Martin Gurri Watch

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Forfare Davis writes,

Whereas conventional forms of collective action, they argue, are reasonably predictable based on demographic information, the hyper interactivity of social media amplifies the role of individual personality as a dominant variable in outcomes that resemble viral outbreaks of collective action of a very unpredictable kind.

He refers to a book by Helen Margetts and others.

The fading of the Constitution means that the political vehicle has lost its brakes. Davis argues that social media have put the mob in the driver’s seat. He does not think it will end well.

You may find the entire essay interesting.

Stimulate Demand, Restrict Supply

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Zac Townsend writes,

San Francisco’s policies are out-of-line with building almost anywhere else. For example, nowhere in San Francisco do you get density bonuses for affordability (like in New York City) and nowhere in San Francisco can you build as of right (like in almost every other municipality). And, perhaps most importantly, no where else is there a belief that you can solve a housing affordability crisis without encouraging the building of more housing.

Read the whole thing.

In my view, the way to look at public policy in food, health care, education, and housing is that it seeks to stimulate demand and restrict supply. It makes no sense from the standpoint of economic theory, but it makes perfect sense from the standpoint of public choice.

Yes, I Saw This

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From Claudio Borio and others.

The hitherto unsuspected villain in this story is the misallocation of resources – in our case, labour – during the credit boom and its long post-crisis shadow. More generally, the findings support the view that the disappointing developments we have been witnessing may be the result of a major financial boom and bust that has left long-lasting scars on the economic tissue (e.g. BIS 2014, Borio 2014, Borio and Disyatat 2014, Rogoff 2015) rather than the reflection of a structural, deep-seated weakness in aggregate demand.

Pointer from Tyler Cowen.

Yes, this seems to support PSST, but they use methods that are of a sort that I cannot endorse. I do not think that “aggregate” productivity growth is well measured to begin with, and then when you try to decompose that into smaller pieces, you really lose me. Another way of putting this is that aggregate productivity is a concept borrowed from the model of the economy as a GDP factory. If your conclusion is that reallocation of resources matters for economic performance, then that suggests that the GDP factory is not a good model, which in turn makes your methods suspect.

By the way, there will be some discussion of PSST in a podcast I did with Russ Roberts that will come out in a few weeks, which in turn is about my forthcoming book, Specialization and Trade, which will come out early this summer. Meanwhile, you will find relevant papers here.

Arthur Brooks, the Dalai Lama, and My Blog

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Brooks (note, not David) writes,

each of us must aspire to what the Dalai Lama calls “warmheartedness” toward those with whom we disagree. This might sound squishy, but it is actually tough and practical advice. As he has stated, “I defeat my enemies when I make them my friends.” He is not advocating surrender to the views of those with whom we disagree. Liberals should be liberals and conservatives should be conservatives. But our duty is to be respectful, fair and friendly to all, even those with whom we have great differences.

Is there any higher authority?

Three Sources of Limits on Liberty

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Going back to Handle’s comment on problems for libertarian thought, he writes,

obsession with explicit state / government action and insouciant attitude regarding social pressures, when, in the modern era, the latter may have emerged as an even worse threat to the exercise of traditional liberties.

The ‘local freedom to coerce’ problem. If we are trying to increase welfare by giving people what they desire, we have to recognize that one of the things people desire is ‘a community’ and for their communities to have particular characters and sets of norms. There are certain forms of social experience or community life which are impossible to coordinate if the overall enterprise is deprived of some of the core, and at least mildly coercive, attributes of sovereignty.

On the first point, John Stuart Mill also worried about social pressure as a restriction on liberty. And on the second point, Barry Goldwater and Milton Friedman (at least if I remember correctly the relevant passages in Capitalism and Freedom) were against Federal intervention to protect African-Americans from segregation, even segregation imposed by state and local governments.

So these are longstanding problems for libertarians. My own position is that the best way to deal with social opprobrium or discrimination is to give the people who are hurt by those phenomena as much opportunity to exit as possible. I think that once you construe it as a problem that government must solve (by passing Civil Rights laws or regulating organizations) the overall consequences are likely to be worse than letting the problem be resolved through exit.

