May 2018 – Difficult Run

Do Minimum Wage Hikes Decrease Non-Wage Benefits?

June 30, 2018May 31, 2018 by Walker

Economist Art Carden writes at Forbes,

A recent working paper from the National Bureau of Economic Research by the economists Jeffrey Clemens, Lisa B. Kahn, and Jonathan Meer should make us pause and question the wisdom of higher minimum wages. The economists explore how minimum wages affect the probability of employer-provided health coverage and find that a chunk of the increased earnings for workers who get higher wages will be offset by a reduction in employer-provided health coverage.

…[T]here’s a lot more to a job than wages. People want work that is meaningful or enjoyable. They might especially value safety, comfort, or flexibility. People can also get a lot of non-wage benefits like health coverage, scholarship opportunities, and paid vacation. Workers can (and do) “buy” these perks by accepting lower wages than they would require if the job weren’t as pleasant, meaningful, or safe or if the fringe benefits weren’t as good.

In short, workers don’t live on wages alone, and minimum wages might not change what workers get paid but rather how they get paid. Minimum wages mandate that cash wages take up a bigger part of employee compensation.

He continues,

Clemens, Kahn, and Meer are limited by available data, so they can’t measure everything comprehensively. They narrow their focus to the relationship between minimum wages and employer-provided health coverage and find that for Very Low wage workers (e.g. food service), about 9% of increase in earnings due to a $1 per hour increase in the minimum wage is offset by the lower probability of employer-provided health coverage. For Low Wage workers (e.g. retail sales), its 16%. For Modest Wage workers ( clerks and food service supervisors), it’s 57%—which is unsurprising since workers with higher wages get a smaller bump from minimum wage increases.

When it comes to worker pay, total compensation must be considered, not just wages.

Does Political Ideology Taint Perceptions About Expertise?

May 23, 2018 by Walker

Need more evidence for political hooliganism? Check out the findings from a recent working paper:

Here, we ask whether (dis)similarity in political views interferes with the ability to learn about another person’s competency in an unrelated task (specifically categorizing [geometric] shapes) in a situation in which it is in people’s best interest to learn who excels in the task in order to turn to them for assistance. In the first part of our experiment, participants had an opportunity to learn whether others (i) had similar political opinions to theirs and (ii) how well they did in a task that required learning about shapes. After rating others on these two characteristics, they completed the second part of the experiment, where they decided to whom to turn to for advice when solving the shape task. They were rewarded for accuracy on the task and thus had an economic incentive to turn to the participant who was most skilled at the task.

We find that (dis)similarity in political views interferes with the ability to make an accurate assessment of people’s expertise in the domain of shapes, which leads to two central outcomes. The first is that people chose to hear about shapes from others who are politically like-minded, even though those people are not especially good at the shape task, rather than to hear from people who excel at the shape task but have different political opinions. The second is that people are more influenced by those with similar political opinions, even when they had the opportunity to learn that those by whom they are influenced are not especially good at the task they are solving. We suspect that these findings are replicated in the real world of political behaviour, and that they help explain a range of phenomena, including the spread of fake news (Friggeri, Adamic, Eckles, & Cheng, 2014; Kahne & Bowyer, 2017), conspiracy theories (Del Vicario et al., 2016), polarization (Druckman, Peterson, & Slothuus, 2013; Prior, 2007), and insufficient learning in general (Yaniv & Kleinberger, 2000; Yaniv & Milyavsky, 2007) (pg. 3-4).

Perhaps this is another contributor to the death of expertise.

Related image — Says the liberal/conservative layman to the conservative/liberal astrophysicist.

Is Partisanship Driven By Misperceptions About Party Makeup?

February 4, 2019May 22, 2018 by Walker

Georgetown philosopher Jason Brennan describes political “hooligans” in this way:

Hooligans are the rabid sports fan of politics. They have strong and largely fixed worldviews. They can present arguments for their beliefs, but they cannot explain alternative points of view in a way that people with other views would find satisfactory. Hooligans consume political information, although in a biased way. They tend to seek out information that confirms their preexisting political opinions, but ignore, evade, and reject out of hand evidence that contradicts or disconfirms their preexisting opinions. They may have some trust in the social sciences, but cherry-pick data and tend only to learn about research that supports their own views. They are overconfident in themselves and what they know. Their political opinions form part of their identity, and they are proud to be a member of their political team…Most regular voters, active political participants, activists, registered party members, and politicians are hooligans.

What’s more, voters are overwhelmingly—at times astonishingly—ignorant. Here’s another study demonstrating this sad state of affairs (from an earlier draft):

Across five studies, we find that people overestimate the degree to which partisans belong to party-stereotypical groups, often vastly so. Even in cases where these groups comprise just a sliver of the population, people report that these groups constitute upwards of 40% of the party they “fit.” And when people are given information about these groups’ shares in the population, the bias in their estimates doesn’t decline, suggesting that people rely on representativeness when making judgments about party composition.

