Tag Archives: Politics

Do You Feel Lucky, Punk?

A recent influential report posed the key Covid-19 issue today as: to mitigate or suppress? Should we focus on “flattening the curve” under the assumption that most everyone will get it soon, or adopt even stronger measures in an attempt to squash it, so most never get it.

Some simple obvious considerations are:

  1. if successful, squashing saves many more lives,
  2. you have to do a lot more to squash than to flatten,
  3. while flattening policies need be maintained only for a few months, squashing policies must be maintained until a strong treatment is available, probably years, and
  4. squashing is far easier when you have only a few infected and when your trading, travel, and physical neighbors don’t have many infected.

Several nations, mostly Asian, seem to have successfully squashed so far, though they started when they had few infected. China and perhaps S. Korea are the main examples of squashing more than a tiny number of infected, though even they had far fewer than we do now in the West where so many are suddenly eager to squash. China had much recent experience with mass surveillance, controlling population movements, and enforcing strict rules. Even so, they screwed up badly early on, and it isn’t at all obvious that China’s squashing will keep working as they let people go back to work, or when many big neighbors get highly infected.

The main point I want to make in this post is that trying to get your Western government to suppress Covid-19 in the usual way is making a big bet on the their quality, and the quality of typical neighboring governments. And also of your public’s commitment. As in the famous Dirty Harry (non-)quote, I ask: “Do you feel lucky, punk?”

Western government agencies and expert communities so far have had a bad record dealing with Covid-19. At first they criticized China’s strong measures and focused on signaling political correctness. The US government badly screwed up the generation and regulation of tests and masks, and the West continues to fail to cut regulation preventing rapid expansion of medical personnel and resources. Western governments only changed policies when public opinion changed, and even now seem more focused on handing out cash to allies, and symbolic but useless acts like banning bicycles.

As with most policy, you must expect that the details matter a lot. So even if you see China policy as a success, you shouldn’t have high hopes if your government merely copies a few surface features of China policy. That only works if this is a simple problem, with simple solutions, and few problems are that simple. This is not just a problem of insufficient moral fervor.

You should have higher hopes if they copied the whole China policy package relatively exactly, and even higher if the Chinese officials who managed their policy implementation personally came to manage implementation here. Even then climate, cultural, or infrastructure differences might mean their policies don’t work here. But no government seems even interested in copying the exact China package, and in my recent poll, 80% of 927 opposed this last idea of Chinese management.

Dear Western citizen, your government has already demonstrated incompetence at dealing with this in the absence of public pressure, and public pressure will mainly push them to do what they guess they would be most blamed by the public for not doing if things go badly. Regardless of whether that actually works; the public may never learn what actually works.

This pandemic has already been allowed to get much bigger than any that has ever been squashed before, and it is harder to squash than most, passing via the air, living on surfaces for days, and with infected folks showing no symptoms for a week. And in contrast to China, your government doesn’t have much recent experience with the mass surveillance, movement controls, and strict rule enforcement.

And yet now at this late date, you are considering if to authorize these same governments to oversee not just large efforts to flatten the curve, but the more extreme efforts required to squash it. Even knowing that to make it work you’ll need very strong public support in a far less-communal culture than those that have so far managed to squash.

Mind you, you are now considering this not because you have great confidence in your government’s competence, or your public’s support. But mostly, it seems, because it would look morally bad for you to give up hope on the millions who will die even if we flatten the curve well. Really, do you feel lucky, punk?

Also consider: even if your local government manages to successfully squash its internal infections temporarily, what happens if half of its neighbors fail, and become mostly infected? Or what if they succeed for a while, but half of their neighbors fail? What will it take to keep external infections from overwhelming you then? Or what will it take for your government and others to coordinate to ensure that most governments succeed? Remember, these are the governments who have so far largely failed to prevent massive illegal immigration, and who continue to fail to coordinate to limit global warming, war, and ocean overfishing, or to promote global innovation.

This wouldn’t matter much if the policies for squashing looked much like the policies to flatten, so we could actually flatten but pretend for a while that we were trying to squash. But there are policies that could help to flatten that look obviously bad for squashing, such as deliberate exposure, which might cut 3/4 of life-years lost. And locking down the economy and social contacts for many years at a level that looks at all like it might succeed in squashing is going to involve enormous costs to the economy and your freedoms.

In my recent polls, 73% and 74% of 393 and 533 respondents predicted US and world (respectively) will become >25% infected before an >80% effective treatment was given to >80% of world. So 3 in 4 agree that global containment just isn’t going to happen. Yet, to show that they care, most governments are giving lip service to squashing as their goal, not flattening. How far will we all go in paying huge costs to pretend that this is at all likely?

Before we all jump off this cliff together, can we at least collect and publish some honest estimates of our chances of success? Such as perhaps via conditional betting markets? If you aren’t willing to exactly copy the whole China policy, or have them manage it, how serious could you really be about succeess?

Look, this is like starting a war. Its not enough to ask “would it be nice to win such a war”, we need to ask “can we actually win?” Don’t start what you can’t finish.

I fear suppression is a monkey trap; afraid to let go the nut of saving everyone, we’ll be trapped in the gourd of not saving nearly as many as we could have.

Added 20Mar: Note that the many responses defending suppression talk about how many lives could be saved, and how they can imagine a plan that would work, but none address the issue of how competent is our government to implement such plans. Amazing how easily people slip from “it could be done” to “my government could do this”.

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Respectable Rants

I’m not very impressed with most political arguments, especially those targeted at mass audiences. I don’t mind such things being informal, passionate, rude, speculative, rambling, or redundant. But I need them to address what I see as key issues. Yes, my tastes may be unusual, but there are many others like me. So let me explain what I want to hear in a good political “rant”.

