Tag Archives: Status

Our Prestige Obsession

Long ago our distant ancestors lived through both good times and bad. In bad times, they did their best to survive, while in good times they asked themselves, “What can I invest in now to help me in coming bad times?” The obvious answer was: good relations and reputations. So they had kids, worked to raise their personal status, and worked to collect and maintain good allies.

This has long been my favored explanation for why we now invest so much in medicine and education, and why those investment have risen so much over the last century. We subconsciously treat medicine as a way to show that we care about others, and to let others show they care about us. As we get richer, we devote a larger fraction of our resources to this plan, and to other ways of showing off.

I’d never thought about it until yesterday, but this theory also predicts that, as we get rich, we put an increasing priority on associating with prestigious doctors and teachers. In better times, we focus more on gaining prestige via closer associations with more prestigious people. So as we get rich, we not only spend more on medicine, we more want that spending to connect us to especially prestigious medical professionals.

This increasing-focus-on-prestige effect can also help us to understand some larger economic patterns. Over the last half century, rising wage inequality has been driven to a large extent by a limited number of unusual services, such as medicine, education, law, firm management, management consulting, and investment management. And these services tend to share a common pattern.

As a fraction of the economy, spending on these services has increased greatly over the last half century or so. The public face of each service tends to be key high status individuals, e.g., doctors, teachers, lawyers, managers, who are seen as driving key service choices for customers. Customers often interact directly with these faces, and develop personal relations with them. There are an increasing number of these key face individuals, their pay is high, and it has been rising faster than has average pay, contributing to rising wage inequality.

For each of these services, we see customers knowing and caring more about the prestige of key service faces, relative to their service track records. Customers seem surprisingly disinterested in big ways in which these services are inefficient and could be greatly improved, such as via tech. And these services tend to be more highly regulated.

For example, since 1960, the US has roughly doubled its number of doctors and nurses, and their pay has roughly tripled, a far larger increase than seen in median pay. As a result, the fraction of total income spent on medicine has risen greatly. Randomized trials comparing paramedics and nurse practitioners to general practice doctors find that they all produce similar results, even though doctors cost far more. While student health centers often save by having one doctor supervise many nurses who do most of the care, most people dislike this and insist on direct doctor care.

We see very little correlation between having more medicine and more health, suggesting that there is much excess care and inefficiency. Patients prefer expensive complex treatments, and are suspicious of simple cheap treatments. Patients tend to be more aware of and interested in their doctor’s prestigious schools and jobs than of their treatment track record. While medicine is highly regulated overall, the much less regulated world of animal medicine has seen spending rise a similar rate.

In education, since 1960 we’ve seen big rises in the number of students, the number of teachers and other workers per student, and in the wages of teachers relative to worker elsewhere. Teachers make relatively high wages. While most schools are government run, spending at private schools has risen at a similar rate to public schools. We see a strong push for more highly educated teachers, even though teachers with less schooling seem adequate for learning. Students don’t actually remember much of what they are taught, and most of what they do learn isn’t actually useful. Students seem to know and care more about the prestige of their teachers than about their track records at teaching. College students prefer worse teachers who have done more prestigious research.

In law, since 1960 we’ve similarly seen big increases in the number of court cases, the number of lawyers employed, and in lawyer incomes. While two centuries ago most people could go to court without a lawyer, law is now far more complex. Yet it is far from clear whether we are better off with our more complex and expensive legal system. Most customers know far more about the school and job prestige of the lawyers they consider than they do about such lawyers’ court track records.

Management consultants have greatly increased in number and wages. While it is often possible to predict what they would recommend at a lower cost, such consultants are often hired because their prestige can cow internal opponents to not resist proposed changes. Management consultants tend to hire new graduates from top schools to impress clients with their prestige.

People who manage investment funds have greatly increased in number and pay. Once their management fees are taken into account, they tend to give lower returns than simple index funds. Investors seem willing to accept such lower expected returns in trade for a chance to brag about their association should returns happen to be high. They enjoy associating with prestigious fund managers, and tend to insist that such managers take their phone calls, which credibly shows a closer than arms-length relation.

Managers in general have also increased in number and also in pay, relative to median pay. And a key function of managers may be to make firms seem more prestigious, not only to customers and investors, but also to employees. Employees are generally wary of submitting to the dominance of bosses, as such submission violates an ancient forager norm. But as admiring and following prestigious people is okay, prestigious bosses can induce more cooperative employees.

Taken together, these cases suggest that increasing wage inequality may be caused in part by an increased demand for associating with prestigious service faces. As we get rich, we become willing to spend a larger fraction of our income on showing off via medicine and schooling, and we put higher priority on connecting to more prestigious doctors, teachers, lawyers, managers, etc. This increasing demand is what pushes their wages high.

This demand for more prestigious service faces seems to not be driven by a higher productivity that more prestigious workers may be able to provide. Customers seem to pay far less attention to productivity than to prestige; they don’t ask for track records, and they seem to tolerate a great deal of inefficiency. This all suggests that it is prestige more directly that customers seek.

Note that my story is somewhat in conflict with the usual “skill-biased technical change” story, which says that tech changed to make higher-skilled workers more productive relative to lower-skilled workers.

Added 10June: Note that the so-called Baumol “cost disease”, wherein doing some tasks just takes a certain number of hours unaided by tech gains, can only explain spending increases proportional to overall wage increases, and that only if demand is very inelastic. It can’t explain how some wages rise faster than the average, nor big increases in quantity demanded even as prices increases.

Added 12Jun: This post inspired by reading & discussing Why Are the Prices So Damn High?

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Low Prestige Hurts More

It can feel terrible to feel unwanted. Unwanted by schools, labor markets, sport teams, music bands, acting troupes, or romantic partners. We feel bad when we feel unwanted, and we often pity others to see them unwanted. Though we don’t usually pity enough to actually choose them over alternatives. And they can feel even worse to see our pity, as it affirms the visibility of their rejection.