Republicans, Democrats, and Independents, all overestimate the share of party-stereotypical groups in both the major parties. Partisan differences, although statistically significant, are relatively small compared to the overall magnitude of these misperceptions. Even more strikingly, those most interested in politics hold the most skewed perceptions of party composition. One plausible explanation for both of these results is that mediated, impersonal information drives these misperceptions. However, all the evidence we have presented on this point is descriptive. Additional research is needed to assess the extent to which media shape these perceptions.

These misperceptions are also consequential. Experimental evidence suggests that beliefs about out-party composition affect perceptions of where opposing-party supporters stand on the issues. These findings provide a potential explanation for why people tend to overestimate the extremity of opposing partisans. In future extensions, we plan to further investigate whether beliefs about party composition explain the striking finding that people also overestimate the extremity of co-partisans (Ahler 2014; Levendusky and Malhotra 2015). Misperceptions about out-party composition also lead partisans to feel more socially distant from the opposing party. Building on work by Hetherington and Weiler (2009) and Mason and Davis (2015), who find that partisan animus is related to party composition, we experimentally show that people’s beliefs about party composition affect their feelings towards the opposing party.

…The experimental findings support the notion that orientations toward constituent social groups affect how people feel toward the parties, among other things. However, they also show that beliefs about shares of various groups in the parties matter. Thus, while the group identity account makes a compelling case that partisanship is a relatively stable, affective attachment, work in this tradition must grapple more thoroughly with the social cognitions (and cognitive biases) that are relevant to how people reason about politics.

This is especially the case because partisans overestimate the share of party-stereotypical groups in their own party. For instance, many lower- and middle-class Republicans think that their party contains far more rich people than it actually does. This suggests that many partisans like their own parties to the extent they do—a great deal, with average ratings exceeding 80 on the thermometer scale (Iyengar, Sood and Lelkes 2012)—despite believing that the party has a greater share of groups to which they tend not to belong than it actually does. Green, Palmquist and Schickler (2002, p. 8) suggest that partisans choose parties based on “which assemblage of groups” looks like them. While this may still be true, the data suggest that people identify with parties based on which groups they like.

Finally, and most broadly, this research furthers our understanding of people’s perceptions of mass collectives and how these perceptions shape individuals’ own political attitudes. Mutz (1998) describes impersonal influence as the effect of people’s perceptions of what others are experiencing, or what others believe, on their own attitudes and behaviors. We take this one step further and assert that people’s perceptions merely of who belongs to a collective can be a source of impersonal influence—and in this case, a catalyst for partisanship in American politics (pg. 27-28).

I’ll say it again: politics makes us mean and dumb.

Does Economic Marginalization Breed Radicals?

May 23, 2018May 19, 2018 by Walker

A few years ago, I linked to a Wall Street Journal op-ed by economist Hernando de Soto that declared “economic hope” to be “the only way to win the battle for the constituencies on which terrorist groups feed.” A couple years later, I discussed the possibility that strict labor laws–and the unemployment it produces–was a major contributor to radicalization in Europe. In short, the lack of economic opportunity breeds extremism.

Recent evidence appears to support this hunch.

Many point to U.S. drone strikes as a causal factor in Islamic radicalization. However, a brand new study argues the contrary, concluding,

Although U.S. drone strikes in Muslim countries might play a role in the radicalization or violent extremism of co-religionists around the world, the available evidence does not support the assertion that drones are “fueling the fires of homegrown radicalization” in Western societies or that these unmanned aerial vehicles are the new Guantánamo.

…The radicalization of individuals in the Somali diaspora, especially in the state of Minnesota, illustrates the role of U.S. policies targeting Muslim communities at home; personal factors, such as conflicted identities among young Somali Americans; and their nationalist desire to evict foreign troops from Somalia, a desire that recruiters from the al-Qaida affiliate al-Shabaab have been able to exploit. My brief examination of the social science literature on the drivers of Islamist militancy among Muslims in European countries similarly points to domestic factors such as an identity crisis among some young Muslims, state policies of marginalization and discrimination, and the role of radical preachers and terrorist recruiters who leverage these vulnerabilities for recruitment (pg. 83-84; emphasis mine).

This is further confirmed by a recent World Bank paper:

Exploiting individual-level education information for these fighters, we link the size of a contingent of fighters to the economic conditions faced by workers in their countries of residence who have the same level of education, by distinguishing primary, secondary and tertiary education. Beginning non-parametrically, we document a correlation between the within-country relative unemployment rate faced by workers from a specific country and education level and the corresponding relative number of recruits. We then conduct panel regressions in which we estimate the impact of unemployment on the propensity to join the terrorist group, controlling for country and education-level fixed effects. The estimated coefficients indicate that higher unemployment rates are a push factor towards radicalization, especially for countries at a shorter distance to Syria, with an elasticity of 0.25; a one percentage point increase in the unemployment rate leads to 42 additional Daesh recruits. The elasticity steeply decreases further away from Syria and becomes both economically and statistically insignificant past the average distance of 2,500 km. The results are robust to the inclusion of education-specific wage rates, strengthening the case for a causal interpretation of these results (pg. 1-2).

