Month: September 2018

Demographics & Inequality: 2017 Edition

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Every year, economist Mark Perry draws on Census Bureau reports to paint of picture of the demographics of inequality. Looking at 2017 data, he constructed the following table:

incomeinequality

Once again, he concludes,

Household demographics, including the average number of earners per household and the marital status, age, and education of householders are all very highly correlated with household income. Specifically, high-income households have a greater average number of income-earners than households in lower-income quintiles, and individuals in high-income households are far more likely than individuals in low-income households to be well-educated, married, working full-time, and in their prime earning years. In contrast, individuals in lower-income households are far more likely than their counterparts in higher-income households to be less-educated, working part-time, either very young (under 35 years) or very old (over 65 years), and living in single-parent or single households.

The good news is that the key demographic factors that explain differences in household income are not fixed over our lifetimes and are largely under our control (e.g., staying in school and graduating, getting and staying married, working full-time, etc.), which means that individuals and households are not destined to remain in a single income quintile forever. Fortunately, studies that track people over time indicate that individuals and households move up and down the income quintiles over their lifetimes, as the key demographic variables highlighted above change, see related CD posts here, here and here.

… It’s highly likely that most of today’s high-income, college-educated, married individuals who are now in their peak earning years were in a lower-income quintile in their prior, single, younger years before they acquired education and job experience. It’s also likely that individuals in today’s top income quintiles will move back down to a lower income quintile in the future during their retirement years, which is just part of the natural lifetime cycle of moving up and down the income quintiles for most Americans. So when we hear the media and progressives talk about an “income inequality crisis” in America, we should keep in mind that basic household demographics go a long way towards explaining the differences in household income in the United States. And because the key income-determining demographic variables are largely under our control and change dynamically over our lifetimes, income mobility and the American dream are still “alive and well” in the US.

Elsewhere, he reveals some rather good news from the same report:

These are his key takeaways:

  • The 1.8% gain in real median US household income last year brought median income to more than $61,000, the highest level ever recorded.
  • The income gain in 2017 was the fifth annual increase and the first period of five consecutive increases in median household income since the late 1990s.
  • Compared to 1975, the typical US household today has $12,464 more annual income (in 2017 dollars) or more than $1,000 more per month in real, inflation-adjusted dollars to spend on goods and services, many of which have become much more affordable today than in the 1970s (or weren’t even available then).
  • Adjusted for household size, which has been falling over time, real median household income per household member last year of $24,160 (in 2017 dollars) was the highest in history.
  • Real median income for married couples with both spouses working reached a new all-time record high last year of $111,000 and has more than doubled from $54,700 in 1963.
  • By three different measures — income shares of the top 5% and 20% and the Gini coefficient — there is no evidence of a significant rise in income inequality over the last 25 years; all three measures have been remarkably flat for more than two decades.
  • The share of US households with incomes of $100,000 or more (in 2017 dollars) reached a new record high of 29.2% last year, which is more than triple the share of households in 1967 with that level of income. At the same time, the share of US low-income households (real incomes of $35,000 or below) fell to a near-record low of 29.5%.
  • America’s middle-class is disappearing but into higher, not lower, income categories over time.

Prayer: Reorienting Desires and Rehearsing for Death

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In his book Atheist Delusions, Orthodox philosopher David Bentley Hart writes,

[I]t is bizarre for anyone to think he or she can judge the nature or credibility of another’s experiences from the outside. If [Daniel] Dennett really wishes to undertake a “scientific” investigation of faith, he should promptly abandon his efforts to describe religion (which…does not really exist), and attempt instead to enter into the actual world of belief in order to weigh its phenomena from within. As a first step, he should certainly–purely in the interest of sound scientific method and empirical rigor–begin praying, and then continue doing so with some perseverance. This is a drastic and implausible description, no doubt; but it is the only means by which he could possibly begin to acquire any knowledge of what belief is or of what it is not (pg. 11-12).