Ever since we were foragers, humans have distinguished two kinds of status: dominance and prestige. Dominance is illicit, and we have norms saying to prevent and resist it, while prestige is not only allowed but encouraged. So one way to sympathize with and support someone who is unwanted is to frame their rejection as illicit dominance.

Since rich folks and big for-profit firms are easily portrayed as illicit dominators, it is easy to blame their illicit dominance when they reject people. So many people like to support those rejected by firms, such as for jobs at firms or loans from banks, by blaming firm dominance. Big firms can also be blamed when the products and services they sell explain why people are rejected by others. E.g., video games, tobacco, and payday lending.

This all helps explain why so many are so quick to blame “capitalist” firms and a larger culture and “system” of capitalism, such as for many kinds of discrimination leading to unfair rejection. Such blamers can then self-righteously sympathize with the rejected without having to actually choose them.

Note that economists often blame public pressures to cut firm rejections for bad economic effects, such as high unemployment in Europe where it is hard to fire workers, and excess home loans to risky households before the 2008 financial crisis.

This perspective also helps explain why people are reluctant to blame their “systems” of romance, friendship, conversation, sport, music, arts, which also result in rejections that make so many feel unwanted. Those systems tend to be associated more directly with prestige, and lack identifiable villains to blame for dominance. Except when big business gets involved. Rejection there can also be blamed on a larger “capitalist” culture causing discrimination, such as re sexual preferences or gender identities.

But here’s the thing: even without any illicit domination, some will have lower prestige than others, and that will hurt. Badly. In fact, it probably hurts even more than having low dominance, as that can be self-righteously blamed on others’ illicit pursuit of high dominance. Being low prestige, in contrast, elicits little sympathy from others, as showing sympathy toward such folks risks being pushed to not reject them, and being seen has having poor evaluation abilities regarding prestige.

The only simple solutions I see are an easy one, ignore it all, and a hard one: sometimes actually and honestly sympathize with the low in prestige. And let them see that sympathy. Which yes, will sometimes lead you to make “pity” choices you might not otherwise make. Do it because it hurts. (Some propose more complex solutions; they must wait for another post.)

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The Persistence of Poverty

On Bryan Caplan’s recommendation, I just read The Persistence of Poverty, by Charles Karelis (2007). Karelis seeks to explain these patterns:

Five patterns that have been common among the poor in many times and places, then, and that played a role in keeping them poor or making them poorer, are: 1. not working much for pay; 2. not getting much education; 3. not saving for a rainy day; 4. abusing alcohol; and 5. taking risks with the law. … [And] having children early and out of wedlock … is doubtless a big factor in poverty in the United States today.

His explanation is that often we experience diminishing returns for “relievers” that reduce our pain. Which actually gives us increasing, not diminishing returns for getting “more” in that area. For example:

Consider housing. Suppose we take the perspective of a couple whose house has a bedroom for them and each of their six children, plus adequate room for entertaining and other functions besides. Clearly they are consuming or using housing in the more-than-sufficient range. Their house is a source of positive experience. As each child leaves for college (let us say), the amount of space available for the use of the couple goes up by roughly equal amounts, but probably their enjoyment of the house goes up by smaller and smaller amounts. …

Now imagine a couple whose dwelling is a one-bedroom house that is barely adequate for themselves. If a child arrives, then given the crowded conditions, the couple’s privacy is much reduced, their peace and quiet is disturbed, and they may have to start sleeping in shifts. Whatever the compensating joys of parenthood may be, these are impressive deteriorations in their physical comfort. By the time child number six arrives, the couple may hardly notice the further deterioration in their situation that occurs as a result. One more voice outside the bedroom door when you cannot sleep anyway on account of the five that are already audible probably will not make much difference.

That is, you don’t notice as much of a difference between very and mildly crowded, as you do between mildly and not at all crowded. Karelis further claims (though without sufficient support in my opinion) that this sort of things happens much more often for people who are poor relative to their culture:

Whether something is functioning as a reliever for a given consumer is relative. It is only partly a question of objective economic circumstances, because it depends too upon how the consumer sees those circumstances. … A more anthropological view responds that the difference lies in neither discipline nor opportunity but in the values of the various sub-cultures. … No one doubts that different cultural groups within the United States have different histories, and that these different histories create different economic norms and expectations. For instance, having come from much poorer countries, Asian immigrants to the United States often have relatively low norms and expectations. By contrast, African-Americans, who are closely acquainted with the lifestyles of middle-class whites, and who have long been exposed to “the American dream” and all it implies, often have relatively high norms, if not exactly expectations. … this … predicts that the felt relief of the marginal dollar will be greater for poor Asian immigrants than the felt relief of the marginal dollar for similarly poor African-Americans.

Karelis first published this idea in 1986, and he notes that similar ideas were published by van Praag in 1968 and Friedman & Savage in 1948. I find the idea coherent and mildly plausible, but just based on Karelis’ arguments, I wouldn’t put it much above other common poverty explanations, such as stupidity, sickness, impatience, impulsiveness, and lack of self-control.

However, I gave more weight to this account after I realized that it is implied by my usual favorite account of income status: utility linear in income rank. As income is usually distributed lognormally, the function relating rank to log income must be convex below and concave above median income. This implies diminishing returns in income above median income, and a range below median income with increasing returns to income. When you have increasing returns to income, you value each unit of income more when you have more of it, rather than the usual diminishing returns case, where you value each unit of income less, the more income you have.