I’m reminded of the famous quote by Nobel laureate Robert Lucas: “The consequences for human welfare involved in questions [of economic growth] are simply staggering: Once one starts to think about them, it is hard to think about anything else” (pg. 5).

Goals Gone Wild…Again

May 18, 2018 by Walker

A few years ago, researchers from Harvard, Wharton, Kellogg, and the University of Arizona argued that goal setting was “overprescribed” and featured “powerful and predictable side effects” (pg. 6). While acknowledging past research demonstrates that “specific goals provide clear, unambiguous, and objective means for evaluating…performance” and thus “motivate performance far better than “do your best” exhortations” (pg. 7), the researchers found that this intensity of focus on goals can lead to tunnel vision and poor, often unethical decisions. Examples include Sears in the early 1990s, whose sales goals for its auto repair staff led to overcharging and unnecessary repairs. Revenue-based rather than profit-based goals at Enron helped lead to the company’s destruction. A challenging goal (a car “under 2,000 pounds and under $2,000”) coupled with a tight deadline at Ford in the late 1960s brought about the easily-combustible Pinto, many deaths and injuries, and expensive lawsuits. These narrow goals crowded out not only ethical behavior, but the broader purpose of the goals themselves. Quality, in essence, is often sacrificed for the quantifiable. Short-term gains are pursued rather than long-term health and growth. Furthermore, such narrow goals create “a focus on ends rather than means…[The researchers] postulate that aggressive goal setting within an organization increases the likelihood of creating an organizational climate ripe for unethical behavior“ (pg. 10). Narrow goals decrease satisfaction, even with high-quality outcomes, which have negative effects on future behavior. They can also inhibit learning and experimentation with alternative methods, undermine cooperation, and harm intrinsic motivation.

Further research supports these findings, including an October 2017 paper. As reported over at Ethical Systems,

Goal setting is often a subject of discussion about behavioral ethics and internal programs. We’ve seen in recent cases such as at Wells Fargo and Volkswagen how cheating and lying become the norm when performance goals are not reasonably achievable. Recent evidence in a paper by Niki den Nieuwenboer, João da Cunha, and ES collaborator Linda Treviño shows the internal dynamics and processes that lead directly to cheating behaviors.

The researchers, one of which was embedded inside the company, observed managers and sales staff over 15 months at a large (10,000 employees) telecommunications company. The company had established goals for its desk sales teams designed to motivate productivity, including a target for sales as well as sales-related work, such as making cold calls to customers, and gathering information about potential customers, among other planning activities.

For the senior leaders at the company, these targets were part of a broader– and cost-lowering — strategy of shifting sales staff from the field towards desk jobs. The field staff cost the company $225 more per customer contact than the sales teams working at desks. The aim was thus to incentivize desk people to improve efficiency and reduce costs in the long-run.

However, because the desk sales team cheated the internal systems, the company didn’t actually gain the cost savings that it thought it had. The apparent success of the desk sales team (based on false information) led to upper management reducing the number of field staff sales numbers, which undermined an important sales channel at the firm.

The misconduct was uncovered inadvertently. Originally, one of the researchers was embedded inside the company to observe the implementation of a sales-related IT system. As he observed and interviewed employees about their use of the system, the scope of the research was soon expanded to include unethical behaviors. He observed that both middle managers and frontline sales staff were aware that the sales goals were unreachable, and that sometimes sales staff tried to push back on pressure from their managers. When sales targets didn’t budge, the managers got creative to solve their goals, devising strategies to induce the sales staff to cheat the internal systems. Manager pay was directly tied to whether their direct reports met performance goals hence the need to game the system to safeguard their income.

The managers took advantage of “structural vulnerabilities” in the system. For example, they changed rules such as expanding the definition of “sales calls” so that more types of calls counted towards that goal – case in point, they counted internal calls and emails as “external” sales calls. Some also just logged fictitious information for calls that never occurred. Other manipulations involved devising IT and administrative schemes that allowed the desk sales teams to take credit for work done by the field sales teams. Additionally, to satisfy the requirement that sales plans be developed for customers, some simply were told to copy and paste plans across various customers, because they knew that very few of them would actually be verified.

Manipulating strategies to meet targets became the norm at the organization. While employees in the unit were aware of these practices, the managers worked to ensure that word of the deceptive practices didn’t get out to senior leaders or to other units.

