Tag Archives: Law

Liability Insurance For All

The world’s first modern limited liability law was enacted by the state of New York in 1811. In England … investors in such companies carried unlimited liability until the Limited Liability Act of 1855. There was a degree of public and legislative distaste for a limitation of liability, with fears that it would cause a drop in standards of probity. … Limited liability has been justified as promoting investment and capital formation by reassuring risk averse investors. … Others argue that while some limited liability is beneficial, the privilege ought not to extend to liability in tort for environmental disasters or personal injury. (more)

General Liability Insurance: Every business, even if home-based, needs to have liability insurance. The policy provides both defense and damages if you, your employees or your products or services cause or are alleged to have caused Bodily Injury or Property Damage to a third party. (more)

If a court finds you guilty and demands that you pay, you are on the hook to pay everything you’ve got. Same for most small businesses. But investors in big firms instead get to play “heads I win, tails we flip again”. If the firm does well they can win cash, but if the firm behaves badly, the court can only take what they’ve put into the firm. That is, the court can extract money that is in the firm, but can’t push further to get more from investors. This usually doesn’t sit well those inclined toward suspicion of big firms; why subsidize big for-profit firms relative to other forms of social organization?

The usual argument for limited liability is that without it investors would be reluctant to invest. Which makes sense and plausibly explains the initial introduction of limited liability. But that happened before the rise of the modern insurance industry. Now that insurance is easy, the obvious solution is liability insurance. Then in case of a court demanding a large payment, the insurance company pays, and the investors are insulated. Small businesses today typically buy such insurance as a matter of good practice, and many contracts with other businesses require them to have it.

Today we require auto accident liability insurance for car drivers. And recently some have proposed requiring gun owners to have liability insurance regarding their gun use. Insurers would then discourage risky people from owning guns, and help others reduce their risk. But many gun owners see this as a back hand way to tax guns; why should guns be singled out relative to lots of other risky products?

Yes, if we require liability insurance for some products and organizations but not others, we are implicitly subsidizing and taxing some relative to others. The obvious simple solution is to require everyone to get liability insurance for everything. The insurance could stand ready to pay the 99th percentile amount demanded of that sort of person or organization. Then we aren’t favoring any particular activity or organization type. And then some new interesting reforms become possible.

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Taboo Gradations

Saturday I visited Monticello, and was struck by hearing this story:

Thomas Jefferson (TJ) brought slaves Sally & James Hemings with him to Paris. After 5 yrs, at ages 16 & 24, they could have stayed free in Paris, but they instead agreed to return to US as slaves. TJ agreed to free Sally’s future kids, and that James would be free in US after training replacements. The rest of their family had remained in US, she was pregnant w/ TJ child, James knew French & had a trade, and the French revolution had started.

Overall my opinion of Jefferson declined, and I tweeted:

Visiting Monticello, I’m not inclined to see Jefferson as more sincere then the typical politician. Articulate, charismatic, well connected, but not especially sincere.

As the Hemmings were famous slaves, they seem an interesting example of people who apparently voluntary chose to become slaves. I’ve long thought this was an interesting category, which includes the historically more common category of debt bondage. Even if one disapproves of enticing someone into voluntarily agreeing to slavery, that still seems less blameworthy than enslaving people via direct physical force. So I tweeted:

There should be a word for slaves who agreed to be salves, w/o extortion or other illegitimate pressures. E.g. Sally Hemings & brother made deals w/ Jefferson. Different word could highlight its lower moral culpability.

I soon added a link to a summary of this history, and the clarification:

Note: I’m not claiming that it is obvious that these two people were not subject to illegitimate pressures, only that it seems plausible that they were not. Allowing them to serve as an example of the concept I ask about.

Let me also now clarify, if it isn’t obvious, that a lower moral culpability can still be a very high level of culpability.

I have so far been subject to a storm of disapproving, and often quite rude, responses (1K comments so far). Most do not make any argument or intellectual point, but there are exceptions. One big set disapproves of making moral distinctions between different cases of slavery; many have said so quite explicitly. Apparently saying that some cases of slavery are worse than others is seen as excusing the less worse cases. They similarly see the claim that not all Nazis were equally bad as a pro-Nazi stance. They apparently see this as a signaling game wherein speaking this truth is taboo, and where violations have bad motives.

In response to a comment (explained below), I said:

Slave owners did many bad things, but each owner didn’t do every single one.

This received a similar storm of disapproval, as did this question:

Do you think all Nazis were equally bad?

Again, hard to see my statement or question as incorrect, but many see pointing to moral variations among slave owners or Nazis as praising them.

To see how many agreed with my claim on moral culpability differences, I did two Twitter polls. By a 2 to 1 margin out of 660 votes, they said that there exist plausible history, options, & preferences to make a scenario where someone got someone else to agree to be a slave less morally culpable than if they had enslaved them via direct physical force. By a 5 to 2 margin out of 486 votes, they said that Jefferson specifically would have been more culpable if he had instead physically forced the Hemmings to return to the US. So they clearly agree with me that we can distinguish different degrees of culpability here.

Another big set of responses to my original tweet that mentioned the Hemmings claimed that their deals did in fact involve “extortion or other illegitimate pressures”. I did a poll here and found folks agreeing with this claim, 2 to 1 out of 409 votes. A followup poll finds that out of four options I gave, most see the illegitimate pressures as due to their having been slaves before, and having family remaining in the US.

