Redistribution Recession watch

The WSJ reports,

Michael Feroli, chief U.S. economist for J.P. Morgan, JPM +1.40% estimates that since the recession, the worker flight to the Social Security Disability Insurance program accounts for as much as a quarter of the puzzling drop in participation rates, a labor exodus with far-reaching economic consequences.

Pointer from Tyler Cowen.

This is one of those topics where the three-axis model correctly predicts that there will be no communication across ideological boundaries.

1. From the progressive perspective, an unemployed person is oppressed by a lack of aggregate demand, end of story. Anyone who suggests otherwise (I’m looking at you, Casey Mulligan) is going to be attacked without mercy. And these are people on disability, for crying out loud. If they are not members in good standing of the oppressed class, then who is?

2. Libertarians see government coercing some of us to give others incentives to be unemployed. In fact, if I were one of those libertarians who felt schadenfreude pleasure out of pointing out the stupidity and perversity of the way that government executes programs, disability insurance would make me happy.

3. Conservatives think that everyone should be like this guy:

Mr. Mann, age 30, said many disabled people can work with the right help, and he included himself. Paralyzed in a diving accident as a teenager, he graduated from Princeton University and earned a doctorate in economics from the University of Pennsylvania. He uses a motorized wheelchair to navigate Mathematica’s Princeton, N.J., offices.

Now that’s civilization for ya.

Since I do not think that there will be a meaningful debate or attempt to reach middle ground, I want to lie low on the issue. For substantive analysis, I outsource to Reihan Salam.

Utilitarianism and the Three-Axes Model

Lifted from the comments on this post:

Where does someone whose commitment is to utilitarianism + empiricism fit into the framwork? It seems to me that this describes a large number of people on both sides of the political center (Democratic technocrats and the endangered species of Republican good government types) who think that barbarism, liberty, and oppression are awfully abstract notions to base concrete government decisions on.

I probably need to emphasize that I do not think that the three axes are used to reason carefully about political issues. I think that they are used rhetorically to solidify loyalties and to put down opponents. If someone uses utilitarianism and empiricism, then that tends to involve reasoning carefully, and it gets away from the three axes.

I do not think that one encounters much careful reasoning nowadays. I think people are too busy engaging in political tribalism. I have a lot more to say about this in my 60-page e-book, which I hope will be available in the not-too-distant future.

Tantalizing Findings

David Autor and Melanie Wasserman summarize trends in education and labor market outcomes by gender. Timothy Taylor locates their explanation for the relative decline among males.

the earnings power of non-college males combined with gains in the economic self-sufficiency of women—rising educational attainment, a falling gender gap, and greater female control over fertility choices—have reduced the economic value of marriage for women. This has catalyzed a sharp decline in the marriage rates of non-college U.S. adults—both in absolute terms and relative to college-educated adults—a steep rise in the fraction of U.S. children born out of wedlock, and a commensurate growth in the fraction of children reared in households characterized by absent fathers.

The second part of the hypothesis posits that the increased prevalence of single-headed households and the diminished child-rearing role played by stable male parents may serve to reinforce the emerging gender gaps in education and labor force participation by negatively affecting male children in particular. Specifically, we review evidence that suggests that male children raised in single-parent households tend to fare particularly poorly, with effects apparent in almost all academic and economic outcomes. One reason why single-headedness may affect male children more and differently than female children is that the vast majority of single-headed households are female-headed households. Thus, boys raised in these households are less likely to have a positive or stable same-sex role model present.

As I interpret it, their story is one of mutually reinforcing economic and social trends. The economic trend is that the comparative advantage of non-college-educated males in the work force has declined, as innovation and globalization have increased productivity in manufacturing. This reinforces a social trend in which those males are not attractive marriage partners, so that women who formerly would have married them are instead having children out of wedlock. This social trend then reinforces the economic trend, because men born out of wedlock are disadvantage when it comes to being able to remain in school.