Don’t Exaggerate – You know who you are, and you know what I mean. There is plenty enough at stake in most areas to motivate me without your exaggerating. At least pretend toward honesty. All of history isn’t at stake, and no this by itself won’t decide between freedom and despotism. Yes, I can roughly correct for your exaggerations, so this item does the least harm. But it still bugs me.

Admit Tradeoffs – We usually can’t get more of something good without also getting less of something else good. Or more of something bad. I might be willing to go for the package, but don’t pretend there won’t be costs. If this choice isn’t new, tell me why we made the wrong tradeoff before. If this used to be a private choice, explain why private choices about this tend to go wrong.

Show Search – The world is complex, our systems in it have many parts, and things keep changing. So much of finding better policy consists of searching in a vast space of possible system-situation combos. Don’t pretend that the best combo is obvious, or that you are sure what will happen under your favored option. Tell me about what options we’ve tried, what we’ve seen there, and about new promising combinations. Tell me about key design principles, and how you may have found a rare design option that happens to embody many good design principles at once.

Prepare To Learn – This is the most important, and neglected, item. Don’t just tell me you have a plan, with details on request. Tell me how we will learn to adapt and improve your plan. What size experiments do we start with, where, and measured how? How we will change our designs in response in new iterations? Don’t tell me we will all make those decisions together, that just won’t work. Instead, tell me who will make those decisions, and especially, what will be their incentives to do this well.

If you want to just copy something that’s worked out pretty well elsewhere, okay maybe I mainly want to hear about tradeoffs seen there. Data. But if you want to do something new, then I need to hear a lot more about your learning plan. Especially when your proposal has a wide scope, its outcomes are hard to measure, and take a long time to be revealed.

Look, our main social problem is how to organize activity so that we can learn together how to be productive and useful to each other. There are other problems, but they are minor by comparison. Somehow each of us must react to the signals our world sends us, and send our own signals in response, to induce all the stuff that needs to happen, and efficiently and well. It is all terribly complex, but also terribly important.

Every policy proposal is of some way to change this huge system. We need some theory not only to estimate consequences of your proposal, but also to deal with its many unanticipated consequences later. Please give me some indication of what theories you’ll rely on. The weaker the theories you need, the better of course, but you’ll need something.

For example, if you propose to nationalize US medicine, tell me which other nationalized system you plan to copy. How does it decide on which treatments are covered, and where new facilities are built? How are doctors evaluated and if needed disciplined? How do patients express their differing individual preferences within this system? And since those other systems don’t contribute much to global medical innovation, tell me that you are okay with a big reduction in global medical innovation, or tell me how your system will be different enough to promote a lot more innovation.

For example, if you propose to regulate social media to be less addictive, stressful, and fake-news-promoting, tell us exactly what is the scope of powers you propose to grant regulators, what standards they will use to measure such things, and how the rest of us are to judge if they do a good job. Is this new proposed feedback process plausibly more effective than each of us individually switching our social media platforms when we feel addicted, stressed, or faked?

As you know, most political discourse purposely avoids most of what I’ve asked for here. Advocates instead tend to frame each dispute as a simple and fundamental moral choice. Details are avoided, dangers are exaggerated, and tradeoffs, search, and learning are rarely unacknowledged as issues. Politicians refer to goals and avoid talking about difficulties of implementation, incentives, measurement, or learning.

And that’s a big reason to be wary of letting political systems manage complex things of wide scope. When I buy something from a private source, they tend to say more about details, about how to measure payoffs, and about how they and I will learn about what works best. Maybe not an ideal amount, but definitely more. They more tell me what I want to hear in a rant, or an ad. If you want to make a to-my-ears good political rant, learn a bit from them.

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Socialism Via Futarchy

On Bryan’s recommendation, I just read Niemietz’s Socialism: The Failed Idea That Never Dies, which credibly argues that two dozen socialism experiments over the last century have consistently failed, with roughly this pattern:

The not-real-socialism defence is only ever invoked retrospectively, namely, when a socialist experiment has already been widely discredited. As long as a socialist experiment is in its prime, almost nobody disputes its socialist credentials. On the contrary: practically all socialist regimes have gone through honeymoon periods, during which they were enthusiastically praised and held up as role models by plenty of prominent Western intellectuals. (More)

Noteworthy results from the latest experiment:

The number of worker-run cooperatives increased from fewer than 1,000 when Chávez was first elected to well over 30,000 in less than a decade. By the end of Chávez’s second term, cooperatives accounted for about 8% of Venezuela’s GDP and 14% of its workforce … It soon became clear … that many cooperatives were behaving like capitalist enterprises, seeking to maximize their net revenue … For example, rather than supplying their products to local markets … export them to other countries where they can sell them at higher prices … Also, many cooperatives have refrained from accepting new members. … As Chávez himself said: … if we are 20 in a cooperative, we are going to work for the benefit of us 20, and that is merely capitalism. Cooperatives need to be impelled towards socialism.’ (More)

Even after so many very expensive experiments, they still apparently have only have the vaguest idea of what detailed arrangements might actually achieve what they want. It seems they have mainly waited until an allied group gained control somewhere, and then tried a few random variations that resonate with local supporters.

There still seems to be great passion in the world for further socialism experiments, but it seems hard to hold much hope if they continue with this pattern. While I’m not personally very inspired by the socialist vision, I do like for people to get what they want, and that includes people who want socialism. So I’m taking the time to think about how to help them get it.

