Category Archives: Politics

Culture and consciousness

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Bret Weinstein and Heather Heying appeared with Robby George to discuss an anthropological theory. They claim that it addresses two question. First, why do humans occupy many ecological niches, rather than just one. And second, why did consciousness emerge.

The answer that they offer is that humans adapt to many niches. In order to do so, they have to be able to innovate. In order to innovate, they need to brainstorm and to test out new ideas. In order to do that, we need to have an ability to recognize the minds of others and our own minds, which requires consciousness.

The wisdom that we accumulate gets embodied in culture. Culture is a conservative force, one that works well in stable environments. Consciousness is an adaptive force, one that works well in novel environments. In a stable environment, we should not disturb Chesterton’s fence. In a novel environment, perhaps we should.

The medium is the mess

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Adam Garfinkle writes,

The deep-reading brain excels at making connections among analogical, inferential, and empathetic modes of reasoning, and knows how to associate them all with accumulated background knowledge. That constellation of sources and connections is what enables not just strategic thinking, but original thinking more broadly. So could it be that the failures of the American political class to fashion useful solutions to public- and foreign-policy challenges turn not just on polarization and hyper-partisanship, but also on the strong possibility that many of these non-deep readers are no longer able to think below the surface tension of a tweet?

If the printing press helped produce the Enlightenment, then perhaps the iPhone is producing the Endarkenment.

A book review

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AEI’s Michael Strain weighed into the debate over whether living standards stagnated in recent decades with The American Dream is Not Dead, which I reviewed. In the end, I wrote

In the 1950s, the ideal for young Americans was to marry, have children, and move to a house in the suburbs. Today, marriage rates are low, fewer children grow up with married parents, and many young people are urban renters.

The decline of the Fifties Dream raises questions that go beyond Strain’s statistical analysis. Has the Fifties Dream lost its appeal? Or has it become harder to obtain, and if so, what are the cultural or economic impediments that are standing in the way?

Visions of moderation

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Steve Teles and Robert Saldin wrote,

there is no politically viable future for moderates outside the Democratic and Republican parties. And within those parties, moderates will only get the power that they desire by organizing as a coherent bloc, recruiting attractive candidates, mobilizing moderate voters in each party to participate in partisan politics, and developing ideas to inspire their base and provide opportunities for policy change. Without strong, durable, organizationally-dense factions, individual moderates or even entire state parties will not be able to distinguish themselves from their national brand or fight for leverage in national politics. In other words, what influence moderates will have in the coming years will only emerge as a result of organizing as coherent minority factions within the Democratic and Republican parties.

As a thought experiment, imagine a 1990s moderate today. What policies that are in place now would appear right-wing to such a moderate? What policies would appear left-wing?

I have just started to read the authors’ new book that takes a look inside the Never Trump movement. It could be a scholarly work or a vehicle for gossip. But if it turns out to be too scholarly, I’ll be disappointed. That would be like getting old issues of Playboy with nothing but the articles.

The formal sector and the informal sector

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Timothy Taylor writes,

Here’s are some columns from a table from the World Employmentand Social Outlook: Trends 2020 published by the International Labour Organization in January 2020. As the report points out, around the world about 60% of workers have informal jobs; in low-income countries, it’s more like 90%

Read the whole post. The ability to cooperate in groups above the Dunbar number is extremely important for economic development. You might hate big corporations, but they are actually a miracle of civilization, as Tim and others have pointed out.

Friends who might lose benefits

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From the WSJ,

More couples are deciding to live together instead of marrying, and strained finances are a top reason many cite. A survey last year by the nonpartisan Pew Research Center found that among those who live with a partner and wish to get married, more than half said they or their partner weren’t financially ready.

About half of middle earners were married in 2018, a drop of 16 percentage points since 1980. Among the highest U.S. earners, 60% were married in 2018, a decline of 4 percentage points over the same period. That marks a reversal. In 1980, a higher proportion of middle-class Americans than top earners were married.

1. You have to decide whether or not to have children.

2. You have to decide whether to live independently or together.

3. If you live together, you have to decide whether or not to get married.

It seems to me that the decision that ought to most be affected by economic circumstances is (1). Raising children is expensive. And that decision in turn would affect (2) and (3).

Whatever you decide about (1), I can also see (2) having an effect, since it is cheaper to live together. And that in turn would affect (3).

But mostly the article is written as if financial status directly affects (3). Both the headline and one of the academics quoted in the story refer to marriage as having become a “luxury good.”

I don’t see (3) as the likely margin along which financial status affects decisions. Something is wrong with this picture.

