A Very Sobering Sentence

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from Jonathan Haidt.

in the academy now, if truth conflicts with social justice, truth gets thrown under the bus.

Earlier in the interview, he says,

For many years now, there have been six sacred groups. You know, the big three are African-Americans, women and LGBT. That’s where most of the action is. Then there are three other groups…Latinos, Native Americans, and people with disabilities. So those are the six that have been there for a while. But now we have a seventh–Muslims. Something like 70 or 75 percent of America is now in a protected group. This is a disaster for social science because social science is really hard to begin with. And now you have to try to explain social problems without saying anything that casts any blame on any member of a protected group. And not just moral blame, but causal blame. None of these groups can have done anything that led to their victimization or marginalization.

Read the whole thing.

Growth, like the future, is not evenly distributed

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Larry Summers writes,

whereas my grandmother would have been at sea if returned to her girlhood home, I would miss relatively little if suddenly placed in the home I grew up in. It takes longer and is less comfortable to fly from Boston to Washington or London than it was 40 years ago. There are more highways now but much more traffic congestion as well. Life expectancy has continued to increase, though at about half the pace it did during my grandmother’s day. But the most important transformation—child death being an extraordinary event—had already happened by the time I was born.

Pointers from both Mark Thoma and Tyler Cowen.

If you compare 1900 to 1960, you can point to a few innovations that transformed America. The car, radio and television, and household appliances like refrigerators and vacuum cleaners.

Has there been comparable transformation since 1960? I would say that there has, but the improvements have been distributed differently and are not embedded as much in tangible goods. Continue reading →

One Language of Politics?

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A piece in the UK Spectator says,

A senior editor of Nature, one of the leading academic journals, refused to consider it for review because she regards scientific research into the personalities of the long-term unemployed as ‘unethical’, and a sociology professor whom the publishers had asked to peer-review the book refused to do so on the grounds that any book linking benefit dependency to personality must be nonsense because personality is a ‘capitalist construct’.

Pointer from Tyler Cowen. The controversial book argues that welfare claimants have personalities that make them difficult to employ. It’s fine if you prefer the oppressor-oppressed narrative to the civilization-barbarism narrative. But instead of shutting the other side down, you should be standing up for their rights to make their case.

Olivier Blanchard and Joseph E.Gagnon: This Time is Different

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They write,

the deviations of the P/E from its historical average are in fact quite modest. But suppose that we see them as significant, that we believe they indicate the expected return on stocks is unusually low relative to history. Is it low with respect to the expected return on other assets? A central aspect of the crisis has been the decrease in the interest rate on bonds, short and long. According to the yield curve, interest rates are expected to remain quite low for the foreseeable future. The expected return on stocks may be lower than it used to be, but so is the expected return on bonds.

Pointer from Mark Thoma.

Their point is that when interest rates are low, you can justify exceeding historical norms for the price-earnings ratio on stocks. I made a similar point about the price-earnings ratio for real estate relative to interest rates during the housing bubble.

Socialism’s Poster Child?

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David Deming writes,

You don’t have to be a student of ancient history to know socialism doesn’t work. The collapse of the Soviet Union in 1989 was an unequivocal demonstration of the moral and economic superiority of capitalism. The misery caused by socialism is unfolding today in Venezuela. Since Venezuela embraced socialism in 1999, poverty, crime and corruption have all increased. Grocery shelves are empty and the annual inflation rate is estimated to be as high as 200 percent.

For the left, the poster children for socialism would not be the Soviet Union or Venezuela. Instead, think of Sweden or Denmark. But one can argue that those are welfare states, not socialist states in the sense of government ownership of the means of production. But consider Singapore:

A majority of the top dividend-paying stocks on the Straits Times Index are government-linked

That is according to Andy Mukherjee. Pointer from Tyler Cowen.

I would suggest focusing on the relationship between knowledge and power. In small states, like Singapore, Sweden, and Denmark, there is relatively little discrepancy between knowledge and power. It is possible for government officials to know more of what they need to know to carry out policy effectively.

Large states are harder for a central government to manage. Decentralized institutions, including markets, do a better job of aligning knowledge with decision-making power.

See my essay on the recipe for good government.

What Books to Read?

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Diane Coyle asks,

What ten books would you absolutely want a young person to read – whatever their subject – to be well-rounded? The idea is a kind of summer reading list for someone about to go to university – what kind of broad mental hinterland should they have before arriving to start a social science degree?

Pointer from Tyler Cowen.

Of the ten she lists, I have read Hume, Kahneman, Camus, and Jacobs. I have strong impressions (possibly too shallow) of what is in Darwin, de Beauvoir, and Scott. I have no strong impression of the other three.

a. I have compiled these sorts of lists before. I think that perhaps more important than which books you put on the list is your thought process in assembling them.

b. There is nothing magic about the number 10.

c. Some of the books that would be in my list have yet to be written.

My first category might be called war and society.