Which induces me to consider variations on futarchy to help to achieve socialism. If you recall, futarchy is a form of governance wherein market speculators choose policies to maximize an ex-post-measured welfare measure. The thicker are these markets (perhaps via subsidies), the stronger are the incentives for speculators to learn what is actually effective in achieving that welfare. This seems a good match, if what socialism most needs now is less a good system and more a good learning environment in which to search for good systems.

The big question for futarchy-based socialism is: what are the ex-post-measurable outcomes that indicate a successful socialism? That is, how would you know one when you saw it? Obviously you’d want to include some basic consumption measures, like G.D.P., but if that’s all you maximize there’s no obvious reason why the result will be especially socialist. You might include risk-aversion over consumption, which punishes inequality to some degree, but again it isn’t obvious that risk-aversion greatly favors socialism. Even more directly and strong punishing inequality and emphasizing the poor doesn’t obviously favor any more socialism than we see in high-redistribution low-regulation capitalist Nordic “social democracies”.

Consider:

Socialism is … characterised by social ownership of the means of production and workers’ self-management of enterprise … Social ownership can be public, collective or cooperative ownership, or citizen ownership of equity. (More)

What all socialism has in common … is … bottom-up governance of society based on local assemblies which elect delegates that share their peoples’ living conditions, can be overridden, answer to and are replaceable by them, who can federate into councils and repeat the process for larger areas and amounts of people. (More; see also)

It seems that to many a central concept of socialism is each person having a high a degree control (also called “ownership”) over their world, including both their immediate world and the larger economic/political world. This is not just control to enable one to achieve high consumption, but also control over one’s workplace, and probably even more control than is required for these purposes. In this view, successful socialism is a world of busybodies with strong abilities to get into each others’ business.

To promote socialism then, we might try a futarchy whose welfare measure includes not just measures of consumption, but also of control.

For example, one measure of control would ask random people to try to induce particular random changes in their world. The stronger the correlation between actual changes afterward and the changes that we randomly assigned them, the more we’d say that people in this world had a lot of control over it. But we’d need to find some widely-accepted weights that say which possible changes count for how much, and we’d need ways to get people to actually try to change their world in the ways we assign them. These seems hard to achieve. Also, this would probably find near zero control for larger social structures, no matter how things are arranged. And we’d need to find ways to prevent this world from suddenly becoming more plastic to support test changes, while less supporting non-test changes.

Also, I worry that simple-minded measures of individual control might induce many decisions to be made via big xor trees. Such trees would seem to let anyone who controls inputs to any leaf of the tree determine the root as well. Though of course in practice not being able to predict the other inputs means you can’t actually usefully control the output. But can we formally define average individual control in a way that doesn’t promote such xor trees?

Probably the simplest solution is to just survey people about their sense of control over their world. You might want to emphasize people who’ve recently visited other worlds, so they can reasonably compare their world to others. And you’d want to limit the abilities of local authorities to force people to give desired survey answers, such as via the threat of retaliation. If a strong central government were part of a socialist society, that may also make it difficult to measure consumption. Such governments have been known to try to distort consumption stats to make themselves look good.

One solution to these problems would be to rely on capitalist foreigners, and on travel to visit them, for both market speculators and welfare measurement.

That is, let random citizens (perhaps whole families) of the socialist society be extracted periodically and made to visit a capitalist foreign land. During that foreign visit, they can be privately interviewed about both their sense of control and their consumption levels, and they can be offered the chance to stay in that foreign land. (Via offers with varying degrees of attractiveness.) Stats on what they said and on who chose to stay could then be used to estimate the welfare of that society, without allowing that socialist government to retaliate via knowing who said what. Foreign speculators could also pay to talk privately to these visitors, to help inform their market speculation choices.

In this scenario, this socialist society would, to help it more quickly learn what works best, commit to delegating to these capitalist foreigners the measurement of its welfare and substantial participation in their speculative governance markets. Of course people at home within this socialist society could also be allowed to speculate in these markets, and to contribute to stats read by foreigners. But this approach avoids extreme corruption problems by making sure that foreigners can speculate, and measure welfare, in ways that are outside of the control of a perhaps powerful socialist government.

Of course if this approach eventually settled on a stable solution for making a good socialist society, they might want to drop this external futarchy run by foreigners to become entirely self-governing. That would make sense if and when full self-governance became more important than faster learning about how to make socialism work.

And that’s as far as I’ve thought for now. Of course if sufficient interest were expressed in this concept, I could put in some more thought.

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Rules of Public Evidence?

The United States is perhaps unique among the developed world in that under law, some hate speech is protected. (more)

The United States has a very complicated system of evidentiary rules; for example, John Wigmore’s celebrated treatise on it filled ten volumes. James Bradley Thayer reported in 1898 that even English lawyers were surprised by the complexity of American evidence law. (more)

The main rules of evidence in Sweden are: (i) the principle of free evidence, meaning that there are basically no provisions on what is permitted as evidence as long as it is relevant to the facts to be proven in the case; and (ii) the principle of free evaluation of evidence, meaning that the court evaluates all evidence at its discretion. (more)

On 2 December 1766 Sweden became the first country in the world to have freedom of the press written into the constitution. (more)

Many in the US are proud that the US has weaker limits on speech than do most other nations, especially regarding political speech. However, most in US are not aware that the US also has some of the strongest “rules of evidence” limits on speech in legal courts. These US rules are new; we didn’t have them centuries ago.

