Tag Archives: Politics

Transferable Citizenship

By Robin Hanson · October 21, 2011 4:30 pm · Comments (21)

In 20th century USA, many feared that if a black moved into their neighborhood, “white flight” would greatly lower their property values. In many places it was illegal to sell your house to a black. But it was never illegal to sell your house to outsiders. At the national level today, however, we actually do adopt the extreme “no house selling” analogy: we don’t let folks transfer their citizenship to foreigners.

Imagine each US citizen could transfer her citizenship to a foreigner, as long as she found somewhere else to live, [added: hadn't recently given birth,] and wasn’t about to die, and the foreigner was at least as old, and wasn’t a terrorist, ex-con, etc. Benefits:

  • Citizenship could be collateral for loans for school, houses, etc.
  • We’ll prefer those who’d pay to come, over those who choose to leave.
  • Undesirable poor folk are especially likely to leave.
  • Retirees could be paid to retire more cheaply abroad.

Similar to those old rules against selling houses to blacks, we could also add more restrictions on to whom citizenship could be transfered. At least if we were willing to publicly own up to the racism, ethnism, etc. that such restrictions embodied.

Now folks like Julian Simon and Gary Becker have proposed selling citizenship before, without much success. But it seems to me better marketing to first focus on giving each person a direct benefit: more freedom to use an asset they already own, citizenship. First, get folks to see that selling citizenships makes as much sense as selling houses or club memberships. Then suggest that letting government add to the pool of citizenships for sale might raise revenue, and maybe help the economy as well.

This post was sparked by hearing a talk by Michael Clemens, who noted that we saw no effect on wages from either the Cuban boat lift that suddenly increased Miami’s population by 7%, nor the sudden elimination of migration restrictions within South Africa. Those sound like great pro-immigration arguments to an economist, but alas seem a bit too indirect for the public.

Added: Bryan suggests immigrants pay extra taxes, while Alex suggests giving visas to house buyers.

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Hidden Trade Barriers

By Robin Hanson · October 15, 2011 9:00 am · Comments (2)

Christopher Magee asks why rich nation tariffs are not high. He concludes they are in fact high, but in hidden ways:

In the median industry … over $42 is transferred from consumers to producers for every $1 in efficiency costs caused by the tariff. … The industry lobby should be willing to contribute a lot to the politician to raise those tariffs. And because higher tariffs cause such a small reduction in overall welfare, the policy-maker should be willing to trade higher tariffs for campaign cash. … Thus, instead of asking why there are trade barriers at all, the real puzzle in the literature should be why the trade barriers are not extremely high in most industries.

Here is my assessment … I do not believe that policy-makers care only about social welfare and do not care about campaign contributions. … I also do not think that tariffs are low because users of imported intermediate goods spend a lot of time and money lobbying against tariff protection. … A moderately important reason why tariffs are low is that free riding limits industries’ ability to organise political lobbies. … I also consider the hidden costs of trade barriers as somewhat important in explaining low tariffs. Policy-makers understand the value of good international relations and the cost of trade wars. …

The most important explanation for the puzzle of surprisingly low tariffs is that the political economy literature is largely right: trade barriers are relatively high even in developed countries but they are hidden as quotas and other non-tariff barriers. Unfortunately, these non-tariff barriers, which do not generate government revenue and become more restrictive as the size of the market grows, harm the economy even more than open tariffs do. … In trade policy, what we don’t see is hurting us the most. …

Kee et al. (2004) estimate that the average manufacturing industry in the USA in 1996 had non-tariff barriers that added over 10% to the price of imported goods and that the non-tariff barriers were over three times larger than the tariff rates. In 2004, the ad valorem equivalent of core non-tariff barriers was 9.5% in the USA and 13.4% in the European Union according to estimates from Kee et al. (2009). Trefler (1993) … finds that … the non-tariff barriers were over six times as restrictive as tariffs and that the ad valorem tariff equivalent of US non-tariff barriers was over 20%. (more)

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A Theory Of Status

By Robin Hanson · October 14, 2011 8:00 am · Comments (10)

A few days ago I asked for a theory of status, to help predict how status will change in a rather different future. Today let me offer such a theory.