1. Violence and Social Orders, by North, Weingast and Wallis. A very powerful political economy framework that I think works.

2. The Best and the Brightest, David Halberstam, about the Vietnam War. It is an epic tale of government failure.

3. Alone, William Manchester’s second volume of his biography of Winston Churchill. If Vietnam was the costliest intervention mistake made by a western democracy in the 20th century, then the failure to heed Churchill’s warnings about Adolf Hitler was the costliest non-intervention mistake.

My second category might be called late 20th-century perspectives on 21st century technology and society.

4. The Diamond Age, a work of science fiction by Neal Stephenson, is longer and more confusing than I would like, but it offers a vision of the impact of technology on society that raises many of the important issues, particularly the class divergences that people are talking about today.

5. The Transparent Society, by David Brin. That also was a very farsighted book, about the issues of privacy and security that are being much discussed today. See my review.

6. The Age of Spiritual Machines, by Ray Kurzweil. He later updated and expanded his thinking in The Singularity is Near, but I think that the older version may be more interesting, because of the long list of predictions made in 1999 for 2009 and 2019 that we can now evaluate.

My third category might be called fictional insights into human nature and power over others.

7. One Flew Over the Cuckoo’s Nest, by Ken Kesey. Don’t bother with the movie, even though it was voted Best Picture. For me, the book offers insights into the dynamics among people who feel entitled to power and people who are nervous about freedom.

8. Animal Farm, by George Orwell. Another book on the determination to exercise power.

9. Lord of the Flies, by William Fielding Golding. I see it as a story of reversion to barbarism.

I do not know how to categorize my next pick.

10. The Blank Slate, by Steven Pinker. The book gives you a lot of modern European philosophy and a lot of evolutionary psychology.

My next category might be “dueling asymmetric insights.”

11. Moral Politics, by George Lakoff. Lakoff, a progressive, offers an interesting theory of the appeal of conservatism. Recommended for conservatives so that you can understand how progressives think of you.

12. The Vision of the Anointed, by Thomas Sowell. Sowell, a conservative, offers an interesting theory of the appeal of progressivism. Recommended for progressives so that you can understand how conservatives think of you.

Finally, I have my category of works yet to be written.

13. Readings on The Industrial Revolution. This would include timelines for growth rates, innovations, and trading patterns. It would include excerpts from various theories (Clark, North, McCloskey, etc.) of why the Industrial Revolution emerged at the time and place that it did.

14. Readings on the Great Depression. This would include a chronology of events, and it would include excerpts from various theories of why it started and why it persisted. It would include analyses of the political legacy of the Great Depression

15. A project that I am currently toying with (probability of attempting of about .2), on the challenge of trying to extricate yourself from political tribalism. A bit of Robin Hanson, a bit of the three-axes model, a bit of Martin Gurri. Possibly embedded in a work of fiction.

Raise the Age of Government Dependency

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Courtney Coile, Kevin S. Milligan, and David A. Wise write,

This is the introduction and summary to the seventh phase of an ongoing project on Social Security Programs and Retirement Around the World. The project compares the experiences of a dozen developed countries and uses differences in their retirement program provisions to explore the effect of SS on retirement and related questions. The first three phases of this project document that: 1) incentives for retirement from SS are strongly correlated with labor force participation rates across countries; 2) within countries, workers with stronger incentives to delay retirement are more likely to do so; and 3) changes to SS could have substantial effects on labor force participation and government finances. . .

This seventh phase of the project explores whether older people are healthy enough to work longer. We use two main methods to estimate the health capacity to work, asking how much older individuals today could work if they worked as much as those with the same mortality rate in the past or as younger individuals in similar health. Both methods suggest there is significant additional health capacity to work at older ages.

The simplest, most logical fix for entitlement programs is to raise the age of government dependency. Most people ought to be able to support themselves well into their seventies. Those of us who want to stop working earlier can plan for it and pay for it ourselves.

If Social Security and Medicare had been indexed for longevity from the outset, those two programs would not be in trouble today.

Progressives Admiring Themselves in the Mirror

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From last Sunday’s WaPo.

1. E.J. Dionne writes,

Many conservatives in the pre-Civil War period opposed the abolition of slavery; many conservatives in the 1930s opposed Social Security; many conservatives in the 1960s opposed civil rights laws. But the justice of these measures became obvious over time, and the values behind them became part of the American way of life. In this moment, conservatives need to ponder whether 10, 20 or 50 years from now, Americans — including conservatives — will feel the same way about same-sex marriage or the guaranteed, universal availability of health insurance.

2, Stephen Prothero writes,

Even though conservatives tend to start the culture wars, liberals almost always win them. The “infidel” Jefferson and “papist” John Kennedy become president. Prohibition is repealed. Marijuana becomes legal. Gays and lesbians get marriage rights. Conservatives manage an occasional victory — on guns, for example. But in almost every arena where the contemporary culture wars have been fought, liberals now control the agenda.

