Society

McCloskey on Piketty

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Earlier this year, The Spectator ran a great article contrasting the worldviews of French economist Thomas Piketty and Chicago-style economist Deirdre McCloskey. “Piketty (for those who have not followed the story so far) worries about capital and, in particular, the tendency for those who already have it to get more,” the article proclaims. “…McCloskey, by contrast, has long argued that economists are far too preoccupied by capital and saving…Th[e] jump in incomes [in the 19th century] came about not through thrift, she says, but through a shift to liberal bourgeois values that put an emphasis on the business of innovation. In place of capitalism, she talks of ‘market-tested innovation and supply’ as the active ingredient of our economic system. It is incidentally a system ‘drenched’ in values and ethics overlooked by economists.” And it is this that gets to the heart of the matter: “whether capital — past accumulation of savings — gets to devour the future, or whether the future is created afresh by each generation. This argument is a struggle between those who think riches are created from riches, and those who think riches are created from rags. Are big profits best viewed as a generous return on capital, in the way that worries Piketty? Or as coming from innovation that ultimately benefits us all?”

Well, McCloskey now has a full response to Piketty’s Capital in the Twenty-First Century forthcoming in the Erasmus Journal of Philosophy and Economics and available on her website. The title? “Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capital in the Twenty-First Century.” From demonstrating Piketty’s misunderstanding of supply and demand curves (“He is in short not qualified to sneer at self-regulated markets…because he has no idea how they work”) to noting the strange obsession with inequality (“…and [apparently] we care ethically only about the Gini coefficient, not the condition of the working class”), McCloskey does a fine job in her 50 pages painting a very different picture of the world. However, my favorite portion has to be the following:

Righteous, if inexpensive, indignation inspired by survivor’s guilt about alleged “victims” of something called “capitalism,” and envious anger at the silly consumption by the rich, do not invariably yield betterment for the poor. Remarks such as “there are still poor people” or “some people have more power than others,” though claiming the moral high-ground for the speaker, are not deep or clever. Repeating them, or nodding wisely at their repetition, or buying Piketty’s book to display on your coffee table, does not make you a good person. You are a good person if you actually help the poor. Open a business. Arrange mortgages that poor people can afford. Invent a new battery. Vote for better schools. Adopt a Pakistani orphan. Volunteer to feed people at Grace Church on Saturday mornings. Argue for a minimum income and against a minimum wage. The offering of faux, counterproductive policies that in their actual effects reduce opportunities for employment, or the making of indignant declarations to your husband after finishing the Sunday New York Times Magazine, does not actually help the poor (pg. 34).

What she said.

President Obama and Immigration

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I’ve blogged before about the benefits of immigration reform and (more) open borders. I also think our path to citizenship is a mess. So, my initial reaction to the President’s announcement regarding immigration was mixed. Peter Suderman at Reason has a pretty balanced take on why my reactions were mixed. In response to the claims that President Obama’s actions are “unprecedented and illegal,” Suderman notes the following:

1. Probably legal: “As Reason’s Shikha Dalmia and Case Western Reserve University Law Professor Jonathan Adler have noted, the president has a great deal of authority to set enforcement priorities and exercise discretion when it comes to immigration law. Even some of the loudest critics of Obama’s action have come around to the idea that, at least technically, it would not exceed the president’s discretionary power, even if it would constitute an unusual and strained use of it.”

2. It is unprecedented: “The administration and some of its supporters are arguing that various presidents, including Republicans, have taken comparable steps before, limiting deportations through executive order, and that makes this well within political norms. This argument leaves out crucial details about congressional involvement and support for those previous presidential orders.” These crucial details have been well-documented by David Frum at The Atlantic.

3. It is a further expansion of executive power and the norms around using it: “Just because an executive action is technically legal does not mean that it falls within legal norms, and executive power can be expanded not only through explicit assertions of previously off-limits authority, but by making use of powers that existed but were never used, or never used to such an extent…Anyone who worries about executive overreach, even those supportive of expanded immigration, ought to be wary of the precedent this move, and the thin line of reasoning behind it, could set.” Expanding the power of one man should be troubling.

4. Executive action may be preferable to reform bill: “If you favor making immigration easier and more straightforward, and think that draconian enforcement efforts are both wasteful and counterproductive, then there are real upsides to executive action when compared to a big congressional overhaul.” Increased border control funding and an “incredibly invasive form of workplace nannying which would create huge hassles for workers and employers, as well as large numbers of false positives—making hiring, and finding employment, an even harder process than it already is.”

