Month: March 2017

Mr. Pence and Mrs. Butterworth

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Let me start out at the outset by saying that The Onion’s spoof of the WaPo’s revelation[ref]Actually, just a mention of something Pence told the Hill back in 2002, but never mind that detail.[/ref] that Mike Pence “never eats alone with a woman other than his wife and that he won’t attend events featuring alcohol without her by his side, either” is hilarious: Mike Pence Asks Waiter To Remove Mrs. Butterworth From Table Until Wife Arrives.

Let me add, as a second point, that the issue of unequal treatment of women is very much alive today, and affects many women, especially those working in male-dominated sectors like engineering and computer science. We’ll come back to that at the end.[ref]I added this paragraph on 2017-April-01 after a Facebook discussion with a woman in one of these sectors. I hadn’t added it before then because I thought it was obvious.[/ref]

The mini-debate that has been ongoing on about Pence’s policy has been quite interesting. At least one friend on Facebook compared it to The Great Dress Debacle of 2015: conservatives found Pence’s stance perfectly normal while liberals were split between ridiculing him and accusing him of practicing Sharia. Lest you think I’m joking, here’s one example cadged from The Federalist:

So, here are a couple of thoughts.

First, some folks seem to be missing the primary point of a rule like this. It is not, as the mockers deride, because Mr. Pence’s self-control is so flimsy he is afraid that merely sitting next to a woman in a restaurant without supervision would place him in danger of fornicating right there on the spot.

This isn’t a minor confusion. It’s a fundamental misapprehension of an ancient worldview that Christians still adhere to. In religious language: we’re all weak, vulnerable, and prone to sin. In modern, secular language: we’re irrational and often behave in ways that counter our own best interests and/or confound the values and goals we think we have. Doesn’t matter if you call it “fallen nature” or “cognitive bias”, in this context we’re talking about the same thing.

So how does this play out? The most common way that Christians (or other social conservatives) might try to explain a rule like Pence’s goes something like this: Anyone who goes on a diet will start by throwing out all the tempting food in their house.

The problem is that this analogy is very easy to misunderstand. One interpretation–the wrong one–is that cheating on your wife is the same kind of momentary lapse as cheating on your diet. It’s as though absent-mindedly chomping down on a Krispy Kreme you forgot to throw out is equivalent to absent-mindedly wandering into a hotel room with a woman you’re not married too. Lots of folks get as far as this (silly) interpretation and stop there.

The actual interpretation of the metaphor is quite different. It is saying that good behavior is not just about making the right decisions in the moment. It’s about manipulating your environment to make it conducive to the kind of behavior that you want in your life. Social conservatives understand that because we’re irrational creatures with amazing abilities to rationalize our ways into following short-term desires part of being virtuous isn’t just saying no to temptation in the moment, but avoiding it altogether.

Pence’s rule doesn’t draw the line at the moment when he’s tempted to be sexually unfaithful to his wife. It draws the line much, much earlier and so prevents the first seeds of infidelity from ever having a chance to take root in the first place.

I don’t follow Pence’s rule. I think it’s overkill. I’m not interested in trying to convince anyone that his particular rule should be some kind of universal standard for everyone. But I don’t think it’s ridiculous or absurd either. After all–in addition to the concerns about compromising marital fidelity out of an initially innocent friendship–there’s also legitimate concerns about being taken advantage of. Politicians are powerful and that also makes them vulnerable. Just ask the KGB (the FSB, these days) which has employed agents to try and seduce traveling politicians and officials for decades and decades in order to blackmail their targets into betraying state secrets. This is, by the way, one of the reasons that the CIA, FBI, and many other agencies are fond of hiring Mormons.[ref]Catch up here, if that is news to you.[/ref] Not only are we extremely family-focused (I know lots of Mormons who follow Pence’s rules), but we also don’t drink. Taken together, this means observant Mormons are less likely to be compromised in this way than the average population.

In the wake of the Republicans failing to pass the AHCA, there was a nauseating avalanche of cutesy Facebook posts from liberal fans of Hamilton. Here’s one:

If you missed the reference, it’s from Cabinet Battle #1, when Madison and Jefferson taunt Hamilton. Other favorites included “Winning was easy… Governing’s harder” and “Do you know how hard it is to lead?”

The funny thing is, if Alexander Hamilton had followed a rule like Mike Pence’s, he could have avoided his part in America’s first political sex-scandal, saved his family a lot of agony, and spared Lin-Manuel Miranda a song or two.[ref]Die-hard Hamilton fans are probably not persuaded by that last one, of course.[/ref]

And that brings me to my second point. Just as liberals are happy to take very selective lessons from Hamilton, there’s an awful weird dichotomy in a town where liberals practice all kinds of non-judgmentalism for open marriages but are more than happy to ridicule and deride someone for trying to keep their marriage closed. That’s the point Jonah Goldberg made at the National Review:

Last summer, when Bill Clinton spoke about his wife at the Democratic convention (“In the spring of 1971, I met a girl . . . ”), liberals gushed at the “love story,” and the rule of the day was that marriage is complicated and the Clintons’ ability to stay married (though practically separated) was admirable. Besides, “Who are we to judge?” — no doubt Bill Clinton’s favorite maxim.