Here are our main clues about status:

  1. Status is a socially shared way to evaluate and rank people
  2. Status seems mostly relative; you can’t raise everyone’s status
  3. Human status has two main parts: dominance and prestige
  4. Most animals have dominance, which is who would win a pairwise conflict
  5. Prestige status seems to not exist in animals with simple social relations.
  6. Unlike other shared rankings, like sexiness or dominance, we seem unaware of what exactly prestige ranks.

So what is prestige? That is, what sort of ranking would be useful for human-like primates to track about each other, but also be something illicit, so that foragers would be reluctant to admit its true function? One obvious candidate stands out to me: one’s value as an ally in coalition politics. That is, how much better off is a typical coalition with this person as an ally, relative to not having them as an ally. This is clearly an important concept, well worth tracking. It only makes sense in groups with complex coalition politics, and foragers have norms against overtly engaging in such politics.

Since an ability to win pairwise contests is useful to coalitions, we expect dominance to add to prestige. But humans and similar primates can also add value to a coalition by having skills that make them useful associates, and by being on good terms with other good-ally-material folks. And both skills and associations also seem to make important contributions to human prestige. Note that this theory predicts that other primates with complex coalition politics, like chimps, will also have a prestige status distinct from dominance status.

If prestige is about one’s value in coalition politics, what does that predict about em prestige? Of the list I gave, items 2,5,7,12,16, should be substantially related to prestige.

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Causes Of Corruption

By Robin Hanson · October 11, 2011 11:00 pm · Comments (16)

At one level, corruption can be seen as a problem of multiple equilibria. When bribes are rare, someone who sees a bribe or bribe offer might reasonably expect to be supported for exposing it, and fear being exposed and punished for going along with it. But when bribes are common, one can expect to be punished more for trying to expose corruption.

At another level, however, many policies can reduce corruption. Bounties paid to any who expose corruption can encourage decentralized policing that central powers can find it hard to suppress. And eliminating government agencies whose social benefit is doubtful or moderate, even without corruption, can eliminate opportunities for corruption. I’m told many places are eliminating drivers licenses, to eliminate corrupt issuing of such licenses.

Since policies can discourage corruption, the deeper question is what makes politicians expect to not be rewarded for supporting such policies. Perhaps the people who benefit from corruption have more political information to know how to vote well, and more influence on other voters. In this case they might in effect have more votes, when votes are weighed by voter information and influence. I find this implausible, however.

Perhaps voters find it plausible that the above anti-corruption policies would work, but also find other ineffective anti-corruption policies similarly plausible. If ordinary voters are fooled by these ineffective policies, but those who benefit from corruption are not fooled, politicians may prefer to adopt such ineffective policies. By the time voters find out the policies didn’t work, the politicians may be long gone.

This raises the question: why do politicians have such short time horizons? Why don’t they expect to win by first implementing corruption-reducing policies, and then waiting for corruption to actually go down, before being rewarded by voters? The puzzle becomes more stark when one notices a usual way world-round to get long term project commitment: hire a multinational firm with a global reputation to protect. Yes, NGOs tend to prefer to hire local organizations to achieve charity aims. But they are often “surprised” to see the money stolen and nothing done. When folks really need something done, they hire long-lived multinational firms.

So the obvious solution to reducing corruption, and promoting good policy more generally, is for big multinationals with reputations to protect to run as candidates in local elections! They’d have a long term view that would make wary of making promises they could not keep. Of course upon hearing this suggestion you immediately know why this can “never be”: nationalism. Even voters of basket-case nations couldn’t stand the “humiliation” of publicly admitting they needed to hire foreigners to do something they couldn’t do for themselves.

And so let us admit that a big root cause of political corruption, and of inefficient policy more generally, is nationalism: the reluctance to hire organizations that seem to do the best worldwide in keeping reputations for effectiveness. Of course people do admit this daily in private, as they choose to use products made and distributed by multinational firms. But alas voting is a far fest of idealism, where the ideal of nationalism has more influence.

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Are Nations Tribes?