I teach law & economics, and so am familiar with the usual legal reasons given for not enforcing contracts, because the deals are not seen as legitimate. For example, when a contract itself has bad effects, as with contracts for assassinations or for price collusion. Or when the context of a contract suggests that it is a mistake, such as with ignorance, mental defects, or fraud. Or when one party induces a contract by threatening to cause harms in illegal ways, such as with a gun. Or when one party has an unusual degree of market power, inducing outcomes far from supply & demand, such as may happen when rescuing someone in the desert.

These are the sort of things I had in mind re “extortion or other illegitimate pressures”. It is fine to dislike the Hemmings’ deal because you just dislike slavery, full stop. But that’s saying the contract itself is bad, not that it was induced in a bad way. To show that it was induced badly, you need to show something like that threats of force were made, or that excess market power was used.

The fact that they were both slaves before shows that they understood what they were agreeing to, and so makes it less likely that this contract was due to a mistake or fraud. And our world is full of people who live far from their family, and full of others who might help them see their family. Surely we don’t want to reject deals just because one party is motivated by wanting to see their family.

Should we reject an airline ticket purchase because the traveler is going to see family? Should we reject a rental agreement because the tenant wants to live near neighbors they like? Should we say that most people are enslaved by their nation because they are reluctant to leave due to wanting to live near family? Should we forbid a church from offering a deal to avoid excommunication, as that act could cut one off from family? I doubt most people in history would agree to be a slave just to live near family, especially when they are young adults already apart for five years, so I’m skeptical this was the main reason the Hemmings agreed to this deal. In this poll of 10K, 90+% say they & most people in history wouldn’t do that.

A number of people argued that we should presume that Jefferson had threatened, if the Hemmings didn’t agree to his terms, to kill their family in the US, and to pay people to hunt them down and kill them. Because some slave owners had in fact threatened such things at times. (That’s the context in which I tweeted “Slave owners did …”) But until we find more specific evidence to suggest that, that seems a crazy extreme assumption to me to make about Jefferson in Paris, where the local law would treat such acts as murder. And I expect the rate at which owners killed the families of escaped slaves in retaliation to be quite low.

Added 1May: Many have argued that slaves are conditioned to obey and avoid risk, and this invalidates the Hemmings’ agreement. That would make more sense if they had just returned to the US without complaint. But (according to our best evidence) they actually explicitly threatened to stay, and negotiated directly with Jefferson on terms; they acted willing to disobey. And if they thought slavery was as terrible as people say, returning to slavery seems the larger risk. I get that harsh circumstances can change you, but I don’t yet see that as a reason to question the choices of such people.

Also, many have said they can’t see any point to making moral distinctions between behaviors if there aren’t people in front of us today that we might punish differently. But I’m an intellectual who specializes in conceptual theory, and who explores radical alternatives to existing institutions. The military draft, prison as a punishment for crime, and debt bondage are all conceptually related to slavery, as are many similar institutions that we might consider.

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Rebooting Justice

In 2017, I read a WSJ review of Rebooting Justice by Barton & Bibas:

When it comes to securing justice in an efficient and affordable fashion, lawyers can in fact be the primary obstacle. … Even basic legal services at small or mid-size firms may cost more than $200 an hour, placing meaningful legal representation beyond the reach of many Americans. … Why … costs of legal education and guildlike restrictions on entry to the profession … increasing complexity of legal processes, … choosing to represent oneself is … on the rise … [but puts one] at a severe disadvantage. … There’s no reason that paralegals, notaries, social workers and others with relevant training could not [help]. … inexpensive, downloadable forms to cover basic legal matters, like living wills or articles of incorporation. … computer-assisted mediation … Their more radical suggestion is to restructure the system so that many processes are specifically designed to omit lawyers. … The biggest obstacle to such reforms could well come from the legal profession itself.

This book was also reviewed in the New York Times:

In many contexts the presence of more lawyers actually reduces the speed and effectiveness of achieving justice. …
Few realize that the long-accepted understanding that courts have the final say on the interpretation of laws in general is not explicitly established by the Constitution. … State courts have simply asserted that they have “inherent authority” over the administration of the legal system. Under this view, rules governing lawyers, as “officers of the court,” and the practice of law in theory are “not subject to legislative reversal or encroachment.” … [Lawyers] benefit from a secretive disciplinary process that almost never results in penalties or expulsion, combined with aggressive policing of the “unauthorized practice of law” … The most powerful innovations documented in “Rebooting Justice” appear to have sprung from the creative minds of nonlawyers.

Every review I’ve found has been positive. Yet the book only got 6 reviews at Amazon (all 5 star), and only 2 at Goodreads. I bought the book back then, but only now just finished it. So the book is far from a page turner, and obviously didn’t sell many copies. But all reviews I’ve seen say it is basically right:

It is hard to argue with most of the arguments in this book: the present legal system is predicated on the assumption of litigants with relatively equal legal representation; however, in the modern age, this is all too frequently an unmet assumption. (more)

One review argued that deregulating who can practice law won’t be enough:

It is far from clear that it is the high cost of legal services—driven by alleged overregulation—that is preventing Americans from obtaining legal assistance. A recent study … found that cost explains the decision to not seek legal assistance in less than a fifth of civil justice situations. … In several states, one can become a lawyer without attending an ABA-accredited law school; some do not require attending a brick-and-mortar law school at all. … The United Kingdom began allowing corporations, known as alternative business structures (ABS), to own law firms and offer legal services since 2007. … not led to the collapse of the legal system. But … also not had an appreciable effect on access to justice.