Praying is an aspect of religion I actually struggle with. It’s very difficult for me, largely because it feels repetitive and admittedly silly. What’s more, it is difficult to stay focused. But this seems to be the nature of the beast. Mormon philosopher Adam Miller captures this well:

When you pray, notice how the same thing happens almost every time. You address God and then you start to think about what you should say and then this prompts you to think about something else and then, caught up in thinking about this other thing, you forget that you were saying a prayer. Your brain browns out. Eventually, after a few minutes, you remember why you were kneeling there in the first place. This moment is the key. When, for the first time, you remember this, your prayer can start for real…To pray is to practice remembering God. The more frequently you forget, the more chances you’ll have to remember, and the more you remember, the deeper your prayer will go. With patience and practice, you’ll remember God more often.[ref]Letters to a Young Mormon, “Prayer,” Kindle edition.[/ref]

However, I’m beginning to think I need to try harder. Anglican priest Sarah Coakley provides some reasons in a 2012 interview:

It took me a long time to realize this, but I think that what seems to be our sheer incompetence in prayer is actually the place where something is happening: it is God invading our willed vulnerability. I think a lot of people try to pray and then give up. They feel it isn’t right for them, that they aren’t good at it. But prayer is not like riding a bicycle or getting a good grade on a term paper. It’s something sui generis precisely because relating to God isn’t like relating to anything or anyone else.

…Many traditions that are enfolded within Christianity plot a sort of progression to prayer, but I’m fairly resistant to the idea of progress as prayer because I have a strong sense that every time I try to pray I know I’m incompetent. At the same time, however, anyone who is seriously committed to prayer on a daily basis will know that things do start to happen: one is being transformed, one’s whole life is being drawn like a magnetized set of iron filings in a unified direction so the bits of one’s self that one thought were completely unconnected suddenly become vibrantly connected. The greatest writers on prayer in the Christian tradition tell us that once you seriously embark on this journey, it’s like giving your life away: “It is a fearful thing to fall into the hands of the living God” (Heb. 10:31 NRSV). And we could say that there are stages of progression in this journey, but it’s never for us to say where we are.

Now, I think that one of the most important things to happen in such a progression is a barely perceptible sharpening or transformation of the senses and the mind, partly because what we now call the unconscious is welling up and forcing itself to be integrated. We suddenly realize that we are seeing and knowing and responding to the world in ways that we didn’t before…[T]he basic idea is that our life is set on a course of transformation and purification. We are given a sensual life, an imaginative life, an affective life, and a noetic life, and each of these features of selfhood has to pass through transformation and purification en route to the vision of God. So of course that affects the mind, the senses, and the imagination.

She continues:

Christianity tells us that these senses ultimately unite in the beatific vision—because there could be nothing more joyous or transformative or pleasurable than being desired by God and responding in complete unity with God—but in the lower rungs of life we have to make choices about how we are going to spend our time, let our imaginations play, or direct our will. In prayer, particularly in silent prayer, these choices press on us in a way that is very disconcerting. We only have to spend about five seconds in silence before we’re thinking, “This is boring. Why don’t I go do something more interesting?” Our minds are immediately distracted with intense desires for cream buns or with random sexual fantasies. Laying ourselves out before God in a sort of naked way releases the imagination. It isn’t relieving; it’s humbling. It’s also quite funny—this is the lot of humanity! Yet if I were starving or dying of thirst, I would only have one interest: the desire to find something to eat or drink. This wandering of the mind—that I can wonder what video game I’m going to play or whether I’m going to have a diet Coke or a non-diet Coke—is thus a privilege of affluence. In North Atlantic culture I think we’ve lost touch with the idea that desires are all related in a kind of nexus, that our desire for a cup of tea is intimately, though not obviously, connected to our desire for sex, for power, and for influence, and these things are ultimately bound up with our desire for God. Silent prayer forces us to think about these puzzling connections and to order our desires in relation to God… Desire isn’t simply about sex; the tether of desire is the lot of humanity, and it requires spiritual and moral discernment. And theologically, I think our goal is to spread out these desires before God, to have them find their proper place. Some of these desires are strongly inflected by sin, and they need attention through grace and the Spirit. Other desires are not necessarily sinful but can get wrongly intensified; they can be in the wrong place or in the wrong order at the wrong time.

