Author Archives: Arnold Kling

Why institutions, including corporations, lean left

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Richard Hanania writes,

If it takes a position on the hot button social issues around which our politics revolve, almost every major institution in America that is not explicitly conservative leans left. In a country where Republicans get around half the votes or something close to that in every election, why should this be the case?

Pointer from Bryan Caplan. The linked essay is long but worth your time.

Later, Hanania writes,

Those who identify on the right are happier, less mentally ill, and more likely to start families. Perhaps political activism is often a sign of a less well-adjusted mind or the result of seeking to fill an empty void in one’s personal life. Conservatives may tell themselves that they are the normal people party, too satisfied and content to expend much time or energy on changing the world. But in the end, the world they live in will ultimately reflect the preferences and values of their enemies.

My father interpreted Eric Hoffer’s The True Believer as saying something similar. That is, people who are dissatisfied with their lives are likely to blame the social system for their personal unhappiness and join radical movements.

Journal of Controversial Ideas

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Insider Higher Ed reports,

McMahan, Singer and their third collaborator, Francesca Minerva, a moral philosopher at Ghent University in Belgium, sit on the political left. But they envision their journal as a home for all well-reasoned, if dangerous, ideas.

Elsewhere, I have read that Larry Summers, Jonathan Haidt, and Philip Tetlock will be on the editorial board. So will the journal be, like, Steve Sailer’s blog but with peer review?

Fantasy Intellectuals Teams for May

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I have an essay about them.

Players who performed better than expected in April and who were consequently prize picks for May included Emily Oster, Zvi Mowshowitz, and Alex Tabarrok. Relative to the April draft, fewer tech people were included. For May, I count only Ben Thompson, Mike Solana, and Balaji Srinivasan. Also relative to April, there were many fewer chosen who work in the D.C. world of politics or think tanks. For May, Yuval Levin seems to be the only one.

The mind and moral categories

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Long time reader Roger Sweeny emails.

I recently read Daniel M. Wegner’ and Kurt Gray’s The Mind Club: Who Thinks, What Feels, and Why It Matters (Viking, 2016), a book that has nothing explicitly to do with politics or wokeness. . . .

I will copy the full email below. But for now, I have to say that this book presents a very powerful model of how people frame moral issues. I have a learned a lot just from reading a few pages.

The book argues, based on empirical analysis, for a moral dyad theory, based on the extent to which an entity is viewed as having experience (being able to feel pain or joy) and/or having agency (having the ability to change outcomes). Consider this matrix.

low agency high agency
high experience a baby a healthy adult
low experience a rock a robot

Sweeny wants to apply this moral dyad theory to the social justice movement. Suppose that the social justice advocates see whites as privileged, i.e., having “a large capacity to act and a small capacity to suffer,” like the robot in the matrix, while blacks occupy the opposite pole, like the baby.

Note that John McWhorter and other black intellectuals who deplore the social justice movement are most angry at the way that it denies agency to blacks. It treats them as if they were nothing more than dogs helplessly beaten.

Most people see George Floyd as comparable to the baby and Derek Chauvin as comparable to the robot. That is, Floyd could suffer, but he could do nothing about his suffering. Chauvin was making conscious decisions, but he has no feelings..

But one could tell the story the other way. Floyd chose to resist arrest. Chauvin was reacting to the situation in response to his fears and those of the other policemen. I am not saying that this is the right framing, just that it leads to a different moral assessment.

The authors point out that people see corporations as being akin to robots–having no feelings but having powerful capabilities. There is much more to be said about how the moral dyad relates to political economy, but I will save that for when I have finished the book.

Note that fans of Girard talk of a scapegoat mechanism, which also addresses how people assign moral rights and responsibilities. I like the moral dyad better. It is better defined and apparently more empirically grounded. Here is what Sweeny wrote:

Continue reading →

Deficit spending means more spending

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Michael Strain writes,

But the costs of financing government spending should always be front and center. When they aren’t, cost-benefit tests simply become benefit tests.