Yet the usual arguments used to argue for free political speech can also argue for free court speech, while the usual arguments supporting rules of evidence can also support similar limits on political speech. And the examples of other nations shows that there isn’t a strong world consensus that court limits make more sense than political speech limits. Sweden shows that one can allow free speech in both contexts, while many other nations show that one can also have strong limits in both contexts.

Here are some common rules of evidence limiting trial speech. These are rough guides; the law is quite complex with simple summaries rarely applying exactly.

  • A big clear separation is required between “news” and “editorials”, that is between supporting evidence (most of a trial) and arguments for conclusions (given in closing statements).
  • All witnesses must swear oaths to tell the truth, and are guilty of a crime if they lie.
  • Anyone may be required to testify, except the accused, spouses, docs, therapists, lawyers.
  • One must apply any burdens of proof separately to each element, not just to overall evidence.

All these kinds of evidence are not allowed:

  1. The opinion of a non-expert, unless it is reached unconsciously,
  2. Unauthenticated tangible evidence,
  3. Indirect circumstantial evidence,
  4. Data on similar prior convictions or behavior by the accused,
  5. Hearsay, i.e., what someone heard someone else say,
  6. Simple “naked” statistical evidence, based on relative counts rather than direct observations,
  7. Extrinsic evidence of the contents of a written contract,
  8. Evidence obtained via illegal acts, and
  9. Confessions obtained in an “unreliable” context.

If we wanted, we could eliminate these court rules, and just let everyone say anything relevant that they want in court, as happens now in Sweden.

Or, we might instead apply many of these rules to public political speech. For example, we could require evidence and argument to appear in separate places, we could ban opinions by non-experts, and ban arguments using hearsay or naked statistical evidence. We might even ban irrelevant distracting tangents.

Such rules would require some discretion to enforce, but not much more than judges already use now to apply such rules in courts. Any disputes about excess or misdirected discretion would be judged by those very same legal judges who now make those judgments in courtrooms. And as with most law, minor offenses, which bring small sanctions, may be mostly ignored by both state police and by private suits.

Even in the US, we already apply many limits to business speech. For example, alcohol firms can’t tell the public that most studies find health benefits from modest consumption, anti-discrimination laws limit the kinds of questions one can ask in a job interview, professional licensing limits who you can pay for advice, and some offers are banned by blackmail and wrongful interference with relations rules.

The business world still roughly functions with these rules, as do political worlds in other nations that have strong limits on political speech. And courts could still roughly function without rules of evidence, as happens now in Sweden. These are clearly choices we could make, not clearly forced on us by survival or even wealth considerations.

So what should we choose, more free speech at trials, less free political speech, or a continuation of our inconsistent approach? Here’s a Twitter poll on that:

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Let Foreigners Speak

In our ordinary informal lives of leisure, friendship, romance, and entertainment, we mainly regulate and mitigate the harms of speech with the option to use more speech. If we don’t like what someone says, we say something critical of what they said, or of them. We label, index, dissect, and evaluate, but we don’t ban or require any particular speech, other than via the incentives that our speech can produce.

However, as we move into the worlds of business and politics, we more often endorse censorship and forced speech. For example, regarding contracts, we allow lawsuits alleging fraud, and we require disclosure of safety info. Occupational licensing limits from whom you can get legal or medical advice. We let regulators forbid alcohol firms from making ads that say truthfully that teetotalers are less healthy than others, and require that firms disclosure financial info. We allow lawsuits alleging that slander hurt our business revenue, and require that everyone all carry valid ID. In politics, we require that donors disclose themselves, and we ban foreigners from direct participation in domestic election conversations.

It is worth remembering that most of the worse villains in history were famously far into censorship and required speech. The Catholic inquisition required people to agree with their dogma, and tortured and killed those who disagreed. US south slave owners beat slaves for speaking their minds, and prohibited teaching them to read. Nazi and communist regimes required public vows of allegiance, censored art and books, and punished dissidents. For centuries dictators have repressed dissidents, censored speech, and sought to control schools, newspapers, radio, and TV. Oppressive churches, firms, and other orgs have also sought to censor dissent and to require public agreement with their dogmas.

To me the obvious lesson from this history is to be reluctant to endorse banned or required speech; try as much as possible to solve speech problems with more speech. Yes, we might want to limit things like saying “fire” in a crowded theatre, but there’s a vast space of possible added speech solutions to explore, and we’ve seen a lot of innovation there in the last few decades. (Such as search engines and prediction markets.) It seems dangerous to empower some groups to decide what to censor or require; their first priority is too often to censor criticism of them and to require public agreement with them.

Traditionally US courts have declared themselves the most reluctant to regulate election-related speech, as they see promoting effective political competition as the core rationale for free speech. But lately it saddens me to see people especially eager to regulate political speech. People push for such regulation of politically-related “fake news” by our new mass-participation common-carriers like Facebook and Google, even though in past generations related common-carriers like telephones were especially prohibited from regulating political speech.

It also saddens me to see Trump critics focus most on cases where Trump encouraged foreigners to collect and distribute info on Trump’s political rivals. The focus of the Mueller investigation was Trump apparently encouraging Russians to find & distribute true dirt on Hillary Clinton. The focus of the current impeachment process is Trump apparently encouraging Ukrainians to find and distribute true dirt on Joe Biden.

I’m not especially a Trump fan, though I don’t intuitively loathe him remotely as much as so many do. And I understand that his critics see him as having done a great many quite blameworthy things. So it is sad to see this focus on foreign election influence, which will make it harder for us to adopt the global free speech norms that I prefer. I’d rather that everyone in the world was allowed and even encouraged to speak on everything in the world, including everyone’s elections. My reason is just the simple standard free speech arguments outlined above.

