Tag Archives: Politics

Em Redistribution

I’m in the last few weeks of finishing my book The Age of Em: Work, Love, and Life When Robots Rule The Earth, about social outcomes in a world dominated by brain emulations. As a teaser, let me share some hopefully non-obvious results about redistribution in the em world.

There are many kinds of inequality. Inequality exists between different species, between generations born at different times, and between nations of the world at a time. Within a nation at a time, there is inequality both between families and within families. There is also inequality across the moments of the life of each person. In all of these cases, there is not only financial inequality, but also inequality in status, prestige, pleasure, lifespan, happiness, and more. There is also inequality between the size of families, firms, cities, or nations, even when individuals within those groupings are equal.

Today, we have relatively little intentional redistribution between generations or between nations. Redistribution within the moments of a person’s life happens, but that is mostly left to that person to choose and to fund. Similarly, redistribution between siblings is mostly achieved via differential treatment by parents. Instead, most concern today about inequality, and most debate about redistribution to address inequality, focuses on one very particular “standard” kind of inequality.

This standard inequality looks at differences in average individual financial incomes between the families of a nation, all at a given time. This type of inequality is actually one of the smallest. For example, in the U.S. today financial inequality between families is only one third the size of that inequality between siblings within families, and even that is much less than the inequality between individuals from different nations. We may focus our redistribution feelings on this standard inequality because it seems to us the most analogous to the inequality that forager sharing norms addressed. Alternatively, perhaps it is the most profitable type of redistribution for opportunistic rent-seekers.

This history suggests that the em world will have little redistribution between em generations or city states, and also that each clan is mostly in charge of deciding how to address inequality within that clan. After all, em clan members are more similar and closer to each other than are human siblings, even if they may sometimes be more distant from each other than are typical human life moments. Also, clan members have rather complex relations with each other, making it hard pick a natural sub-clan unit to be the standard basis for counting inequality. So that leaves ems with comparing inequality between clans.

A set of em clans can be unequal in two different ways. One way focuses on individual incomes, or perhaps individual happiness or respect, and says that a clan is better off if its individuals are on average better off. The other way focuses on the overall size and success of a clan. Here a clan is better off if it has more members, resources, or respect. Historically, most redistribution efforts have focused on average individual outcomes. For example, we have seen very little efforts to redistribute between human family clans based on family size. That is, we almost never take from families with many descendants in order to give to families that have few descendants. Nor do we take much from big nations, cities, or firms to give to smaller ones.

Because most em wages are near subsistence levels, unregulated wages have less inequality than do wages today. So em clans naturally have less inequality of the standard sort that is the focus of today’s redistribution. In contrast, em clans have enormous inequality in clan size, resources, and respect. However, history gives little reason to expect much redistribution to address this inequality. It is not very analogous to forager sharing, nor does it lend itself to profitable rent-seeking.

Thus the main kind of redistribution that we have reason to expect in the em era is between the clans of a city, based on differences of average within-clan individual income. But we expect less inequality of this sort in the em world, and so expect less redistribution on this basis.

Income taxes are today one of our main mechanisms for reducing the standard inequality that compares individual incomes between families within a nation. Over the last two centuries, big increases in the top marginal tax rates have mostly followed wars where over two percent of the population served in the military. For example, in the U.S. the top marginal tax rate jumped from 15% to 67% in 1917, during World War I. Controlling for this effect, top tax increases have not been correlated with wealth, democracy, or the political ideology of the party running the government. This weakly suggests that the local degree of individual income redistribution between the clans of an em city may depend on the local frequency of large expensive em wars.

If ordinary humans are included straightforwardly in the redistribution systems of the em world, then the simple result to expect is transfers, not only away from richer humans, but also from humans to ems overall. After all, in purely financial terms typical ems are poorer than the poorest humans. Redistribution systems may perhaps correct for the fact that em subsistence levels are much lower than are human subsistence levels. But if so such systems may also encourage or even require recipients of aid to switch from being a human to being an em, in order to lower costs.

