Walker

Walker joined Difficult Run as an editor in August 2013. He graduated from the University of North Texas with an MBA in Strategic Management and a BBA in Organizational Behavior and Human Resource Management. He's currently a grad student in Government at Johns Hopkins University. He has been published in SquareTwo, BYU Studies Quarterly, Dialogue, Graziadio Business Review, and Economic Affairs. He also contributed to Julie Smith's (ed.) 'As Iron Sharpens Iron: Listening to the Various Voices of Scripture'. His other online writing can be found at Worlds Without End and Times & Seasons. He lives in Denton, Texas, with his wife.

Why Therapy Works: Interview with Louis Cozolino

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This is part of the DR Book Collection.

Image result for why therapy worksI don’t think I’ve ever mentioned this before on here, but, as some of  you may have guessed, I go to therapy. I haven’t as of late for various reasons, but for a solid two years I went pretty much every other week. My interest in shame and vulnerability has been largely due to my personal work in therapy. This is why as soon as I heard of psychologist Louis Cozolino’s book Why Therapy Works: Using Our Minds to Change Our Brains, I immediately picked it up. Granted, like most of my books, it sat dormant for quite a while until I finally finished it up toward the end of last year.

Cozolino walks the reader through the findings of cognitive neuroscience, discussing the “fast” (i.e., “primitive systems, which are nonverbal and inaccessible to conscious reflection, [that] are referred to as implicit memory, the unconscious, or somatic memory”, pg. 5) and “slow” (i.e., “conscious awareness…[which] eventually gave rise to narratives, imagination, and abstract thought”, pg. 5) systems of the brain. Because of this “fast” system, we often have negative internalizations that we’re not even consciously aware of. This is what Cozolino calls “core shame”:

Core shame needs to be differentiated from appropriate shame and guilt that emerge later in childhood. Appropriate shame is an adaptation to social behavior required by the group. Core shame, on the other hand, is an instinctual judgment about the self, and it results in a sense of worthlessness, a fear of being found out, and a desperate striving for perfection. In essence, core shame is tied to our primitive instinct to be a worthy part of the tribe; it is a failure to internalize a deep sense of bonded belonging. As a result, people with core shame feel damaged, unlovable, and abandoned. Thus, core shame becomes a central factor in the perpetuation of insecure attachment and social status schema (pg. 10).

The brain, according to Cozolino, “is a social organ” and “we can leverage the power of human relationships to regulate anxiety and stimulate learning” (pg. xxii). This makes the relational nature of therapy all the more important and effective:

The reasons for our struggles often remain buried in networks of implicit memory, inaccessible to conscious reflection. Psychotherapy guides us in a safe exploration of our early experiences and helps us create a narrative that associates these early experiences with the ways in which our brains and minds distort our current lives. In the process, our symptoms come to be understood as forms of implicit memory instead of insanity, character pathology, or plain stupidity. This process can open the door to greater compassion for oneself, openness to others, and the possibility for healing (pg.9).

The book is comprehensive and excellent for both laypersons and scholars. You can see short interview clips with Cozolino below.

The Soul of the World: Interview with Roger Scruton

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This is part of the DR Book Collection.

Image result for the soul of the worldI’ve been a fan of British philosopher Roger Scruton ever since I stumbled on his BBC documentary Why Beauty Matters as an undergrad. I picked up his Oxford-published Beauty[ref]I believe it was republished as Beauty: A Very Short Introduction.[/ref] at the UNT library soon after. I found Scruton’s ideas to be powerful and provocative, even if the writing was at times difficult or lackluster compared to the concepts.

I felt the same way about his Princeton-published The Soul of the World. As The Wall Street Journal summarizes,

Viewed through the lens of scientific reductionism, all existence is fundamentally the bouncing around of various material particles, some arranged in the form of gene-perpetuating machines we call humans. Mr. Scruton almost agrees—we are, in fact, gene-perpetuating machines, and the finer, higher aspects of human existence emerge from, and rest upon, biological machinery. As he points out, though, it’s a long jump from this acknowledgment to the assertion that “this is all there is.” The jump, according to Mr. Scruton, lands us in “a completely different world, and one in which we humans are not truly at home.” A truly human outlook involves the intuition of intangible realities that find no place in even our most sensitive systems of biology, chemistry or physics.