Which is probably right. But no review disputed the book’s most radical suggestion: switch to an inquisitorial legal system, wherein judges take the initiative. From the book:

We can learn from the American system of administrative law judges and from European courts. We can adapt the inquisitorial system, in which court officials actively investigate the facts and probe the evidence instead of relying on the parties’ lawyers. That approach can cut through distracting procedural games to focus on the facts and issues at the heart of a case. Though inquisitorial judging sounds like an exotic foreign transplant, American administrative agencies already use similar methods to adjudicate unemployment and Social Security disability claims, and so do small claims courts. … Most courts in the world, including virtually all of the courts in continental Europe and most of the courts in Asia, South America, and Africa, run on an inquisitorial system.

This system is not only used in most of the world, in US administrative law, and in our small claims courts, it was also the main legal system in ancient societies, and it is used today by most non-government dispute-resolution systems, such as in churches, schools, firms, and families. This system is usually paired with a less precedent-based and more text-based system for deciding are the legal rules.

We in Anglo societies are often told that our different more adversarial and precedent-based system is superior, because it less allows corrupt judges. But as the book says,

[In a precedent based legal system] exceptions and balancing tests offer judges great discretion to adjust the law to reach almost any set of facts. They also create a massive amount of uncertainty in the system.

And if the main issue were corrupt judges, we could easily spend far more on that. For example, allow entrapment and pay many to try to bribe judges. Make 10% of court cases be fake cases designed to test judges. Often have several judges review the same case independently, and compare judge ruling stats. Monitor judge activities full time. Billion dollar bounties to those who prove corruption. Death penalties for the guilty.

Today most people simply can’t afford to use the courts to sue, and if accused of a crime they must mostly settle as if guilty, even if they are innocent, all because the system is now crazy expensive. (It didn’t use to be.) Inquisitorial judges would change that, and give most people meaningful access to a legal system to defend themselves.

By the way, requiring legal liability insurance would be another way to make sure both sides have equal access to effective lawyer support.

Here are a few more interesting quotes from the book: Continue reading "Rebooting Justice" »

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Consider Reparations

First … ally of President Trump’s. “We are in a civil war,” he said. “The suggestion that there’s ever going to be civil discourse in this country for the foreseeable future is over. . . . It’s going to be total war.” The next day … Trump critic … agreed with him — although she placed the blame squarely on the president. Trump, she said, “greenlit a war in this country around race. (more) 

Frequently in human history, one party has complained about how they’ve been treated by another. Typically, the first party suggests that the issue be resolved in particular ways, and the second party tries to avoid giving in to such demands. To pressure the other party to give in, such parties often act less cooperatively toward one another, and try to enlist allies to assist in this stance. Such conflicting coalitions can grow large, and the resulting feuds can be quite destructive, sometimes escalating into full scale war.

The larger society has an interest in resolving such disputes fairly, as the expectation of fair future resolutions can encourage better behavior. But that larger society has an even stronger interest in just resolving disputes somehow, anyhow, to prevent the accumulation of destructive feuds. So for roughly a million years, humans have used informal group norm enforcement. If a forager had a complaint about someone else, they could tell their band, and that band would discuss it and come to a consensus on how to resolve the issue. The band would then apply increasing pressures to get the disputing parties to abide by their decision, and to stop any feud.  

During the farming era, we formalized this practice as law, which lowered costs of making and enforcing group decisions on how to resolve particular conflicts. But the key idea remains: prevent escalating feuds via having relatively independent judges declare resolutions, and pressuring parties to respect them. Hopefully fair resolutions, but more importantly clear and widely accepted ones. Pressure parties and their allies not only to do what resolutions say, but also to publicly accept such decisions as resolving their conflicts. 

That is, we want people who have been loudly declaring their dispute to publicly put it behind them. For example, by treating ex-cons as “having paid their debt to society”. We’d like these legal resolutions to be reliable and predictable, to give people incentives to behave well and not do things that cause disputes. And when disputable events happen, we want the involved parties to have incentives to quietly make a deal to resolve them, so as to avoid larger social conflict and the need for a formal legal resolution. 

For a very long time, most legal conflicts have been resolved via cash transfers. Not always, of course; crimes often need more punishment than fines can produce. (At least without selling people into slavery or requiring crime insurance.) But cash makes many things easier, including trade and charity. Yes, cash doesn’t always make the best symbolic statement. Even so, law usually uses cash because it is an admirably robust measure of value across a wide range of groups and social contexts.  

Which brings me to the current US political conflict, and the topic of reparations for slavery and racism. Our political climate seems today to be drifting toward a war-like lack of restraint. And “grievances” seem an important part of this conflict. One side at least claims to represent wronged parties, parties whose wrongs have not been adequately addressed. And one especially big and long-lasting grievance has been about our history of raced-based slavery, and related racism. Many say that we have not adequately addressed this complaint. 

My main point here is that cash reparations for past slavery and racism harms make a lot of sense in the context of the general history and purpose of law. We have been suffering from a costly long-standing political feud, a law-like resolution could help us resolve and get past that feud, and cash transfers are our standard go-to way to resolve law-like conflicts.