Without the norm of a balanced budget, the political cost of government spending drops to zero. So we get more and more of it. That is why tax cuts do not lead to less government spending. In the absence of a balanced-budget norm, lower taxes make more spending seem all the better.

The cruelest tax

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In all the discussion of proposed increases in the capital gains tax, I have not seen any mention of the fact that capital gains are not adjusted for inflation for tax purposes. This is important, because by definition long-term capital gains come from assets that are held long enough for inflation to erode their value.

For example suppose I buy stock today for $100, and five years from now I can sell it for $120. Suppose that in the meantime the cost of living has gone up at total of 15 percent, and that the capital gains tax rate is 40 percent. That means that I can keep 60 percent of my $20 gain, or $12. So I will have $112 in five years, even though I would need $115 just to keep up with inflation.

So even if the Democrats do not increase the tax rate on capital gains at all, they can still end up taxing the heck out of capital gains by causing a lot of inflation. Which I believe they will do.

Investors, have a nice day.

Sub-Dunbar vs. Super-Dunbar

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Marion Tupy writes,

Among the relevant psychological characteristics that humans developed in the Pleistocene were our propensities toward tribalism, egalitarianism, and zero-sum thinking. We evolved in small bands composed of 25 to 200 individuals. We all knew and were often related to one another. Everyone knew who contributed to the band’s survival and who shirked his or her responsibilities. Cheaters and free riders were targets of anger and, sometimes, punishment.

…To summarize, the psychology that evolved when our ancestors lived in small hunter-gatherer groups prepared us to cope with a world of personal cooperation and exchange in small communities. It did not prepare us to cope with a world of impersonal cooperation and exchange between millions of people (i.e., a typical advanced economy) or billions of people (i.e., the global economy). In a way, the complexity of the modern economy outran the ability of our Stone Age minds to understand it. Yet it is that transition, from personal simplicity to impersonal complexity, that makes capitalism so effective at producing great wealth. To complicate matters further, the extended marketplace of millions or billions of people enables enterprising individuals with value-creating ideas to amass greater wealth than they would be able to amass while catering to small communities. That resulting wealth inequality rubs against our egalitarian predispositions and zero-sum thinking. Finally, our tribalism helps to explain why, even when we do consent to trade with other nations, we often continue to resent them and suspect them of thriving at our expense.

I have written a lot about this, both in Specialization and Trade and in essays such as Camping Trip economics vs. Woolen Coat economics.

One reason I suspect that people are reverting back to sub-Dunbar thinking is that smart phones have confused the intimate sub-Dunbar world and the remote super-Dunbar world. Corporate CEO’s used to be part of the remote world, and you did not care about them personally. Now they show up on the same screen as your friends. So they have to take positions on social issues in order to remain on your good side.

All rhetoric, no debate?

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In my latest essay, I write,

It turns out that the most difficult challenge in scoring opinion pieces is that the writer or podcaster rarely states a succinct question. As a reader or listener, I struggle to figure out what the pundit is trying to say.

All too often, someone goes off on a general rant, without stopping to formulate a specific question.

I noticed years ago that most opinion pieces are intended not to open anyone’s mind but instead to close the minds of people on your own side. If they were really designed to persuade, opinion pieces would state clearly the point that they are trying to make.

1960 vs. 2020: entrepreneurship and inequality

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Paul Graham writes,

You could get rich from starting your own company in 1890 and in 2020, but in 1960 it was not really a viable option. You couldn’t break through the oligopolies to get at the markets. So the prestigious route in 1960 was not to start your own company, but to work your way up the corporate ladder at an existing one.

He concludes,

It’s easier now to start and grow a company than it has ever been. That means more people start them, that those who do get better terms from investors, and that the resulting companies become more valuable. Once you understand how these mechanisms work, and that startups were suppressed for most of the 20th century, you don’t have to resort to some vague right turn the country took under Reagan to explain why America’s Gini coefficient is increasing.