She concludes, “Prayer is this constant return to the place where one’s projects are frail and fallible and where one can only fall on God’s mercy. That’s the place God works. And God works powerfully there.” Perhaps prayer is an act of vulnerability and humility; what Coakley refers to below as “rehearsing for death.”

Perhaps I need to rehearse more.

Diversity Is A Strength

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Earlier this year, I highlighted some research on diversity and its relation to the immigration question. The Washington Post had a recent piece on Fox News anchor Tucker Carlson’s less-than-subtle anti-diversity views. Within the article, the author highlighted several studies on how diversity contributes to organizational well-being. I thought I’d dive into these studies for your reading pleasure.

One study from Cloverpop, as reported in Forbes, 

analyzed approximately 600 business decisions made by 200 different business teams in a wide variety of companies over two years, using the Cloverpop decision-making database. The full research results on inclusive decision making are available for download if you’d like to dive in. To topline it, our research shows a direct link between inclusive decision making and better business performance:

• Inclusive teams make better business decisions up to 87% of the time.

• Teams that follow an inclusive process make decisions 2X faster with 1/2 the meetings.

• Decisions made and executed by diverse teams delivered 60% better results.

… According to the research, teams outperform individual decision makers 66% of the time, and decision making improves as team diversity increases. Compared to individual decision makers, all-male teams make better business decisions 58% of the time, while gender diverse teams do so 73% of the time. Teams that also include a wide range of ages and different geographic locations make better business decisions 87% of the time.

… We also found that diverse groups are more likely to encounter operational friction when executing business decisions. In short, less diverse teams make worse decisions, and then diverse teams struggle to put their decisions into action. The worst situation is to have an all-male team make a decision that is executed by a gender-diverse group. This worst-of-both-worlds combination underperformed by 15%. In contrast, our analysis found that the most inclusive decision-making and execution teams performed 60% better than average.

A 2014 study reviewed the relevant literature and found the following benefits of diversity (while admitting that managing diversity is difficult, but doable):

Diversity stimulates innovation and productivity and creates a world class culture that can outperform the competition.

A multicultural organization is better suited to serve a diverse external clientele in a more increasingly global market. Such organizations have a better understanding of the requirements of the legal, political, social, economic and cultural environments of foreign nations (Adler, 1991).

In research-oriented and hi-tech industries, the broad base of talents generated by a gender-and ethnicdiverse organization becomes a priceless advantage. “Creativity thrives on diversity” (Morgan, 1989).

Multicultural organizations are found to be better at problem solving, possess better ability to extract expanded meanings, and are more likely to display multiple perspectives and interpretations in dealing with complex issues.

Organizations employing a diverse workforce can supply a greater variety of solutions to problems in service, sourcing, and allocation of resources.

Employees from diverse backgrounds bring individual talents and experiences in suggesting ideas that are flexible in adapting to fluctuating markets and customer demands.

A diverse collection of skills and experiences (e.g. languages, cultural understanding) allows a company to provide service to customers on a global basis.

A diverse workforce that feels comfortable communicating varying poitns of view provides a larger pool of ideas and experiences (pg. 83).

Finally, a 2016 Harvard Business Review article provides a nice rundown of several important studies on diversity:

A 2015 McKinsey report on 366 public companies found that those in the top quartile for ethnic and racial diversity in management were 35% more likely to have financial returns above their industry mean, and those in the top quartile for gender diversity were 15% more likely to have returns above the industry mean.

In a global analysis of 2,400 companies conducted by Credit Suisse, organizations with at least one female board member yielded higher return on equity and higher net income growth than those that did not have any women on the board.

… People from diverse backgrounds might actually alter the behavior of a group’s social majority in ways that lead to improved and more accurate group thinking. In a study published in the Journal of Personality and Social Psychology, scientists assigned 200 people to six-person mock jury panels whose members were either all white or included four white and two black participants. The people were shown a video of a trial of a black defendant and white victims. They then had to decide whether the defendant was guilty. 

It turned out that the diverse panels raised more facts related to the case than homogenous panels and made fewer factual errors while discussing available evidence. If errors did occur, they were more likely to be corrected during deliberation. One possible reason for this difference was that white jurors on diverse panels recalled evidence more accurately.