During the em era, humans typically have industrial era incomes, which are much higher than subsistence level incomes. While many and perhaps most humans may pay to create a few ems, they tend to endow them with much higher than subsistence incomes. In contrast, a small number of successful humans manage to give rise to large em clans, and within these clans most members have near subsistence incomes. Thus transfers based on individual income inequality take from the descendants of less successful humans and give to descendants of more successful humans.

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Regulating Government

Wall Street is apparently profiting from helping local governments use an accounting trick to underfund pensions:

Pension bonds … current boom is … being driven … by a new accounting quirk that has largely escaped public notice while morphing into a major marketing tool for Wall Street banks. The quirk stems from a rule change that was meant to force governments to more clearly disclose the health of their pension funds. … If a pension plan is so poorly funded that it is projected to run out of cash, the new rules require it to make less optimistic projections about future returns. That increases the reported pension shortfall. But if governments infuse a big slug of borrowed money into the fund, they can resume using optimistic projections, and the shortfall shrinks. …

A review by ProPublica and The Post of the 20 largest pension bonds issued since 1996 found that in three-fourths of the deals, governments did not make their full required contribution in the years after the bonds were sold. … Because of the underfunding, most of the pension funds now are worse off than before the bonds were issued. (more)

I find it plausible that these pension bonds are often bad ideas, and that some general regulation might be useful to prevent their misapplication. But today I’m less interested in the particular issue of pensions, and more in the general issue of when democratic governments can be trusted to act in the interest of their voters.

Consider also the examples of public employee unions, and of eminent domain. In all these cases we don’t trust democratic governments to make the best choices for their citizens, and so we may empower some other democratic government to regulate or constrain those distrusted governments. For example, it seems we don’t trust governments to choose good wages for their employees, since we empower unions to negotiate with them.

It is not just that some citizens aren’t allowed to vote, or that governments representing different regions may have conflicts, or that the same government at different times can have conflicting time-inconsistent preferences. It seems to also be about a limited ability of citizens to pay attention to government activities. But how is it exactly that citizens can pay enough attention to the regulating government to help it choose a good regulation role, but can’t pay enough attention to the regulated government, tempting that government to make bad decisions? How is this supposed to work, even in theory?

This seems an important issue, and I’m interested in reading more about it. I expect there is a literature out there on this, but I don’t recall ever coming across it. Anyone have some good cites?

This topic is of course related to the possibility that governments may often be over-regulated.

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Who Wants Thick Democracy?

Last night I heard the author talk on this book: The Business of America is Lobbying: How Corporations Became Politicized and Politics Became More Corporate. The audience was mostly DC policy wonks and related academics. The talk and responses to it made me realize that most policy folks, and most ordinary people as well, don’t actually like democracy that much. Let me explain.

In a democracy, candidates run for office, and the ones with the most votes win. Winners set new policies and oversee government agencies that set more policies. Prior to the vote, a limited number of issues come to the attention of voters, including candidate positions on future acts and incumbent past acts and related outcomes.

A basic fact about modern governance is that the number of issues that can gain salience in elections is only a tiny fraction of the number of policy decisions governments make. So a key question about democracy is whether and how voters can influence that vast dark matter of unseen policy decisions. How can voters, who see only a few dashboard knobs, effectively control the vast complex machinery that is a modern government?

In a “thin democracy” the answer to this question is “They can’t.” Instead, many government officials have a lot of what Bryan Caplan calls “slack.” Such officials make choices according to personal preferences, constrained mainly by physics, budgets and the choices of other officials. Here it is the set of people willing and able to take government jobs that control most of the dark matter of government policy. Government is good or bad depending these people, their cultures, and the institutions they use to organize themselves.

In contrast, in a “thick democracy” many voters collect themselves into complex organizations to monitor and lobby government actions. Such “interest groups” collect detailed preferences from members, study government acts and plans in detail, advise officials in person on preferred act details, and advise voters on candidates to reward or punish in elections. Such organizations let voters escape personal limits on how much detail they can manage.

Because thick democracy requires voters to join complex organizations managing detailed info, this scenario is subject to big agency failures. Many things can go wrong between voter input and pushing particular policies to particular officials, and agents in the mess in the middle tend to make things go wrong in their favor. Some organizations will thrive and others collapse due to basically random factors.