I’m not going to argue for any particular level of compensation, nor for any particular interpretation of particular cases of precedent. I can believe that precedent isn’t clear here, and that many issues and complexities are in play. But complexity needn’t prevent resolution; we rely on law all the time to resolve complex disputes. In fact, in terms of avoiding wider social conflict, law is probably more socially valuable in more complex cases. 

Yes, reparations today for wrongs from long ago does require some form of vicarious liability, wherein the people who lose and those who gain from a cash transfer aren’t the same as those who did wrongs and who were harmed. But we actually use many forms of vicarious liability in law today, and ancient societies used it a lot more.  

Some fear that even after paying reparations, racism-complaint-based conflict would persist unabated. Others fear the opposite, that many would feel that we could cut back on other responses to racism, such as affirmative action, and “put the issue behind us”, risking complacency on future problems. Here I must come down strongly in favor of risking complacency. 

One of the main goals of law, and of humanity’s more ancient norm enforcement, has been to try to get disputes resolved, to give them a better chance of fading away. Yes, it remains possible that past wrongs will be repeated in the future. But to always presume that is to never allow disputes to be resolved, and to instead accumulate escalating complaints and feuds until war becomes nearly inevitable. 

If our national legal system isn’t up to the task of resolving this conflict, or isn’t seen as neutral enough by important audiences, I have a simple proposal: randomly pick 13 adults from the whole world, let them each pick one legal advisor, then isolate them all in a room and have them work together as a jury to pick a resolution. When they must pick a number, let them just use a median vote (each submits a number, the median of which is the answer). Finally, let the whole world apply social pressure to get everyone to accept this as the most neutral and independent resolution likely to be available anytime soon. Accept it, implement it, and then let it go. (If you worry about one side betraying the resolution later, consider spreading cash payments out over a long time period.) 

When conflict appears in a marriage, the couple sometimes seeks a counselor, who often offers neutral independent advice on how to resolve their conflict. Which is helpful when partners actually do want to resolve a conflict. But sometimes they prefer war, and the marriage ends. Similarly an independent reparations recommendation can’t force us to resolve our conflict over racism and slavery, if what we really want is all out war. But as with a feuding couple, if we think there’s still a chance that we’ll want to stay together, we might still give the independent counselor thing a try.  

Yes, like you I hear of many who seem eager for all-out war, as they feel confident they will win. For example, some intend to crush all opposition within the elite professions that they expect to dominate, such as journalism, academia, government, social media tech, and even law. But while such people do exist, social media exaggerates their numbers. It is not yet too late to step back from the brink, and reconcile. Via something like law. 

In a recent Twitter poll, I found that 800 respondents favored cash reparations (CR) 4-1 over affirmative action (AA) as a way to deal with past and present racism, including race-based slavery:


My 73 facebook poll respondents favored CR over AA 87% to 13%. Yes, there are reasons to doubt a wider public shares this judgment, but three different polls find at least that majorities of blacks favor cash reparations. The idea isn’t crazy.

Added 3pm: Over the weekend, I paid for nationally representative surveys via Google Surveys. When I asked the above question except with “just show results” replaced by “I don’t know” (IDK), then out of 220, IDK got 77%, AA 14%, and CR 9%. I initially paid for a much bigger survey, but bailed when I saw so many IDK. I tried again without the IDK option, and out of 1154, AA got 53% and CR 47%. I agree that these stats aren’t very supportive of a majority favoring CR over AA.

I interpret these stats as Google Survey respondents trying to answer as fast as they can to get paid more faster, and so only giving accurate opinions when such can be generated very quickly. If the question looks at all complex, then they pick an IDK or “none of the above” if they see one, and otherwise pick randomly. I’d pay a lot more for surveys where the same person is asked the same question a week apart, and only gets paid if their answers match.

Added 6Mar: Almost all responses are critical, from folks who apparently don’t want any reparations. They mainly complain that this case would be difficult to judge from a legal precedent point of view. But we almost never refuse to have a legal proceeding on the basis of difficulty of judging. If it seems plausible that a judge might find for the plaintiff, the case goes forward. A judge might then rule for the defendant because it seems too hard to find a clear enough reason to rule otherwise. But that’s after a proceeding, not before. I’m okay if the jury of 13 that I suggested picks, after much deliberation, a median compensation of zero; no reparations.

Added 8Mar: David Brooks comes out in favor of reparations:

Reparations are a drastic policy and hard to execute, but the very act of talking about and designing them heals a wound and opens a new story.

George Will opposes reparations because they’d be complicated.

Added 10Mar: A Postily poll of 283 finds 28% prefer AA, 36% prefer CR, 36% say IDK. Non-whites like CR more across the board, but even whites favor it 33% to 27%. Masters degrees & higher prefer AA. Democrats prefer AA over CR 45% to 26%. Oddly, all regions but the South preferred AA over CR.

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Why Weakly Enforced Rules?

While some argue that we should change our laws to open our borders, it is more common for pro-immigrant folks to argue for weaker enforcement of anti-immigration laws. They want fewer government agencies to be authorized to help enforcement, fewer resources to go into finding violators, and weaker punishment of violators. Similar things happen regarding prostitution and adultery; many complain about enforcement of such laws, and yet don’t support eliminating them.