For Scruton, this reductionism “overlook[s] the aspect of our mental states that is most important to us, and through which we understand and act upon each other’s motives, namely, their intentionality or “aboutness”” (pg. 4). The theism presented by Scruton is a kind of general classical theism, one that could be embraced by someone outside a specific religious tradition. His last few chapters discussing art, music, and the faces of others are especially enlightening. Just as no one would reduce the Mona Lisa to mere pixels on a canvas or the music of Bach to random sounds, to reduce humans and nature to their mechanical functions is to misunderstand reality and suppress our own daily experiences of the world. Thought-provoking stuff.

You can hear a brief snippet of an interview with Roger Scruton below.

Is Entrepreneurship Predetermined?

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How much is entrepreneurship predetermined by family background? According to a new study,

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Parent Role-Modelling

recent papers have collectively suggested that entrepreneurship might be more predetermined than previously thought – entrepreneurship education has been proven to be effective in primary school (Huber et al 2014) and, to a lesser extent, in secondary school (Elert et al 2015), but not at all when individuals are older, that is, students (Oosterbeek et al 2010) or adults (Fairlie et al 2015). Moreover, strong intergenerational associations in entrepreneurship have attracted considerable attention. While part of this relationship has been shown to be genetic (Nicolaou et al 2008), parental role-modelling appears to be the main driver of the intergenerational association in entrepreneurship (Lindquist et al. 2015). Additionally, exposure to a dense entrepreneurial environment during formative years also increases the likelihood of entry into entrepreneurship (Guiso et al. 2015).

So the policy-relevant questions arise: To what extent is entrepreneurship predetermined? Have we spent (public) funds wisely by implementing policy measures and education aimed at changing the behaviour of adult people?

In a recent paper, we assess the predetermination of entrepreneurship outcomes by calculating and analysing sibling correlations (Lindquist et al 2016). We argue that sibling correlations are more complete and precise measures of predetermination, including the importance of genes, family background, and neighbourhood effects as determinants of entrepreneurship. Sibling correlations have been used before to study outcomes other than entrepreneurship and provide much broader measures of the importance of family background and neighbourhood effects than intergenerational associations (Solon 1999). Their interpretation is also straightforward – the higher the sibling correlation, the larger the importance of family background.

Their results?:

  • 25% of the variance in individuals’ decisions to become self-employed is explained by family background and community influences;
  • For incorporation, this is close to 35%;
  • These percentages are slightly higher when we consider measures of successful entrepreneurship such as above median years of self-employment and incorporation;
  • Brother correlations are always larger than sister correlations;
  • The largest correlation is for males with above median years of incorporation, which is close to 50%;
  • Mixed sibling correlations are consistently smaller than same-sex correlations.
  • Parental entrepreneurship status is quite important;
  • Parental education and income matter much less; and,
  • Family structure and immigrant status do not matter.
  • Parental self-employment is a prime explanatory force in individual self-employment, but not incorporation; and
  • Parental incorporation explains individual incorporation best, but not self-employment.
  • Between 56–78% of the sibling correlations in self-employment; and
  • Between 38–46% of the sibling correlations in incorporation.

The researchers conclude “that parental entrepreneurship and genes are the two most important factors generating sibling similarities in entrepreneurship.” Policy wise, the authors explain that “children appear to be able to learn about entrepreneurship through their family and community environment, which implies that it may be possible to teach entrepreneurship to young people.”

Check it out.