Pointer from Tyler Cowen.

1969 vs. 2021

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A reader politely points out that I am old man.

You have lived much longer than I have. . .Please contrast the 60s to the 20s. From my limited vantage point, I feel like our current situation is completely irredeemable and won’t end well. We are too divided on basic common values. Am I wrong? What does the knowledge gained from the 60s indicate (if anything)?

As of 1968, the country seemed to be coming apart. Assassinations, riots, the Chicago convention, etc.

In hindsight, we know that the movie ended without a civil war. The divide between hippies and straights healed, with the former deciding to get jobs and the latter deciding to wear blue jeans, grow long hair, and celebrate female sexuality and women in the workplace. The mainstream media held onto a reputation for straight reporting (whether or not you think they deserved it). President Nixon ended the draft, which cooled things down a lot.

We don’t know how today’s movie is going to end. Some remarks:

1. As Martin Gurri has pointed out, today’s mobs have more bark than bite. People show up at demonstrations to take selfies, and then they go home and do nothing. Bottom-up revolts break out all around the world, and they almost all have no agenda and accomplish nothing. Maybe Tunisia and Egypt were exceptions, but in the latter it seems like “Meet the new boss, same as the old boss.”

2. The real action is a battle between elites.* I don’t think that the average Joe is exercised one way or the other about the progressive religion. There is a segment of the elite that swears by the religion, and there is a segment of the elite that despises it.

3. It is reminiscent of the 1960s in that the elites of the young generation are overwhelmingly on one side. Just as a lot of middle-aged conservatives and war hawks in the 60s discovered that their children were in the anti-war movement, a lot of middle-aged conservatives today are finding a lot of wokeishness in our children.

4. I think that the battle lines between elites are much harder than they were in the 60s. Back then, there were plenty of liberal Republicans and conservative Democrats. Bipartisanship was still a thing, and it remained so at least through the first years of the Clinton Administration. Perhaps when the Dems owned the House they felt they could afford to be generous and the Republicans felt that they had no choice but to compromise.

5. I agree with Martin Gurri and Andrey Mir that a lot of the dynamics these days reflect the changes in the media environment brought about by the Internet. For example, it was easy to be pro free speech when it was hard for extremists to get control of a newspaper or a TV station. It turns out that a more democratized media environment has a lot of people longing for central control and suppression.

6. In the 1960s, hippies had straight friends, and vice-versa. Today, progressive zip codes are devoid of Trump supporters, and vice-versa.

7. I think that in 2020, just as in 1968, the public longed for a lowering of the political temperature. President Nixon delivered, governing well to the left of where the hearts of the Republicans were. He was re-elected in a landslide. President Biden is doing the opposite, carrying out a progressive offensive. Whether that is due to differences in the makeup of the two men or to differences in the cultural atmosphere I cannot say. I expect Biden to be much less popular in 2024 than Nixon was in 1972.

Andrew Sullivan is also disappointed with the way that Biden is starting. But Sullivan sees Republicans as equally immoderate.

8. I am, perhaps wrongly, anticipating that the Woke Movement will meet its Waterloo. I thought that perhaps there would be sufficient backlash against Major League Baseball and other elite institutions for their posturing on the Georgia voting law that this would prove to be such a Waterloo. But I may be over-estimating the strength of my own side in this contest.

My bottom line is that I think that the country could recover its balance, as it did after 1968. But not if every CEO and Democratic politician decides to act like a university administrator.

*This may also have been true in the 1960s, but I think back then the hippies and war protesters really were outside of the power structure. I am not sure how much effect the anti-war protests actually had. We are unable to run a controlled experiment without the protest movement, but I am willing to venture the opinion that Democratic and liberal Republican elites would have gotten sick of the war, anyway. Nobody ran as a pro-war candidate in 1968.