It’s a very strange place we’ve found ourselves in when elites say we have no right to judge adultery, but we have every right to judge couples who take steps to avoid it.[ref]Emphasis added.[/ref]

He’s not wrong, you know.

I do think there are some legitimate concerns. The most important being that if you’re, say, a business executive who follows these rules, does it mean that you’re creating an environment where you give preferential treatment to men? If a young, up-and-coming male executive could ask you out to lunch to seek your advice, but a young, up-and-coming female executive cannot, then we do have a legitimate problem. It’s also possible to simply take this stance too far. I don’t recall conservatives having a problem with forcing Muslim boys to shake hands with their (female) teachers in Switzerland, for example.[ref]Unsurprisingly, liberals have a double standard that cuts against traditionalist Christians while social conservatives have a double standard that cuts against traditionalist Muslims.[/ref]

So I’m not saying that it’s impossible to have questions and concerns about a position like Pence’s. But the degree of hostility and deliberate (or at least, lazy) misunderstanding of the rules that the Pences have agreed on for their own marriage are at least as concerning as the rules themselves.

The Perfect is the Enemy of Space Exploration

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It’s hard to find a good reason to wag your finger disapprovingly at Elon Musk’s idealistic crusade to take us in to outer space, but wherever a talented individual is working hard to make the world a materially better place you will find a contrarian academic with an axe to grind and rhetorical snake oil to peddle. After all, that’s really the inevitable consequence of the ideological homogenization of American academia.[ref]See Walker’s post.[/ref] In a world where professors have substantially divergent views, there’s room for substantive arguments. But in a world where professors are all cut from the same ideological mold, the drive to differentiate oneself from the herd leads to increasingly bizarre and extreme signalling. Novelty supplants ingenuity, provocation supplants integrity, and the next thing you know space travel is racist.

That, essentially, is the point of Andrew Russell’s piece at Aeon: Whitey on Mars.[ref]You thought I was exaggerating, didn’t you?[/ref] The motivating question can be summarized this way: why throw away money on science that’s of no benefit to anyone while we’ve got real problems to solve down here on Earth?

Like much that passes for serious conversation today, the question is sheer Bulverism. Russell isn’t sincere. He doesn’t want to talk about the relative trade offs of money spent on space exploration vs. money spent fighting poverty. Nope, that would be much too old-fashioned. In the 21st century, we never make the argument we say we’re making. We just assume conclusions and skip straight to psycho-analyzing, the better to virtue-signal. Here, I’ll let C. S. Lewis explain:

You must show that a man is wrong before you start explaining why he is wrong. The modern method is to assume without discussion that he is wrong and then distract his attention from this (the only real issue) by busily explaining how he became so silly.

In the course of the last fifteen years I have found this vice so common that I have had to invent a name for it. I call it “Bulverism”. Some day I am going to write the biography of its imaginary inventor, Ezekiel Bulver, whose destiny was determined at the age of five when he heard his mother say to his father — who had been maintaining that two sides of a triangle were together greater than a third — “Oh you say that because you are a man.” “At that moment”, E. Bulver assures us, “there flashed across my opening mind the great truth that refutation is no necessary part of argument. Assume that your opponent is wrong, and explain his error, and the world will be at your feet. Attempt to prove that he is wrong or (worse still) try to find out whether he is wrong or right, and the national dynamism of our age will thrust you to the wall.” That is how Bulver became one of the makers of the Twentieth Century.

I know Russell isn’t interested in an argument on the actual merits, but I’m going to pretend that he is. Why? Because I don’t really know of any other way to respond to Bulverism, for one thing. And because the subject is actually pretty interesting, for the second. So: why should we seriously consider spending a lot of money on space travel while things are so desperately out of whack down here on Earth? I present two arguments.

The first begins with a video game analogy. Most modern multiplayer games come int two flavors: PvE and PvP. The first stands for “Player vs Environment” and the second for “Player vs. Player.” In PvP game modes, the primary action comes from players trying to kill each other. Of course, cooperation is possible. In fact, cooperation is often essential in these games. This is an age-old truth of human biology: we cooperate in order to become better at competition. As the old proverb goes: “Me against my brother, me and my brother against my cousin, me and my cousin against the stranger.”

In the alternative PvE mode, combat between human players is impossible. Cooperation is still usually required, because the the environment becomes the enemy. Players have to work together to overcome computer-controlled bad guys (in the most common arrangement) or other constraints and challenges.

My contention is that the PvE and PvP paradigms are the only two major paradigms through which human beings can confront the universe. We define ourselves in contrast to something else. In the short run, at least, that much is inevitable. Waiting around for an age of enlightenment when conflict and oppositions disappear is–at best–a kind of foolish utopianism. If you want to deal with humanity as it exists today you have to accept that these are basically you’re only oppositions. It’s either us-vs-them (PvP) or us-vs-it (PvE) where “it” is the challenge, danger, risk, and opportunity of hazardous exploration.