Density and Productivity

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A new study finds evidence that denser populations are more productive:

Is it selection, or the sorting of talents (Behrens et al. 2014) that leads only the most productive firms to locate in denser areas? Or do agglomeration economies explain why firms located in less dense environments are less productive?  Empirical evidence suggests that the main driver of differences in productivity is not selection (i.e. tougher competition inducing less productive firms to exit the market) but agglomeration economies (Combes et al. 2012). The usual suspects are the higher availability of services, better infrastructure, sharing of public goods, a denser labour market allowing for better matching, and technology spillovers (Duranton and Puga 2004). Using firm-level data for France, we confirm in a recent study that misallocation has a spatial dimension: resource allocation and the associated effect on productivity are related not only to firms’ characteristics, but also to the environment in which they operate (Fontagné and Santoni 2016). Denser commuting zones seem to offer a better match between employers and employees.

It’s a bit technical, but interesting nonetheless. Check it out.

Biased Regulators

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In their book Nudge, authors Richard Thaler and Cass Sunstein advocate what they call “libertarian paternalism”: a kind of governmental choice architecture that seeks to influence the choices choosers make. This restructuring tends to rely on small tweaks to the system, recognizing that people are often biased and irrational in their decision-making.

However, a new study shines light on an overlooked aspect of bias and policy. Economist and paper author David Hirshleifer explains,

What if the choice architects are subject to psychological bias? This could come from biases of regulators, politicians, or even economists. It can also come from the psychological biases of the voters who hire and fire political agents.

Teoh and I argue that important features of financial and accounting rules and regulation are shaped by psychological bias on the part of the architects, rather than as a useful remedy for the biases of the decision makers being acted upon.  Typically the resulting regulation is far from libertarian, as well.

We call the approach to understanding regulation as coming from smart and benevolent architects `Good Rules for Bad Users.’ (Libertarian paternalism is slightly different: `Good Suggestions for Bad Users.’) We feel the other side of the coin has been neglected, that the architects themselves may be biased, resulting simply in `Bad Rules.’ (This is not to say that all regulation is bad, but it does say that bad rules will sometimes be approved.)  We call this perspective the psychological attraction approach to financial and accounting regulation.

Specifically, we argue that some forms of regulatory ideas are good at ensnaring the attention, emotions, and cognitive biases of regulators and the public. Such regulations do not necessarily help others, on the whole, and indeed may have highly perverse effects. But people are attracted to certain rules because they are superficially appealing. This point applies even to accounting rules, which have evolved over centuries through the interactions of different users. Rules concerning what firms have to expense, what they can capitalize, whether they are required to be conservative in reporting their performance—all, we argue, have been influenced by heuristic intuitions, not just economic efficiency.

The biases of regulators have been addressed before by other researchers. It’s a glaring oversight among “nudge” advocates that needs to be continually studied.

Improving American Schools

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“The latest results [of the PISA exam],” reports The New York Times,

…reveal the United States to be treading water in the middle of the pool. In math, American teenagers performed slightly worse than they usually do on the PISA — below average for the developed world, which means they scored worse than nearly three dozen countries. They did about the same as always in science and reading, which is to say average for the developed world.

But that scoreboard is the least interesting part of the findings. More intriguing is what the PISA has revealed about which conditions seem to make smart countries smart. In that realm, the news was not all bad for American teenagers.

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Vertical: Math ranking; Horizontal: Spending, ages 6-15

The good news is that–although “the United States had not raised its average scores”–its

measures of equity…had improved. One in every three disadvantaged American teenagers beat the odds in science, achieving results in the top quarter of students from similar backgrounds worldwide.

This is a major accomplishment, despite America’s lackluster performance over all. In 2006, socioeconomic status had explained 17 percent of the variance in Americans’ science scores; in 2015, it explained only 11 percent, which is slightly better than average for the developed world. No other country showed as much progress on this metric. (By contrast, socioeconomic background explained 20 percent of score differences in France — and only 8 percent in Estonia.)

But what countries had the best outcomes overall?

Generally speaking, the smartest countries tend to be those that have acted to make teaching more prestigious and selective; directed more resources to their neediest children; enrolled most children in high-quality preschools; helped schools establish cultures of constant improvement; and applied rigorous, consistent standards across all classrooms.[ref]For example, see the Smithsonian on Finland’s school system.[/ref]

Of all those lessons learned, the United States has employed only one at scale: A majority of states recently adopted more consistent and challenging learning goals, known as the Common Core State Standards, for reading and math. These standards were in place for only a year in many states, so Mr. Schleicher did not expect them to boost America’s PISA scores just yet. (In addition, America’s PISA sample included students living in states that have declined to adopt the new standards altogether.)…Standards like the Common Core exist in almost every high-performing education nation, from Poland to South Korea.