More importantly, we have little reason to expect that different kinds of people with different kinds of issues would have remotely similar influence through this process. In a thick democracy, influence depends greatly the complexity of your issue, the ease of monitoring relevant actions and outcomes, the trustworthiness of your agents, the quality of your members, the incentives that members can impose on each other, and the availability of preexisting organizations to build on.

Today the strongest best organized kinds of groups in our society are firms. They can impose strong incentives on members, they are already arranged to minimize agency failures, and the issues they care about are especially simple and easy to monitor. So thick democracies give firms big advantages over other interest groups. In fact:

Corporations and their trade associations now spend about $2.6 billion a year in reported [US] lobbying. … That … is about 34 times the total lobbying spending for all labor unions and groups representing public and consumer interests. (more)

Maybe one could find ways to greatly suppress this firm advantage. But that would hardly give everyone else equal influence. Because influence in a thick democracy depends on complex management of incentives and info, it gives big advantages to those who happen to be better organized.

One might hope for a third approach of “compressed democracy”. In this scenario, we would find ways to compress most of what we care about in the high-dimensional variation of government policy into a small number of summary statistics. These few summaries might then fit into the small set of issues that voters can notice in an election, letting voters control government without complex interest group organizations.

This might work via “retrospective voting”, if voters would just focus on reelecting incumbents only when their personal lives had gone better than expected, and if incumbents cared about little else besides reelection. This approach might also work via agreeing on and measuring a “national welfare” number, such as I proposed in futarchy. But so far voters have shown little interest in such approaches.

At the meeting last night, it seemed to me that most policy wonks and related academics preferred the thin democracy status quo wherein people like them and the students they train have most of the power over the dark matter of hidden policy. And I’d guess that most voters mostly agree with them. Yes, a few “activists” are eager for a thick democracy fight, seeing themselves as especially well organized for such fights, at least without “unfair” corporate competition.

But most people can’t be bothered, and aren’t particularly optimistic about what a thicker democracy would produce. Voters already get lots of status via appearing to be in control. Thicker democracy might create an orgy of rent-seeking activity, and for what? Not that voters would fight it if it were the status quo. But they see the current mostly-thin democracy status quo as reasonable. Just as we accept priests deciding most detail in religion, docs deciding most details in medicine, soldiers deciding more details in war, and teachers deciding most details in schools, we accept government officials deciding most details in government. If the rest of us get bothered enough about something, we can demand to have it done our way. But for everything else, we let someone else figure it out.

I’m not saying that this status quo is in fact the best form of government. I’m just saying I can understand why we see little inclination to change it.

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Party in the Street

Michael Heaney and Fabio Rojas’s new book Party in the Street: The Antiwar Movement and the Democratic Party after 9/11 tries to explain the puzzle of antiwar protests falling greatly after the election of Obama, who mostly continued previous war policies:

In examining war policy positions taken by candidates in the 2004 and 2008 [US presidential] elections, we find that Democratic politicians articulated more fervent antiwar positions than did politicians within the Republican Party, even though there were varying positions among politicians in both parties. Exit poll data reveal that politicians in the Democratic Party benefited during electoral contests from the support of antiwar constituencies. However, when we look at the evolution of actual war policies from the Bush to the Obama administrations, we find more continuity than change. The Obama administration shifted emphasis from Iraq to Afghanistan, but these shifts were still only a slight redirection of the trajectory set forth by the Bush administration. Given Obama’s continuation of many of Bush’s policies, we would have expected the antiwar movement to react with steady or increased levels of protests. Yet, antiwar protests declined during Obama’s presidency, even in the presence of policies that continued war. We argue that, in order to explain this pattern, a new perspective is needed on the relationship between parties and movements. (p.8)

On the surface, this looks like simple hypocrisy: Democratic party elites exploiting false voter beliefs that Democrats are more anti-war than Republicans. Heaney and Rojas are clear that this belief is false:

Our focus is not on why the antiwar movement failed to prevent – or to end – the wars in Iraq and Afghanistan. We think that the answer to this question is similarly evident: Barriers to policy success for the antiwar movement may have been insurmountable from the start. In general, antiwar movements tend to be less successful in achieving their policy goals than other social movements because they challenge the security interests of state actors and, thus, receive relatively little facilitation from the state. As a result, antiwar movements rarely prevent nations from going to war. (p.7)

But Heaney and Rojas do not phrase their explanation in the language of hypocrisy. They talk instead of identity:

Political actors embrace multiple identities during their participation in politics. When these identities overlap, they have the potential both to amplify party-movement cooperation (when they reinforce one another) and to undercut party-movement cooperation (when they conflict with one another). Thus, the interplay of multiple identities helps to provide an explanation for the dynamics of the party in the street. Drawing upon scholarship in the intersectionality tradition, we hypothesize that partisan identities often trump movement identities during periods of conflict, a tendency that may lead to important identity shifts among mobilized actors. …

Antiwar activists with identities linked to the Democratic Party tended to depart from the antiwar movement earlier than did activists without Democratic identities. Further, … although Democratic Party members generally held an antiwar point of view, their mobilization for the antiwar cause usually assumed a lower priority than mobilization on many other issues, such as health care. … We reach these conclusions after controlling for alternative explanations for individuals’ behavior, such as the possibility that differences in ideology may account for activists’ opposition to war under all circumstances, as opposed to under specific conditions. (p.9)

While this is all plausible, it seems to me rather evasive on the source of the key “reinforcement” and “conflict”. The authors don’t directly say why being anti-war and Democrat reinforce each other with a Republican president, yet are in conflict with Democrat president. Yet if Democrats were actually much more anti-war than Republicans, why is there a conflict between being anti-war and Democrat with a Democrat president? And if voters thought Republicans were no more pro-war than Democrats, why is anti-war reinforced with a Republican president?

When we identify with a party, we tend to be willing to believe its idealistic descriptions of itself, even in the face of consistent and strong evidence to the contrary. We like to think we pick a party because we agree with its positions, but in fact we often change our positions when our party changes its positions, to stay loyal:

At least some members of the mass electorate switch their issue preferences to align with their partisan identification, even when that issue is highly salient to them. … “The fact that partisanship leads to changes in attitudes on issues like abortion, government provision of services, and government help for blacks for many citizens clearly runs counter to the idea that party identification is largely a summary of other evaluations.” …

What does a politician do when she or he is left behind by the party on a key issue? … Politicians are much more likely to deliberately adjust their issue positions to the party’s new stand. … Politicians who elect to leave the group … are met with great scorn by their former colleagues. (pp.77-79)

Added 8p: If they had framed their story more in terms of hypocrisy, they might have asked which media or interest groups tried to tell antiwar protesters the truth before Obama was elected, what reception they received, and why did other big media chose not to tell.

Added 9a: More evidence here that voters change positions in response to changes in which politicians are in power.

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Collusion In Quadratic Voting

Two weeks ago I posted on the idea of quadratic voting, where voters pay a cost to buy votes, a cost that goes as the square of the number of votes they buy. Under certain reasonable assumptions, this voting system should produce economically efficient outcomes! Since so many get so obsessed with the objection that the rich might buy more votes, I focused on a “voting quarks” variation, wherein everyone gets the same number of points to spend across many elections.

I mentioned that this system could make agenda-setting more important. And if we did not ensure anonymous voting, there could also be a problem with some paying others to vote certain ways. On reflection, however, what I most worry about is that collusive voting becomes a bigger issue under quadratic voting, relative to ordinary voting.

How strongly you care about an election outcome depends on how much of a difference it makes to outcomes you care about, and on your chance of being pivotal, so that the election turns on your vote. Under ordinary voting, how much you care influences 1) if you bother to vote at all, and 2) how much effort you put into getting relevant info. But under quadratic voting, we must also add 3) how many votes you buy.

Without collusion, i.e., with each voter choosing independently, then under ordinary voting everyone has the same chance to be pivotal. So then if voting were mainly done to influence election outcomes, the election outcome would become a weighted average, among those who care enough to bother to vote, of how well informed each voter is, times the sign of their preference on the election. Note that the weights satiate, however; once you care enough to bother and are well informed, it doesn’t matter if you care a lot more or get much better informed.