I do not believe that a robust space program that captivated the popular imagination would in a single stroke obviate all the political tensions dividing Americans let alone the older and deeper ethnic and national hatreds separating so many people around the globe. But I do believe there is nothing wrong with moving a little bit along the spectrum away from PvP and towards PvE. More than that, I believe it would help–in a small but meaningful way–to give Americans and humans something to root for, some opposition entity that enabled an us without relying on an otherized them. I can think of no program more amenable to this goal than a program of exploration and really our only choices in this regard are space or the ocean. Since space is both more romantic (for most people) and less hazardous to our own ecosystem, the choice seems clear.

So let’s get to the second major reason that space exploration is a worthwhile investment: survival. The reality is that as long as the human race lives exclusively on Earth, we’re literally keeping all our eggs in one basket. This is a recipe for extinction. The most likely source of this extinction will be from asteroid impact. Small rocks routinely impact the Earth, most frequently burning up in orbit and doing no harm. Here’s a map of small asteroids (1-20 meters in diameter) hitting the Earth between 1993 and 2014.

Map of 556 impacts on the Earth from 1993-2014.
Map from NASA/Planetary Science. Click for more information. (Public Domain)

These little rocks are no threat, but they illustrate that asteroids hitting the Earth are not some kind of rare event. It’s very, very common. The question is just: when are we going to get hit with a really big one? By studying impact craters on the Moon, it’s possible to come up with some basic estimates, which Wikipedia summarizes:

Asteroids with a 1 km (0.62 mi) diameter strike Earth every 500,000 years on average. Large collisions – with 5 km (3 mi) objects – happen approximately once every twenty million years. The last known impact of an object of 10 km (6 mi) or more in diameter was at the Cretaceous–Paleogene extinction event 66 million years ago.

So, these are very rare events. But they are also–over a long enough period of time–inevitable. We’re a sitting duck, and one day another one of those really big space rocks is going to come hurtling our way. With no extra-terrestrial humans and no active defenses whatsoever, that would spell the end of human civilization and possibly the end of the human species. It probably won’t happen. Not in our lifetime, not in our nation’s lifetime, maybe not in our species’ lifetime. Then again, it might.

These are the two simplest reasons I believe we shouldn’t wait to turn Earth into an egalitarian utopia before we turn our eyes to the stars. There are a couple more that I will only skim over. One is that research into space exploration has already led to lots of benefits for life on Earth. Another is just the general problem with trying to solve the world’s problems in serial instead of parallel. This is a ludicrously bad model for tackling the problems we face for the simple reason that we couldn’t all coordinate on attacking just one problem at a time even if we wanted to, and even if we agreed on what problem that would be. It makes more sense for different people and institutions to work on the problems that they are–by temperament and opportunity–most able to address. In other words: we don’t have to pick either/or. It’s always going to be “yes, and…” Let’s embrace that.

Final thought: NASA’s budget has been slowly climbing towards $20billion for the last few year, but it’s relative share of the federal budget has fallen from about 1% in the early 19990s to 0.5% today. This is significantly down from the all-time high of 3-4% in the mid 1960s when the Space Race was at its height. Throwing a few more billion NASA’s way seems like a small investment in a critically endangered resource: social unity. Of course, the most striking thing about Russell’s article is that he’s attacking Elon Musk’s privately funded space exploration efforts. It’s very, very hard to understand how one man’s quest to bring a widely-shared human dream to reality and make the world a better, safe place for humanity could draw condemnation as racism, but these are the times we live in.

 

Service & Sobriety

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British journalist Johann Hari said, “[T]he opposite of addiction is not sobriety. The opposite of addiction is connection.” According to some research, he may be right:

[T]here might be a secret weapon in the fight against addiction: helping people.

While other researchers look for ways to improve prescription drug regimens or talk therapies, Maria Pagano of Case Western University has focused her attention on the addict’s social connections. In studies spanning over a decade, she and her colleagues have shown that having a supportive network, reducing isolation, decreasing social anxiety, and—especially—helping others can increase the chances of staying sober by up to 50 percent. Her findings suggest that addiction should not be characterized solely as a failure of individual willpower, but must be viewed through the lens of positive social connection.

…In one 2012 study, Pagano and her colleagues found that having a network of people who support one’s abstinence can significantly impact an addict’s ability to stay sober up to three years later…But finding a positive social network when you’re an addict is not that easy to do, she says. Many addicts report having social anxiety—a feeling that one is onstage and not approved of by those around them. In fact, social anxiety often leads one to try drugs or alcohol in the first place, since people think intoxicants act as social lubricants. But using drugs for anxiety control can lead to dependence and can easily get out of control, ruining one’s health, relationships, and work life.