To tweak the Keynes/Hayek rap battle a tad, quotas are a means, not the ends in themselves.

Identity Politics and Happiness

May 17, 2018May 17, 2018 by Walker

Image result for yelling protester — I know they don’t look it, but they’re probably pretty happy people.

Now for something not the least bit surprising. From a recent working paper:

Results show that political affiliations of national politicians, especially the president, have an effect on reported happiness while there is no effect of state, gubernatorial or legislative, party control. Individuals report being happier when the president is a member of their own party, has conservative ideology, and an ideology that matches their individual tastes. Throughout all specifications, republicans and those holding conservative political values report higher happiness. Shockingly, regardless of liberal or conservative political values, those who hold extreme political values report higher levels of happiness. The large effect of partisanship and extreme views support the view that partisanship is a result of social identity and provides a psychological need for certainty and structure.

Economist Arthur Brooks, the soon-to-be-former president of the American Enterprise Institute, made this point years ago in his book Gross National Happiness:

Americans who describe themselves as holding extreme political views–somewhere between 10 and 20 percent of the population–are among the happiest people in America. All of those angry protesters who denounce Dick Cheney as a murderer; all of the professional political pundits who use the rhetoric of rage and misery to get on cable television–it turns out they’re not miserable at all. On the contrary, they’re enjoying themselves rather a lot.

In 2004, 35 percent of people who said they were extremely liberal were very happy (versus 22 percent of people who were just liberal). At the same time, a whopping 48 percent of people who were extremely conservative gave this response (compared with 43 percent of nonextreme conservatives). Indeed, the gusto with which Bill Clinton’s attackers in 1998 went after him was really a clue that they were having a grand old time. George W. Bush’s harshest critics–those who have felt the predations of the Bush administration to the very depths of their soul–are quite likely to be a great deal happier than more moderate liberals.

Why are ideologues so happy? The most plausible reason is religion–not real religion, but rather, a secular substitute in which they believe with perfect certainty in the correctness of their political dogmas. People want to hold the truth; questioning is uncomfortable. It is easy to live by the creed that our nation’s ills are because of George W. Bush; it is much harder to acknowledge that no administration is perfect–or perfectly awful. True political believers are martyrs after a fashion willing to shout slogans in public for causes they are sure are good, or against causes they are convinced are evil. They are happy because–unlike you, probably–they are positive they are right. No data could change their minds (pgs. 33-34).

In other words, being a political hooligan feels really good, which makes change very unlikely. Unfortunately, as Brooks points out,

the happiness of political extremists is an unhappy fact for America. They may themselves be happy, but they make others unhappy–that is, they actually lower our gross national happiness. In many cases, extremists actually intend to upset people–it is part of their strategy…Extremists are happy to stir up their own ranks, but they are even happier when they cause misery for their political opponents. For people on the far left and right, people who do not share their views are not just mistaken, but bad people, who are also stupid and selfish. They deserve to be unhappy…Extremists thrive on dehumanizing their opponents (pgs. 34-35).

Politics makes us mean and dumb.

The Value of the Internet

May 11, 2018 by Walker

From The Economist:

Many economists believe that national accounts may underestimate the economic significance of technological innovations. Despite the advent of the internet, smartphones and artificial intelligence, the official value added by the information industry as a share of GDP has scarcely changed since 2000. What might explain this paradox?

Part of the problem is that GDP as a measure only takes into account goods and services that people pay money for. Internet firms like Google and Facebook do not charge consumers for access, which means that national-income statistics will underestimate how much consumers have benefitted from their rise.

One way to quantify how much these internet services are worth is by asking people how much money they would have to be paid to forgo using them for a year. A new working paper by Erik Brynjolfsson, Felix Eggers and Avinash Gannamaneni, three economists, does exactly this and finds that the value for consumers of some internet services can be substantial. Survey respondents said that they would have to be paid $3,600 to give up internet maps for a year, and $8,400 to give up e-mail. Search engines appear to be especially valuable: consumers surveyed said that they would have to be paid $17,500 to forgo their use for a year.

Recall the thought experiment put forth by The Washington Post: “Try this thought experiment. Adjusted for inflation, would you rather make $50,000 in today’s world or $100,000 in 1980’s? In other words, is an extra $50,000 enough to get you to give up the internet and TV and computer that you have now?”

The DR Book Collection: Catch-Up #4

May 5, 2018May 3, 2018 by Walker

This is part of the DR Book Collection.

I’m once again behind on my book reviews, so here’s a list of the books I’ve read recently, their descriptions, and accompanying videos.