When a group of voters colludes to vote as a block, then their chance of being pivotal is roughly proportional to the number of votes that their block controls. This proportionally increases their collective interest in bothering to vote, and in getting info. So they have a stronger interest in getting themselves to vote, and in getting info about which way to vote. But, this effect satiates at the point where they will pretty surely vote and are pretty sure which way to vote. So the possibility of block voting does end up adding an additional weight favoring groups who can coordinate, but all groups who can coordinate above some level count the same.

Under quadratic voting, colluding groups acquire an additional advantage, because they also have a stronger group interest in buying more votes. And importantly, this advantage does not satiate, but continues to grow with the size of the group. So the election outcome much more strongly weighs the ability of people to form larger groups that coordinate to vote as a block. I’m not at all sure this would be a good thing.

Added 5a: I was wrong to say that collusion gains satiate once a group is sure to vote and sure how they want to vote. A group also gains from internal vote trading, and this gain continues to larger groups. This gain happens in both ordinary and quadratic voting.

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Trade Quarks, Not Votes

If you don’t care about some election today all you can do is abstain, but what if you could instead save your vote to have extra votes in a future election? Or what if you could transfer your vote from a topic where you care less, say mayor, to a topic you where care more, say president? Or what if you could trade votes with other people, like your next two cycles of mayor votes for one of their president votes? Or what if you could buy and sell votes for cash on an open market?

All of these options have intrigued people over the years. But they all have the same problem: they tend toward having each election decided by the few people who care the most about it. True, ordinary elections don’t reflect people’s strength of preference; people who care a lot have the same influence as people who care a little. But these alternate ways to collect, transfer, and trade votes all have the opposite problem; most everyone’s preferences may be ignored except for the few extremists who care the very most.

However, a simple yet amazing variation can allow collection, transfer, trading, and selling in the voting process, while having elections tend to be decided by a weighted average of how much each voter cares. This amazing variation is: voting quarks.

Hadrons are basic particles in physics that can fly around and smash into things. They are made out of quarks, but (in our world today) those quarks are always stuck inside hadrons, and can’t fly around by themselves. Quarks influence the world via the hadrons of which they are part.

By analogy, a voting quark is a part of a vote that can’t influence an election by itself; it must be part of a vote particle. And voting quarks must be formed into square arrays in order to make votes. So you can use one quark to make a vote of size one, or four quarks to make a vote of size two, or nine quarks to make a vote of size three, and so on.

The key idea here is that elections are won by which ever side has the most votes, with bigger votes counting for proportionally more; but what voters are given are quarks, not votes. For example, each election each voter might be given four new quarks. If no collection, transfer, or trading were allowed, this would be pretty boring, as the only useful option would be to convert those four quarks into one vote of size two to use in this election. (After which that vote, and those quarks, would be gone.)

But if quark collection was allowed, a voter could choose to instead save all these new quarks for future elections. Or they might use one quark this election to make a vote of size one, and save the other three for future elections. Or if they had collected at least five previous quarks, they might add them to these new four quarks to create a vote of size three to use in this election.

Abilities to transfer or trade quarks would work similarly; you’d move the quarks around as allowed by the rules, and then form votes from the quarks as desired to use in each election. The system might even not directly give voters quarks at all, but only sell them quarks for cash.

The main point is that in a system like this people have an incentive to vote in each election roughly in proportion to their strength of preference on that topic. Which allows elections to produce more economically efficient outcomes. And the wider the scope over which quarks can be moved, the wider the scope over which choices could be more efficient.

This point has been plausibly argued in a paper called “Quadratic Voting” by Steven Lalley and Glen Weyl. (Weyl has a related paper with Eric Posner.) They talk about this in terms of buying votes directly with cash, paying proportional to the square of the votes bought. This is an extreme version that I suspect most people will find hard to swallow, at least as the first change to accept. So I designed the above quark language to show how we might move there gradually, such as perhaps by first allowing collection, then transfer, then trading. And we might slowly increase the number of quarks given per election, to approach a more continuous voting.