Other studies have yielded similar results. In a series of experiments conducted in Texas and Singapore, scientists put financially literate people in simulated markets and asked them to price stocks. The participants were placed in either ethnically diverse or homogenous teams. The researchers found that individuals who were part of the diverse teams were 58% more likely to price stocks correctly, whereas those in homogenous groups were more prone to pricing errors, according to the study, published in the journal PNAS. Diverse teams are more likely to constantly reexamine facts and remain objective. They may also encourage greater scrutiny of each member’s actions, keeping their joint cognitive resources sharp and vigilant.

… Greater diversity may also change the way that entire teams digest information needed to make the best decisions. In a study published in the Personality and Social Psychology Bulletin, Katherine Phillips of Northwestern University and her team divided sorority or fraternity members into four-member groups, each of which had to read interviews conducted by a detective investigating a murder. Three people in every group, referred to as “oldtimers” in the study, came from the same sorority or fraternity, whereas the fourth, the so-called “newcomer,” was either a member of the same sorority or fraternity or a different one. The three oldtimers in each group gathered to decide who was the most likely murder suspect. Five minutes into their discussion, the newcomer joined the deliberation and expressed their opinion as to who the suspect was. It turned out that although groups with out-group newcomers felt less confident about the accuracy of their joint decisions, they were more likely to guess who the correct suspect was than those with newcomers who belonged to the same group.

…In a study published in Innovation: Management, Policy & Practice, the authors analyzed levels of gender diversity in research and development teams from 4,277 companies in Spain. Using statistical models, they found that companies with more women were more likely to introduce radical new innovations into the market over a two-year period.

In another study, published in Economic Geography, the authors concluded that increased cultural diversity is a boon to innovativeness. They pooled data on 7,615 firms that participated in the London Annual Business Survey, a questionnaire conducted with the UK capital’s executives that asks a number of questions about their companies’ performance. The results revealed that businesses run by culturally diverse leadership teams were more likely to develop new products than those with homogenous leadership.

Though you may feel more at ease working with people who share your background, don’t be fooled by your comfort. Hiring individuals who do not look, talk, or think like you can allow you to dodge the costly pitfalls of conformity, which discourages innovative thinking.

“How, precisely, is diversity our strength,” you ask, Tucker? See above. And see here, here, and here.

On Contraceptives vs. Abortifacients

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The political outrage of the moment is the assertion that SCOTUS nominee Brett Kavanaugh thinks that contraceptives and abortifacients are the same thing. HuffPost provides a sample article with the contention that “Kavanaugh] referred to contraception as ‘abortion-inducing drugs.'” and then a quote from the EVP of the Planned Parenthood Action Fund:

Kavanaugh referred to birth control ― something more than 95 percent of women use in their lifetime ― as an ‘abortion-inducing drug,’ which is not just flat-out wrong, but is anti-woman, anti-science propaganda.

This is a convenient narrative for pro-choice activists, who routinely smear the pro-life movement as being motivated by regressive prudery or just an outright “War on Women.” They would have you believe that pro-lifers are out to control women’s reproduction, and therefore pro-lifers oppose contraception and abortion as one and the same thing.

None of this is true.

First, it’s not true that the pro-life movement conflates contraceptives and abortifacients. These are two very different things. Abortifacients act after fertilization to cause the death of an innocent human being. Opposition to this–at least, in elective cases–is the core of the pro-life cause.

Contraceptives, on the other hand, act to prevent fertilization. If there’s no fertilization then no human life is at stake. So the pro-life movement has no relevance here.

It’s true that some pro-life people view contraception as immoral. It’s also true that some pro-life people would like to bring school prayer back. But just because they do, it doesn’t make school prayer a pro-life issue. It just shows that there’s overlap between people who are pro-life and people who like school prayer. Same concept here: there’s overlap between people who are pro-life and people who view contraceptives as immoral, but opposition to contraceptives (morally or legally) has nothing to do with the pro-life cause because there isn’t a human life directly at stake. 