If the chain of thinking were “We’ve decided that we can’t afford children, and if we can’t afford children then there is no point in getting married,” would make sense. It also would be very sad.

But the article says:

More couples are forming families without matrimony. One in four parents living with a child is unmarried, according to Pew. More than one-third of them are living with a partner, up from one in five in 1997, the Pew study of 2017 data found.

Seriously? People are thinking We wanted children, but getting married seems like too much of a commitment. We can’t afford to make that kind of commitment yet. ?????

I still think that replacing means-tested entitlements with a UBI would make low-wage men more attractive as marriage partners. Indeed, the article profiles a couple with children who fit with my model of non-marriage.

They said they want to get married but are holding off because Ms. Dlouhy is enrolled in a publicly funded program that pays for her to earn a nursing license. Combining their income could jeopardize that assistance, she said, as well as her state health-insurance subsidies.

Guns and incarceration

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Barry Latzer writes,

Western Europe, Canada and Australia have far fewer guns and, compared with the United States, far fewer crimes committed with firearms. From 2000 to 2012 there were an estimated 1,500 gun homicides per year in all of Europe, around 20 percent of total homicides. For a comparable period there were nearly 12,000 annual gun homicides in the United States, eight times as many as Europe, and guns were responsible for 67 percent of all killings. In 1990, a peak year for murder here, the Western European firearm homicide rate was a mere 0.53 per 100,000. The United States rate was 5.57 per 100,000—ten and one-half times higher.

He cites these statistics as part of a claim that incarceration rates in America, while high relative to that in other countries, is not high relative to the dangers that the criminal population presents.

Note that this observation will trouble just about every political view. Conservatives and libertarians will not like to see guns treated as a causal factor in high crime severity. Progressives will not like to see high crime severity as a cause of “mass incarceration.”

Clark Neily attempts to counter Latzer’s overall claim that the U.S. does not over-incarcerate, but I find Latzer’s analysis more persuasive. Let me state my views, which are tentative and impressionistic, rather than well-formed.

1. There may be some margins along which more lenient policies on imprisonment would have little adverse effect on the prevalence of crime, but I am dubious of the view that we would be better off with a much smaller prison population.

2. It is conceivable to me that at some point in the future, prison will be seen as an inhumane solution to crime. Other solutions that protect the public while giving convicted criminals better treatment will have been shown to be superior. But those “other solutions” do not yet exist, or are not widely understood of they do exist.

3. I am convinced by those who say that prosecutors play a game of threatening accused criminals with very severe sentences in order to get them to plead to lesser offenses. You should want the crime with which a prosecutor charges the defendant to be the charge with which the prosecutor expects to convict the defendant, not the charge that can scare the defendant into a plea bargain. Even if the outcomes of the current game are reasonable (i.e., the defendants who plea bargain actually deserve their sentences), the process is rotten. We should figure out what got us into this equilibrium and how to get out of it. Note that what got us into this equilibrium might include characteristics of the judicial process that make it difficult for prosecutors to succeed without playing the plea-bargaining game.

4. We have too many statutory crimes. It would be better to aim for a system with a few statutes, well and uniformly enforced. If you want to see a more tolerant criminal justice system, I would propose that you put more of your energy into the front end of the process (pruning the criminal statutes) than the back end of the process (reducing incarceration of those who are charged). For example, if you think that too many prisoners are serving over-long sentences for drug offenses, then try to change the relevant statutes.

Re-reading an essay on the analogy with religion

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James Lindsay and Mike Nayna wrote,

to the degree that we can accept that Social Justice is a faith-based program based upon a kind of locally legitimized special revelation, we should feel serious concerns and discomfort about institutionalizing its beliefs in any space that isn’t wholly devoted to them. We should also be quick to be honest about which spaces are and which aren’t. Public institutions like public universities, being public, should be very hesitant to implement Social Justice initiatives. Private institutions, like corporations and private universities, can make their own choices on the matter and accept the benefits and consequences of openly aligning with a faith initiative as they come.

. . .Social Justice, because it is an (applied) postmodern mythological system upon which a moral tribe is built, is not technically a religion but is a kind of faith system. This raises serious questions about how we should deal with its attempts to institutionalize itself in various cultural enterprises—especially education—under the guise of being secular in the broad sense merely because it qualifies in the narrow sense. Most importantly, however, it provides all of us with explicit permission to treat its claims and advances in the same way we would any other faith—say, like Scientology—and to proceed accordingly without the guilt it attempts to foist upon us as a conversion mechanism.

I linked to the essay when it first appeared, but when I recently came across it again I felt it deserved another mention.

My conversation with Eric Weinstein

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I talked about one area where we disagree and one area where we agree.