Steven Levitt has commented positively on the quadratic voting idea, but Tyler Cowen criticized it for encouraging “intense preferences of minorities”. I find that a rather odd criticism, and agree with Eric Posner’s response.

I do have a concern though: this approach would require us to pay more attention to agenda setting. Once votes or quarks can be moved between elections, then every election not only decides an issue, it also creates resources that be used to decide other elections. So we’d want to try to ensure that issues in elections connected by quark moves are similarly important, or perhaps set relative quark prices between them.

Also, the act of introducing an election on some topic ends up being an implicit tax on the people who expect to win that election. They will have to use up quarks there than they can’t use elsewhere. If the status quo is already in their direction, then people who favor the status quo will regret holding an election on that topic, even if they expect to win. Factions may conspire to hold repeated elections that they expect to repeatedly lose, just to tax other factions.

This isn’t an overwhelming objection. We already must pay substantial attention to agenda setting even under ordinary voting. But this does up the ante a bit. So we should try this stuff out slowly, gradually, testing and observing as we go. And we may need to invent new ways to set agendas. But this looks pretty promising, so let’s get started!

Added 11a: OK, on reflection one only has to worry about the relative importance of elections when voters can collect or transfer quarks between them. If voters can instead only trade quarks between elections, their relative importance will be reflected automatically in the relative prices of quarks traded. Also Eric Posner suggests a general agenda mechanism:

Added 10Jan: Commenters are too hung up on money. Money is only relevant in the most extreme version I mentioned, where quarks are bought with cash. Consider instead the other options to only collect, transfer, or trade quarks.

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You Don’t Rule The World

In far mode we emphasize basic values a lot more, relative to practical constraints; in near mode we do the opposite. … This certainly fits my more detailed opinions on large scale policy and the future. You have to pay attention to an awful lot of detail in order to figure out which policies are best, or what is likely to actually happen in the distant future. But most people seem to quickly form opinions on such topics using simple value associations. When they can identify a clear value association, people seem pretty willing to form opinions, which seems to me a vastly overconfident attitude. (more)

When people talk about larger social scales, like nations or the world, or when they talk about long time scales, they prefer to talk values, not practical facts and constraints. One might argue that people neglect physical and organizational constraints because they don’t understand such things well. But people also tend to ignore political constraints, which they usually say that they understand pretty well.

That is, people tend to show a lot of interest in tracking the various political coalitions, and their varying power and preferences. But people show far less interest in working out what sort of political compromises might be feasible and desirable. Instead, people usually prefer to talk about what they’d do if they personally ruled the world, if their nation ruled the world, or if their favored coalition ruled the world or their nation.

Yes, figuring out what you personally want can sometimes be a useful first step. You might then reevaluate what coalitions to support, and then focus on which possible political comprises and deals you’d be most interested in helping to promote. But people rarely go beyond that first step — talking about what they personally want. And people are usually rather reluctant, even hostile, to discussing specific compromises proposed by others.

The obvious interpretation here is that politics isn’t about policy. While people talk as if they care about outcomes and want to discuss big issues in order to influence outcomes, what they really want is to declare and express values. Expressing values helps them to signal loyalty to like-minded folks, and a commitment to norms their community holds dear. Discussing compromise, in contrast, risks your seeming a traitor to your allies, and lacking firm value principles.

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Pondering Plasticity

Tyler recently praised (cultural) anthropologists, and with good reason. I’ve learned a great deal from reading them. Yes, economists often look down on other social scientists (who often complain loudly back), and yes anthropologists are one of the most liberal academic disciplines (e.g. high Democrat to Republican ratio), while economists (including Tyler and I) are less so. But maybe Tyler and I are more broad minded than you think.

Just as supply and demand is the crown jewel of econ insight, the crown jewel of anthropology insight is cultural plasticity. This is the idea that humans are pretty flexible – we can be okay in and with few reservations accept the practices of a wide range of cultures, if we grow up there. Not to say humans are infinitely flexible, but just more flexible that we tend to think.