Jon D. Levenson, The Love of God: Divine Gift, Human Gratitude, and Mutual Faithfulness in Judaism (Princeton University Press, 2016): “The love of God is perhaps the most essential element in Judaism—but also one of the most confounding. In biblical and rabbinic literature, the obligation to love God appears as a formal commandment. Yet most people today think of love as a feeling. How can an emotion be commanded? How could one ever fulfill such a requirement? The Love of God places these scholarly and existential questions in a new light. Jon Levenson traces the origins of the concept to the ancient institution of covenant, showing how covenantal love is a matter neither of sentiment nor of dry legalism. The love of God is instead a deeply personal two-way relationship that finds expression in God’s mysterious love for the people of Israel, who in turn observe God’s laws out of profound gratitude for his acts of deliverance. Levenson explores how this bond has survived episodes in which God’s love appears to be painfully absent—as in the brutal persecutions of Talmudic times—and describes the intensely erotic portrayals of the relationship by biblical prophets and rabbinic interpreters of the Song of Songs. He examines the love of God as a spiritual discipline in the Middle Ages as well as efforts by two influential modern Jewish thinkers—Martin Buber and Franz Rosenzweig—to recover this vital but endangered aspect of their tradition. A breathtaking work of scholarship and spirituality alike that is certain to provoke debate, The Love of God develops fascinating insights into the foundations of religious life in the classical Jewish tradition” (Amazon).

Richard V. Reeves, Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do About It (Brookings Institution, 2017): “It is now conventional wisdom to focus on the wealth of the top 1 percent—especially the top 0.01 percent—and how the ultra-rich are concentrating income and prosperity while incomes for most other Americans are stagnant. But the most important, consequential, and widening gap in American society is between the upper middle class and everyone else. Reeves defines the upper middle class as those whose incomes are in the top 20 percent of American society. Income is not the only way to measure a society, but in a market economy it is crucial because access to money generally determines who gets the best quality education, housing, health care, and other necessary goods and services. As Reeves shows, the growing separation between the upper middle class and everyone else can be seen in family structure, neighborhoods, attitudes, and lifestyle. Those at the top of the income ladder are becoming more effective at passing on their status to their children, reducing overall social mobility. The result is not just an economic divide but a fracturing of American society along class lines. Upper-middle-class children become upper-middle-class adults. These trends matter because the separation and perpetuation of the upper middle class corrode prospects for more progressive approaches to policy. Various forms of “opportunity hoarding” among the upper middle class make it harder for others to rise up to the top rung. Examples include zoning laws and schooling, occupational licensing, college application procedures, and the allocation of internships. Upper-middle-class opportunity hoarding, Reeves argues, results in a less competitive economy as well as a less open society. Inequality is inevitable and can even be good, within limits. But Reeves argues that society can take effective action to reduce opportunity hoarding and thus promote broader opportunity. This fascinating book shows how American society has become the very class-defined society that earlier Americans rebelled against—and what can be done to restore a more equitable society” (Amazon).

Alex Rosenberg, The Atheist’s Guide to Reality: Enjoying Life Without Illusions (W.W. Norton & Co., 2011): “We can’t avoid the persistent questions about the meaning of life-and the nature of reality. Philosopher Alex Rosenberg maintains that science is the only thing that can really answer them―all of them. His bracing and ultimately upbeat book takes physics seriously as the complete description of reality and accepts all its consequences. He shows how physics makes Darwinian natural selection the only way life can emerge, and how that deprives nature of purpose, and human action of meaning, while it exposes conscious illusions such as free will and the self. The science that makes us nonbelievers provides the insight into the real difference between right and wrong, the nature of the mind, even the direction of human history. The Atheist’s Guide to Reality draws powerful implications for the ethical and political issues that roil contemporary life. The result is nice nihilism, a surprisingly sanguine perspective atheists can happily embrace” (Amazon).

William V. Smith, Textual Studies of the Doctrine and Covenants: The Plural Marriage Revelation (Greg Kofford Books, 2018): “Joseph Smith’s July 12, 1843, revelation on plural marriage was the last of his formal written revelations and a transformational moment in Mormonism. While acting today as the basis for the doctrine of eternal nuclear families, the revelation came forth during a period of theological expansion as Smith was in the midst of introducing new temple rituals, radical doctrines on God and humanity, a restructured priesthood and ecclesiastical hierarchy, and, of course, the practice of plural marriage. In this volume, author William V. Smith examines the text of this complicated and rough revelation to explore the motivation for its existence, how it reflects this dynamic theology of the Nauvoo period, and how the revelation was utilized and reinterpreted as Mormonism fully embraced and later abandoned polygamy” (Amazon).