In these histories, progressives are like the Harlem Globetrotters and conservatives are like the Washington Generals. It is a totally one-sided match-up, with the good guys always winning in the end.

In Prothero’s rendition, Prohibition was a culture war started by conservatives. I don’t remember that from my high school history textbook. Neither does Wikepedia, which writes,

It was promoted by the “dry” crusaders, a movement led by rural Protestants and social Progressives in the Democratic and Republican parties

In fact, when I read Dionne’s column, I started thinking of instances in which Progressives got things wrong. Wage and price controls as a cure for inflation. Eugenics. And I thought of Prohibition.

But that is not the way Progressives see things when they look in the mirror. Their self-image is such that if Prohibition turned out badly, then it must be the case that conservatives wanted it and progressives opposed it.

Because they believe that they have never been wrong in the past, Progressives are certain that they are right going forward. Prothero goes on to write,

Causes once labeled “liberal” become “American values,” embraced by liberals and conservatives alike. Same-sex marriage becomes just marriage. Islam is recognized as part of our shared Abrahamic tradition. We cease to view particular immigrant groups as threats — as “drug dealers,” “rapists” and terrorists — and instead appreciate their contributions to our society.

And we all sing, Kumbaya.

Timothy Taylor and Russ Roberts

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Self-recommending.

Taylor says,

it just seems to me that often when people talk about growth, the first thing they talk about is not the role of the private sector or firms. They talk about how the government can give us growth, through tax cuts or spending increases or the Federal Reserve. When they talk about fairness and justice, they don’t talk about the government doing that. They talk about how companies ought to provide fairness and justice in wages and health care and benefits and all sorts of things. So it seems to me that our social conversation about those things is topsy turvy.

Thoughts on Social Class

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Scptt Alexander writes,

All those studies that analyze whether some variable or other affects income? They’d all be much more interesting if they analyzed the effect on class instead. For example, there’s a surprisingly low correlation between your parents’ income and your own income, which sounds like it means there’s high social mobility. But I grew up in a Gentry class family; I became a doctor, my brother became a musician, and my cousin got a law degree but eventually decided to work very irregularly and mostly stay home raising her children. I make more money than my brother, and we both make more money than my cousin, but this is not a victory for social mobility and family non-determinism; it’s no coincidence none of us ended up as farmers or factory workers. We all ended up Gentry class, but I chose something closer to the maximize-income part of the Gentry class tradeoff space, my brother chose something closer to the maximize-creativity part, and my cousin chose to raise the next generation. Any studies that interpret our income difference as an outcome difference and tries to analyze what factors gave me a leg up over my relatives (better schools? more breastfeeding as a child?) are stupid and will come up with random noise. We all got approximately the same level of success/opportunity, and those things just happen to be very poorly measured by money. If we could somehow collapse the entirety of tradeoffspace into a single variable, I bet it would have a far greater parent-child correlation than income does. This is part of why I don’t follow the people who take the modest effect of IQ on income as a sign that IQ doesn’t change your opportunities much; maybe everyone in my family has similar IQs but wildly different income levels, and there’s your merely modest IQ/income relationship right there. I think some studies (especially in Britain) have tried analyzing class and gotten some gains over analyzing income, but I don’t know much about this.

My thoughts:

1. I agree that income is a noisy measure of something that is more fundamental and more highly heritable. I take Gregory Clark’s The Son Also Rises as strong evidence for that. Re-read my review.

Clark and his researchers looked at multi-generational outcomes on a variety of measures in several countries. They concluded that under many different institutional arrangements and across many time periods, the true correlation across generations in social status is somewhere between .7 and.8, which is much higher than most conventional estimates. In short, persistence of social class is much higher than most researchers believe it to be, based on single-generation correlations that are biased downward by measurement error.

2. Alexander describes a number of impressionistic descriptions of social class. I prefer the data-based approach used by sociologists and market researchers. See, for example, The Clustering of America, which uses cluster analysis.

3. People are much more tightly grouped around social class than around income or political beliefs. That is why so many of us feel totally isolated from the Trump phenomenon. Remember Charles Murray’s bubble test?

4. Speaking of Trump, Alexander writes,

Donald Trump appeals to a lot of people because despite his immense wealth he practically glows with signs of being Labor class. This isn’t surprising; his grandfather was a barber and his father clawed his way up to the top by getting his hands dirty. He himself went to a medium-tier college and is probably closer in spirit to the small-business owners of the upper Labor class than to the Stanford MBA-holding executives of the Elite. Trump loves and participates in professional wrestling and reality television; those definitely aren’t Gentry or Elites pastimes! When liberals shake their heads wondering why Joe Sixpack feels like Trump is a kindred soul even though Trump’s been a billionaire his whole life, they’re falling into the liberal habit of sorting people by wealth instead of by class. To Joe Sixpack, Trump is “local boy made good”.

I find that insightful.