By Robin Hanson · September 15, 2011 9:10 am · Comments (71)

Ezra Klein:

During Monday’s debate, CNN’s Wolf Blitzer asked whether an uninsured 30-year-old who had chosen to go without insurance should be left to die if he falls unexpectedly ill. Ron Paul dodged the question. … If you collapse on a street, an ambulance will rush you to a hospital. If you get into a car accident, you’ll wake up in intensive care. … Whether you get billed or your family gets billed or society gets billed, someone will pay the bill. … Even the hardest of libertarians has always understood that there are places where your person ends and mine begins. Generally, we think of this in terms of violent intrusion or property transgressions. But in health care, it has to do with compassion. We are a decent society, and we do not want to look in people’s pockets for an insurance card when they fall to the floor with chest pains.

But a great many ill, collapsed, etc. folks in the world are largely left to die, at least if curing them costs anything like a US hospital stay. Ezra argues above for “decent” national care, not global care. And even libertarians wouldn’t leave family members to die. So everyone agrees that we heroically help some, and leave others to die. We only disagree on who falls into which category.

I see key similarities between this and many responses to my recent posts, such as on 9/11, alien elites, or immigration. Such as: How can I not see that 9/11 deaths matter far more than most deaths, because this was them attacking our way of life? Or that alien elites secretly running our society, even running it well, must be exterminated though that would be unreasonable for human elites? Or that the richest big US county, Fairfax County, shouldn’t restrict immigration from poorer counties because we US folks are similar enough to each other?

Humans clearly evolved quite different mental modes for thinking about how to treat folks with our our local tribe, vs. how to treat distant strangers. Libertarians largely accept the usual ideas about how to treat both groups. Where they disagree is who counts as a stranger.

Libertarians limit “my tribe” to close family and small chosen communities, much as did our forager ancestors, who were free to change bands at any time. Farmer culture taught farmers to think of distant strangers as “my tribe”, as long as “our elites” said so, or if “we” fought wars together. And nation-states have worked hard over the last few centuries to transfer this feeling to nations. Libertarians mostly just don’t accept this. And though I’m not strictly libertarian, on this I agree – it is far from obvious that nations must be our tribes.

Now people usually try to be nicer to their tribe than to distant strangers. From this one might conclude that libertarians, who see more folks as strangers, are not as nice people. But not only are folks who see their tribe as smaller usually nicer to such insiders, libertarians also tend to be more accepting of mutually beneficial interactions with strangers. And economists make a pretty strong case that libertarian policies such as free immigration would greatly improve overall welfare.

As with Ezra’s comments above, most critiques of libertarian policy seem to miss this central point, by invoking standard ways to classify folks into “us” and “them.” To criticize libertarians effectively, you need to make clear why exactly “we” are a nation, rather than the entire world, or close family and friends. Alas, few critics even try to argue this point.

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Coworker vs. Class Envy

By Robin Hanson · July 12, 2011 3:00 pm · Comments (21)

Almost half of all workers in the U.S. “are either contractually forbidden or strongly discouraged from discussing their pay with their colleagues.” … Researchers … found that employees who know what their peers make—especially if their salaries are below median earnings—were more dissatisfied with their jobs than their peers who knew nothing. (more)

Imagine a national law banning citizens from talking about each other’s income. Similar to the way firm rules against discussing coworker incomes raise job satisfaction, a law against discussing citizen incomes would also probably make people more satisfied. Yet I predict that if such a law were actually passed, a huge public outcry would spell political disaster for supporting politicians. People would wail about the horrors of totalitarianism and suppressing class consciousness, and call for revolution if needed to repeal it.

Yet most who work at firms with no-salary-talk rules are probably ok with it. Few refuse to apply for jobs at such firms, or even demand substantially higher salaries to work there. In fact, there’s a decent case to make that people are on average willing to accept lower salaries to work at such firms. After all, if not such policies would cost firms more in salaries, with few obvious compensating benefits.

This example highlights how differently we act in workplaces vs. national political forums. When talking national politics we refuse to compromise on key ideals that we hardly care about in workplaces. Voting is indeed a far fest, while we submit hyper-farmer style to domination at work.