I would say that the trends are real, but the narrative is controversial. I think this is a situation where you pick your narrative to fit your policy recommendation. Are you Bryan Caplan, and do you recommend promoting marriage? Then your narrative has to be that marriage plays a causal role in improving men’s earnings. Are you Barack Obama, and do you recommend expanding pre-school and access to college? Then your narrative is that the the main causal factor is education. Are you Charles Murray and do you recommend promoting Victorian virtues? Then your narrative is that this is a civilization-barbarism problem, and we have to reverse the slide into barbarism.

My preferred narrative is that Neal Stephenson predicted this in The Diamond Age. The Vickies and the Thetes have divergent lifestyles, and I suspect that the attempt by the Vickies to impose their lifestyle on the Thetes is doomed to fail.

On the topic of marriage trends, Reihan Salam writes,

instead of serving as a foundation of a successful adult life (a “cornerstone”), it is seen as a culmination of a successful young adulthood (a “capstone”), according to the authors of the Knot Yet report on delayed marriage.

Pointing out the likely correlation between a decline in marriage and an increase in government dependency, Salam writes,

My suspicion is that it will be very difficult to construct such a post-marital libertarian agenda, but that’s not to suggest it’s a futile effort.

He then writes,

What I find interesting is the emerging tension between two tendencies on the center-left: (1) the civil libertarian desire to protect the autonomy of families, particularly families rooted in minority cultural traditions, as a post-marital culture yields ever more children raised in the context highly fragile, unstable family relationships; and (2) the egalitarian imperative to do more to build the human capital of children raised in the poorest households, an effort that may well require increasingly intrusive, heavy-handed, paternalistic interventions.

At the risk of being uncharitable, I do not think that (1) is a factor. Using the three-axes model, the single mom is in the oppressed class and her disadvantaged offspring are in the oppressed class, end of story.

In the talk that I gave in Phoenix, I compared universal pre-school to eugenics. Both appeal to the same desire to improve the human race based on “scientific evidence” of the unfitness of some parents.

Are Libertarians Natural Allies of Conservatives?

A reader writes,

The appeal of the civilization-barbarism axis to people seeing the world through a freedom-slavery axis is obvious. The use of force by the gang holding state power is a return to barbarism.

One way to think of this is that a conservative supports the use of state power only in defense of civilization and only under the constraints of rules and norms. The progressive supports the use of state power whenever it can promote what the progressive sees as good. For a libertarian, the conservative only appears to go off track by over-stating the threats to civilization posed by foreigners or by licentious behavior. However, the progressive appears to be off track in a more fundamental sense.

Another way to think of this is to ask when a libertarian might say, “I can go along with you philosophically, but empirically I disagree.” To a conservative, you can say that you agree that government should be on the side of civilization, but you disagree that civilization is threatened by gay marriage or open borders. That would not be insincere, although the strength of the disagreement might be high.

To a progressive, libertarians might say that they agree that government should help oppressed workers, but they do not think that the minimum wage achieves that goal. However, that would be a tactical statement, lacking in sincerity. The libertarian is not really prepared to say that if the minimum wage or other policies can be shown to help oppressed workers then such policies are legitimate.

Bryan Caplan on the Marriage Premium

He writes,

It’s easy to see the appeal of the selection story: Married people have many traits in common: willingness to commit, to defer gratification, to conform to social norms. Why then, though, do married men earn a large premium, while married women earn a modest penalty? Shouldn’t favorable selection enhance women’s earnings, too?

Read the whole thing. If beliefs were intellectual, rather than tribal, you would think that the same people who think that people would be more likely to either attribute causality to both the marriage premium and the college premium or to neither. The fact that so many people readily treat the college premium as causal and the marriage premium as coincidental (or vice-versa) is evidence for tribalism, in my view. In particular, treating the marriage premium as causal tends to align with civilization vs. barbarism, so that it appeals much more to conservatives than to progressives.

Lifted from the Comments on the Three-Axis Model

On this post.

Watching some Kenneth Branagh documentary about Goebbels I was surprised how central oppressor-oppressed narrative was in Hitler’s speeches. Oppressor-oppressed narrative is crucial to forming in-group identities, and in-group identity is a useful and powerful tool.