The recently celebrated “criminal justice reform” didn’t make fewer things illegal, or substitute more efficient forms of punishment (eg torture, exile) for less efficient prison. It mainly just reduces jail sentence durations. When I probed supporters, they confirmed they didn’t want fewer things illegal or more efficient enforcement.

The policing reforms that many want are not to substitute more cost-effective enforcers such as bounty hunters, or stronger punishments against police misconduct, but to instead just have police do less: pull over fewer drivers, investigate fewer suspects, etc.

When I claim that stronger norm enforcement is a big advantage of legalized blackmail, many people say that’s exactly the problem; they want less enforcement of common norms. For example, Scott Sumner:

Great literature and great films often turn people violating society’s norms into sympathetic characters, especially when they are ground down by “the machine”. I suspect that the almost universal public opposition to legalizing blackmail reflects society’s view (subconscious to be sure) that enforcing these norms (especially for non-criminal activities) requires a “light touch”, and that turning shaming into an highly profitable industry will do more harm than good. It will turn society into a mean, backstabbing culture. The people hurt most will be sensitive good people who made a mistake, not callous gang members who don’t care if others think they are evil.

On the surface, all of these positions seems puzzling to me; if a norm or law isn’t worth enforcing well, why not eliminate it? Some possible explanations:

  1. People like the symbolism of being against things they don’t really want to stop. It is more about wanting to look like the sort of person who doesn’t fully approve of such things.
  2. Having more rules that are only weakly enforced allows the usual systems more ways to arbitrarily punish some folks via selective enforcement. You might like this if you share such system’s tastes re who to arbitrarily punish. Or if you want to signal submission to authorities who want to use such power.
  3. If these things were actually legal and licit, people might sometimes publicly suggest that you are engaging in them. But if they are illicit or illegal, there’s a norm against accusing someone of doing them without substantial evidence. So if you want to discourage others from lightly accusing you of such things, you may want those activities to be officially disapproved, even if you don’t actually want to discourage them.
  4. We mainly want these norms and laws to help us deal with some disliked “criminal class” out there, a class that we don’t actually interact with much. So when we see real cases in our familiar word, they seem like they are not in that class, and thus we don’t want our norms or laws to apply to them. We only want less enforcement for folks in our world.
  5. What else?

Added 26Feb: I clearly didn’t communicate well in this post, as many commenters and this responding post saw me as arguing that all punishment, conditional on being caught and convicted, should either be zero or max extreme (eg death). Yes of course it is often reasonable to use intermediate punishments.

But enforcement also includes a chance of being caught, not just a degree of punishment, and there are issues of the cost-effectiveness of the processes to catch and punish people. There are many who want less punishment if caught, and less chance of catching, for most all offenses, and don’t want more cost effective catching or punishment, for fear that this might lead to more catching or punishing. To me, this seems hard to explain via just thinking that we’ve overestimated the optimal punishment level for some particular offenses.

Added 3Mar: A striking example is how in WWI recruits were supposed to be age 19 or older, but it was easy to lie and get in at younger ages, and most everyone knew of someone who had done this. We tsk tsk about child soldiers elsewhere, but don’t seem much ashamed of our own.

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Checkmate On Blackmail

Often in chess, at least among novices, one player doesn’t know that they’ve been checkmated. When the other player declares “checkmate”, this first player is surprised; that claim contradicts their intuitive impression of the board. So they have to check each of their possible moves, one by one, to see that none allow an escape.

The same thing sometimes happens in analysis of social policy. Many people intuitively want to support policy X, and they usually want to believe that this is due to the good practical consequences of X. But if the policy is simple enough, one may be able iterate through all the possible consequential arguments for X and find that they all fail. Or perhaps more realistically, iterate through hundreds of the most promising actual consequential arguments that have been publicly offered so far, and both find them all wanting, and find that almost all of them are repetitions, suggesting that few new arguments are to be found.

That is, it is sometimes possible with substantial effort to say that policy X has been checkmated, at least in terms of known consequentialist supporting arguments. Yes, many social policy chess boards are big, and so it can take a lot of time and expertise to check all the moves. But sometimes a person has done that checking on policy X, and then frequently encounters others who have not so checked. Many of these others will defend X, basically randomly sampling from the many failed arguments that have been offered so far.

In chess, when someone says “checkmate”, you tend to believe them, even if you have enough doubt that you still check. But in public debates on social policy, few people accept a claim of “checkmate”, as few such debates ever go into enough depth to go through all the possibilities. Typically many people are willing to argue for X, even if they haven’t studied in great detail the many arguments for and against X, and even when they know they are arguing with someone who has studied such detail. Because X just feels right. When such a supporter makes a particular argument, and is then shown how that doesn’t work, they usually just switch to another argument, and then repeat that process until the debate clock runs out. Which feels pretty frustrating to the person who has taken the time to see that X is in fact checkmated.

We need a better social process for together identifying such checkmated policies X. Perhaps a way that a person can claim such a checkmate status, be tested sufficiently thoroughly on that claim, and then win a reward if they are right, and lose a stake if they are wrong. I’d be willing to help to create such a process. Of course we could still keep policies X on our books; we’d just have to admit we don’t have good consequential arguments for them.