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Hail War And Peace

By Robin Hanson · July 4, 2011 2:00 pm · Comments (15)

War And Peace is my favorite novel ever. In contrast to the modern style of appearing only to describe events and leaving interpretations to the reader, Tolstoy interprets openly and heavily. And oh what wonderfully insightful interpreting! He usually describe several levels, including what people say, what they think, and what they are doing without realizing. I see homo hypocritus played out in great detail. Here is a section on agency failures in charity:

[Count] Pierre … sent for all his stewards to the head office and .. told them that steps would be taken immediately to free his serfs- and that till then they were not to be overburdened with labor, women while nursing their babies were not to be sent to work, assistance was to be given to the serfs, punishments were to be admonitory and not corporal, and hospitals, asylums, and schools were to be established on all the estates. Some of the stewards … listened with alarm, supposing these words to mean that the young count was displeased with their management and embezzlement of money …

He discussed estate affairs every day with his chief steward. But he felt that this did not forward matters at all. … Pierre had none of the practical persistence that would have enabled him to attend to the business himself and so he disliked it and only tried to pretend to the steward that he was attending to it. The steward for his part tried to pretend to the count that he considered these consultations very valuable for the proprietor and troublesome to himself. …

The chief steward, who considered the young count’s attempts almost insane – unprofitable to himself, to the count, and to the serfs – made some concessions. Continuing to represent the liberation of the serfs as impracticable, he arranged for the erection of large buildings- schools, hospitals, and asylums- on all the estates before the master arrived. …

On all his estates Pierre saw with his own eyes brick buildings erected or in course of erection, all on one plan, for hospitals, schools, and almshouses, which were soon to be opened. Everywhere he saw the stewards’ accounts, according to which the serfs’ manorial labor had been diminished, and heard the touching thanks of deputations of serfs in their full-skirted blue coats.

What Pierre did not know was … that since the nursing mothers were no longer sent to work on his land, they did still harder work on their own land. He did not know that the priest who met him with the cross oppressed the peasants by his exactions, and that the pupils’ parents wept at having to let him take their children and secured their release by heavy payments. He did not know that the brick buildings, built to plan, were being built by serfs whose manorial labor was thus increased, though lessened on paper. He did not know that where the steward had shown him in the accounts that the serfs’ payments had been diminished by a third, their obligatory manorial work had been increased by a half. And so Pierre was delighted with his visit to his estates and quite recovered the philanthropic mood in which he had left Petersburg. …

The steward promised to do all in his power to carry out the count’s wishes, seeing clearly that not only would the count never be able to find out whether all measures had been taken, … but would probably never even inquire and would never know that the newly erected buildings were standing empty and that the serfs continued to give in money and work all that other people’s serfs gave – that is to say, all that could be got out of them. (more)

Note that even in such a different world (1806 Russia), the three classic “good deeds” were medicine, education, and poverty assistance. This suggests modern liberal obsessions with such areas are not a local historical accident.

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Revised Growth Claim

By Robin Hanson · June 20, 2011 10:30 am · Comments (17)

Me in March:

Non-democracies seem more our future than democracies, because while the two groups have the same average economic growth rates, non-democracy rates vary more, and high rates dominate. … Whenever you have a portfolio of items with different (log) growth rates, your portfolio’s long run average return is dominated by the portfolio items with the highest average rates.

William Easterly in May (see also):

The large literature on growth regressions has demonstrated that there is no easy answer to separating out the partial correlation of one particular variable from a long list of other equally plausible variables. The scope for specification searching leads to results that are not credible. The same situation holds here. Indeed, it is not hard with the above variables to produce regressions either showing autocracy to be statistically significant with other controls or statistically insignificant.

His point is valid. So let me revise my claim: Some nations appear to have more variance in general, which manifests itself in more variation in growth, leaders, and forms of governance. What exactly causes this higher variance is unclear, as is how much some kinds of variance encourage other kinds. It makes sense for democracy to reduce policy variance, but we can’t tell how important is that channel relative to other channels.

But whatever causes this variance, the higher variance set of nations should eventually dominate wealth, because peak growth rates dominate wealth. And if having dictators more often continues to be part of that mix, then rich nations will eventually have a lot of dictators among them.

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Raid The Rich

By Robin Hanson · June 19, 2011 12:10 pm · Comments (9)

Me in March on Why Track Trends?:

Tyler’s thesis is that the US has slower growth than decades ago because we’ve used up the low hanging fruits. … My grad school (Caltech) didn’t teach macro … so I’ll stay agnostic for now. But what I can speak to is how little such trend analysis or projection matters, at least for most economic policy.  … The question of which institutions will most increase economic welfare rarely depends much on the exact values of the sorts of parameters social scientists and the media track with such enthusiasm and concern.