…In a recent study in which she tested this theory, she found that many of her participants—adolescents in treatment for addiction, ages 14-18—had a deep fear of being scrutinized in social situations, while 15 percent met the diagnostic criteria for a social anxiety disorder (or SAD). While her results showed that levels of participation in a 12-step program did not differ significantly between those with an SAD diagnosis and those without one, one thing did make a difference: The adolescents with SAD who actively participated in helping had a significantly reduced risk of relapse or incarceration in the six months after their treatment finished.

…In one 2013 study, she and her colleagues recruited 226 recovering alcoholics from nine outpatient treatment programs, and they followed these patients for 10 years while measuring alcohol consumption, AA participation levels, and self-rated thoughtfulness towards other people at different points in time. They also measured whether or not participants helped others by becoming a sponsor or by completing step 12 in AA.

By using statistical analyses, Pagano and colleagues showed that those who’d attended more AA meetings and engaged in helping stayed sober longer and reported higher interest in others up to 10 years later. Helping others had a unique effect on the outcome, suggesting that helping has a special role in recovery—and should receive more attention.

The article continues with even more studies demonstrating the importance of social connections and service in combating addiction. Well worth the read.

High-Skilled Immigrants and Innovation in US History

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How important have high-skilled immigrants been to innovation in US history? According to a recent study,

Medical inventions (e.g. surgical sutures) accounted for the largest share of immigrants, but this category produced just 1% of all US patents. However, immigrants were also active in chemicals and electricity – two sectors that had a particularly large effect on US economic growth, accounting for 13.9% and 12.6% of all US patents, respectively. Noticeably, immigrants accounted for at least 16% of patents in every area. This evidence suggests that their impact on inventive activity was widespread.   

[The graph below] also shows that the majority of immigrant inventors originated from European countries, with Germans playing a particularly prominent role. This is consistent with the findings of Moser et al. (2014) who show that German-Jewish émigrés who fled the Nazi regime boosted innovation in the US chemicals industry by around 30%. Today the closest analogue to these high-impact individuals would be inventors of Indian and Chinese ethnic origin who make substantial contributions to the development of innovation clusters in areas like Silicon Valley (Hunt and Gauthier-Loiselle 2010, Kerr and Lincoln 2010).

The researchers

constructed a measure of foreign-born expertise, which multiplies the share of each country’s patents granted in a given technology area between 1880 and 1940 (as a measure of proficiency) by the number of immigrants from that country in the 1940 Census (as a measure of how intensely that proficiency diffuses to the host country).

We find that technology areas with higher levels of foreign-born expertise experienced much faster patent growth between 1940 and 2000, in terms of both quality and quantity, than otherwise equivalent technology areas. Although we do not identify a causal relationship, our quantitative evidence can be used alongside qualitative evidence to highlight two areas where immigrant inventors may have acted as catalysts to economic growth: through their own inventive activity and through externalities affecting domestic inventors.

Immigrant inventors were responsible for some of the most fundamental technologies in the history of US innovation, which still influence our lives today. For example, Nikola Tesla, who was born in Serbia, worked in America on alternating current electrical systems; the Scotsman Alexander Graham Bell was instrumental to the development of the telephone from a workshop in Boston; Swedish inventor David Lindquist, while living in Yonkers, New York, assigned his patents relating to the electric elevator to the Otis Elevator Company located in Jersey City, New Jersey; and Herman Frasch, a German-born chemist, worked in Philadelphia and Cleveland on techniques which are analogous to modern fracking.

In short, the evidence suggests that “immigrant inventors were of central importance to American innovation during the 19th and 20th centuries. Although the migration of high-skilled inventors to the US involved some costs, immigrant inventors contributed heavily to new idea creation, through both their own work and collaboration with domestic inventors. Our evidence aligns with the view that growth in an economy is determined by its ablest innovators, regardless of national origin. The movement of high-skilled individuals across national borders therefore appears to have aided the development of the United States as an innovation hub.”

Does Corporate Culture Matter?

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Image result for corporate cultureYes and a lot, according to a new study. Researchers from Duke and Columbia University performed an interview-based analysis of 1,348 North American firms, finding that the majority of senior executives believe corporate culture to be a major driver of firm value. More important, though, they did “not find a strong relation between tracking stated values and business outcomes. We argue that for stated cultural values to have full impact on business outcomes, they must be complemented by norms that dictate actual behavior and by formal institutions. Consistent with this argument, we find that norms are at least as important as the values themselves in driving outcomes, and that formal institutions can either reinforce or work against these informal corporate institutions” (pg. 3; emphasis mine). “More specifically,” they write,

our econometric investigation into the effects of culture on business outcomes suggests several important findings. First, for culture to have full impact, values should be complemented by reinforcing norms and by formal institutions. Second, formal institutions and cultural norms substantially explain the effectiveness of corporate culture. These factors alone explain almost 36% of the variation in the effectiveness of culture. Third, an effective culture impacts firm value significantly, and influences many specific examples of innovation and ethical outcomes. Fourth, we find evidence consistent with an effective culture working by intrinsically motivating employees to perform and shaping the way their expectations are formed. Finally, given that an effective culture is positively associated with value creation and economic efficiency, we ask executives what is preventing their firm’s culture from being effective in practice. 69% blame their firms’ underinvestment in culture.