Karelis suggests some policy implications:

Seeing that the income effect and the substitution effect of strategies to make work pay will be mutually reinforcing, making work pay [via increased wages] is a double-barreled anti-poverty approach. By contrast, no-strings assistance is a single-barreled approach, since it lacks a positive substitution effect. …

Thirty-five years ago the speeches and writings of American civil rights leaders often framed or interpreted the circumstances of their audiences by “comparing them up”—measuring them against the circumstances of the middle-classes and the upper-middle classes, or even against the images of the good life found within the American Dream. This was openly done for the sake of energizing audiences with discontent. The goal was reasonable enough, but according to our theory, the strategy was probably counterproductive. …

Increasing the differential between the income from crime and the income from honest work—by raising the odds of punishment, lengthening sentences, or making (honest) work pay better—is likelier to be effective than strategies built on the assumption that criminals are dysfunctional and hence unresponsive to sticks and carrots of this kind; and it is likelier to be effective than strategies built on the assumption of atypical preferences. …

Our utility function could [correctly] be used to justify putting the least poor people ahead of the very poorest people in distributing assistance.

Though Karelis didn’t mention it, the same logic says to allow and even promote more gambling among the poor; within the convex region gambles look like a net gain. For the same reason, it would be good to promote inequality among the poor.

However, all these policy recommendations are based on assuming that the preferences of other poor people don’t change when you help one poor person move up their utility function. But if the transition from convex to concave utility, and other aspects of the utility of money, result from the actual distribution of income in one’s reference culture, then helping one person changes the distribution against which others compare themselves.

For example, if utility is linear in rank, the help you give one person is exactly cancelled by the hurt you thereby inflict on the others who this one person has jumped over in rank. Yes, with some other functional form, the help might outweigh the hurt, but with other forms the hurt might outweigh the help. This effect of changing the reference distribution is not small, and shouldn’t be ignored as Karelis does.

Finally, Karelis focuses entirely on immediate choices, rather than on long-term strategies. Young poor people who care about the long run should focus on trying to dig their way out of poverty, and so much less display the six patterns of poverty that Karelis tries to explain. So to predict typical poor behaviors, we need to add a substantial degree of impatience or lack of self-control to Karelis’ account.

Added 4p: Karelis responded to my email, and asked me to post this comment:

Thank you for blogging so thoughtfully about my book. One comment. The hypothesis of the book can fairly easily be extended to the putative fact that impulsiveness, impatience, and lack of self-control are commoner among the poor by introducing the idea that overcoming these weaknesses is a kind of work. The idea would be that this “will-work” will have less appeal when the material gain produced yields a smaller rather than larger addition to utility, as (the hypothesis contends) is the case in the lower income ranges. As I recall, Andrew Sullivan, Ezra Klein, and Ta-nehisi Coates all noted this extrapolation of my theory around the time the book appeared. The amendment was made possible, really, by research into the nature of willpower subsequent to the publication of my book.

This story can work re efforts to make small gains while poor, but doesn’t work re making big gambles or long-term efforts to dig oneself out of poverty. Those should be seen as large gains, even for someone who can’t find sufficient motivation to work for small gains. So to explain a poor person uninterested in either of those, we need to add something else to our story.

Added 6p: Karelis further responds:

Yes, we need to add something else to our story, but maybe not too much. My hypothesis says that medium-sized  additions to the consumption of someone at the low end of the income scale (additions that leave them shy of sufficiency) will raise and not lower their marginal utility for the good in question, and thereby increase their motivation to secure more of that good. You are right to see that these medium additions need not come from an external source. Self-help can be as effective as exogenous help in raising marginal utility in this way. For instance, if you have ten unwashed dishes in the sink, and someone washes eight of them, the psychological benefit you will get from washing the last two will be more than you would have gotten from washing the first two, and it doesn’t matter whether that “someone” is you or a friend.

So why don’t poor people perform this kind of self-help more often? They may have internalized the law of diminishing marginal utility, just like the policy folks who resist helping the poor for fear of undermining their motivation for self-help. More likely, none of us, rich or poor, is very good at self-gaming, i.e. figuring out and acting upon the likely impact of possible actions on what will seem rational to us when we have completed those actions.
One might plausibly argue that no one ever really makes long term plans. People who seem to be doing so, such as students going to college, are really just executing standard cultural plans, doing “what you are supposed to do”. Then the “extra” we’d need to add, to explain why the poor don’t seem to have long term plans to dig them out of poverty, is to say that the cultures of poor people often don’t have standard cultural plans that induce them to so dig.
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Populists Like Late Bloomers 

Late bloomers … possess qualities that can only be acquired through time and experience. They tend to be more curious, compassionate, resilient and wise than younger people of equal talent. (more)

We don’t treat people as equals in our society; some are seen as more valuable than others. And a key question is: how fast do we learn who is more valuable? The faster that we learn, the faster we can successfully sort people into the more versus less valuable, and the more strongly success and respect will correlate with merit. But the longer it takes to learn who is more valuable, the less we can infer about who is good from who has succeeded so far. 

A populist culture will pander more to the typical person, who wants to believe that he or she is really more valuable than their success so far suggests. An elitist culture, in contrast, will pander more to the typical elite, who wants to believe that his or her current high success level is a strong indicator of their higher merit. So is our culture populist or elitist? 

One big clue comes from our attitudes toward late bloomers. The harder it is to tell quality early in life, the more often that people who seemed low quality early in life will be revealed as high quality later in life. That is, in the world that populists want to believe in, there are more late bloomers. So a populist culture should more expect and celebrate late bloomers. An elitist culture, in contrast, should expect few late bloomers, as quality is quickly revealed early in life. Both should expect that at older ages a higher fraction of elites are late bloomers.

The tech industry famously prefers young workers, and rejects older workers, and so takes a more elitist stance. The high status of that industry suggests that our larger culture is also more elitist. Finance, management consulting, and athletics are also high status areas that prefer younger workers who are quickly sorted into high versus low value. Management and politics, in contrast, usually prefer older workers. Overall I’d say our culture leans elitist, though I admit this is hard to tell.