I can maybe see limiting the abilities of enemy combatants during wartime to make their case to our citizens that we should quit the war or that we are the morally guilty party. Though even here I’m not very convinced. But outside of war, I’d rather just let foreigners talk as much as they want to our voters. Yes of course they will have agendas they pursue in what they say, but that’s usually true of most everyone not only in election conversations, but in most all kinds of conversations.

Let the listener beware. Don’t believe everything you hear, and if you don’t like what others say, then by all means criticize it. But don’t outlaw it. Or require people to say the opposite. We just shouldn’t consider it treason or espionage to encourage foreigners to influence domestic elections by talking.  (It is fine, of course, to disapprove of assassinations.)

I can see the point of arguing that when a politician tries to negotiate to encourage particular speech, some kinds of pressures or incentives they might offer are legitimate, while others are not. But my understanding is that most backroom politics is largely about offering pressures and incentives to get people to go along with your plans, many of which are driven by selfish career agendas. It is not yet clear to me that Trump’s pressures and incentives in these foreign talk cases were greatly out of line with most politics.

But my main interest here isn’t Trump, it is foreign free speech. Let’s remember the larger lesson of speech in history, that the worst villains ever didn’t like it. So let us be wary of speech bans and requirements, and instead move toward letting everyone talk on everything, and fixing speech problems with more speech.

Added 11Oct: Alas, my Twitter followers don’t agree with me:

Added 13Oct: US law bans on foreigner participation in US elections.

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Yay Democracy Dollars

My proposal is that we give every American 100 democracy dollars that you can only give to candidates and causes that you like. This would washout the lobbyist cash by a factor of eight to one. (Yang in Thursday debate)

Gillibrand proposed this also, as have some law profs, and its been tried in Seattle. In my Twitter poll, the main concern people express re private firms doing things instead of government is that firms might lobby to change policy. I’m personally not so concerned about firm lobbying, as public employees and agencies also lobby, and as academics find it hard to see any substantial effects of lobbying. But there does seem to be a perception problem and $100 a person per year seems to me a small price to pay to address it.

Reading up on this idea, I see that many try to tie it to other policies they want, and so try to require politicians to accept no other money if they accept this, or only allow it to be spent in your state or only at particular points in the election cycle. Yang seems to have it right; spending constraints are mistakes. As Yang says, let people use the money at any time for any political organization, lobbyist, or candidate.

The only criticism I can find online, beyond harms from spending constraints, is this complaint that it might make politicians listen more to the public:

It would simply multiply the amount of money in politics by an order of magnitude, with effects that wouldn’t be good for the political system at large, but would be good for ad buyers and PR flacks and political operatives. … Citizens have no reason to think too hard about how they spend. … Will politicians get more populist or less? Will voters gravitate towards visionary leaders making hard decisions about confounding policy issues? Or will they pick whoever tells the most flattering lies in the most entertaining way? Because we know what that looks like. It’s ugly, and it’s orange. (More)

Yes, overall I might rather slant the system toward the better informed, and elite money in politics might be seen as doing that. But if that’s going to push people to avoid substituting firms for government, I’d rather use some other method to promote informed voters.

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10% Less Democracy

My GMU econ colleague Garett Jones has a book coming out in February: 10% Less Democracy: Why You Should Trust Elites a Little More and the Masses a Little Less. I just read it, and found it so engaging that I’ll respond now, even though Jones’ publisher surely prefers book publicity nearer its publication date.

Regarding to the vast space of possible governments, it seems to me that Jones uses “more democratic” to describe situations closer to a 100% democracy ideal, wherein all citizens have an equal say and can vote directly on all government choices, with government able to control all other choices. In this framing, anything that makes it harder for voters to simply and directly choose the options they understand and prefer makes a system less democratic.

That includes electing representatives instead of directly voting on policy, and also logrolling, divided government, and other complexities that make it harder for citizens to tell what is going on and to assign responsibility. It includes any limits on who can vote, and any ties to outsiders that limit internal discretion, like treaties with other nations or selling debt to bondholders. And it includes longer terms for the elected, and more indirection, such as when politicians appoint other officials instead of directly electing those other officials.

By these standards, our current system obviously deviates greatly from a fully democratic ideal, and Jones approves of most of these deviations, especially ones that result in longer term views and in more informed voters and officials. And he’d like to move modestly further in such less-democracy directions, though not too far, as he accepts that strong autocrats tend much more to kill their citizens, allow famines, and create more economic growth volatility (though similar average levels of war and growth). Jones musters a lot of data in support of his modestly-cut-democracy view.

I did a few surveys yesterday which suggest that overall my Twitter followers find the existing degree of democracy pretty close to their ideal, though a majority would also prefer a reduction. So, for them, Jones’ position doesn’t seem at all controversial:

In the past I’ve tended to think about all this in terms of principal-agent problems. It doesn’t always make sense to make all decisions yourself, if you can instead consult an agent who does or could know more than you. But you must be careful to keep such agents under sufficient control. So if they are careful, voters may reasonably gain by delegating to experts. However, the reason I found Jones’ book so engaging is that I found a lot of the data Jones presented to be challenging to understand from this principal-agent view. (And also, it was a pleasure to engage such fundamental issues.)

For example, politicians with longer terms but without safe districts act at the end of their term more like politicians who have shorter terms. They pass fewer bills, make more pork projects, more trade protection, more labor market regulation, more environmental reforms, have optimistic budget forecasts, and support fewer currency devaluations. Apparently, voters don’t remember much of what politicians do beyond the last years or so.