…Our work relates to a number of strands in the literature. First, our findings are consistent with recent research pointing to the first-order importance of internal company practices for determining productivity and performance (Bloom and Van Reenen (2007); Bloom, Sadun, and Van Reenen (2012); Martinez et al. (2015)). Second, our research highlights the vital, but underappreciated, role that corporate culture plays in value creation (Hermalin (2001); Guiso, Sapienza, and Zingales (2006); Guiso, Sapienza, and Zingales (2015a); Guiso, Sapienza, and Zingales (2015b)). Third, our results suggest that formal institutions such as corporate leadership (Bertrand and Schoar (2003); Gibbons and Henderson (2013)), incentive compensation (Lazear (2000)), and corporate governance (Shleifer and Vishny (1997); Popadak (2016)) meaningfully interact with the underlying corporate culture. Fourth, our results indicate culture works by intrinsically motivating employees, consistent with theory showing trade-offs among systems of incentives within organizations (Akerlof and Dickens (1982); Gibbons (1998); B´enabou and Tirole (2003)) and the literature suggesting contract incompleteness depends on the firms’ internal organizations (Macaulay (1963); Levin (2003)). Finally, our evidence links culture to ethics (Guiso, Sapienza, and Zingales (2006)), myopia (Graham, Harvey, and Rajgopal (2005); Dichev et al. (2013)), whistle-blowing (Bowen, Call, and Rajgopal (2010); Dyck, Morse, Zingales (2010)), risk (Fahlenbrach, Prilmeier, and Stulz (2012)), and compliance (Kedia, Luo, and Rajgopal (2015)) (pgs. 3-4).

Shaping corporate culture is something managers should take seriously.

Between-Firm Inequality

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A couple years ago, I linked to a post by AEI’s James Pethokoukis that claimed income inequality was in part explained by more profitable companies paying their employees more. A recent Harvard Business Review article by economist Nicholas Bloom further supports this insight. He says,

If we want to truly understand income inequality — if we want to mitigate it and its pernicious effects — we must look beyond CEO compensation and tax policy and consider the role played by firms and their hiring and compensation policies for ordinary, non-millionaire workers. This is not a simple morality play in which evil companies are pitted against the middle class. There is nothing nefarious about Google’s goal of being the global leader in software and machine learning, or in its hiring the best employees it can find. Yet the result of countless strategic decisions in pursuit of such goals by Google and other elite companies throughout the world — not just in tech — has been to raise the compensation of some workers far more than others.

Bloom points out that “it’s not just the top 1% who are pulling away. The gap between workers with a college education and ones with only a high school diploma has increased dramatically as well. In 1979, the average annual salary for American men with a college degree was $17,411 higher (after adjusting for inflation) than the average for men with a high school degree. By 2012, the gap had nearly doubled, to almost $35,000; the gap between women with college degrees and those with high school diplomas nearly doubled as well.”

So what explains this growing gap?

Over the past several years, economists have begun to examine pay gaps between and within firms to see how company strategy and corporate trends affect the broader rise of inequality. The findings from this new area of study are striking and help explain why incomes have risen so much for some and not at all for others. They also explain why so many executives, managers, and other well-paid workers have failed to notice the growing disparity.

Companies can contribute to rising income inequality in two ways. As we’ve just discussed, pay gaps can increase within companies — between how much executives and administrative assistants are paid, for example. But studies now show that gaps between companies are the real drivers of income inequality. Research I conducted with Jae Song, David Price, Fatih Guvenen, and Till Von Wachter looked at U.S. employers and employees from 1978 to 2013. We found that the average wages at the firms employing individuals at the top of the income distribution have increased rapidly, while those at the firms employing people in the lower income percentiles have increased far less. (See exhibit “Inequality Between Companies Is Also Growing.”)

In other words, the increasing inequality we’ve seen for individuals is mirrored by increasing inequality between firms. But the wage gap is not increasing as much inside firms, our research shows. This may tend to make inequality less visible, because people do not see it rising in their own workplace.

This means that the rising gap in pay between firms accounts for the large majority of the increase in income inequality in the United States. It also accounts for at least a substantial part in other countries, as research conducted in the UK, Germany, and Sweden demonstrates.

BLOOM_INEQUALITYBETWEENCOMPANIES

Bloom writes, “[O]ur research suggests…that companies are paying more to get more: boosting salaries to recruit top talent or to add workers with sought-after skills. The result is that highly skilled and well-educated workers flock to companies that can afford to offer generous salaries, benefits, and perks — and further fuel their companies’ momentum. Employees in less-successful companies continue to be poorly paid and their companies fall further behind.