Note that the degree to which people want to believe more in late bloomers depends both on their status and on their age; the strongest difference is that mid-aged unsuccessful people want to believe in late blooming, while mid-aged successful people don’t want to believe in that. Early in life, the indicators are weak, and so everyone can believe that they will eventually succeed. And late in life, people have mostly been sorted, and there’s relatively little chance left for reversals of fortune. It is in the middle of life that the successful most want to believe the game is over, while others most want to believe the game has hardly begun. 

Within traditional gender roles, it takes longer to evaluate men than women. Women are traditionally evaluated more on beauty, fertility, and nurturing, which are revealed earlier. Men are evaluated more on fame, wealth, and career success, which are revealed later. Thus traditionally, men were more the late bloomers. This implies that the populist stance made more sense regarding men, and the elitist stance made more sense regarding women. 

This implied that when men and women paired up with others of the same age, men could more reliably see what they were getting in female partners, while women were taking more of a chance on male partners. So women who prefer older men would tend to believe more in late blooming for men, and thus take a more populist attitude. Similarly, men who prefer younger women would believe less in late blooming for women.  

I was personally a late bloomer; I started my Phd at the age of 34, with two kids age 0 and 2 at the time. I also chose to marry a woman who was four years older than me. So I guess that leans me toward populism regarding how fast value is revealed. Though now that I’m getting relatively old, I guess I’m less vested in such opinions. 

Added 29May: The new book Range argues that late blooming correlates with a more generalist strategy. The longer you search for an area in which to specialize, the more general skills you collect.

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Revolt of The Public

Martin Gurri’ book The Revolt of The Public and the Crisis of Authority in the New Millennium has gotten *lots of praise. For example, Tyler:

I am reading this splendid book for the first time. It basically explains why Brexit and Trump won, and what will happen next. Due to social media, we are disillusioned with our elites, and that will prove hard to reverse. (more)

Here is a summary by Arnold Kling:

The insiders operate within formal organizational structures, such as corporations, universities, and government agencies. These organizations have regular processes for setting goals and making decisions. There is a formal hierarchy, … The outsiders operate without formal organizational structures. They have no planning process. Their tactics are ad hoc. … The outsiders’ credentials, if they even have any, have little relevance. …

Activists who wanted to foment demonstrations against the government had to form organizations and distribute newsletters, where today they can instigate flash mobs using text messages. … Insiders see the existing order as something to preserve and improve upon. Their proposals for reform are limited and specific. They take into account constraints imposed by economic and political realities. …

Outsiders can only articulate what they are against. They can identify flaws in the existing order. But they lack a vision for reform or the skills to govern. … the dominant strategies of insiders and outsiders will lead to an outcome in which government performance worsens, legitimacy declines, and conflict increases. (more)

And one by Noah Smith:

Social media has empowered the public, and that the public is using its newfound power to attack – but not to replace – the dominant institutions of society. … Gurri defines the public as the set of people who are interested enough in a particular issue to pay attention and get involved. … Social media, … freeing [public] from the control of centralized, hierarchical push-media. …

The newly empowered public, he argues, has not focused on building things up, but on breaking them down. The public’s goal is negation – denunciation of respected leaders, derailment of political programs, overthrow of parties or governments, discrediting of institutions, etc. Gurri worries that this constant anti-everything attitude will descend into “nihilism”, and that weakened institutions will be trapped in an eternal stalemate with an eternally raging public. (more)

Here is Gurri himself:

We stand at the earliest moment of what promises to be a cataclysmic expansion of information and communication technologies: the fifth wave. … The fourth wave, now nearly spent, was that of mass media. Its organization was industrial, its orientation commercial or propagandistic, but its most radical innovation – the difference between what transpired before and after – was the demand for a silent public. … That has changed forever. … The public … has largely stopped listening, and it has started talking back. …

The question is what happens … fragmentation, leading almost to disintegration. The mass public was an invention of the mass media. What actually exists is a variegated patchwork of people and groups … Countries not burdened by the despot’s choice have seen the public assume a fractured shape consistent with its actual preferences. In the US, it is probably more accurate to speak of the public in the plural: many publics, speaking with many voices. …

Marginal players have seized on the new technologies to increase their audience and influence – only to collide with political and professional hierarchies horrified by such barbarian invasions into their proprietary fiefs. … The end can only be the discrediting of authoritative elites, … the new technologies have given the power of speech to a silent public, to players marginalized by the media monopoly over the information space. … It’s early days. … Digital natives, riding the fifth wave, will then burst upon the world as breakers of governments and overturners of elites. (more)

The meat of the book is a half dozen case studies of protest movements in the early 2010s, from around the world, wherein vocal & active but otherwise ordinary people complained loudly about a failure they attributed to official institutions. As such protesters were reluctant to create or endorse formal organizations or parties, and were much less interested in policy details, they mostly had limited impacts such as getting people to quit or reversing recent policy changes.

Gurri’s day job is intelligence analyst, and he seems good at that. That is, he’s good at describing concrete events in ways that give the impression that he understands what is going on and could roughly predict what will happen next. Though hard to be sure of that, as he offers no track record of predictions. But the more Gurri generalizes, the more doubts I have. And as the above quotes suggest, he goes quite far in generalization.

First, Gurri claims that the pattern of these early 2010s events shows a fundamental social change from previous decades. But he doesn’t actually show this. He only discusses one prior event, Kennedy’s Bay of Pigs scandal, where he notes that the media and public mostly forgave Kennedy. Yet the public doesn’t scream about most things authorities do today; that doesn’t show a change.

Second, Gurri attributes the changes he sees to lower costs of sharing information. Clearly this is right at the finest scales, in the sense that in these events social media often allowed a very rapid transition from a few people complaining online to large groups shouting in big plazas together. But it is much less obvious that cheaper info is the key cause of a less docile, more complainy, less organized public that is less supportive of formal hierarchies. I do find it plausible that the public is getting more polarized, egalitarian, and complainy over decades, but I see other plausible causes of such trends, if in fact these are real trends. Gurri didn’t convince me that info costs are more than a minor contributing factor here.