Check it out.

Happy New Year…Sort Of

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Today I’ve been thinking about a First Things piece by Orthodox philosopher David B. Hart written several years ago on the festivities of New Year’s. He notes

that my family never observed the day when I was growing up, and always made a point of going to bed well before midnight on New Year’s Eve.

In part, I think, this was simply because everyone in my family tends to be of a somewhat reclusive temperament, and so is generally averse to loud noises, close crowds, or forced jollity. In larger part, though, I think we always saw New Year’s Day—when treated as a kind of feast day of its own—as a profane intrusion on the twelve days of Christmas, which was by far our favorite time of year. From Christmas Eve to Twelfth Night, we were fairly good at keeping the festal flames alight and really had no need of any other excuse for our good spirits.

There is, of course, a feast of the Church traditionally celebrated on January 1st: to wit, the Feast of the Circumcision, considered important not merely as a commemoration of an episode from the biography of Christ, but as a remembrance of the first blood shed by Christ for the sake of the world’s redemption. But that obviously has nothing whatever to do with the arrival of the new year. In fact, throughout the Middle Ages, there was little firm agreement regarding what day really marked the inauguration of a new year, even though the Roman mensal calendar was in continual use.

The “real” 12 days of Christmas (not the song), according to Christianity Today, are as follows:

The traditional Christian celebration of Christmas is exactly the opposite [of the modern version]. The season of Advent begins on the fourth Sunday before Christmas, and for nearly a month Christians await the coming of Christ in a spirit of expectation, singing hymns of longing. Then, on December 25, Christmas Day itself ushers in 12 days of celebration, ending only on January 6 with the feast of the Epiphany.

Exhortations to follow this calendar rather than the secular one have become routine at this time of year. But often the focus falls on giving Advent its due, with the 12 days of Christmas relegated to the words of a cryptic traditional carol. Most people are simply too tired after Christmas Day to do much celebrating.

…The three traditional feasts (dating back to the late fifth century) that follow Christmas reflect different ways in which the mystery of the Incarnation works itself out in the body of Christ. December 26 is the feast of St. Stephen—a traditional day for giving leftovers to the poor (as described in the carol “Good King Wenceslas”). As one of the first deacons, Stephen was the forerunner of all those who show forth the love of Christ by their generosity to the needy. But more than this, he was the first martyr of the New Covenant, witnessing to Christ by the ultimate gift of his own life. St. John the Evangelist, commemorated on December 27, is traditionally the only one of the twelve disciples who did not die a martyr. Rather, John witnessed to the Incarnation through his words, turning Greek philosophy on its head with his affirmation, “The Word was made flesh, and dwelt among us” (John 1:14, KJV).

On December 28, we celebrate the feast of the Holy Innocents, the children murdered by Herod. These were not martyrs like Stephen, who died heroically in a vision of the glorified Christ. They were not inspired like John to speak the Word of life and understand the mysteries of God. They died unjustly before they had a chance to know or to will—but they died for Christ nonetheless. In them we see the long agony of those who suffer and die through human injustice, never knowing that they have been redeemed. If Christ did not come for them too, then surely Christ came in vain. In celebrating the Holy Innocents, we remember the victims of abortion, of war, of abuse.

…In the Middle Ages, these three feasts were each dedicated to a different part of the clergy. Stephen, fittingly, was the patron of deacons. The feast of John the Evangelist was dedicated to the priests, and the feast of the Holy Innocents was dedicated to young men training for the clergy and serving the altar. The subdeacons (one of the “minor orders” that developed in the early church) objected that they had no feast of their own. So it became their custom to celebrate the “Feast of Fools” around January 1, often in conjunction with the feast of Christ’s circumcision on that day (which was also one of the earliest feasts of the Virgin Mary, and is today celebrated as such by Roman Catholics).