Cal Newport, Deep Work: Rules for Focused Success in a Distracted World (Grand Central Publishing, 2016): “Deep work is the ability to focus without distraction on a cognitively demanding task. It’s a skill that allows you to quickly master complicated information and produce better results in less time. Deep work will make you better at what you do and provide the sense of true fulfillment that comes from craftsmanship. In short, deep work is like a super power in our increasingly competitive twenty-first century economy. And yet, most people have lost the ability to go deep-spending their days instead in a frantic blur of e-mail and social media, not even realizing there’s a better way. In DEEP WORK, author and professor Cal Newport flips the narrative on impact in a connected age. Instead of arguing distraction is bad, he instead celebrates the power of its opposite. Dividing this book into two parts, he first makes the case that in almost any profession, cultivating a deep work ethic will produce massive benefits. He then presents a rigorous training regimen, presented as a series of four “rules,” for transforming your mind and habits to support this skill. A mix of cultural criticism and actionable advice, DEEP WORK takes the reader on a journey through memorable stories-from Carl Jung building a stone tower in the woods to focus his mind, to a social media pioneer buying a round-trip business class ticket to Tokyo to write a book free from distraction in the air-and no-nonsense advice, such as the claim that most serious professionals should quit social media and that you should practice being bored. DEEP WORK is an indispensable guide to anyone seeking focused success in a distracted world” (Amazon).

Henry Cloud, John Townsend, Boundaries: When to Say Yes, How to Say No To Take Control of Your Life (Zondervan, 1992): “If you’ve ever wondered: Can I set limits and still be a loving person? How do I answer someone who wants my time, love, energy, or money? Why do I feel guilty when I consider setting boundaries? Unpacking the 10 laws of boundaries, Drs. Henry Cloud and John Townsend give you biblically based answers to these and other tough questions, and show you how to set healthy boundaries with your spouse, children, friends, coworkers, and even with yourself. In Boundaries, Drs. Cloud and Townsend show you how to bring new health to your relationships. You’ll discover firsthand how to reclaim your freedom to walk as the loving, giving, fulfilled individual God created you to be” (Amazon).

Steven Pinker, Enlightenment Now: The Case for Reason, Science, Humanism, and Progress (Viking, 2018): “Is the world really falling apart? Is the ideal of progress obsolete? In this elegant assessment of the human condition in the third millennium, cognitive scientist and public intellectual Steven Pinker urges us to step back from the gory headlines and prophecies of doom, which play to our psychological biases. Instead, follow the data: In seventy-five jaw-dropping graphs, Pinker shows that life, health, prosperity, safety, peace, knowledge, and happiness are on the rise, not just in the West, but worldwide. This progress is not the result of some cosmic force. It is a gift of the Enlightenment: the conviction that reason and science can enhance human flourishing. Far from being a naïve hope, the Enlightenment, we now know, has worked. But more than ever, it needs a vigorous defense. The Enlightenment project swims against currents of human nature–tribalism, authoritarianism, demonization, magical thinking–which demagogues are all too willing to exploit. Many commentators, committed to political, religious, or romantic ideologies, fight a rearguard action against it. The result is a corrosive fatalism and a willingness to wreck the precious institutions of liberal democracy and global cooperation. With intellectual depth and literary flair, Enlightenment Now makes the case for reason, science, and humanism: the ideals we need to confront our problems and continue our progress” (Amazon).

Peter Enns, Inspiration and Incarnation: Evangelicals and the Problem of the Old Testament (Baker Academic, 2005): “In this accessible study, Peter Enns offers an evangelical affirmation of biblical authority that considers questions raised by the nature of the Old Testament text. Enns looks at three questions raised by biblical scholars that seem to threaten traditional views of Scripture. First, he considers ancient Near Eastern literature that is similar to the Bible. Second, he looks at the theological diversity of the Old Testament. Finally, he considers how New Testament writers used the Old Testament. Based on his reflections on these contemporary issues, Enns proposes an incarnational model of biblical authority that takes seriously both the divine and human aspects of Scripture. The book includes a useful glossary, which defines technical terms and an annotated bibliography for further reading” (Amazon).

Bryan Caplan, The Case Against Education: Why the Educational System Is a Waste of Time and Money (Princeton University Press, 2018): “Despite being immensely popular–and immensely lucrative—education is grossly overrated. In this explosive book, Bryan Caplan argues that the primary function of education is not to enhance students’ skill but to certify their intelligence, work ethic, and conformity—in other words, to signal the qualities of a good employee. Learn why students hunt for easy As and casually forget most of what they learn after the final exam, why decades of growing access to education have not resulted in better jobs for the average worker but instead in runaway credential inflation, how employers reward workers for costly schooling they rarely if ever use, and why cutting education spending is the best remedy. Caplan draws on the latest social science to show how the labor market values grades over knowledge, and why the more education your rivals have, the more you need to impress employers. He explains why graduation is our society’s top conformity signal, and why even the most useless degrees can certify employability. He advocates two major policy responses. The first is educational austerity. Government needs to sharply cut education funding to curb this wasteful rat race. The second is more vocational education, because practical skills are more socially valuable than teaching students how to outshine their peers. Romantic notions about education being “good for the soul” must yield to careful research and common sense—The Case against Education points the way” (Amazon).