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Speculator-Chosen Immigrants

On immigration, the big political tug-o-war axis today is: more or less immigrants. But if you want tug the rope sideways, both to oppose polarization and to have a better chance of adding value, you might do better to focus on a perpendicular axis. Such as transferable citizenship, crime liability insurance for immigrants, or the topic of this post: who exactly to admit.

Even if we disagree on how many immigrants we want, we should agree that we want better immigrants. For example, good immigrants pay lots of taxes, volunteer to help their communities, don’t greatly harm our political or social equilibria, are not criminals, and impose fewer burdens on government benefit systems. Yes, we may disagree on the relative weights to assign to such features, but these disagreements seem relatively modest; there’s plenty of room here to work together to make better choices.

Note that, for the foreseeable future, we aren’t likely to approve for immigration more than a small fraction of all the outsiders who’d be willing to apply, if we were likely to accept them. So as a practical matter our efforts to pick candidates should focus on estimating well at the high tail of the distribution, for the candidates most likely to be best.

Note also that while a better way to select immigrants might induce us to accept more immigrants, those who are wary of this outcome tend to feel risk averse about such changes. Thus we should be looking for ways to pick immigrants that seem especially good at assuring skeptics that any one person is a good candidate.

To achieve all this, I suggest that we look at the prices of new financial assets that we can create to track the net tax revenue from each immigrant, conditional on their being admitted. Let me explain.

For every immigrant that we admit, the government could track how much that person pays in taxes each year, and also how much the government spends on that person via benefits whose costs can be measured individually. We could probably assign individual costs for schools, Medicare and Medicaid, prison, etc. For types of costs or benefits that can’t be measured individually, we’d could attribute to each immigrant some average value across citizens of their location and demographic type. When there are doubts, let us err in the direction of estimating higher costs, so that our measures are biased against immigrants adding value.

Okay, so now we have a conservative net financial value number for each immigrant for each year, a number that can be positive or negative. From these numbers we can create financial assets that pay annual dividends proportional to these numbers. If we let many people trade such assets, their market prices should give us decent estimates of the current present financial value of this stream of future revenue. And if we allow trading in such assets regarding people who apply to immigrate, with those trades being conditional on that person being admitted and coming, then such prices would estimate the net financial value of an immigration candidate conditional on their immigrating.

We could then admit the candidates for whom such estimates are highest; using a high threshold could ensure a high confidence that each immigrant is a net financial advantage. Those who are skeptical about particular immigrants, or about immigration in general, could insure themselves against bad immigration choices via trades in these markets, trades from which they expect to profit if their skepticism is accurate.

As usual, there are some subtitles to consider. For example, traders must be given some info on each candidate, and market estimates are more accurate the more info that traders are given. While I see no obvious legal requirement to do so, candidates could be assured some privacy. Immigration skeptics, however, might want to limit such privacy, to better ensure that each immigrant is a net gain.

Once immigrants become citizens, they of course have stronger privacy rights. While the government-calculated dividend values on them each year would reveal some info, there’s no need to reveal details of how that number was computed. To cut info revealed further, we might even wait and pay dividends as a single lump every five years.

In principle, a trader might acquire a large enough net negative stake in a particular immigrant that they have an incentive to hurt that immigrant, or at least to hurt that immigrant’s chances of achieving high net value. We might thus want to limit the size of negative stakes, at least after the immigrant comes, and among traders with opaque abilities to cause such harms.

The fact that net financial revenue can be both positive and negative complicates the asset creation. We might add some large constant to the financial numbers, to ensure that dividends paid have a positive sign. Or we might create two assets, one that pays dividends for the positive amounts, and one that pays for the negative amounts.

Some groups of candidates, such as a church, family, or firm, might be worth more if admitted as a unit together. We might then have trades on packages of assets for a whole group of candidates, trades conditional on their all being admitted as a unit. With a high enough estimated value of the group, we might then just admit such groups as units, even when we have doubts about individual members.

And that’s it, another pull-the-rope-sideways proposal designed to improve policy on a hot-button topic without taking a side on topic’s main dispute. Whether you want more or fewer immigrants, you should want better immigrants.

Added 1p 25Mar: If we could design individual measures of cultural assimilation and impact on cultural change, and assign dollar values to those measures, then we could include them in this proposed system.

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Can We Trust Deliberation Priests?

In Science, academic “deliberation” experts offer a fix for our political ills:

Citizens to express their views … overabundance [of] … has been accompanied by marked decline in civility and argumentative complexity. Uncivil behavior by elites and pathological mass communication reinforce each other. How do we break this vicious cycle? …

All survey research … obtains evidence only about the capacity of the individual in isolation to reason about politics. … [But] even if people are bad solitary reasoners, they can be good group problem-solvers … Deliberative experimentation has generated empirical research that refutes many of the more pessimistic claims about the citizenry’s ability to make sound judgments.

Great huh? But there’s a catch:

Especially when deliberative processes are well-arranged: when they include the provision of balanced information, expert testimony, and oversight by a facilitator … These effects are not necessarily easy to achieve; good deliberation takes time and effort. Many positive effects are demonstrated most easily in face-to-face assemblies and gatherings, which can be expensive and logistically challenging at scale. Careful institutional design involv[es] participant diversity, facilitation, and civility norms …

A major improvement … might involve a randomly selected citizens’ panel deliberating a referendum question and then publicizing its assessments for and against a measure … problem is not social media per se but how it is implemented and organized. Algorithms for ranking sources that recognize that social media is a political sphere and not merely a social one could help. …

It is important to remain vigilant against incentives for governments to use them as symbolic cover for business as usual, or for well-financed lobby groups to subvert their operation and sideline their recommendations. These problems are recognized and in many cases overcome by deliberative practitioners and practice. … The prospects for benign deployment are good to the degree that deliberative scholars and practitioners have established relationships with political leaders and publics—as opposed to being turned to in desperation in a crisis.