Let’s start with where we disagree. I take the conventional economic view in favor of international trade, and you differ.

Let me see if I can steel-man your argument. You say that American workers, as citizens of this country, should have a right to access to job opportunities that give them a decent way of life. If we are willing to have their family members go off to fight wars in the name of protecting the rest of us from terrorists, then we certainly owe them protection from having their jobs taken away by outsourcing to Chinese factories.

My counter will be that international trade is isomorphic with other economic actions that you are more likely to approve. Outsourcing to a factory in China and taking away a factory worker’s job is not very different from developing Uber and taking away a taxi driver’s job or a rental-car agent’s job.

Our prosperity comes from breaking production down into steps. When you break the process down into steps, you get more efficiency. This goes back to Adam Smith’s pin factory. Breaking a process into steps can involve what most economists call capital, but the Austrian economists use the term “roundabout production,” which I like. When a farmer uses a tractor instead of a horse to pull a plow, this is roundabout production–manufacturing the tractor becomes a step in the farming process.

International trade is another form of roundabout production. As David Friedman put it, one way to manufacture an automobile is to grow wheat, put it on a ship to Japan, and have the ship turn around carrying an automobile.

The process of breaking production down into steps is mind-boggling in its complexity. There are so many conceivable ways to break down a production process into different steps. How are we to know which is best? The answer is that the price system co-ordinates the process. Prices inform entrepreneurs about the costs of alternative patterns of specialization.

The profit system directs the evolution of the process. As new ideas are tried, the most efficient ones prove sustainable, as indicated by profitability. Less efficient patterns of specialization and trade are weeded out by losses.

Thus, progress proceeds by creative destruction. Ways of life that are tied to a particular step in the production process are bound to be undermined if a new production process emerges that is more efficient. A society cannot enjoy the benefits of economic progress without incurring the cost of job destruction. The market treats work as a bug, not a feature, and it tries to get rid of it.

Back to the comparison of outsourcing to a factory in China or developing Uber. You might be tempted to say that when Uber changes the process of providing people with car rides, at least it doesn’t use Chinese labor in the process. But is that really the case? For Uber to work, somebody has to take the step of adding computer and communications capacity, and that probably uses components imported from China. Consumers need smart phones in order to hail rides, and those phones are partially manufactured in China. And even if there were no Chinese workers involved in the steps to create Uber rides, would that be any consolation to the taxi drivers and rental-car agents who lose their jobs?

If you want to suggest policies for making economic progress less painful for people whose jobs are displaced, that would be very constructive. But insinuating that economists are engaged in a conspiracy to hide the truth about international trade isn’t constructive–it’s just scapegoating.

On the area where we agree, I said,

I’m more in agreement with you on what you call the DISC, which I believe stands for Distributed Information Suppression Complex. Although once again, it sounds a bit too conspiratorial for my taste, and I prefer to think of it in terms of an emergent phenomenon.

Think of life in academic research as consisting of two games. If you play Game One, you pose important questions within your field and try to answer them. If you play Game Two, you try to climb the ladder of prestige by participating in the latest fads and fashions and by ingratiating yourself to people who are in a position to help you get jobs and publication acceptances. Let me use the Game One, Game Two model to offer my take on the DISC.

1. I can imagine a world in which the strategies for playing Game One and Game Two are basically the same. When that sort of Divine Coincidence exists, you will see a very vibrant academic discipline.

2. I don’t think that anyone ever consciously chooses between playing Game One and Game Two. We just go with our instincts. When I was in grad school in the late 1970s, my instinct just happened to be to play Game One. But by that point in time in economics, the profession was selecting away from Game One types and in favor of particularly ruthless Game Two types.

[Note: As John Cochrane wrote recently,

Self-interest, for people to preserve hard-won human capital, and for institutions to support research that keeps them going, is a powerful explanatory force. Even if individuals do not respond to this incentive, and are all pure in their pursuit of ideas, selection is a powerful explanatory force. Economics is a good way to explain economics!

]

The Game Twoers of my era wrote dissertations on Rational Expectations Macroeconomics, which I thought was a dead end. Nothing that has happened since has changed my mind about that.

When I was on the job market, an assistant professor from Amherst came to MIT to interview all of us on the market that year. I gave him a copy of my job market paper, and I talked about it with him. He never offered me an opportunity to audition for a job at Amherst. But he did subsequently publish my exact idea, including a new term that I introduced, called “reputation price,” meaning the price that consumers would expect to see at a store based on their last purchase there. He published it in the Quarterly Journal of Economics, which has typically been a top-five journal, although at that time it was more in the 6-10 tier. No attribution to me of course. I was lucky just to get a version of my dissertation published in Economic Inquiry, a much lower-tier journal.