Me 1.4 years ago on Enable Raiders!:

A robust, properly functioning market for corporate control is vital to the performance of a free-enterprise economy. …

It is hard to exaggerate how very important this is – we’d be so much richer now if it it had long been easier for raiders to take over public firms. We now put many inexcusable obstacles (listed below) before such raiders, including disclosure, super-majority, poison pill, and merging delay rules.

Today’s Post:

Growing income disparity in the United States … has reached levels not seen since the Great Depression. In 2008, … the [140,000 member] top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, … with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. …

In 1975 … the top 0.1 percent of earners garnered about 2.5 percent of the nation’s income, including capital gains. …. By 2008, that share had quadrupled and stood at 10.4 percent. … The share of the income commanded by the top 0.01 percent rose from 0.85 percent to 5.03 percent over that period. For the 15,000 families in that group, average income now stands at $27 million.

The inquiring mind is surely curious to know who exactly are today’s super-rich, and how much richer they are now than before. But good policy is mostly about good institutions, which just shouldn’t depend much on such parameters. If you worry that managers get paid more than they contribute to firm value, a robust solution is to strengthen competition for corporate control, so raiders can takeover and then fire overpaid managers. Trying to independently determine manager contribution is far far harder.

If you worry instead about how much managers respond to taxes by reducing their efforts or moving to other jurisdictions, that also probably doesn’t depend much on just how rich they are or how much that has changed in recent decades. Wanting to tax managers more because you learned that they made more money than you thought seems much more like envy than neutral efficiency analysis.

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More Natural Hypocrisy

By Robin Hanson · June 15, 2011 9:20 pm · Comments (63)

Back in April I posted on a video which suggested:

Most people believe that redistributing money within a nation is good, but that redistributing GPA within a school is bad, and if asked why these should be treated differently, have little to say. My point isn’t to say one can’t come up with reasons to treat these differently. … My point is that most people can’t think of such reasons, making it pretty unlikely that such reasons are the cause of their opinions.

Here’s a related video:

This new video suggests that most people think school and professional affirmative action is good, but that sports affirmative action is bad, and if asked why these should be treated differently, have little to say.  Hat tip to Mungowitz, who seems to agree:

I was amused to see the kids struggle with making ANY of the above [valid] arguments. The video does a good job of showing how our “support” for aff-action is a religion, not a considered conclusion.

Alas, what Mungowitz counts as valid rationales for treating these differently are pretty weak:

1. If anything, coaches already try to find white players.
2. … “Racism” is directed at the societal minority, which is NOT white people. …
3. Performance in sport (as in music, and the military) is objective. … But academics … are more subjective. A bad time in the 40 yard dash means you are slow. A bad SAT score could mean all sorts of things. …
4. Basketball is the key sport among urban populations, many of whom are black. Hockey, swimming, lacrosse much less so. This is sorting, not racism.

If the idea is to discourage discrimination in general, then we should entertain the possibility that whites could sometimes be victims of discrimination. And if it is valid to explain differing sport outcomes by noting that basketball is more popular than hockey in “urban populations,” it should also be valid to posit that math is less popular there, say relative to sport, to explain worse math outcomes. Finally, SAT tests seem to me as objective as typical basketball tryout routines.

The question is what evidence is sufficient to create a presumption of discrimination. In education, the main evidence usually offered is unequal education outcomes. But if that evidence is sufficient, then unequal sports outcomes should lead us to presume discrimination in sports as well.

Remember that we only have laws against discrimination by employers or schools, not by employees or students, and not at all regarding friends and romance. We aren’t trying to generally reduce discrimination – we are trying to achieve something far more specific.

I suspect this all is more about status than discrimination. That is, people feel we have made a decision to raise (certain types of) status for certain groups. And while one way to raise such status is to reduce related unequal outcomes that disfavor those groups, another way to raise their status is to allow and even encourage unequal outcomes that favor those groups. So while we are happy to presume that disfavoring unequal outcomes are “discrimination” to be prevented and compensated, we are also happy to overlook unequal outcomes that favor the group whose status we are trying to raise.

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