So ordinary people are capable of fair and thoughtful deliberation, but only via expensive processes carefully managed in detail by, and designed well in advance by, proper deliberation experts with “established relationships with political leaders and publics.” That is, these experts must be free to pick the “balance” of info, experts, and participants included, and even who speaks when how, and these experts must be treated with proper respect and deference by the public and by political authorities.

No, they aren’t offering a simple well-tested mechanism (e.g., an auction) that we can apply elsewhere with great confidence that the deployed mechanism is the same as the one that they tested. Because what they tested instead was a mechanism with a lot of “knobs” that need context-specific turning; they tested the result of having particular experts use a lot of discretion to make particular political and info choices in particular contexts. They say that went well, and their academic peer reviewers (mostly the same people) agreed. So we shouldn’t worry that such experts would become corrupted if we gave them a lot more power.

This sure sounds like a priesthood to me. If we greatly empower and trust a deliberation priesthood, presumably overseen by these 20 high priest authors and their associates, they promise to create events wherein ordinary people talk much more reasonably, outputting policy recommendations that we could then all defer to with more confidence. At least if we trust them.

In contrast, I’ve been suggesting that we empower and trust prediction markets on key policy outcomes. We’ve tested such mechanisms a lot, including in contexts with strong incentives to corrupt them, and these mechanisms have far fewer knobs that must be set by experts with discretion. Which seems more trustworthy to me.

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Why Grievances Grow

We have come to call these fields “grievance studies” in shorthand because of their common goal of problematizing aspects of culture in minute detail in order to attempt diagnoses of power imbalances and oppression rooted in identity. (more)

A full 80% [of US] believe that “political correctness is a problem in our country.” … The woke are in a clear minority across all ages. … Progressive activists are the only group that strongly backs political correctness: Only 30% see it as a problem. … Compared with the rest of the [nation], progressive activists are much more likely to be rich, highly educated—and white. … What people mean by “political correctness.” … [is] their day-to-day ability to express themselves: They worry that a lack of familiarity with a topic, or an unthinking word choice, could lead to serious social sanctions for them. (more)

While the American legal system favors the state over the individual in property takings, for example in contrast with the Japanese system, the political system favors NIMBYs and really anyone who complains. Infrastructure construction takes a long time and the politician who gets credit for it is rarely the one who started it, whereas complaints happen early. This can lead to many of the above-named problems [with transit construction], especially overbuilding, such as tunneling where elevated segments would be fine or letting agency turf battles and irrelevant demands dictate project scope. (more)

Chronic Complainers: These folks live in a constant state of complaint. If they’re not voicing about their “woe is me” attitude, they’re probably thinking about it. Psychologists term this compulsory behavior rumination, defined as “repetitively going over a thought or a problem without completion.” Rumination is, unfortunately, directly relayed to the depressed and anxious brain. (more)

Customers with high status tended to register more service failures and to complain more frequently than customers of lower social status. All three social status distinctions explored in this study (gender, education, and age) correlated negatively with formal complaint, but only age correlated negatively with informal complaint. … Two cultural dimensions [power distance and uncertainty avoidance] had the expected negative effect on intention to complain, and moderated the relationship between social status and intention to complain. (more)

My favorite one-factor theory of social attitude (and value) change over the last few centuries is that increasing wealth has induced a drift from farmer back to forager attitude (and values). (A theory I also outline in Age of Em.) Which plausibly helps explains changing attitudes toward fertility, gender, slavery, crime, democracy, war, leisure, art, and travel. In this post I want to suggest a (to me) new hypothesis about forager attitudes, which could help explain some recent attitude trends.

Foragers are fiercely egalitarian. They share many kinds of food and other resources, and enforce a norm of quickly and aggressively squashing any signs of attempts to use or threaten to use force, or any inclinations to do so. In fact, this is probably the uber-norm that drove the evolution of norms in the first place. Bragging about your physical strength is a no-no, as that can be interpreted as an implicit threat to use that strength. Even bragging about your intelligence or other resources is discouraged, as those might also be seen as threats, or as attempts to form coalitions that might threaten. Forager group decisions are to be made by consensus, after everyone has had a chance to weigh in.

Now consider foragers attitudes about complaining. When someone more dominant makes a complaint to someone less dominant, that can often be interpreted as a threat to use power if the complaint isn’t fixed. Which is a big forager no-no. But when a less dominant person complains to a more dominant person, it is harder to see that as a threat to use power. So complaints down are discouraged more than complaints up, just as punching down is more of a no-no than punching up. And we’ll tend to interpret complaints as a pro-down positions.

A complaint that is made to third parties fits the standard norm-enforcement pattern, a pattern of which foragers greatly approve. Thus having A complain to B about how a more dominant person C is treating a less dominant person D badly should generally meet with approval. This is A helping out with norm enforcement, and can be seen as “speaking truth to power.” If A is a high prestige person, and B is a wise and moral audience, this pattern should be especially approved. After all, we naturally believe prestigious people more than others. And if a complaint leads to action of which we later approve, that can increase the prestige of the complainers.

Yes, people who complain a lot tend to seem unhealthy, and we tend to think less of frequent complainers. Even so, foragers likely a big soft spot in their hearts for prestigious people who complain to the whole group that some low dominance people are being treated badly by high dominance people. Those complaints, foragers respected.

In our society today, we tend to frame big firms, governments, rich folks, and larger demographic groups as more dominant actors. So when a local neighborhood group complains about a government plan for a transit construction project, we tend to see that as a low dominance actor complaining about a high dominance actor, and habitually sympathize. And to the extent that we have forager-like attitudes about such situations, this increases the political negotiating power of such complainers, inducing governments to give in to them, and raising the costs of transit construction projects. Similar processes likely increase the power of neighborhood groups who demand rent, zoning, and private construction restrictions, resulting in less new buildings and housing.