Hart explains that as an adult his own family somewhat celebrates New Year’s Eve/Day. “But, on the whole,” he writes, “it is still a minor observance for us, and nothing to compare to the celebrations we like to hold on Twelfth Night, the eve of Epiphany, when the last of the Christmas presents are opened, games are played, and the decorations come down from the tree. (I know many Americans think of Christmas as a single day and like to clear away the trappings of the season well before the fifth of January, but that is sheer barbarism, if you ask me, morally only a few steps removed from human sacrifice, cannibalism, or golf.) The long and the short of it, then, is that I have really nothing much to say about New Year’s Day.” He concludes, “Whatever the case, I hope any of you who plan to spend [New Year’s Eve] chasing after strange gods will find something of interest in it. At my house, however, we will still be celebrating Christmas.”

All in all, I find this appealing. Mormonism doesn’t have much of a Christmas tradition outside the American version, but this doesn’t mean we can’t draw on the traditions of our Christian neighbors. Perhaps celebrating “the first blood shed by Christ for the sake of the world’s redemption” on January 1st isn’t such a bad idea.

The Circumcision by Luca Signorelli

GMU Interview with Joe Henrich

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Joseph Henrich (left), Tyler Cowen (right)

Anthropologist and cultural psychologist Joseph Henrich is an academic whose work I’ve been following over the last couple years. His work has been highlighted multiple times here at Difficult Run. He is a co-author of some of my favorite studies in the last decade or so. And his latest book–The Secret of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter–looks absolutely amazing (it’s waiting patiently for me on my Kindle).

He recently sat down with economist Tyler Cowen for a segment of Conversations with Tyler at GMU’s Mercatus Center. The interview is fascinating as they discuss Henrich’s work on cultural evolution and its implications for both today and the future. What perhaps excited me the most was Henrich’s discussion of his work-in-progress on marriage norms and the development of Western individualism:

In my latest project I’m really looking at the kind of spread of the Western church into Europe and how it transformed the social structure in ways that I think led to individualism, it led to a different kind of cultural psychology that would eventually pave the way for secular institutions and economic growth. The church is the first mover in that account…When the church first began to spread its marriage-and-family program where it would dissolve all these complex kinship groups, it altered marriage. So it ended polygyny, it ended cousin marriage, which…forced people to marry further away, which would build contacts between larger groups. That actually starts in 600 in Kent, Anglo-Saxon Kent. Missionaries then spread out into Holland and northern France and places like that. At least in terms of timing, the marriage-and-family program gets its start in southern England.

This project is in its early stages (according to the email Henrich sent me), but it’s something I’m greatly anticipating. The entire interview is worth watching/listening to. Cowen provides both insightful feedback and even pushback, making the discussion a productive one. Check it out.

Unintended Consequences: Redistribution and the World’s Poor

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Last summer, two consultants at the Minneapolis Fed published a paper entitled “On the Ethics of Redistribution.” They begin by framing the discussion with a global perspective:

A typical American in the lowest 5 percent of income (for America) has a higher income than 95 percent of Indians, 80 percent of Chinese and 50 percent of Brazilians. In the United States, 99 percent of households have indoor plumbing (a toilet with a sewer connection). In India, it’s 12 percent. For Americans below the poverty line, nearly three-quarters have a car (and 31 percent have two or more) and 97 percent have air conditioning. In India, only 5 percent of all households have cars and 2 percent of all households have air conditioning.

This then begs the following question: Are policies that purport to help the comparatively well-off (those at, say, the poverty line in developed countries) at the expense of the superlatively well-off (the rich in developed countries) desirable from the behind-the-veil perspective assuming that that perspective is global?

Increasing world trade is an example of the tension between policies that help those in developing countries versus those that help those lower in the income distribution in developed countries. According to a World Bank Study, in the three decades between 1981 and 2010, the rate of extreme poverty in the developing world (subsisting on less than $1.25 per day) has gone down from more than one out of every two citizens to roughly one out of every five, all while the population of the developing world increased by 59 percent. This reduction in extreme poverty represents the single greatest decrease in material human deprivation in history.