Why didn’t I go after the guy? My dissertation supervisor, Robert Solow, advised me not to. Even though I am still bitter about the Amherst guy (who got tenure), and bitter about Solow’s nonchalance about it, I have to admit that there is nothing that going after the guy would have done to improve my life, which has turned out pretty well if I may say so.

Anyway, such was my introduction to Game Two.

3. I think that in the last half of the twentieth century, Game Two economics produced little gain from a Game One perspective, and arguably a net loss.

4. I agree very much with your view that academic economists have been slow to come to terms with the fact that the Internet enables businesses to deliver content to consumers at essentially zero marginal cost, but with some fixed costs. One of my lines is that “Information wants to be free, but people need to get paid.” If you want to say that this implies widespread market failure in a textbook sense, I could agree to that. But widespread market failure in no way ensures widespread government success.

Note that there is no link, because this conversation only took place in my imagination.

Giving globalization a bad name

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Reacting to a post by Peirre Lemieux on the coronavirus, Alberto Mingardi writes,

Will people learn the lesson, and realize that a closed economy is poorer, as Pierre hopes? I fear not. Though the emergency measures somehow provide us with a preview of the kind of country the economic nationalists would like us to live in, they will quickly turn the tables, blaming the virus on globalization, and making trade with China the villain of the story. Italy’s reaction to coronavirus is convincing other countries to treat Italians as we treat ourselves – limiting direct flights, imposing quarantines, etc. This will also increase the perception that reliance on international trade is a weakness, thereby fueling a renewed rhetoric of the marvels of autarky. Sure enough, when people travel they carry their diseases with them: this is not news. Prepare for a new nationalist narrative built around this idea.

I agree. I don’t think that this will make people appreciate globalization–quite the opposite.

Incidentally, I think that this makes it unlikely that President Trump will suffer a political setback because of the coronavirus. Closing the border is his signature issue, and the Democrats have staked out a position as the “resistance” to that. I know that they think they can benefit from this crisis, but I would be surprised if they do.

As for the economics of the crisis, I see it in terms of a PSST story. Many patterns of specialization and trade depend on globalization. The conventional wisdom seems to be that the central banks will be prominent actors, but I could not disagree more. I would suggest that instead of monitoring the Fed, one should watch the transportation hubs–especially ports–and manufacturing centers. To the extent that the attempts to contain the virus cause those places to be shut down, patterns of specialization and trade will be broken, and there won’t be anything that the Fed can do about it.

In my view, Scott Sumner and Jason Furman and other macroeconomists who apply a monetarist or Keynesian “model” are simply not capable of interpreting the world as it really exists. That is a harsh judgment, but I cannot be more gentle.

As Peter Zeihan puts it,

Modern manufacturing is a logistical marvel that taps hundreds of facilities in dozens of countries, but that system is based on frictionless international trade. Break just a few links and the entire network collapses. A modern car has about 2000 parts. If you are missing ten, you’ve got a large paperweight.

I suspect that for the economy, the best-case scenario is that authorities gradually decide that it’s not such a crisis, they let everyone go about their business, and whoever gets the virus, gets it. The worst-case scenario is that clusters of cases continue appearing, and each appearance leads authorities to strangle more transportation and production centers. If the latter happens, then I am pretty sure you will find the PSST paradigm more useful in explaining and predicting outcomes.

Paula Bolyard draws an interesting analogy with the Y2K computer scare. If that analogy proves correct, then we should be closer to the best-case scenario. But one thing about the Y2K scare is that it had a definite endpoint–by mid-January of 2000, doomsday was a dud. I only see the coronavirus panic ending when the media can no longer attract eyeballs to the story.

As to the outlook for the virus itself, consider three scenarios:

1) the proportion of people exposed to the virus approaches 100 percent

2) the proportion of people exposed to the virus approaches 0.

3) the proportion of people exposed to the virus approaches some middle number.

I am not a virologist, but this virus seems optimized for spreading. So wouldn’t you bet on 1)?

Suppose that the virologists in the media successfully convince us to become OCD handwashers and germophobes. Will that actually be able to stop the virus? What other consequences, good and bad, might accompany such a change in culture?

Note that I wrote this at the end of February, adding the Bolyard paragraph on March 2 and the references to Peter Zeihan and Jason Furman on March 6. By the time this post appears, I may have to correct some of my claims in light of developments.

UPDATE: John Cochrane has thoughts. Also, Scott Alexander. And Tyler Cowen.