Forager-like attitudes similarly prime us to favor ordinary consumers or employees who complain about big firms, and this encourages regulations focused mostly on consumer and employee welfare, relative to the welfare of investors, who are framed as rich and thus dominators. Even rich high status people feel comfortable complaining about how big firms treat them, and in fact they feel more comfortable than low status folks. Their higher prestige can make them feel like respected moral crusaders for all.

As larger race/ethnicities are framed as dominators relative to smaller ones, forager-like attitudes prime us to sympathize with complaints that the former mistreat the latter. Similarly for complaints on how the larger groups who have more standard gender and sexual preferences treat the smaller groups who have more deviant genders and sexual preferences. Men’s higher physical strength and participation in war, and higher percentage among top positions at most organizations, has long induced us to frame men as more dominant relative to women.

Thus when we have more forager-like attitudes, we naturally sympathize when high prestige people complain that these more dominant groups are mistreating the less dominant groups. And in fact people with the potential for high prestige can seek to cement and increase their prestige via such complaints. Which is plausibly why it is high prestige folks who participate most in “grievance studies” type complaining.

Forager-like attitudes should make us sympathize with most any complaint about how rich people treat less rich people. Including how they conspire to mess up markets, political systems, or legal systems. Also, when criminals are committing crimes, they can seem like illicit dominators relative to ordinary citizens. But police, courts, and prisons can seem like dominators relative to criminals, thus inducing us to sympathize with complaints that criminals are being treated too harshly by the legal system. Perhaps explaining why prestigious folks seem to consistently push for weaker criminal punishments.

My wealth-induces-farmer-to-forager-attitudes story says that this complaint-sympathizing effect has been slowly getting stronger as we’ve been getting richer and more forager-like. It is strongest in the richest nation, which is currently the US, and it will continue to get stronger world-wide as the world gets richer. And these grievances accumulate when we do not use law to try and settle them.

And that’s my story. Hyper-egalitarian foragers were especially sympathetic to complaints by prestigious folks that high-dominance folks were mistreating less-dominant others, and with increasing wealth we’ve been slowly increasing our embrace of this forager attitude. And so we’ve been listening more to such complainers, and giving them more political and social power, which has encouraged more high prestige folks to present themselves as such crusading complainers. Which results in a growing accumulation of such grievances.

What to do about this will have to wait for another post.

Added 10Mar: The conceptual power here is that this theory is more specific than the general idea that we dislike inequality and dominance, and so work consistently to reduce them. A habit of favoring specific complaints against more dominant parties can actually increase inequality and dominance in many cases.

Added 11Mar: Martin Gurri’s book Revolt of the Public can be seen as describing a switch to a focus on popular complaints. He describes many new social movements around 2011 that focused on complaining loudly to an enthusiastic public, but which due to egalitarian ideals weren’t interested in or capable of negotiating concrete demands or working within the usual political systems.

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Enforce Common Norms On Elites

In my experience, elites tend to differ in how they adhere to social norms: their behavior is more context-dependent. Ordinary people use relatively simple strategies of being generally nice, tough, silly, serious, etc., strategies that depend on relatively few context variables. That is, they are mostly nice or tough overall. In contrast, elite behavior is far more sensitive to context. Elites are often very nice to some people, and quite mean to others, in ways that can surprise and seem strange to ordinary people.

The obvious explanation is that context-dependence is gives higher payoffs when one has the intelligence, experience, and social training to execute this strategy well. When you can tell which norms will tend to be enforced how when and by whom, then you can adhere strongly to the norms most likely to be enforced, and neglect the others. And skirt right up to the edge of enforcement boundaries. For weakly enforced norms, your power as an elite gives you more ways to threaten retaliation against those who might try to enforce them on you. And for norms that your elite associates are not particularly eager to enforce, you are more likely to be given the benefit of the doubt, and also second and third chances even when you are clearly caught.

One especially important human norm says that we should each do things to promote a general good when doing so is cheap/easy, relative to the gains to others. Applied to our systems, this norm says that we should all do cheap/easy things to make the systems that we share more effective and beneficial to all. This is a weakly enforced norm that elite associates are not particularly eager to enforce.

And so elites do typically neglect this system-improving norm more. Ordinary people look at a broken system, talk a bit out how it might be improved, and even make a few weak moves in such directions. But ordinary people know that elites are in a far better position to make such moves, and they tend to presume that elites are doing what they can. So if nothing is happening, probably nothing can be done. Which often isn’t remotely close to true, given that elites usually see the system-improving norm as one they can safely neglect.

Oh elites tend to be fine with getting out in front of a popular movement for change, if that will help them personally. They’ll even take credit and pretend to have started such a movement, pushing aside the non-elites who actually did. And they are also fine with taking the initiative to propose system changes that are likely to personally benefit themselves and their allies. But otherwise elites give only lip service to the norm that says to make mild efforts to seek good system changes.

This is one of the reasons that I favor making blackmail legal. That is, while one might have laws like libel against making false claims, and laws against privacy invasions such as posting nude picts or stealing your passwords, if you are going to allow people to tell true negative info that they gain through legitimate means, then you should also let them threaten to not tell this info in trade for compensation.

Legalized blackmail of this sort would have only modest effects on ordinary people, who don’t have much money, and who others aren’t that interested in hearing about. But it would have much stronger effects on elites; elites would be found out much more readily when they broke common social norms. They’d be punished for such violations either by the info going public, or by their having to pay blackmail to keep them quiet. Either way, they’d learn to adhere much more strongly to common norms.