Second, returning to Kavanuagh specifically: he knows this. Much as Planned Parenthood would like to scare up some more donor dollars by terrifying people with the specter of a crazed misogynist who can’t tell the difference between contraception and abortion, Kavanaugh’s dissent in Priests for Life vs. HHS (which is what Ted Cruz was asking Kavanugh about) makes clear that he is perfectly aware of the difference:

By regulation, that insurance must cover all FDA-approved contraceptives, including certain methods of birth control that, some believe, operate as abortifacients and result in the destruction of embryos.

Page 1 of Kavanaugh’s dissent.

The drug that Kavanugh is talking about is levonorgestrel. In low doses, levonorgestrel is a contraceptive that acts by preventing fertilization. This raises no pro-life concerns. But levonorgestrel is also available in a much higher dosage as the emergency contraceptive Plan B. In this higher dosage–and taken after sex (which is the whole point of an emergency contraceptive)–levonorgestrel may kick in after fertilization has already occurred and prevent an embryo from implanting. This is the scenario that concerns pro-lifers, because once fertilization takes place we have a new, living human being and the entire point of the pro-life movement is that it shouldn’t be legally permissible to electively kill human beings.

So, contrary to Planned Parenthood propaganda, Kavanaugh isn’t attacking all contraceptives. He’s not even attacking all uses of levonorgestrel. In fact, he’s not attacking anything at all.  He’s merely pointing out that “some believe” (i.e. Priests for Life believe) that in this particular case, levonorgestrel may act as an abortifacient and not as a contraceptive.

Is the concern reasonable? Probably.

The question of whether or not Plan B can act as an abortifacient is incredibly controversial because it has to do with abortion, but Wikipedia (with a citation) concludes that “While it is unlikely that emergency contraception affects implantation it is impossible to completely exclude the possibility of post-fertilization effect.”

One last important thing before we wrap up. There’s a lot of sophistry surrounding the issue of whether or not Plan B is an abortifacient. WebMD is a case-in-point:

Plan B One-Step is not the same as RU-486, which is an abortion pill. It does not cause a miscarriage or abortion. In other words, it does not stop development of a fetus once the fertilized egg implants in the uterus. So it will not work if you are already pregnant when you take it.

This is misleading because they’re relying on a technical definition of pregnancy that doesn’t have anything to do with the moral issue at hand. Their argument is that pregnancy starts at implantation rather than fertilization. If Plan B stops an embryo from implanting, then it hasn’t interrupted a pregnancy because technically the pregnancy hasn’t started yet. Therefore it can’t be an abortion, because there is no pregnancy to abort. This is all technically true and yet at the same time ethically irrelevant, since the germane issue is not whether a pregnancy has ended but whether or not a human life has ended. 

Other sources, like NPR, have covered the issue much more responsibly and still conclude that Plan B is not an abortifacient because it doesn’t block implantation, only fertilization. If that is demonstrably proven (my understanding is that the jury is still out) then Plan B will no longer be a pro-life concern.

Ultimately none of this will be persuasive to people who are pro-choice because it seems self-evident that an embryo only a day or so old is not really what we mean by “a human life” even if, speaking scientifically, it is in fact a distinct, living human organism. I understand that, and I’m not going to address that aspect of the debate today.

My point is simply this: Kavanaugh in particular did not conflate all contraceptives with abortifacients and the pro-life movement in general is similarly able to tell the difference between these two very distinct things.

Institutions Matter

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From a recent St. Louis Fed study: 

Using cross-country analysis, we find that a key factor for fast-growing countries to grow faster than the United States and for trapped economies to grow slower than the United States is the relative TFP, which may be technology driven and not related to institutional barriers.  Yet more-severe institutional barriers in the lag-behind countries actually hinder the process of structural transformation and economic development, causing these countries to fall behind the fast-growing economies despite having similar or even better initial states five decades ago. Overall, we find that institutional barriers have played the most important role, accounting for more than half the economic growth in fast-growing and trapped economies and for more than 100 percent of the economic growth in the lag-behind countries. By conducting country studies, we identify that unnecessary protectionism, government misallocation, corruption, and financial instability have been key institutional barriers causing countries to either fall into the poverty trap or lag behind without a sustainable growth engine. Such barriers have created frictions or distortions to capital markets, trade, and industrialization, subsequently preventing these countries from advancing (pg. 260-261).