Bloom attributes this between-firm inequality to “three factors: the rise of outsourcing, the adoption of IT, and the cumulative effects of winner-take-most competition”:

  • Outsourcing: “As companies focused on their core competences and outsourced noncore work, the corporate world began to divide between knowledge-intensive companies such as Apple, Goldman Sachs, and McKinsey and labor-intensive companies such as Sodexo, which provides food service and facilities management services. Workers with lots of education and desirable skills were hired in the knowledge sector, with high pay, perks, and benefits. Less-educated workers got jobs in labor-intensive firms, where pay was stagnant or even falling and benefits such as health insurance were hardly guaranteed. Employees from these two types of firms often work in the same building, but they’re no longer in the same orbit.”
  • IT and Automation: “My research and other studies suggest that between-firm pay inequality has grown faster in industries that spend more on IT. Investments in technology allow successful online firms to rapidly scale up and reap the benefits of network effects. In this way, leading companies such as Amazon and Facebook dominate their markets. Offline, improved enterprise software and automation of routine tasks make it far easier to manage and grow large businesses, from Shake Shack (burgers) to Xiaomi (smartphones).”
  • Winner-Take-Most Competition: “[O]ver the past 35 years, firms have divided between winners and losers, and between those that rely heavily on knowledge workers and those that don’t. Employees inside winning companies enjoy rising incomes and interesting cognitive challenges.”

Bloom ends by listing several policy recommendations. There is also a link to further commentary on this subject by various experts, all of which are worth reading.

This is an important insight in the inequality debate. Policymakers and voters should take notice.

With great responsibility comes great power

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This post is part of the General Conference Odyssey.

This week we’re covering the priesthood session of the October 1975 General conference. Next week, we’ll take a break from hour General Conference Odyssey to cover the entire April 2017 General Conference. The week after that we’ll return to the Odyssey with the Sunday morning session of the October 1975 General Conference.

As for this priesthood session, there was at least one very clear them: sacrifice more. In the first talk Elder Brown said “a law of life” was that “Only if you sacrifice for a cause will you love it,” and stated:

In the world, many organizations, churches, governments, even families have lost much of their vitality because they are afraid to ask people to sacrifice. It is imperative that we not make the same mistake in the Aaronic Priesthood. We must be fearless in expecting Aaronic Priesthood holders to do the work which the Lord has commanded.

In the second, Elder Bangerter said “the devil taught us” to ask the question “[have you] got your home teaching done?” He explained:

That is a very poor way to refer to the comprehensive mission embodied in home teaching. By getting us to ask “Did you get your home teaching done?” the devil destroys 90 percent of our effectiveness. All that question implies is a quick visit the last day of the month so that we can send in the report.

In other words: give more.

Experience since 1975 have born this wisdom out. The churches that have gone the farthest in lowering expectations for their adherents have seen those adherents walk away. Living according to the strict discipline of a traditional faith is hard, but—it turns out—living according to the lax guidelines of a modern faith is pointlessly easy.

With great power, the saying goes, comes great responsibility. One thing Mormons understand is that the converse is also true.

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Check out the other posts from the General Conference Odyssey this week and join our Facebook group to follow along!

Gorsuch and the Frozen Trucker

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Neil Gorsuch, nominee for Associate Justice to the U.S. Supreme Court, and President Donald Trump, via the official White House YouTube page. (Public Domain)

As you might be able to tell from my last post, I like Judge Gorsuch. I’d never heard of him before his nomination, but I listened into a lot of his hearing, and quickly came to respect his philosophy of judicial integrity.[ref]That’s actually what was at the heart of my last post about his hearing.[/ref]

Earlier today, I had a Facebook friend castigating Gorsuch for the “frozen trucker case.” This refers to a dissent that Gorsuch wrote in 2016. According to a critical Slate article by Jed Shugerman, here are the basic facts of the case:

Alphonse Maddin was a truck driver for TransAm. Late on a January night in temperatures below zero, he discovered that his trailer’s brakes had locked up due to the cold weather. (The truck itself could drive but not when attached to the trailer). He called TransAm’s road service for help at 11:17 p.m., and then discovered that the truck cabin’s heat was broken. He fell asleep and woke up two hours later with a numb torso. Maddin also could not feel his feet. He called the road service again, and they told him to “hang in there” despite the life-threatening conditions. He waited about 30 more minutes before unhitching the broken trailer. Although his supervisor ordered him to stay, Maddin decided to drive off with the truck after almost three hours in the subzero cold. A service truck did arrive 15 minutes after he left, but it’s hard to blame him for deciding not to risk his life. It’s amazing he waited so long at all.

TransAm fired Madding for leaving behind his trailer. In his turn, Maddin filed a complaint with OSHA, arguing that his decision to drive away from the trailer was statutorily protected. Then Tenth Circuit sided with Madding and OSHA, but Gorsuch wrote a strong dissent. This strong dissent has come back to haunt him, as Democrats in his confirmation hearing and journalists and pundits outside of it are using the dissent to paint him as having an “arrogant and cold judicial personality.”

