfunded liabilities, the expansion of the Administrative State, and the perversion of the principle of federalism, we have lost big time.

4. Libertarians already were thrown under the bus in the George W. Bush administration. No Child Left Behind. Expansion of Medicare to include prescription drugs. Nation-building. The whole “compassionate conservatism” motif.

5. I don’t think that what the Republican Party needs right now is a circular firing squad. Let the Democrats march under the banner of social justice, and Republicans could counter that with the principle of equality under the law. Let the Democrats champion socialism, and Republicans could counter by championing capitalism. Let the Democrats focus on America’s guilt as an oppressor, and Republicans could counter with a focus on the moral progress of America. Let the Democrats attempt to raise the status of non-traditional sexual identity, and let Republicans attempt to raise the status of grandparents.

Martin Gurri watch

After attending a conference, he wrote,

The conference organizers got our predicament right. At every level of contemporary social and political life, we are stuck in the muck of a profound crisis of authority. The mass audience of the twentieth century has fractured like a fallen mirror. An angry and alienated public inhabits the broken shards – and nobody speaks for the whole. The elites who should take the first step into the unknown are paralyzed by doubt and fear. They utter the words science and reason like incantations, claim ownership to Platonic truth, and believe, with astonishing unanimity, that they have been overthrown by a tsunami of lies.

A useful exercise would be to compile a list of stories that reflect badly on the elites. Put the list into two columns: stories that are mostly true; and stories that are mostly false.

It sounds as if the speakers at the conference want to blame their woes on the second column. Gurri and I would say that the first column matters more.

Only grandparents should vote

Alex Tabarrok writes,

the time-horizon of (self-interested) older voters is short so perhaps this biases the political system towards short time-horizon policies such as deficit spending or kicking the can down the road on global warming. Philosopher William MacAskill offers an alternative, age-weighted voting.

The post covers many obvious objections, and Tabarrok is not endorsing the scheme to give younger voters more weight.

But I want to suggest that the people with the longest time horizon are grandparents. Grandparents love our grandchildren, and we concern ourselves with their future. If you want an electorate with a long time horizon, give more weight to the folks with grandchildren.

I do not really believe that only grandparents should vote. But I wish that our perspective on life were better known.

Three Fundamental Concepts of Social Science

The essay is here. An excerpt:

There are many causal factors that affect human behavior and human interaction. As a result, “social science” is not nearly as reliable as physical science. We can speculate on what causes political and economic events, but we cannot prove our hypotheses. Experts may propose two or more differing theories, none of which can be definitively ruled out.

Yuval Levin on nationalism and conservatism

Levin says that modern conservatism involves

skepticism of arrogant claims to knowledge and power, and makes us protective of those ways of living that have led prior generations not only closer to social peace and economic prosperity but closer to justice and to God. It also leads us to a reverence for community, for history, for culture, and to emphasize the importance of the preconditions for raising children.

On nationalism, Levin says

The nation is not best understood as one whole to be divided into parts but as the sum of various uneven, ancient, loveable elements. This has everything to do with Burke’s concern for national sentiment and love of country, and with his emphasis on national character. We are prepared for love of country by a love of home.

And concerning our current political temper, he says

Those with whom we disagree in our society are not our enemies; they are our neighbors. They are not out to do harm to our country; they differ with us about what would be good for it. To love our country is to love them too—even when they do not show us the same regard, even when they are illiberal and we have to quarrel with them in the public square.

Ben Powell and Bob Lawson on Socialism

Their new book, to be released July 30, is called Socialism Sucks, and it’s off-beat in a refreshing way. Its motif is a breezy alcohol-fueled travelogue. You follow Ben and Bob as they visit Sweden, Cuba, Georgia (not the state next to Florida, but the country next to Russia), and other places. One interesting chapter gives their impressions from a conference of American socialists, where participants seem to be operating without a clear definition of “socialism.” Another interesting chapter transcribes a conversation with Matt Kibbe on common populist appeals of libertarianism and socialism.

The basic question that a lot of us have is why capitalism is such a boo-word among young people and why socialism is such a yeah-word. Young people sympathetic to socialism seem determined to believe that when they observe things they don’t like, capitalism is at fault; when they observe things that they do like, socialism deserves the credit. Yet the book drives home the point that the truth is the opposite.

Overall, my reaction to Socialism Sucks resembles my reaction to Tyler Cowen’s Big Business. Both represent a clever, original approach to trying to persuade people to appreciate capitalism. I remain skeptical that either book will persuade (or even reach) people who do not already share its point of view.

A Klassic

A reader reminded me of this post, from ten years ago. An excerpt:

He sketched a pyramid, taken from his latest book, with the human mind at the bottom, beliefs in the middle, and economic behavior on top. Traditional economics only looks at the top of the pyramid. Masonomics wants to look at all of it, which means ignoring boundaries between economics and other disciplines, including sociology, political science, and psychology. I think that Tyler’s pyramid would fit well with Doug North, who in turn would credit Hayek.

I have sometimes described this in computer terms. We have hardware, consisting of our sensory apparatus and basic instincts. We have an operating system, as shaped by evolution. We have cultural apps running on top of that. And economic behavior is a subset of cultural apps.

The annuities puzzle

Timothy Taylor writes,

Among economists, it’s sometimes known as the “annuities puzzle”: Why don’t people buy annuities as frequently as one might expect?

I think that the puzzle is why economists insist that annuities are a terrific idea.

The idea of an annuity is this:

1. Suppose that at age 65, you have $500 K and you retire.

2. If you are going to live to age 75, you can afford to spend a lot of money every year. But if you are going to live to be 100, you can afford much less.

3. If you trade your $500 K for an annuity, you can then spend the amount appropriate for an average life expectancy, regardless of how long you actually live. If you don’t live very long, the company that sells you the annuity wins. If you live longer than the average person, then the company loses.

Economists think that old people who do not annuitize their wealth are dumb. I decided a long time ago that it is the economists who are dumb.

Old people face many risks other than the risk of living longer than average. Many risks give rise to needing to spend a lot of money at once. You might develop an illness that is treatable but very expensive to deal with. You might find that you have grandchildren living in a different city, and while you are still relatively healthy you want to visit a lot or even pick up and move there.

The risk of excess longevity is one that you can transfer to your children. That is, you might plan to leave $250 K to your children if you die at age 85, but you leave them nothing if you die at age 95.