As an example, let me offer blackmail. I’ve posted seven times on this blog on the topic, and in one of my posts I review twenty related papers that I’d read. I’ve argued many times with people on the topic, and I consistently hear them repeat the same arguments, which all fail. So I’ll defend the claim that not only don’t we have good strong consequential arguments against blackmail, but that this fact can be clearly demonstrated to smart reasonable people willing to walk through all the previously offered arguments.

To review and clarify, blackmail is a threat that you might gossip about someone on a particular topic, if they don’t do something else you want. The usual context is that you are allowed to gossip or not on this topic, and if you just mention that you know something, they are allowed to offer to compensate you to keep quiet, and you are allowed to accept that offer. You just can’t be the person who makes the first offer. In almost all other cases where you are allowed to do or not do something, at your discretion, you are allowed to make and accept offers that compensate you for one of these choices. And if a deal is legal, it rarely matters who proposes the deal. Blackmail is a puzzling exception to these general rules.

Most ancient societies simply banned salacious gossip against elites, but modern societies have deviated and allowed gossip. People today already have substantial incentives to learn embarrassing secrets about associates, in order to gain social rewards from gossiping about those to others. Most people suffer substantial harm from such gossip; it makes them wary about who they let get close to them, and induces them to conform more to social pressures regarding acceptable behaviors.

For most people, the main effect of allowing blackmail is to mildly increase the incentives to learn embarrassing secrets, and to not behave in ways that result in such secrets. This small effect makes it pretty hard to argue that for gossip incentives the social gains out weigh the losses, but for the slightly stronger blackmail incentives, the losses out weight the gains. However, for elites these incentive increases are far stronger, making elite dislike plausibly the main consequentialist force pushing to keep blackmail illegal.

In a few recent twitter surveys, I found that respondents declared themselves against blackmail at a 3-1 rate, evenly split between consequential and other reasons for this position. However, they said blackmail should be legal in many particular cases I asked about, depending on what exactly you sought in exchange for your keeping someone’s secret. For example, they 12-1 supported getting your own secret kept, 3-2 getting someone to treat you fairly, and 1-1 getting help with child care in a medical crisis.

These survey results are pretty hard to square with consequential justifications, as the consequential harm from blackmail should mainly depend on the secrets being kept, not on the kind of compensation gained by the blackmailer. Which suggests that non-elite opposition to blackmail is mainly because blackmailers look like they have bad motives, not because of social consequences to others. This seems supported by the observation that women who trash each other’s reputations via gossip tend to consciously believe that they are acting helpfully, out of concern for their target.

As examples of weak arguments, Tyler Cowen just offered four. First, he says even if blackmail has good consequences, given current world opinion it would look bad to legalize it. (We should typically not do the right thing if that looks bad?) Second, he says negotiating big important deals can be stressful. (Should most big deals be banned?) Third, it is bad to have social mechanisms (like gossip?) that help enforce common social norms on sex, gender and drugs, as those are mistaken. Fourth, making blackmail illegal somehow makes it easier for your immediate family to blackmail you, and that’s somehow better (both somehows are unexplained).

I’d say the fact that Tyler is pushed to such weak tortured arguments supports my checkmate claim: we don’t have good strong consequential arguments for making gossiper-initiated blackmail offers illegal, relative to making gossip illegal or allowing all offers.

Added 18Feb: Some say a law against negative gossip is unworkable. But note, not only did the Romans manage it, we now have slander/libel laws that do the same thing except we add an extra complexity that the gossip must be false, which makes those laws harder to enforce. We can and do make laws against posting nude pictures of a person who disapproves, or stealing info such as via hidden bugs or hacking into someone’s computer.

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Umpires Shouldn’t Be On Teams

There are many complex issues to consider when choosing between public vs private provision of a good or service. But one issue seems to me to clearly favor the private option: rights. If you want to make rights-enforcing rules that are actually followed, you are better off having courts or regulators enforcing rules on a competitive private industry.

Consider this excellent 2015 AJPS paper:

Many regulatory policies—especially health, safety, and environmental regulations—apply to government agencies as well as private firms. … Unlike profit‐maximizing firms, government agencies face contested, ambiguous missions and are politically constrained from raising revenue to meet regulatory requirements. At the same time, agencies do not face direct competition from other firms, rarely face elimination, and may have sympathetic political allies. Consequently, the regulator’s usual array of enforcement instruments (e.g., fines, fees, and licensure) may be potent enough to alter behavior when the target is a private firm, but less effective when the regulated entity is a government agency. …

The ultimate effect of regulatory policy turns not on the regulator’s carrots and sticks, but rather on the regulated agency’s political costs of compliance with or appeal against the regulator, and the regulator’s political costs of penalizing another government. One implication of this theory is that public agencies are less likely than similarly situated private firms to comply with regulations. Another implication is that regulators are likely to enforce regulations less vigorously against public agencies than against private firms because such enforcement is both less effective and more costly to the regulator. …

We find that public agencies are more likely than private firms to violate the regulatory requirements of the [US] Clean Air Act and the Safe Drinking Water Act. Moreover, we find that regulators are less likely to impose severe punishment for noncompliance on public agencies than on private firms. (more)

See also:

There is evidence … that [public entities] are [better] able to delay or avoid paying fines when penalties are assessed. (more)

Public sector employees experienced a higher incidence rate of work-related injuries and illnesses than their private industry counterparts. (more)

I’ve tried but failed to find stats on public vs private relative rates of abuse, harassment, bribery, embezzlement, nepotism, and test cheating. (Can you find more?) But I’d bet they’d also show government agencies violating such rules at higher rates.