I thought I’d look into this, so I read Gorsuch’s dissent, which you can find online here. Here’s the most important paragraph, where Gorsuch explains why he believes TransAm’s firing of Maddin wasn’t illegal:

It might be fair to ask whether TransAm’s decision was a wise or kind one. But it’s not our job to answer questions like that. Our only task is to decide whether the decision was an illegal one. The Department of Labor says that TransAm violated federal law, in particular 49 U.S.C. § 31105(a)(1)(B). But that statute only forbids employers from firing employees who “refuse[] to operate a vehicle” out of safety concerns. And, of course, nothing like that happened here. The trucker in this case wasn’t fired for refusing to operate his vehicle. Indeed, his employer gave him the very option the statute says it must: once he voiced safety concerns, TransAm expressly — and by everyone’s admission — permitted him to sit and remain where he was and wait for help. The trucker was fired only after he declined the statutorily protected option (refuse to operate) and chose instead to operate his vehicle in a manner he thought wise but his employer did not.

The logic is pretty straight forward and irrefutable. The law protects people who don’t operate equipment out of safety concerns. It doesn’t protect people who do operate equipment under safety concerns. And so–applying the statute–TransAm was free to fire Maddin as far as the law is concerned. And that is the only thing that Gorsuch (and his fellow judges) were called to decide. Gorsuch goes on:

… there’s simply no law anyone has pointed us to giving employees the right to operate their vehicles in ways their employers forbid. Maybe the Department would like such a law, maybe someday Congress will adorn our federal statute books with such a law. But it isn’t there yet. And it isn’t our job to write one — or to allow the Department to write one in Congress’s place.

This is a theme that Gorsuch talked about frequently during his hearing. Again and again he reiterated his position that a judge has to apply the law as it is actually written and can’t simply “interpret” the law in ways that suit our notions of justice or fairness or propriety or even common sense.

Reading between the lines, the majority opinion in this case was especially egregious because the judges invented a rationale for their position (siding with Maddin) that wasn’t even raised by the OSHA lawyers. Gorsuch points out that the majority opinion cites a prior ruling (Cehvron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.) even though:

…the Department [OSHA] never argued the statute is ambiguous, never contended that its interpretation was due Chevron step two deference, and never even cited Chevron. In fact, the only party to mention Chevron in this case was TransAm, and then only in a footnote in its brief and then only as part of an argument that the statute is not ambiguous.

I don’t think there’s any doubt that Maddin should not have been fired. As a matter of morality and basic decency, that’s a given. But the responsibility to grant him that legal protection rests with the legislative branch. It’s their job to write the law to cover that case. They failed to do so. Relying on the judicial branch to fix their mistake by–in effect–amending the law to be what it should have been is impermissible under American rule of law. As Gorsuch put it, “it is our obligation to enforce the terms of that compromise as expressed in the law itself, not to use the law as a sort of springboard to combat all perceived evils lurking in the neighborhood.”

 

I don’t like the ruling that Gorsuch came to, and Gorsuch didn’t like it either, but it was certainly the correct ruling to make under the Constitutional system of law we are supposed to live under. According to his critics, this case is supposed to make me like Gorsuch less, but it’s not working. It makes me like him more.

Donald Trump the Peronist

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[Trump’s] nationalistic view reminds me, of course, of [Juan] Peron, in some regards.

– Sebastion Edwards

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Financial Times‘s Cardiff Garcia has an incredibly enlightening interview with UCLA economist Sebastian Edwards on the economics of populism.

Garcia: …Americans have been taken off-guard by some of the phrasings of Donald Trump and what he says is part of his agenda. But that if you’re from Latin America, you’ve seen how a lot of this movie plays out before.

Edwards: That is correct. You’ve seen it before. The modus operandi is very similar. And it’s very ironic. You have Donald Trump, and the way he approaches many of these issues is not too different to what Hugo Chavez did in Venezuela. And that’s exactly what makes this whole story quite fascinating.

How is “populism” defined? Edwards elaborates,

Rudi Dornbusch and I defined the economics of populism as an economic programme, a package of policies, that disregarded good, solid received wisdom on economics. And in the case of Latin America, which is going to be interesting when we compare it to Donald Trump, disregarded all budget and monetary constraints – and violated all those constraints, as the populists do, in a way that generates euphoria in the immediate short run, but ultimately results in a very deep crisis that affects, in particular, those that were supposed to be benefited by the whole programme. So populist economics is an economic policy package that disregards budget constraints, macroeconomic constraints, good solid productivity constraints, and generates short run benefits at the cost of crisis in the future.

…So those are the policies, what I described. And what the populist leader does then is that in a rhetoric that is quite extreme, and where he or she divides the population between “us, the people” and “them” – and it’s a vague “them”…In that rhetoric, the populist leader takes the discourse directly to the people through big rallies, a referendum, plebiscites. I’m talking about Hugo Chavez and Donald Trump, who continues to be, although he’s now the president, in campaign mode. And in doing this [he] skips the institutions. For instance, they tend to dislike the central bank because it is an institution that tends to maintain sound policies in most countries. First thing that Hugo Chavez did was fire Ruth de Krivoy, the Governor of the central bank of Venezuela, right. So they disregard the institutions, both economic and political. 