I usually hear people talk of cultural plasticity as favoring a liberal point of view. For example, Thomas Sowell’s A Conflict Of Visions and Steven Pinker’s The Blank Slate both describe liberals as seeing human plasticity as supporting the feasibility of ambitious social engineering. That is, liberals imagine they can change cultural rules as they wish, then teach people to accept their new rules, and after a transition period it will all stick.

Conservatives, in contrast, are seen as fearing that because human nature can’t bend much, only certain cultures will work, and so they fear that liberal changes will break everything. E.g., if culture doesn’t support marriage, kids won’t get needed support. Or if culture doesn’t support military virtues, we’ll be enslaved by foreign invaders.

It seems to me that in fact cultural plasticity tends more to favor the conservative position. Yes more plasticity means reduced fears that change will break us. But more plasticity also gives less reason to bother. Why make everyone pay big costs of change if most people are pretty happy no matter what the culture?

The driving emotion of liberal reform seems to me to be a strong feeling that most people are not truly happy in typical non-liberal cultures, and that they’d be more truly happy in liberal cultures. Without liberalism they suffer crushing conformity, excess work, and limited vistas, and they lack authenticity, self-expression, autonomy, self-discovery, variety of experience, blah blah blah. Which is why we must struggle to change culture to be more liberal. This seems to me a rather non-plastic point of view.

In contrast, the driving emotion of conservative reluctance to reform is a sense that things are good and ok just as they have long been. Oh they aren’t perfect, but if it was good enough for grandpa, its good enough for me. What we have binds us together; who do you think you are to demand more? We like who we are, so why take a chance changing to be like some strangers, or like something imaginary? Change might break precious things; what is worth that risk?

We can distinguish two kinds of cultural plasticity – plasticity of happiness and plasticity of function. Plasticity of happiness says that people can be happy in a wide range of cultures. In contrast, plasticity of function says that a wide range of cultures result in similar levels of production, security, innovation, etc.

We economists are pretty confident that there is in fact only a limited plasticity of function. That is, different cultures in fact produce quite different levels of production, security, innovation, etc. In contrast, plasticity of happiness seems a far more plausible position. In fact, the main reason that cultures vary in happiness seems to be because they vary in function. That is, cultures that produce more (or are more secure) are happier, but most other cultural dimensions don’t matter much for happiness.

An emphasis on cultures that just produce well, as opposed to cultures that fit some more direct idea of human flourishing, seems to me a conservative emphasis. It is conservatives who worry more about losing cultural pressures to work, to have kids, or to fight hard against enemies. And it is liberals who focus more on imagining people who suffer because of specific features of existing culture, and wanting to change culture to help those victims.

In the em future that I’ve been exploring, there would be a vast increase in total production and security, but practices and values would move away from typical liberal ideals. This horrifies many with strong liberal inclinations. But I’m more okay with it, as I expect most people will adapt just fine, and be nearly as happy there once it is the world they grow up in. Especially since this world would select strongly for folks who are okay with it. So I guess this means I lean conservative in this respect.

It seems that anthropologists have discovered that human happiness is surprisingly robust to cultural changes, and that economists have discovered that production, security, innovation, etc. vary a lot more with cultures. And overall this seems to favor a conservative emphasis on accepting the culture you were born with, and mainly only considering changes to make your society physically stronger. Spiritual fulfillment will mostly take care of itself.

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Yes, Compare Nations

I called for more empirical work on the effects of liberty:

Libertarians focus too much on trying to argue abstractly that liberty would be better, and not enough on just concretely describing how liberty would be different. … From [our] vast literature we should be able to identify many concrete patterns and “stylized facts” about how government-provision and heavy-regulation tends to change products and services. (more)

David Henderson agrees:

The reality is that after Stigler’s speech, many economists did look more at the data and the data tended to show that the free market and economic freedom work better than government control. But Robin is not satisfied. There is more to be done, he says, and he’s right.  (more)

But he does have a criticism:

I do have one main criticism of Robin’s post. … It’s the West/East Germany and the South/North Korea comparisons that I want to defend. With all the variables that could affect economic growth, think about how hard it is to know what some of the most important factors are. … The stark contrast between those two pairs of countries and what that said about some economic freedom versus harsh totalitarianism.