Cities with appointed (vs elected) city treasurers pay 0.7% lower interest rates. Central bankers who are more independent produce lower inflation and fewer financial crises, at no overall cost to unemployment or real growth rates. Elected judges give more awards to in-state folks at the expense of out of state folks, and their legal opinions are less often cited as precedent. Nations with more independent judges have stronger property rights, less red tape to start a business, fewer employment regulations, and less government ownership of banks.

In general, elected regulators allow utilities to pass fewer costs on to customers, resulting in both lower prices but also in less investment and worse service. Electric utilities regulated by elected officials have lower consumer prices, pay higher interest rates, and more blackouts. Elected telecom regulators oversee lower capacity services, and independent telecom regulators gave in less to demands by government telecom organizations.

Jones is inspired by these examples to support Alan Blinder’s proposal to create an independent central-bank-like expert body to set tax policy, with Congress deciding only broad parameters like total take, progressively, and corporate fraction.

Some of these patterns can be understood in terms of commitment problems. When there is a temptation for politicians to renege on prior commitments, it can help to let them commit via choosing appointees who are out of their control at the crucial moments of temptation. Commitment problems seem especially important for city treasurers, central bankers, and utility regulators. And law court decisions are a classic commitment problem.

These results can also be somewhat understood in terms of the advantages of retrospective relative to prospective voting, and of aggregation in retrospective voting. That is, if voters are impatient and can better judge how their life has gone in the past than they can judge the effects of policies on the future, then voters can be better off when politicians are judged more on their past accomplishments, which happens more with longer terms. And if voters find it hard to attribute responsibility to specific officials, it can be better if they they focus on electing fewer bigger politicians (like mayors) who appoint more other officials.

However, I’m not sure that commitment problems and retrospective voting actually account for most of these patterns. Jones’ book subtitle talks instead about trusting elites, and do note that there is a much more widespread pattern of governments authorizing high status experts in each area to decide key results in their area, including who are to be considered the next generation of experts.

Consider how much we defer to military experts on defense, police on crime, medical experts on health, academics on research, lawyers on law, etc. Yes, in principle we could punish them if past outcomes in their area were bad, but we rarely do this. And professional licensing is a more general policy by which government authorizes control by the high status people in each area. These policies seem less like clever indirect ways to commit or to enable retrospective voting, and more like a simple status effect, wherein voters and politicians want to be seen as respecting and not opposing those high in status.

While all these examples that Jones didn’t include seem to be examples of less democracy, they seem to me to less clearly support his position that this kind of less democracy is good. Excess professional licensing does a lot of harm. The military seems to overemphasize things that high status leaders like more, like fighter planes and aircraft carriers. Medicine seems to overemphasize high status doctors over other medical professionals. Education and research seems to overemphasize the topics by which academics gain the highest status. Law seems overly complex and to overemphasize the need for expensive lawyers. And so on.

Compared to arguing over specific policies, I very much appreciate Jones calling our attention to larger more general issues regarding the design of our political system. But I prefer to generalize even further, via something like futarchy. I can support futarchy without needing opinions on whether tax policy should be run by a panel of independent experts, nor even whether it is in general better or worse to let high status experts in each area control those areas. As long as we use some reasonable (broad retrospective) national welfare measure, with futarchy I could instead trust a general mechanism to make good choices about such things.

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Grabbing Now Versus Later

Today and yesterday’s Democratic debates suggests a big recent bump in tastes for regulation and redistribution, in order to lower the status of big business and the rich, and to spend more on the needy and worthy causes. South Korea, which I’ve just visited, sees a similar trend, as does Europe:

Europe’s mainstream parties are going back to the 1970s. In Germany, the U.K, Denmark, France and Spain, these parties are aiming to reverse decades of pro-market policy and promising greater state control of business and the economy, more welfare benefits, bigger pensions and higher taxes for corporations and the wealthy. Some have discussed nationalizations and expropriations. It could add up to the biggest shift in economic policy on the continent in decades. (more)

While I often hear arguments on the moral and economic wisdom of grabbing to redistribute, I rarely hear about the choice of whether to grab now versus later. The issues here are similar to those for the related choice in charity, of whether to give now versus later:

Then Robin Hanson of Overcoming Bias got up and just started Robin Hansonning at everybody. First he gave a long list of things that people could do to improve the effectiveness of their charitable donations. Then he declared that since almost no one does any of these, people don’t really care about charity, they’re just trying to look good. … he made some genuinely unsettling points.

One of his claims that generated the most controversy was that instead of donating money to charity, you should invest the money at compound interest, then donate it to charity later after your investment has paid off – preferably just before you die. … He said that the reason people didn’t do this was that they wanted the social benefits of having given money away, which are unavailable if you wait until just before you die to do so. And darn it, he was totally right. Not about the math – there are severe complications which I’ll bring up later – but about the psychology. (more)

Others … argue that giving now to help people who are sick or under-schooled creates future benefits that grow faster than ordinary growth rates. But … if real charity needs are just as strong in the future as today, then all we really need [for waiting to be better] are positive interest rates. (more)

You may be tempted to move resources from the rich and business profits to the poor and worthy projects, because you see business exploitation, you see low value in the rich buying mansions and yachts, you see others in great need, and you see great value in many worthy projects. But big business doesn’t actually exploit much, the consumption of the rich is less of real resources, and the rich tend to consume less relative to investing and donating.

So instead of grabbing stuff from the rich and businesses today, consider the option of waiting, to grab later. If you don’t grab stuff from them today, these actors will invest much of that stuff, producing a lot more stuff later. Yes, you might think some of your favorite projects are good investments, but let’s be honest; most of the stuff you grab won’t be invested, and the investments that do happen will be driven more by political than rate-of-return considerations. Furthermore, if you grab a lot today, news of that event will discourage future folks from generating stuff, and encourage those folks to move and hide it better.