Yes, this would cause harm in some areas where popular norms are dysfunctional. Such as norms to never give in to terrorists, or to never consider costs when deciding whether to save lives. Elites would have to push harder to get the public to accept norm changes in such areas, or they’d have to follow dysfunctional norms. But elites would also be pushed to adhere better to the key norm of working to improve systems when that is cheap and easy. Which could be a big win.

Yes trying to improve systems can hurt when proposed improvements are evaluated via naive public impressions on what behavior works well. But efforts to improve via making new small scale trials that are scaled up only when smaller versions work well, that’s much harder to screw up. We need a lot more of that.

Norms aren’t norms if most people don’t support them, via at least not disputing the claim that society is better off when they are enforced. If so, most people must say they expect society to be better off when we find more cost-effective ways to enforced current norms. Such as legalizing blackmail. This doesn’t necessarily result in our choosing to enforce norms more strictly, though this may often be the result. Yes, better norm enforcement can be bad when norms are bad. But in that case it seems better to persuade people to change norms, rather than throwing monkey-wrenches into the gears of norm enforcement.

So let’s hold our elites more accountable to our norms, listen to them when they suggest that we change norms, and especially enforce the norm of working to improve systems. Legalized blackmail could help with getting elites to adhere more closely to common norms.

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Social Media Lessons

Women consistently express more interest than men in stories about weather, health and safety, natural disasters and tabloid news. Men are more interested than women in stories about international affairs, Washington news and sports. (more)

Tabloid newspapers … tend to be simply and sensationally written and to give more prominence than broadsheets to celebrities, sports, crime stories, and even hoaxes. They also take political positions on news stories: ridiculing politicians, demanding resignations, and predicting election results. (more

Two decades ago, we knew nearly as much about computers, the internet, and the human and social sciences as we do today. In principle, this should have let us foresee broad trends in computer/internet applications to our social lives. Yet we seem to have been surprised by many aspects of today’s “social media”. We should take this as a chance to learn; what additional knowledge or insight would one have to add to our views from two decades ago to make recent social media developments not so surprising?

I asked this question Monday night on twitter and no one pointed me to existing essays on the topic; the topic seems neglected. So I’ve been pondering this for the last day. Here is what I’ve come up with.

Some people did use computers/internet for socializing twenty years ago, and those applications do have some similarities to applications today. But we also see noteworthy differences. Back then, a small passionate minority of mostly young nerdy status-aspiring men sat at desks in rare off hours to send each other text, via email and topic-organized discussion groups, as on Usenet. They tended to talk about grand big topics, like science and international politics, and were often combative and rude to each other. They avoided centralized systems to participate in many decentralized versions, using separate identities; it was hard to see how popular was any one person across all these contexts.

In today’s social media, in contrast, most everyone is involved, text is more often displaced by audio, pictures, and video, and we typically use our phones, everywhere and at all times of day. We more often forward what others have said rather than saying things ourselves, the things we forward are more opinionated and less well vetted, and are more about politics, conflict, culture, and personalities. Our social media talk is also more in these directions, is more noticeably self-promotion, and is more organized around our personal connections in more centralized systems. We have more publicly visible measures of our personal popularity and attention, and we frequently get personal affirmations of our value and connection to specific others. As we talk directly more via text than voice, and date more via apps than asking associates in person, our social interactions are more documented and separable, and thus protect us more from certain kinds of social embarrassment.

Some of these changes should have been predictable from lower costs of computing and communication. Another way to understand these changes is that the pool of participants changed, from nerdy young men to everyone. But the best organizing principle I can offer is: social media today is more lowbrow than the highbrow versions once envisioned. While over the 1800s culture separated more into low versus high brow, over the last century this has reversed, with low has been displacing high, such as in more informal clothes, pop music displacing classical, and movies displacing plays and opera. Social media is part of this trend, a trend that tech advocates, who sought higher social status for themselves and their tech, didn’t want to see.

TV news and tabloids have long been lower status than newspapers. Text has long been higher status than pictures, audio, and video. More carefully vetted news is higher status, and neutral news is higher status than opinionated rants. News about science and politics and the world is higher status that news about local culture and celebrities, which is higher status than personal gossip. Classic human norms against bragging and self-promotion reduce the status of those activities and of visible indicators of popularity and attention.

The mostly young male nerds who filled social media two decades ago and who tried to look forward envisioned high brow versions made for people like themselves. Such people like to achieve status by sparring in debates on the topics that fill high status traditional media. As they don’t like to admit they do this for status, they didn’t imagine much self-promotion or detailed tracking of individual popularity and status. And as they resented loss of privacy and strong concentrations of corporate power, and they imagined decentralized system with effectively anonymous participants.

But in fact ordinary people don’t care as much about privacy and corporate concentration, they don’t as much mind self-promotion and status tracking, they are more interested in gossip and tabloid news than high status news, they care more about loyalty than neutrality, and they care more about gaining status via personal connections than via grand-topic debate sparring. They like wrestling-like bravado and conflict, are less interested in accurate vetting of news sources, like to see frequent personal affirmations of their value and connection to specific others, and fear being seen as lower status if such things do not continue at a sufficient rate.

This high to lowbrow account suggests a key question for the future of social media: how low can we go? That is, what new low status but commonly desired social activities and features can new social media offer? One candidate that occurs to me is: salacious gossip on friends and associates. I’m not exactly sure how it can be implemented, but most people would like to share salacious rumors about associates, perhaps documented via surveillance data, in a way that allows them to gain relevant social credit from it while still protecting them from being sued for libel/slander when rumors are false (which they will often be), and at least modestly protecting them from being verifiably discovered by their rumor’s target. That is, even if a target suspects them as the source, they usually aren’t sure and can’t prove it to others. I tentatively predict that eventually someone will make a lot of money by providing such a service.

Another solid if less dramatic prediction is that as social media spreads out across the world, it will move toward the features desired by typical world citizens, relative to features desired by current social media users.

Added 17 Nov: I wish I had seen this good Arnold Kling analysis before I wrote the above.

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