This perspective seems very relevant to criminal justice reform. Our status quo criminal justice system embodies enormous inefficiencies and injustices, but when I propose changes that involve larger roles for private actors, I keep hearing “yes that might be more efficient, but won’t private actors create more rights violations?” But the above analysis suggests that this gets the comparison exactly wrong!

Yes of course, if you compare a public org that has a rule with a private actor to whom no such rules applies, you may get more rule “violations” with the latter. And yes, enforcement of central rules can be expensive and limiting, so sometimes it makes sense to use private competition as a substitute for central rules, and so impose fewer rules on private actors. But once we allow ourselves to choose which rules to impose, private orgs seem just overall better for enforcing rules.

Note that when a government agency directly contracts with a specific private organization, using complex flexible terms and monitoring, as in military procurement, the above theory predicts that this contractor will look much more like an extension of the government agency for the purpose of rule enforcement. Rule enforcement gains come instead from private orgs that compete to be chosen by the public, or that compete to win simple public prizes where public orgs do not have so much discretion over terms that they can pick winners, but get blamed for rights violations of losers.

It is these independent private actors that I seek to recruit to reform criminal justice. We will get more, not less, enforcement of rules that protect rights, when the umpires who enforce rights are less affiliated with the teams who can violate them.

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Can You Outsmart An Economist?

Steven Landsburg’s new book, Can You Outsmart An Economist?, discusses many interesting questions. For example, in this nice and real example, median wages for all workers only rose 3% from 1980-2005, yet they rose 15% or more for each race/sex subgroup. Because the relative group sizes changed:

Taking the book title as a challenge, however, I have to point out the one place where I disagreed with the book. Landsburg says:

In a recent five-year period on the Maryland stretch of I-95, a black motorist was three times as likely as a white motorist to be stopped and searched for drugs. Black motorists were found to be carrying drugs at pretty much exactly the same rate as whites. (A staggeringly high one-third of stopped blacks and the same staggeringly high one-third of stopped whites were caught with drugs in their cars.) This was widely reported in the news media as clear-cut evidence of racial discrimination. … If you believe that people respond to incentives, then you must believe that if blacks were stopped at the same lower rate that whites were, more of them would have carried drugs. …

If [police] were single-mindedly out to maximize arrests, they’d start by focusing their attention on the group that’s most inclined to carry drugs—in this case, blacks. … If blacks are still carrying more drugs than whites, the police shift even more of their focus to blacks, leading the gap to close a bit more. This continues until whites and blacks are carrying drugs in equal proportions. … If you want to maximize deterrence, you’ll concentrate more on stopping whites, because there are more whites in the population to deter, … which would deter more whites from carrying drugs—and then the average white motorist would carry fewer drugs than the average black.

I’m with him until that last sentence. I think he is assuming that each choice to carry drugs or not is chosen independently, that choice is deterred independently via a perceived chance of being stopped, that potential carriers know only the average chance that someone in their groups is stopped, and that police can’t usefully vary the stopping chance within groups.

If a perceived stopping chance could be chosen independently for each individual, then to maximize deterrence overall that chance would be set somewhat differently for each individual, according to their differing details. But the constraint that everyone in a group must share the same perceived stopping chance will prevent this detailed matching, making it a bit harder to deter drug carrying in that group. This is a reason that, all else equal, police motivated by deterrence may try a little less harder to deter larger groups, who are harder to deter, because they have more internal variation.

Landsburg instead argues that you’ll put more effort into deterring the larger group, apparently just because there is a larger overall benefit from deterring a larger group. Yes, of course, deterring a group twice as large could produce twice the deterrent benefit in terms of its effect on the overall drug-carrying crime rate. But that comes at twice the cost in terms of twice as many traffic stops. I don’t see how there is a larger benefit relative to cost from focusing deterrence efforts on larger groups.

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My Poll, Explained

So many have continued to ask me the same questions about my recent twitter poll, that I thought I’d try to put all my answers in one place. This topic isn’t that fundamentally interesting, so most you you may want to skip this post.

Recently, Christine Blasey Ford publicly accused US Supreme Court nominee Brett Kavanaugh of a sexual assault. This accusation will have important political consequences, however it is resolved. Congress and the US public are now put in the position of having to evaluate the believability of this accusation, and thus must consider which clues might indicate if the accusation is correct or incorrect.

Immediately after the accusation, many said that the timing of the accusation seemed to them suspicious, occurring exactly when it would most benefit Democrats seeking to derail any nomination until after the election, when they may control the Senate. And it occurred to me that a Bayesian analysis might illuminate this issue. If T = the actual timing, A = accurate accusation, W = wrong accusation, then how much this timing consideration pushes us toward final beliefs is given by the likelihood ratio p(T|W)/p(T|A). A ratio above one pushes against believing the accusation, while a ratio below one pushes for it.