Also, the rich put much of what they don’t invest into charity. And there’s good reason to think they do a decent job with their charity efforts. Most have impressive management abilities, access to skilled associates, and a willingness to take risks. And they can more effectively resist political pressures that typically mess up government-managed projects.

Finally, when the rich do spend money on themselves, much of that goes to paying for positional and status goods that generate much less in the way of real wastes. When they bid up the price of prestigious clubs, real estate, colleges, first-class seats, vanity books and conference talks, etc., real resources are transferred to those who get less prestigious versions. And our best model of status inequality says that allowing more of this doesn’t cause net harm.

So the longer you wait to grab from the rich, the longer they will grow wealth, donate it well, and transfer via status goods. Just as it is dangerous to borrow too much, because you may face big future crises, it can be unwise to grab from the rich today, when you could grow and farm them to create a crop available to harvest tomorrow. South Korea would have been much worse off doing big grabs in 1955, relative to waiting until today to grab.

Added 29June: Some people ask “wait how long?” One strategy would be to wait for a serious crisis. This is in fact when the rich have lost most of their wealth in history, in disasters like wars, pandemics, and civilization collapse. Another strategy would be to wait until there’s so much capital that market rates of return fall to very low levels.

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Libertarian Varieties

Here at GMU Econ we tend to lean libertarian, but in a wide range of ways. For example, here are two recent posts by colleagues:

Don Boudreaux:

The economy is an emergent and dynamic order that was not, and could not possibly be, designed – and, hence, that cannot possibly be successfully engineered. … the economy is not a device or an organization with a purpose. It is, instead, the result of the multitude of interactions of hundreds of millions of diverse individual entities – persons, households, firms, and governments – each pursuing its own purposes. …

Competent intro-economics professors keep their aspirations modest. In my case, these are two. The first is to impress upon my students the full weight of the fact that the economy is an inconceivably complex order of interactions that cannot possibly be engineered. The second is to inspire students always to ask questions that too often go unasked – questions such as “From where will the resources come to provide that service?” “Why should Sam’s assessment of Sally’s choices be regarded more highly than Sally’s own assessment?” “What consequences beyond the obvious ones might result from that government action?” And, most importantly of all, “As compared to what?”

Students who successfully complete any well-taught economics course do not have their egos inflated with delusions that they can advise Leviathan to engineer improvements in society. Quite the opposite. But these students do emerge with the too-rare humility that marks those who understand that the best service they can offer is to ask penetrating and pertinent questions that are asked by almost no others. (more)

I’m a big fan of learning to ask good questions; it is great to be able to see puzzles, and to resist the temptation to explain them away too quickly. However, I’m less enamored of teaching people to “ask questions” when they are supposed to see certain answers as obvious.

And the fact that a system is complex doesn’t imply that one cannot usefully “engineer” connections to it. For example, the human body is complex, and yet we can usefully engineer our diets, views, clothes, furniture, air input/outputs, sanitation, and medical interventions.

Yes, most students are overly prone to endorse simple-minded policies with large side effects that they do not understand. But I attribute this less to a lack of awareness of complexity, and more to an eagerness to show values; they care less about the effects of polices than about the values they signal by supporting them. After all, people are also prone to offer overly simple-minded advise to the individual people around them, for similar reasons.

Dan Klein:

Government is a special sort of player in society; its initiations of coercion differ from those of criminals. Its coercions are overt, institutionalized, openly rationalized, even supported by a large portion of the public. They are called intervention or restriction or regulation or taxation, rather than extortion, assault, theft, or trespass. But such government interventions are still initiations of coercion. That’s important, because recognizing it helps to sustain a presumption against them, a presumption of liberty. CLs [= classical liberals] and libertarians think that many extant interventions do not, in fact, meet the burden of proof for overcoming the presumption. Many interventions should be rolled back, repealed, abolished.

Thus CLs and libertarians favor liberalizing social affairs. That goes as general presumption: For business, work, and trade, but also for guns and for “social” issues, such as drugs, sex, speech, and voluntary association.

CLs and libertarians favor smaller government. Government operations, such as schools, rely on taxes or privileges (and sometimes partially user fees). Even apart from the coercive nature of taxation, they don’t like the government’s playing such a large role in social affairs, for its unhealthy moral and cultural effects.

There are some libertarians, however, who have never seen an intervention that meets the burden of proof. They can be categorical in a way that CLs are not, believing in liberty as a sort of moral axiom. Sometimes libertarians ponder a pure-liberty destination. They can seem millenarian, radical, and rationalistic. …
But libertarian has also been used to describe a more pragmatic attitude situated in the status quo yet looking to liberalize, a directional tendency to augment liberty, even if reforms are small or moderate. (more)

Along with Dan, I only lean against government intervention; that presumption can be and is often overcome. But the concept of coercion isn’t very central to my presumption. At a basic level, I embrace the usual economists’ market failure analysis, preferring interventions that fix large market failures, relative to obvious to-be-expected government failures.

But at a meta level, I care more about having good feedback/learning/innovation processes. The main reason that I tend to be wary of government intervention is that it more often creates processes with low levels of adaptation and innovation regarding technology and individual preferences. Yes, in principle dissatisfied voters can elect politicians who promise particular reforms. But voters have quite limited spotlights of attention and must navigate long chains of accountability to detect and induce real lasting gains.