Economist Linda Yueh explains why institutions are important for economic growth:

Research by the OECD estimates that by 2030, for the first time in history, more than half of the world’s population will be middle class (OECD 2012). That’s 4.9 billion out of an estimated 8.6 billion people. In 2009 1.8 billion (out of around 7 billion) people earned between $10 and $100 per day, a measure of the income that defines the new global middle class. That’s enough to buy a refrigerator, adjusted for what a dollar buys in their countries.

Based on current trends, in 2030 around two-thirds of the middle classes worldwide – nearly 3 billion people – will be in Asia. The UN describes it as a historic shift not seen for 150 years (Yueh 2018). The European and North American middle classes will fall from more than half of that class’s world total to one-third.

How has this been achieved? Possessing good institutions is what economists have come to focus on and the spread of such institutions seems to have been key, as the father of New Institutional Economics predicted. The seminal work in this area was by Douglass North who was frustrated by neoclassical economic models that focused on measurable factors like workers and investment, with attempts to measuring technological progress, even though they could not fully explain why some economies grow well and others do not.

So, North took economics out of its comfort zone, which consisted of examining more easily measured inputs like labour and capital, and instead brought in politics, psychology, and strategy, as well as history, in order to understand why some countries succeed and others fail. He stressed that there was no reason why countries could not learn from more successful economies to better their own institutions. That finally happened in the 1990s.

In the early 1990s, China, India, and Eastern Europe changed course. China and India re-oriented their economies outward to integrate with the world economy, while Eastern Europe shed the old communist institutions and adopted market economies. In other words, having tried central planning (in China and the former Soviet Union) and import substitution industrialisation (in India), these economies abandoned their old approaches and adopted as well as adapted the economic policies of more successful economies. For instance, China, which has accounted for the bulk of poverty reduction since 1990, undertook an ‘open door’ policy that sought to integrate into global production chains which increased competition into its economy that had been dominated by state-owned enterprises. India likewise abandoned its previous protectionist policies and embraced exports to a greater extent. The wholesale transformation of the economic system was of course in Central and Eastern Europe. Communism gave way to capitalism, with these nations adopting entirely new institutions that re-geared their economies toward the market and many joining the EU.

Thus, the 1990s witnessed the rapid growth of emerging economies whose growth via industrialisation eventually led to an extraordinary commodity super-cycle due to their voracious demand for raw materials to fuel their development. As many of these economies, especially China, have become middle-income countries, their economic growth is slowing down. And they may slow down so far that they never become rich. But, their collective growth has lifted a billion people of out of extreme poverty, and the UN hopes that their continued growth will lead to the end of abject poverty in the next decade or so, which would be a historic achievement. That would realise the first of the Sustainable Development Goals adopted by every nation around the world to end extreme poverty – i.e. those earning less than $1.90 per day adjusted for what a dollar buys in their country – by 2030.

Institutions matter.

Is the Politicization of Facebook Making Us More Partisan?

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Regarding the claim that political deliberation leads to positive results, philosopher Jason Brennan writes,

In a comprehensive survey of the empirical research on democratic deliberation, political scientist Tali Mendelberg (2002, 154)  concludes that the “empirical evidence for the benefits that deliberative theorists expect” is “thin or non-existent”. Deliberation tends to undermine cooperation among groups (Mendelberg 2002, 156). When groups are of different sizes, deliberation tends to exacerbate conflict rather then mediate it (Mendelberg 2002 158). Status-seeking drives the discussion. Deliberators try to win positions of influence and power over others (Mendelberg 2002, 159). High-status individuals have more influence, regardless of whether the high status individuals actually know more (Mendelberg 2002, 165-7). During deliberation, people use language in biased and manipulative ways (Mendelberg 2002, 170-2). As Mendelberg concludes, “in most deliberations about public matters”, group discussion tends to “amplify” intellectual biases rather than “neutralize” them (Mendelberg 2002, 176, citing Kerr, MacCoun, and Kramer 1996).