I hasten to add that exit is not a solution to every problem. Cities, in particular, are bundles of externalities. For any individual, some of these externalities are positive, and some of them are negative. If the positive externalities are strong enough, you will stay in a city and put up with major negative externalities. In theory, using government to get rid of those negative externalities would be an improvement. In practice, I have to say that it is the local government that is the negative externality where I live. That is, if you ask me what would motivate me to move, the first thing that comes to mind is the local government, which increasingly is going to collect taxes to pay for union pensions, not to provide actual services.

Jason Furman on Tax Reform

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He says,

The awkward fact, however, is that more than half of the value of these tax expenditures reflects exclusions from income that actually make it easier for individuals to file taxes. Many tax expenditures allow taxpayers to exclude or deduct income that is not received in cash and would be much harder to measure precisely than wages on a W-2. Taxing home production, imputed rent on owner-occupied housing, pension earnings, inside buildup on life insurance policies, and all government benefits would move the tax system closer to many economists’ ideal “Haig-Simons” concept of taxable income, but would in fact make filing taxes much more complex.

Pointer from Mark Thoma. Keep in mind that Furman is still part of the Obama Administration and so is not completely free to speak his mind. Still, I would bet he believes at least 90 percent of what he says here. I think that the one thing he leaves out is the payroll tax. I would place a high priority on reducing the payroll tax, which I think can be counted as progressive tax reform.

Kling vs. Haidt

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A commenter asks,

Could you do a post comparing and contrasting your three-axis model with Haidt’s five-or-six parts of mortality? (Care/Harm, Liberty/Oppression, etc.)

The main contrast is in terms of purpose. With the three-axis model, I do not propose to explain why people differ in their political views. I think of someone’s preferred axis as the easiest way to communicate with them about an issue. When you hear an issue described in terms of your preferred axis, it resonates with you. When you hear it described on someone else’s axis, it does not resonate with you so well.

Haidt’s moral foundations are supposed to explain political views. He describes them as six dials that are set to different levels. The idea is that if you measure each person’s moral dial settings, you can predict their political leanings. There is an implication that there is a causal relationship between the dial settings and political views.

I do not think of the causality as running from the three axes to political views. It might very well be the other way around–once you choose your political tribe, your preferred axis follows from that. I am agnostic about causality.

Slouching Toward Progressivism?

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From a Handle comment on problems with contemporary libertarian thought.

A steady slouching towards progressivism. (e.g. The Niskanen Center). Of course it is hardly alone in his regard, and one may just as easily point to trends in mainstream conservatism or Christianity.

My remarks.

1. I believe that Robert Conquest’s second law says that any organization not explicitly right-wing sooner or later becomes left-wing.

2. I think that progressives are more prone to using the threat of scorn or excommunication, and it is hard not to respond to that. As a thought experiment, I believe that if I were to say, “I think gay marriage is ok” in a room full of conservatives, they would not hold that against me. However, if I you were to say, “I think gay marriage is wrong” in a roomful of progressives, they would give me what-for and never let me forget it.

3. Handle also says that liberatiranism tends toward

An overoptimistic – to put it charitably – account of human nature, psychology, and the decision-making capacity of most adult human beings. Specifically, there are hard questions about the nature of utility or happiness and the origin of our wants that are often overlooked.

More specifically, I think that whether libertarians break left or right depends on their outlook on human nature. The libertarians I know who break right all seem to share with conservatives a concern with the more competitive and violent propensities in human nature. The libertarians I know who break left tend to see such tendencies only in politicians.

Three Axes and Jews

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Larry Summers writes,

It has seemed to me that a vast double standard regarding what constitutes prejudice exists on American college campuses. There is hypersensitivity to prejudice against most minority groups but what might be called hyper-insensitivity to anti-Semitism.

The progressives own the sensitivity issue, which means that it is aligned with the oppressor-oppressed axis. Nowadays, Jews do not qualify as oppressed. End of story.

Passover is coming up in a few weeks. The Passover story is an oppressor-oppressed narrative with the Hebrews as the oppressed group that is redeemed from slavery. I believe that the power that this story holds for Jews is one of the factors accounting for the tendency of Jews to lean left. However, I see a lot of Jews my age experiencing cognitive dissonance between their left-leaning historical inclinations and the fact that nowadays the oppressor-oppressed axis is often invoked against Israel.

Note that Larry Summers has another reason for experiencing cognitive dissonance relative to left-wing college students and their oppressor-oppressed axis. Recall that he lost his Harvard Presidency over his alleged insensitivity to women.