The term P(T|A) seemed to me the most interesting term, and it occurred to me to ask what people thought about it via a Twitter poll. (If there was continued interest, I could ask another question about the other term.) Twitter polls are much cheaper and easier for me to do than other polls. I’ve done dozens of them so far, and rarely has anyone objected. Such polls only allow four options, and you don’t have many characters to explain your question. So I used those characters mainly to make clear a few key aspects of the accusation’s timing:

Many claimed that my wording was misleading because it didn’t include other relevant info that might support the accusation. Like who else the accuser is said to have told when, and what pressures she is said to have faced when to go public. They didn’t complain about my not including info that might lean the other way, such as low detail on the claimed event and a lack of supporting witnesses. But a short tweet just can’t include much relevant info; I barely had enough characters to explain key accusation timing facts.

It is certainly possible that my respondents suffered from cognitive biases, such as assuming too direct a path between accuser feelings and a final accusation. To answer my poll question well, they should have considered many possible complex paths by which an accuser says something to others, who then tell others people, some of which then chose when to bring pressure back on that accuser to make a public accusation. But that’s just the nature of any poll; respondents may well not think carefully enough before answering.

For the purposes of a Twitter poll, I needed to divide the range from 0% to 100% into four bins.
I had high uncertainty about where poll answers would lie, and for the purpose of Bayes rule it is factors that matter most. So I choose three ranges of roughly a factor of 4 to 5, and a leftover bin encompassing an infinite factor. If anything, my choice was biased against answers in the infinite factor bin.

I really didn’t know which way poll answers would go. If most answers were high fractions, that would tend to support the accusation, while if most answers were low fractions, that would tend to question the accusation. Many accused me of posting the poll in order to deny the accusation, but for that to work I would have needed a good guess on the poll answers. Which I didn’t have.

My personal estimate would be somewhere in the top two ranges, and that plausibly biased me to pick bins toward such estimates.  As two-thirds of my poll answers were in the lowest bin I offered, that suggests that I should have offered an even wider range of factors. Some claimed that I biased the results by not putting more bins above 20%. But that fraction is still below the usual four-bin target fraction of 25% per bin.

It is certainly plausible that my pool of poll respondents are not representative of the larger US or world population. And many called it is irresponsible and unscientific to run an unrepresentative poll, especially if one doesn’t carefully show which wordings matter how via A/B testing. But few complain about the thousands of other Twitter polls run every day, or of my dozens of others. And the obvious easy way to show that my pool or wordings matter is to show different answers with another poll where those vary. Yet almost no one even tried that.

Also, people don’t complain about others asking questions in simple public conversations, even though those can be seen as N=1 examples of unrepresentative polls without A/B testing on wordings. It is hard to see how asking thousands of people the same question via a Twitter poll is less informative than just asking one person that same question.

Many people said it is just rude to ask a poll question that insinuates that rape accusations might be wrong, especially when we’ve just seen someone going through all the pain of making one. They say that doing so is pro-rape and discourages the reporting of real rapes, and that this must have been my goal in making this poll. But consider an analogy with discussing gun control just after a shooting. Some say this is rude then to discuss anything but sympathy for victims, but others say this is exactly a good time to discuss gun control. I say that when we must evaluate a specific rape accusation is exactly a good time to think about what clues might indicate in what direction on whether this is an accurate or wrong accusation.

Others say that it is reasonable to conclude that I’m against their side if I didn’t explicitly signal within my poll text  that I’m on their side. That’s just the sort of signaling game equilibrium we are in. And so they are justified in denouncing me for being on the wrong side. But it seems a quite burdensome standard to hold on polls, which already have too few characters to allow an adequate explanation of a question, and it seems obvious that the vast majority of Twitter polls today are not in fact being held to this standard.

Added 24Sep: I thought the poll interesting enough to ask, relative to its costs to me, but I didn’t intend to give it much weight. It was all the negative comments that made it a bigger deal.

Note that, at least in my Twitter world, we see a big difference in attitudes between vocal folks who tweet and those who merely answer polls. That later “silent majority” is more skeptical of the accusation.

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Radical Markets

In 1997, I got my Ph.D. in social science from Caltech. The topic that drew me into grad school, and much of what I studied, was mechanism and institution design: how to redesign social practices and institutions. Economists and related scholars know a lot about this, much of which is useful for reforming many areas of life. Alas, the world shows little interest in these reforms, and I’ve offered our book The Elephant in the Brain: Hidden Motives in Everyday Life, as a partial explanation: most reforms are designed to give us more of what we say we want, and at some level we know we really want something else. While social design scholars would do better to work more on satisfying hidden motives, there’s still much useful in what they’ve already learned.

Oddly, most people who say they are interested in radical social change don’t study this literature much, and people in this area don’t much consider radical change. Which seems a shame; these tools are a good foundation for such efforts, and the topic of radical change has long attracted wide interest. I’ve tried to apply these tools to consider big change, such as with my futarchy proposal.

I’m pleased to report that two experts in social design have a new book, Radical Markets: Uprooting Capitalism and Democracy for a Just Society:

The book reveals bold new ways to organize markets for the good of everyone. It shows how the emancipatory force of genuinely open, free, and competitive markets can reawaken the dormant nineteenth-century spirit of liberal reform and lead to greater equality, prosperity, and cooperation. … Only by radically expanding the scope of markets can we reduce inequality, restore robust economic growth, and resolve political conflicts. But to do that, we must replace our most sacred institutions with truly free and open competition—Radical Markets shows how.

While I applaud the ambition of the book, and hope to see more like it, the five big proposals of the book vary widely in quality. They put their best feet forward, and it goes downhill from there. Continue reading "Radical Markets" »

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