…Mendelberg’s take on the empirical literature is not unusual. Other reviews of the extant political literature—including by people who favor deliberative democracy—find similar results (Landemore 2012, 118-19; Pincock, 2012). For instance, deliberation tends to move people toward more extreme versions of their ideologies rather than toward more moderate versions (Sunstein 2002). Deliberation over sensitive matters—such as pornography laws—often leads to “hysteria” and “emotionalism”, with parties to the debate feigning moral emergencies and booing and hissing at one another (Downs, 1989).

Relatedly, political scientist Diana Mutz’s (2006) empirical work shows that deliberation and participation do not come together. The people who are most active in politics tend to be Hooligans. Vulcans tend to stay home.

Mutz finds that being exposed to contrary points of view tends to lessen one’s enthusiasm for one’s own political views. Cross-cutting political exposure decreases the likelihood that a person will vote, reduces the number of political activities a person engages in, and makes people take longer to decide how to vote (Mutz 2006, 92, 110, 112-113). In contrast, active, participatory citizens tend not to engage in much deliberation and tend not to have much cross-cutting political discussion (Mutz 2006, 30). Instead, they seek out and interact only with others with whom they already agree.  When asked why other people hold contrary points of view, participatory citizens tend to respond that others must be stupid or corrupt.

Many political theorists advocate provide more meaningful opportunities for political participation.  Mutz, in effect, finds that the people most likely to take advantage of such opportunities are extremists and partisans (Mutz, 135-6).

Some might wonder, if deliberative democracy does not work, then what does? Unfortunately, the answer might be nothing.

While Mutz’s work finds that positive interpersonal interactions can increase political compromise, a new study suggests that online interactions do quite the opposite:

Social media sites like Facebook are often charged with increasing political polarization by establishing what are called “echo chambers,” places of discourse that prevent people from being exposed to things that contradict their beliefs. It is commonly believed that exposure to opposing opinions is a good thing, as it allows one to empathize with their interlocutors and see the merits of another point of view. A recent study published in the Proceedings for the National Academy of Sciences seems to imply the opposite though, increased exposure to opposing political views can actually increase one’s political polarization.

In the published study, the researchers first surveyed 2 large groups of Republicans and Democrats who were frequent Twitter users about a range of policy issues. Then they had each group follow Twitter bots that retweeted content from elected officials and public figures with opposing political views for one month. Afterward, the participants were surveyed again regarding their political opinions. What the researchers found was that Republicans who followed a liberal Twitter bot expressed substantially more conservative opinions than before. Alternatively, they found that Democrats following a conservative Twitter bot expressed slightly more liberal opinions, although not to a statistically significant degree.

Such a study highlights the important (and potentially negative) effects that social media can have on political discourse. It is commonly touted nugget of wisdom that exposure to opposing political beliefs can temper one’s own, causing them to fall closer to the center of the political spectrum. In actuality, sometimes exposure to opposing opinions can have a “backfire effect”—where exposure to foreign ideas actually makes one hold their own ideas more strongly and can push one further to the ends of the political spectrum.

…The results indicated that liberals who had followed a conservative bot showed a slight increase in liberal attitudes, but not to any statistically significant degree. On the contrary, Republicans who followed a liberal Twitter bot showed a substantial increase in conservative political opinions. Of the Republican respondents who fully completed the ending survey, the researchers measured an average increase in polarization of .60 points, around .59 standard deviations. Even when controlled for both age, and for initial extremeness of position, the results stayed the same; Republicans had a much more pronounced polarizing reaction to exposure to opposing political opinions. Thus, it seems that this “backfire effect” is more likely to be seen and be more pronounced in Republicans than Democrats.

That’s disappointing, if entirely predictable.

Does the U.S. Subsidize Global Health Care?

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From a USC study earlier this year:

What we pay for medicines today affects the number and kinds of drugs discovered tomorrow. Empirical research has established that drug development activity is sensitive to expected future revenues in the market for those drugs. The most recent evidence suggests that it takes $2.5 billion in additional drug revenue to spur one new drug approval, based on data from 1997 to 2007.