Oppressor-oppressed narrative is used to form co-operation to take over existing structures. Civilization/barbarism narrative is used to preserve status quo. Freedom/coercion narrative is for individualists. Individualism is for the wealthy and secure.

Worth pondering. However, I think that most progressives really want to preserve the status quo. They do not try to argue that they are the oppressed class. Rather, they argue that they represent the oppressed class. More important, progressives characterize their opponents as the apologists for oppression.

Passover 2013 Edition

Random thoughts:

1. Passover is the original oppressor-oppressed narrative.

2. Sheryl Sandberg is much in the news with her book arguing that women ought to be more willing to choose to be ambitious and men ought to be more accomodating toward ambitious women. Here is her Ted talk. My takes:

a. I think a lot of the pushback that she gets in fact reinforces one of her points, which is that leadership qualities that are admired in men are resented in women.

b. The main pushback I would give is that I do not think that our goal should be to raise some women’s ambition up the level of that of the most-ambitious men. I think that hyper-ambitious males are a problem. They are a problem in finance, where they take excessive risks with other people’s money. They are a problem in government, where they exercise too much power. I think that ambition requires checks and balances. The market works imperfectly as a check on the ambition of executives. I think that institutional structures and social norms can provide a check on the ambition of politicians, and I regret that in our country both the structures and the norms have deteriorated considerably from that perspective.

c. I think that Sandberg’s thesis would provide a good discussion topic for a seder.

3. On April 3, Russ Roberts and Jared Bernstein will participate in a debate on whether or not to abolish the minimum wage. Tickets are $40. I am not sure what the audience expects at that price, and I expect that the price will affect the outcome. If you pay that much to get in, how can you not feel guilty voting to abolish the minimum wage? Especially so soon after Passover? My thoughts are:

a. The optimum minimum wage is probably closer to 0 than to $22 an hour, which is where Elizabeth Warren claims it might be.

b. The minimum wage issue is high on symbolism and low on substance. Few workers earn the minimum wage. As a practical matter, most workers’ reservation wage is much, much higher, as is demonstrated by the existence of unemployment. And most of the friction in the labor market comes from other factors, such as the payroll tax and employer-provided health insurance.

Libertarian or Conservative?

A reader pointed me to the home page for this year’s Freedom Fest, presumably a libertarian event. It features a 2-minute video with the theme that we are like the Roman empire, in its state of decline. The reader sees this video as

completely based on the civilization-barbarism axis.

My reaction:

1. Although the video does pay some lip service to freedom issues, I tend to agree with the reader. It seems to me that the video itself would appeal more to conservatives than to libertarians. My guess is that libertarians will not be totally turned off by the video, but they may not be attracted by it, either.

2. There is some irony in talking negatively about Roman debauchery in advertising a conference that is held annually in Las Vegas.

3. The conference agenda is rather heavily weighted toward investment strategy. Only a couple of the currently-listed speakers have topics that pertain to libertarian theory or practice.

4. Perhaps these ambiguities are a good thing. The conference may attract a mix of libertarians and conservatives, wealthy right-wingers, financial advisers, and academics.

5. I do not like large conferences at all, but perhaps that means I should force myself to go to some of them. But not in Las Vegas, which is one of my least favorite cities.

Wealth, Saving, and Inequality

Noah Smith writes,

If you do the math, you discover that in the long run, income levels and initial wealth (factors 1 and 2 from above) are not the main determinants of wealth. They are dwarfed by factors 3 and 4 — savings rates and rates of return. The most potent way to get more wealth to the poor and middle-class is to get these people to save more of their income, and to invest in assets with higher average rates of return.

Is this true? If so, it strikes me as a very conservative proposition. It suggests that the civilization-barbarism axis is what drives inequality of wealth, because deferred gratification is one of the civilized values in the conservative pantheon. In effect, Smith is saying that wealth comes from civilized behavior and lack of wealth comes from barbaric behavior.

Utterly oblivious to irony, Smith proceeds to recommend that government teach people to save.

Pointer from Mark Thoma.