But this decrease in extreme poverty in the developing world has coincided with a marked increase in income inequality in the developed world, and the latter has received much more attention, at least from policy analysts in these richer nations.

The authors then move to the subject of skilled/unskilled labor and the effects of redistribution:

Image result for redistributionIn a world with just two countries, one developed and the other poor, output is produced in each by a combination of skilled workers and unskilled workers. When they’re young, unskilled workers have the opportunity to become skilled by working with older, skilled workers.

…A rich-country policy to tax high incomes will redistribute income (within that country) from those with high innate abilities (and, by assumption, with the ability to become highly skilled) to those with lower innate abilities. In so doing, that policy will reduce inequality within the rich country, but it will also create disincentives there to becoming highly skilled and thereby reduce the global supply of skilled workers. This reduced supply of skilled workers from the developed country then reduces opportunities for young workers in the poor country to become skilled.

Applying the Harsanyi-Rawls behind-the-veil-of-ignorance criterion but considering only people in the developed country would appear to make this a beneficial policy because it helps the poor of that rich country. But, in our example, it hurts the poorest of the poor in the world, those in the developing nation. A proper application of the behind-the-veil-of-ignorance criterion—one that takes all people in all countries into consideration—can thus lead to the implication that such a policy is extremely undesirable. At the very least, a proper application of the criterion says that redistribution within rich countries imposes costs on people in other countries which need to be taken into account.

They conclude, “A giant literature in public finance justifies such social welfare functions by appealing to the veil-of-ignorance. Our point simply is that those who use this criterion should weight the welfare of poor people in Chad, the world’s poorest nation, very heavily. To our knowledge, very little if any of the relevant research does so.”

Geography and Unemployment

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Does geography contribute to unemployment? “In a paper published in 1965,” reports The Economist,

John Kain, an economist at Harvard University, proposed what came to be known as the “spatial-mismatch hypothesis”. Kain had noticed that while the unemployment rate in America as a whole was below 5%, it was 40% in many black, inner-city communities. He suggested that high and persistent urban joblessness was due to a movement of jobs away from the inner city, coupled with the inability of those living there to move closer to the places where jobs had gone, due to racial discrimination in housing. Employers might also discriminate against those that came from “bad” neighbourhoods. As a result, finding work was tough for many inner-city types, especially if public transport was poor and they did not own a car.

Is there any data to back up this theory?

A new paper,[ref]This is a 2014 article.[/ref] published by the National Bureau of Economic Research…looks at the job searches of nearly 250,000 poor Americans living in nine cities in the Midwest. These places contain pockets of penury: unemployment in inner Chicago, for instance, is twice the average for the remainder of the city. Even more impressive than the size of the sample is the richness of the data. They are longitudinal, not cross-sectional: the authors have repeated observations over a number of years (in this case, six). That helps them to separate cause and effect. Most importantly, the paper looks only at workers who lost their jobs during “mass lay-offs”, in which at least 30% of a company’s workforce was let go. That means the sample is less likely to include people who may live in a certain area, and be looking for work, for reasons other than plain bad luck.

For each worker the authors build an index of accessibility, which measures how far a jobseeker is from the available jobs, adjusted for how many other people are likely to be competing for them. The authors use rush-hour travel times to estimate how long a jobseeker would need to get to a particular job.

If a spatial mismatch exists, then accessibility should influence how long it takes to find a job. That is indeed what the authors find: jobs are often located where poorer people cannot afford to live. Those at the 25th percentile of the authors’ index take 7% longer to find a job that replaces at least 90% of their previous earnings than those at the 75th percentile. Those who commuted a long way to their old job find a new one faster, possibly because they are used to a long trek.

Governments could seek to “help workers either to move to areas with lots of jobs, or at least to commute to them. That would involve scrapping zoning laws that discourage cheaper housing, and improving public transport. The typical American city dweller can reach just 30% of jobs in their city within 90 minutes on public transport. That is a recipe for unemployment.”[ref]AEI’s James Pethokoukis has a good piece expanding on this.[/ref]