I very much agree that those nation pairs make useful comparisons; sorry that what I wrote could mislead on that point. These comparisons do indeed suggest that “some freedom” is better than “harsh totalitarianism”, and they are good data-points on which to base stylized facts on the general effects of more liberty. Their main limitations are that they don’t say much directly about the effects of a lot more liberty than is found in West Germany or South Korea. To imagine even more liberty, we need those stylized facts.

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Policy vs. Meta-Policy

What is our main problem, bad policy or bad meta-policy? That is, do our collective choices go wrong mainly because we make a few key mistakes in choosing particular policies? Or do they go wrong mainly because we use the wrong institutions to choose these policies?

I would have thought meta-policy was the obvious answer. But CATO asked 51 scholars/pundits this question:

If you could wave a magic wand and make one or two policy or institutional changes to brighten the U.S. economy’s long-term growth prospects, what would you change and why?

And out of the 29 answers now visible, only four (or 14%) of us picked meta-policy changes:

Michael Strain says to increase fed data agency budgets:

BLS data on gross labor market flows … are not available at the state and MSA level, they do not have detailed industry breakdowns, and they do not break down by occupation or by job task. … We also need better “longitudinal” data — data that track individuals every year (or even more frequently) for a long period of time. … The major federal statistical agencies need larger budgets to collect the data we need to design policies to increase workforce participation and to strength future growth. … My second policy suggestion is to expand the … EITC.

Lee Drutman says to increase Congress staff policy budgets:

I would triple the amount the Congress spends on staff (keeping it still at just under 0.1% of the total federal budget). I’d also concentrate that spending in the policy committees. I’d give those committees the resources to be leading institutions for expertise on the issues on which they deal. I’d also give these committees the resources to hire their own experts — economists, lawyers, consultants, etc. But I’d also make sure that these committees were not explicitly partisan.

Eli Dourado says to pay Congress a bonus if the economy does well:

A performance bonus would help to overcome some of Congress’s complacency and division in the face of decades-long economic stagnation. … One good performance metric would be total factor productivity (TFP). … Fernald adjusts his TFP estimate for cyclical labor and capital utilization changes, making his series a better measure. … Members of Congress would earn a $200,000 bonus if the two-year period in which they serve averages 2 percent TFP growth. (more)

Robin Hanson says to use decisions markets to choose policies:

First, I propose that our national legislatures pass bills to define national welfare, and fund and authorize an agency to collect statistics to measure this numerical quantity after the fact. … Second, … create an open bounty system for proposing policies to increase national welfare. … Third, … create two open speculative decision markets for each official proposal, to estimate national welfare given that we do or do not adopt this proposal. … If over the decision day the average if-adopted price is higher than the average if-not-adopt price (plus average bid-ask spread), then the proposal … becomes a new law of the land.

It seems to me that Michael, Lee, and Eli feel wave pretty weak wands. Surely if they thought their wands strong enough to cast any policy or meta-policy spell, wouldn’t they pick meta-policy spells a bit stronger than these? (And why is it always more spending, not less?)

By focusing on policy instead of meta-policy, it seems to me that the other 25 writers show either an unjustified faith in existing policy institutions, or a lack of imagination on possible alternatives. Both of which are somewhat surprising for 51 scholars chosen by CATO.

Added Dec3:  3 of the 25 remaining proposals were in the meta-policy direction:

Susan Dudley:

[Regulatory] agencies should be required to present evidence that they have identified a material failure of competitive markets or public institutions that requires a federal regulatory solution, and provide an objective evaluation of alternatives.

Michael Mandel:

The Regulatory Improvement Commission … would have a limited period of time to come up with a package of regulations to be eliminated or fixed, drawing on public suggestions. The package would then be sent to Congress for an up-or-down vote, and then onto the President for signing.

Megan McArdle:

Instead of analyzing whether the [cost-benefit] calculations in a regulatory ledger sum to a positive or a negative number, we need to set a level of [regulatory] complexity that we’re willing to live with, and then decide which positive sum regulations we’re willing to discard in order to stay within that budget. … Crude rules which might well serve, like capping the number of laws and regulations, allowing a new one to be implemented only if an older one is repealed.

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