Jonathan A. Stapley, The Power of Godliness: Mormon Liturgy and Cosmology (Oxford University Press, 2018): “The Power of Godliness is a key work to understand Mormon conceptions of priesthood, authority, and gender. With in-depth research and never previously used documents, Jonathan A. Stapley explores the rituals of ordination, temple “sealings,” baby blessings, healing, and cunning-folk traditions. In doing so, he demonstrates that Mormon liturgy includes a much larger and more complex set of ritualized acts of worship than the specific rites of initiation, instruction, and sealing that take place within the temple walls. By exploring Mormonism’s liturgy more broadly, The Power of Godliness shows both the nuances of Mormon belief and practice, and how the Mormon ordering of heaven and earth is not a mere philosophical or theological exercise. Stapley examines Mormonism’s liturgical history to reveal a complete religious world, incorporating women, men, and children all participating in the construction of the Mormon universe. This book opens new possibilities for understanding the lived experiences of women and men in the Mormon past and present, and investigates what work these rituals and ritualized acts actually performed in the communities that carried them out. By tracing the development of the rituals and the work they accomplish, The Power of Godliness sheds important new light on the Mormon universe, its complex priesthoods, authorities, and powers” (Amazon).

Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization (The Belknap Press of Harvard University Press, 2016): “One of the world’s leading economists of inequality, Branko Milanovic presents a bold new account of the dynamics that drive inequality on a global scale. Drawing on vast data sets and cutting-edge research, he explains the benign and malign forces that make inequality rise and fall within and among nations. He also reveals who has been helped the most by globalization, who has been held back, and what policies might tilt the balance toward economic justice. Global Inequality takes us back hundreds of years, and as far around the world as data allow, to show that inequality moves in cycles, fueled by war and disease, technological disruption, access to education, and redistribution. The recent surge of inequality in the West has been driven by the revolution in technology, just as the Industrial Revolution drove inequality 150 years ago. But even as inequality has soared within nations, it has fallen dramatically among nations, as middle-class incomes in China and India have drawn closer to the stagnating incomes of the middle classes in the developed world. A more open migration policy would reduce global inequality even further. Both American and Chinese inequality seems well entrenched and self-reproducing, though it is difficult to predict if current trends will be derailed by emerging plutocracy, populism, or war. For those who want to understand how we got where we are, where we may be heading, and what policies might help reverse that course, Milanovic’s compelling explanation is the ideal place to start” (Amazon).

Are Americans Becoming Less Religious?

May 2, 2018 by Walker

Pew Research Center has a new study out on American’s religious beliefs. Their previous research on the rise of the “nones” (i.e., the unchurched or religiously unaffiliated) received a lot of press with many claiming that religious belief was on the decline. Sociologist Rodney Stark has been calling out the misleading nature of these numbers, pointing out that a lack of religious affiliation does not say much about the person’s beliefs. His criticisms are based on his detailed, large-scale survey of Americans’ beliefs and practices as well as his analysis of cross-country data. And now, Pew’s recent research seems to indicate that Stark had a point:

A new Pew Research Center survey of more than 4,700 U.S. adults finds that one-third of Americans say they do not believe in the God of the Bible, but that they do believe there is some other higher power or spiritual force in the universe. A slim majority of Americans (56%) say they believe in God “as described in the Bible.” And one-in-ten do not believe in any higher power or spiritual force.

…The survey questions that mention the Bible do not specify any particular verses or translations, leaving that up to each respondent’s understanding. But it is clear from questions elsewhere in the survey that Americans who say they believe in God “as described in the Bible” generally envision an all-powerful, all-knowing, loving deity who determines most or all of what happens in their lives. By contrast, people who say they believe in a “higher power or spiritual force” – but not in God as described in the Bible – are much less likely to believe in a deity who is omnipotent, omniscient, benevolent and active in human affairs.

And what of the so-called “nones”?:

Compared with Christians, Jews and people with no religious affiliation are much more likely to say they do not believe in God or a higher power of any kind. Still, big majorities in both groups do believe in a deity (89% among Jews, 72% among religious “nones”), including 56% of Jews and 53% of the religiously unaffiliated who say they do not believe in the God of the Bible but do believe in some other higher power of spiritual force in the universe. (The survey did not include enough interviews with Muslims, Buddhists, Hindus or respondents from other minority religious groups in the United States to permit separate analysis of their beliefs.)