Another study assesses the Orphan Drug Act, passed in 1982 to stimulate development of treatments for rare diseases. Its key feature was the granting of market exclusivity that would restrict entry by competitors— in other words, allow for higher prices. The result was a dramatic increase in the number of compounds brought into development to treat rare diseases (figure 3). This linkage may not help patients with tuberculosis today in Nigeria and Indonesia — two poor countries hardest hit by tuberculosis—but it is currently benefiting patients in the same countries who have HIV. Decades ago, demand for HIV treatment in wealthy countries spurred medical breakthroughs that have since found their way — albeit more slowly than we would like — into the poorest corners of the globe. As of July 2017, 20.9 million people living with HIV were accessing antiretroviral therapy globally; 60 percent of them live in eastern and southern Africa.

American consumers may feel some philanthropic pride about the benefits they have spurred for the world’s poorest HIV patients. But similar benefits are also enjoyed by German, British, and French HIV patients, and were financed by the same revenues generated, in large part, by high American drug prices. Whether one sees this as philanthropy on the part of American drug buyers, or free-riding on the part of other wealthy countries who pay much less for the same drugs, America clearly contributes more to pharmaceutical revenue, and hence incentives for new drug development, than its income and population size would suggest (pg. 2).

The study goes on to point out that Americans pay 3 times as much on drugs as Europeans and 90% more as a share of income. American consumers “account for about 64 to 78 percent of total pharmaceutical profits, despite accounting for only 27 percent of global income…American patients use newer drugs and face higher prices than patients in other countries” (pg. 2-3). Most policy discussions focus on lowering American prices. But what if we instead raised European prices? The researchers write,

Increasing European prices by 20 percent — just part of the total gap — would result in substantially more drug discovery worldwide, assuming that the marginal impact of additional investments is constant. These new drugs lead to higher-quality and longer lives that benefit everyone. After accounting for the value of these health gains — and netting out the extra spending — such a European price increase would lead to $10 trillion in welfare gains for Americans over the next 50 years. But Europeans would also be better off in the long run, by $7.5 trillion, weighted towards future generations. This is because European populations are rapidly aging, and they need new drugs too…At the end of the day…evidence conclusively demonstrates that higher expected revenues leads to more drug discovery, with the most recent numbers suggesting that on average every $2.5 billion of additional revenue leads to a new drug approval (pg. 4).

In short, “if other wealthy countries shouldered more of the burden for medical innovation, both American and European patients would benefit” (pg. 5). Recent research confirms that the difference between U.S. and European healthcare is driven mainly by prices. The authors suggest that more can be done through trade, international harmonization of regulatory standards, and further research on the costs of free-riding. “As incomes in less-developed countries rise,” they conclude, “they will face the challenges of fighting conditions like diabetes, heart disease, and even dementia. Spending a bit more now to ensure their populations have access to effective treatment is in everyone’s interest (pg. 5).

Medical innovations are vital to increased well-being and the U.S. dominates in this arena.

Drug Discovery, 1996-2017
Medical Laboratory Technology, 1996-2017
Medicine, 1996-2017

Even when compared to the European Union as a whole, the United States still comes out on top.

As the authors of the two graphs above explain,

Although many factors are surely relevant, one likely contributor is differences in monetary compensation. Other things being equal, individuals and firms will tend to invest more in medical innovation when (a) they expect a larger return; (b) the returns will last for a longer period of time; and (c) the returns arrive sooner rather than later…Americans pay more for pharmaceuticals because of the nature of our health care system. Single-payer and other centrally organized health care systems, like those in much of Europe, are characterized by a great deal of monopsony (buyer) power that pushes down compensation…In addition to pushing down prices, centrally organized health care systems also limit the use of new drugs, technologies, and procedures. Those systems “control costs by upstream limits on physician supply and specialization, technology diffusion, capital expenditures, hospital budgets, and professional fees.” The result is that those countries use new innovations less extensively than the United States (pg. 8).

They conclude (and I agree), “The healthcare debate should address more than just covering the uninsured and controlling costs. It should also consider whether proposed policies will promote or hinder the ability of creative individuals to innovate” (pg. 11).