Garcia notes “that the majority of the populist leaders [Edwards] studied have been left wing. A lot of Marxists.” But as Edwards explains,

In some ways, [Juan] Peron, who had great sympathy for the fascist movements – he was a great admirer of Benito Mussolini – was right wing in many respects. 3 So there is no reason why we cannot have corporatist right-wing populist leaders that favour specific groups in their rhetoric and in their policies and again, very clearly blame, in quotation marks, “the other” for the suffering of “us, the people”. And in the case of Latin America, often “the other” was related to some foreign force – the multinationals, international speculators and, of course, the International Monetary Fund. And what is very ironic is that in the case of Donald Trump, foreigners also are blamed for the plight of the people and, in this case, they are immigrants, the Chinese and international terrorists.

Edwards then lays out the conditions for a populist leader to emerge:

[T]he first phase is a deep public dissatisfaction and discontent. And this dissatisfaction and discontent is of two types. Sometimes it’s quite abrupt. And in Latin America, usually that abrupt crisis has been associated historically with a very large devaluation of the currency…In other cases, the crisis develops much more slowly and it’s a simmering crisis. And that is what we can see in the United States where there is a simmering dissatisfaction, in particular among white, blue collar workers. So first phase, great dissatisfaction. And you can see it in country after country after country…The second phase is the emergence of this populist leader, very charismatic, who operates outside of the political institutions…So this leader that comes out is extremely forceful, very articulate, and in rallies and in direct appeal to the people, provides this very nationalistic rhetoric and gets the people to approve this particular political programme that disregards all sorts of constraints of good, solid economic management.

What does this begin to look like in practice?:

And what we see in many of these populist extremisms in Latin America is that the authority starts picking up on specific companies, firms, conglomerates. And the strong man or the strong woman (Cristina in Argentina) would call the CEO or the controlling figure of that company and would threaten him or her personally or would denounce that company in public rallies, and would direct the mobs to riot and to maybe even break into those stores. And then they are called in and they are told, you have to reduce your prices, or you have to do this, or you have to do that, and you have to raise wages by 50% while, at the same time, you cannot increase the prices of your product. Which, of course, is a variant of what Trump is doing with companies that want to invest and start plans in other parts of the world. So the rule of law, and in particular, the impersonal treatment – equal treatment of everyone in front of the regulators, and so on and so forth – starts to disappear.

The whole thing is great.

Religious Belief: Less Analytical, More Pro-Social?

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A 2016 study finds that while religious belief has a negative correlation with analytic thinking, it has a significantly positive association with moral concern. Interestingly enough, the negative correlation with analytic thinking can in part be explained by the tension between it and moral concerns. “When there’s a question of faith, from the analytic point of view, it may seem absurd,” said Tony Jack, who led the research.

“But, from what we understand about the brain, the leap of faith to belief in the supernatural amounts to pushing aside the critical/analytical way of thinking to help us achieve greater social and emotional insight.”


…”A stream of research in cognitive psychology has shown and claims that people who have faith (i.e., are religious or spiritual) are not as smart as others. They actually might claim they are less intelligent,” said Richard Boyatzis, distinguished university professor and professor of organizational behavior at Case Western Reserve, and a member of Jack’s team.

“Our studies confirmed that statistical relationship, but at the same time showed that people with faith are more prosocial and empathic,” he said. In a series of eight experiments, the researchers found the more empathetic the person, the more likely he or she is religious. That finding offers a new explanation for past research showing women tend to hold more religious or spiritual worldviews than men. The gap may be because women have a stronger tendency toward empathetic concern than men. Atheists, the researchers found, are most closely aligned with psychopaths—not killers, but the vast majority of psychopaths classified as such due to their lack of empathy for others.

…“Because of the tension between networks, pushing aside a naturalistic world view enables you to delve deeper into the social/emotional side,” Jack explained. “And that may be the key to why beliefs in the supernatural exist throughout the history of cultures. It appeals to an essentially nonmaterial way of understanding the world and our place in it.”

…[Jared] Friedman said, “Having empathy doesn’t mean you necessarily have anti-scientific beliefs. Instead, our results suggest that if we only emphasize analytic reasoning and scientific beliefs, as the New Atheist movement suggests, then we are compromising our ability to cultivate a different type of thinking, namely social/moral insight.”

“These findings,” Friedman continued, “are consistent with the philosophical view, espoused by (Immanuel) Kant, according to which there are two distinct types of truth: empirical and moral.”

In short, “taking a carefully considered leap of religious faith appears be an effective route to promoting emotional insight. Theirs and other studies find that, overall, religious belief is associated with greater compassion, greater social inclusiveness and greater motivation to engage in pro-social actions.”