As Stark writes,

The world is more religious than it has ever been. Around the globe, four out of every five people claim to belong to an organized faith, and many of the rest say they attend worship services. In Latin American, Pentecostal Protestant churches have converted tens of millions, and Catholics are going to Mass in unprecedented numbers. There are more churchgoing Christians in Sub-Saharan African than anywhere else on earth, and China may soon become home of the most Christians. Meanwhile, although not growing as rapidly as Christianity, Islam enjoys far higher levels of member commitment than it has for many centuries, and the same is true for Hinduism. In fact, of all the great world religions, only Buddhism may not be growing…[D]espite [the] confident proclamations about the decline of religion, Pew’s findings were certainly misleading and probably wrong. Consider only one fact: the overwhelming majority of Americans who say they have no religious affiliation pray and believe in angels! How irreligious is that?

Furthermore,

The [Pew] findings would seem to be clear: the number of Americans who say their religious affiliation is “none” has increased from about 8 percent in 1990 to about 22 percent in 2014. But what this means is not so obvious, for, during this same period, church attendance did not decline and the number of atheists did not increase. Indeed, the percentage of atheists in America has stayed stead at about 4 percent since a question about belief in God was first asked in 1944. In addition, except for atheists, most of the other “nones” are religious in the sense that they pray (some pray very often) and believe in angels, in heaven, and even in ghosts. Some are also rather deeply involved in “New Age” mysticisms.

So who are these “nones,” and why is their number increasing–if it is? Back in 1990 most Americans who seldom or never attended church still claimed a religious affiliation when asked to do so. Today, when asked their religious preference, instead of saying Methodist or Catholic, now a larger proportion of nonattenders say “none,” by which most seem to mean “no actual membership.” The entire change has take place within the nonattending group, and the nonattending group has not grown.

In other words, this change marks a decrease only in nominal affiliation, not an increase in irreligion. So whatever else it may reflect, the change does not support claims for increased secularization, let alone a decrease in the number of Christians. It may not even reflect an increase in those who say they are “nones.” The reason has to do with response rates and the accuracy of surveys.

Are We Underestimating the Gains from Trade?

May 1, 2018 by Walker

It sure looks that way. According to a recent study,

Assessing the size and identifying the sources of gains from trade is a long-standing challenge for economists. Theoretical and quantitative studies have mostly focused on static economies where changes in international market integration have only one-off effects on the levels of income and consumption but do not affect the long-run dynamics of these key economic variables (Costinot and Rodriguez-Clare, 2014). Since innovation and technological change are key drivers of income growth in the long-run (Aghion and Howitt, 2009, Akcigit et al. 2017), in a recent paper (Impullitti and Licandro 2018) we explore the sources and assess the size of the gains from trade in an economy where growth spurs from technological progress.

Building a quantitative model for policy analysis requires a theory sufficiently grounded on a (large enough) set of relevant empirical facts. We focus on the following facts, each corresponding to a particular channel of gains from trade.

First, there is strong evidence documenting competition effects of trade (Feenstra and Weinstein 2017). Increasing foreign competition is often found to reduce firm prices thereby shrinking their profit margins. Lower prices benefit consumer by increasing their purchasing power, this is the so-called pro-competitive effect of trade.

Second, the reduction in profits forces some of the less-profitable and less-productive firms out of the market, thereby reallocating market shares toward the most productive firms (Bernard et al. 2012). This selection effect generates an additional channel of gains from trade, as more productive firms charge lower prices.

Finally, foreign competitive pressure and selection, along with access to foreign markets induce firms to increase their investment in innovation to improve productivity and stay ahead of competitors (Bloom et al. 2015, Aghion et al. 2017). This innovation effect leads to dynamic gains from trade, as higher productivity growth produces not just one-off price reductions but a sequence of reductions across time, thereby increasingly benefiting present and future consumers.

We construct a model embedding all three key channels through which trade can potentially increase average income and consumption and calibrate it to replicate key aggregate and firm level trade and innovation statistics of the US economy. Frontier quantitative trade models embed only the first two channels in static economies where the effects of a policy change take place through timeless reallocations of market shares across firms and sectors but each firm’s productivity is kept constant. The selection and competition effects of trade reallocates resources toward the most productive firms, thereby increasing the average level of productivity and reducing prices. In our dynamic economy, trade-induced reallocations increase the size of the most productive firms and raise their incentives to innovate, thereby pushing up the growth rate of productivity. Hence, the model is able to separately measure the static gains form competition and selection and the dynamic gains produced by the interaction of these forces with innovation-driven productivity growth.

The authors’ findings

suggest that policy evaluation with static trade models is likely to largely underestimate the gains from globalisation. We have shown that innovation can be a key driver of dynamic gains from trade. Other recent papers have suggested that dynamic gains from trade can also come via technology diffusion (Sampson, 2016, Perla and Tonetti, 2016), and also stressed the importance of quantifying both the short and long-run effects of trade by exploring the full transitional dynamics generated by trade shocks (Akcigit, et al. 2018). This new class of macro-trade models have laid the basis for future quantitative frameworks to measure the effects of globalisation on per-capita income and consumption.

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