Yes, low-government mechanisms often also have big problems with adaptation and innovation, especially when customers mainly care about signaling things like loyalty, conformity, wealth, etc. Even so, the track record I see, at least for now, is that these failures have been less severe than comparable government failures. In this case, the devil we know more does in fact tend to be better that the devil we know less.

So when I try to design better social institutions, and to support the proposals of others, I’m less focused than many on assuring zero government invention, or on minimizing “coercion” however conceived, and more concerned to ensure healthy competition overall.

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Understandable Social Systems

Brennan and Magness’ book Cracks in the Ivory Tower: The Moral Mess of Higher Education reviews many ways that colleges overpromise, and fail to deliver. It confirms (with Caplan’s Case Against Education) a picture wherein ordinary people are pretty clueless about a big institution in their lives. This cluelessness also seems to apply to many other life areas, such as medicine, charity, politics, etc. In each area, most people don’t seem to understand very basic things, like what exactly is the product, and what are the incentives of professionals?

That is, we each live in many complex social systems, such as political, transport, medical, religious, food, and school systems. Due to our poor understanding of such systems, we have low abilities to make intelligent personal choices about them, and even worse abilities to usefully contribute to efforts to reform them. This suggests a key criteria for evaluating social systems: understandability.

When we don’t understand our social systems, we can be seen as having little agency regarding them. They are like the weather; they exist, and may be good or bad, but we are too ignorant to do much about them. If a situation is bad, we can’t work to make it better. Some elites might have agency re such institutions, but not the rest of us. So a key question is: can we reform or create social institutions that are more understandable, to allow ordinary people to have more agency regarding the institutions in their lives?

One possible solution is to use meta-institutions, like academia, news media, or government regulators, that we may better understand and trust. We might, for example, support a particular reform to our medical system based on the recommendation of an academic institution. Our understanding of academia as a meta-institution could give us agency, even when we were ignorant of the institutions of medicine.

As an analogy, imagine that someone visits a wild life refuge. If this visitor does not understand the plants and animals in this area, they might reasonably fear the consequences of interacting with any given plant or animal, or of entering any given region. In contrast, when accompanied by a tour guide who can advise on what is safe versus dangerous, they might relax. But only if they have good reason to think this guide roughly shares their interests.  If your guide is a nephew who inherits your fortune if you die, you may be much less relaxed.

So here’s a key question: is there, at some level of abstraction, a key understandable institution by which we can usefully choose and influence many other parts of our social world? If we think we understand this meta institution well enough to trust it, that could give us substantial agency regarding key large scale features of our social worlds. For example, we could add our weight to particular reform efforts, because we had good reasons to expect such reforms to on average help.

Alas, academia, news media, and government regulators all seem too complex and opaque to serve in this key meta role. But three other widely used and simpler social mechanisms may be better candidates.

  1. Go with the majority. Buy the product that most other people buy, use the social habits that most others use, and have everyone vote on key big decisions. When some people know what’s best, and others abstain or pick randomly, then the majority will pick what’s best. Yes, there are many topic areas where people don’t abstain or pick randomly when they don’t know what’s best. But if we can roughly guess which are the problematic topics, then in other areas we may gain at least rough agency by going with the crowd.
  2. Follow prestige. Humans have rich ancient intuitive mechanisms for coordinating on who we find impressive. These mechanisms actually scale pretty well, allowing us to form consensus on the relative prestige of nations, professions, schools, cities, etc., and via these proxies, of individuals. Related ancient mechanisms let us form consensus on elite opinion, i.e., on what prestigious people tend to think on any given topic. Yes, elites are biased toward themselves, and to express opinions that make them seem impressive. Still, we can do worse than to follow our best.
  3. Embrace Winners. Nations, cities, firms, professions, teams, media, clubs, lovers, etc. often compete, in the sense that some grow at the expense of others that shrink or disappear. Often they compete for our personal support. And often we see judge that the competition is roughly “fair” and open to many potential competitors. In such cases, we may embrace the winners. For example, we may try many competitors, and stick with those we like best. Or we may go with the lowest price offer, if we can control well enough for quality variations.

Each of these big three mechanisms has limits, but they do seem to satisfy the requirement that they are very simple and many ordinary people can at least roughly understand why they work, and where they run into problems. Together they may cover a pretty wide range of cases. In addition, we can augment them with many other approaches. For example, we can just expose ourselves to choices and follow our intuitions on which are best. We can follow choices by those we know and trust well, those who seem to know more about a topic, and those who seem more honest in their evaluations. Together all these tricks may give us substantial agency re the social institutions in our lives.

Yet those examples of how badly most people misunderstand school, medicine, etc. suggest there is vast room for improvement. And so I look for ways to do better. Not just at designing institutions that actually work, in the sense of producing efficiency, equity, generality, robustness, evolvability, etc. Not just at designing meta-institutions with these features. And not just at gaining the support of majorities or elites, or at winning many fair competitions in the world. I seek meta-mechanisms that can also be simple and clear enough to their advantages be understandable to many ordinary people.

This is the context in which I’d like you to see my highest hopes for prediction markets. I offer them not just as mechanisms that actually work, producing and aggregating info at a low cost. After all, there may be other complex and subtle mechanisms that experts expect to achieve similar or even somewhat better results. But the problem in that case is that ordinary people may wonder how well they can trust such expert judgements.

No, I’m interested in the potential for prediction markets to serve as a simple understandable meta-institution, on par with and at the level of going with the majority, following prestige, and embracing winners. Simple enough that many ordinary people can directly understand why they should work well in many applications, and also to understand roughly where their limitations lie. Yes, not everyone can understand this, but maybe most everyone could know and trust someone who does understand.

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