5. Executive action could poison broader, more stable reform: “There’s no question that the immediate political consequence would be to further outrage Republicans, and turn a party that has long had a mix of views about the virtues of expanding immigration into one dominated by opposition…But the backlash might not just be the immediate consequence, and it might not just be limited to the congressional GOP and its core supporters; unilateral action might result in a deepened long-term opposition to greater immigration as well.” I highly doubt this has anything to do with the morality of immigration. It is likely nothing more than a political move meant “to provoke Republicans into a frothing rage, in hopes that they will do something politically stupid as a result. (They might oblige.)”

Suderman concludes with caution:

This is not to simply condemn Obama’s plan, but instead to warn enthusiastic supporters that the choice to act at this time, in this way, without legislative backing or public support, might be satisfying in the moment, but also stands a real chance of closing off opportunities for a better, more lasting solution at some point in the future. Consensus is hard, and sometimes it seems impossible, but in politics, it’s also important.

President Eyring at the Vatican

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President Henry B. Eyring–LDS apostle and First Counselor in the First Presidency–participated in The Complementarity of Man and Woman: An International Interreligious Colloquium at Vatican City on Nov. 18, 2014. His presentation was entitled “To Become as One.” The video is below.

Julie Smith at Times & Seasons had an excellent insight about the following quote from President Eyring:

Her capacity to nurture others grew in me as we became one. My capacity to plan, direct, and lead in our family grew in her as we became united in marriage. I realize now that we grew together into one—slowly lifting and shaping each other, year by year. As we absorbed strength from each other, it did not diminish our personal gifts.

Smith notes,

What I hear him saying is that men and women come to marriage with a different set of roles/characteristics,[ref]For a social scientific view of these different set of characteristics, see Steven Pinker, The Blank Slate: The Modern Denial of Human Nature (New York: Penguin Books, 2002) and Gender and Parenthood: Biological and Social Scientific Perspectives, ed. W. Bradford Wilcox, Kathleen Kovner Kline (New York: Columbia University Press, 2013).[/ref]  but one goal of marriage is for them to teach each other and to adopt each other’s roles. I sometimes hear in LDS venues a rather opposite idea–one I find theologically problematic inasmuch as it suggests that men and women should maintain separate characteristics, something I find incompatible with both the idea of the perfection of Christ and his ability to serve as an example for all both men and women, as well as the idea of men and women striving to themselves become perfected. His thinking here can be a great bridge from older teachings about gender difference to a newer vision where those differences can still be acknowledged but won’t be seen as limiting. I especially like his idea that, as he took on nurturing and his wife took on leading, it didn’t diminish either of them. (Contra language we sometimes hear bemoaning the loss of femininity and masculinity.)[ref]A fairly popular post by evangelical blogger Rachel Held Evans makes similar observations.[/ref]

Smith’s observation reminds me of a point made by Texas A&M professor and fellow Latter-day Saint Valerie M. Hudson regarding the telos (“end,” “purpose,” “goal”) of marriage:

What we [Mormons] understand from our doctrine is that the telos of marriage is to ground every human family in real, lived, embodied gender equality.  And then, as a consequence, all reproduction would occur only within that context of gender equality.  If the ideal were lived, then every son and daughter of God would be born into a family that lived gender equality, and thus each would learn how to form such a relationship when they themselves came of age.  Reproduction is the fruit, not the root, of what God intended in establishing marriage. 

That is why it doesn’t matter who’s fertile, and whether a marriage of infertile people is a marriage is beside the point.  The test of whether you have a marriage or not is whether it is gender-equal monogamy.

For Hudson, companionate heterosexual monogamous marriage is a matter of gender equality and human peace incarnate.[ref]See her Sex & World Peace (New York: Columbia University Press, 2012).[/ref] I think President Eyring’s talk could lead to exciting new ways of discussing gender in the LDS Church.

New AEI Study on Family Structure

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A brand new study from the American Enterprise Institute (authored by sociologist W. Bradford Wilcox and economist Robert Lerman) looks at the impact of family structure. Its key findings:

  1. The retreat from marriage—a retreat that has been concentrated among lower-income Americans—plays a key role in the changing economic fortunes of American family life. We estimate that the growth in median income of families with children would be 44 percent higher if the United States enjoyed 1980 levels of married parenthood today. Further, at least 32 percent of the growth in family-income inequality since 1979 among families with children and 37 percent of the decline in men’s employment rates during that time can be linked to the decreasing number of Americans who form and maintain stable, married families.
  2. Growing up with both parents (in an intact family) is strongly associated with more education, work, and income among today’s young men and women. Young men and women from intact families enjoy an annual “intact-family premium” that amounts to $6,500 and $4,700, respectively, over the incomes of their peers from single-parent families.
  3. Men obtain a substantial “marriage premium” and women bear no marriage penalty in their individual incomes, and both men and women enjoy substantially higher family incomes, compared to peers with otherwise similar characteristics. For instance, men enjoy a marriage premium of at least $15,900 per year in their individual income compared to their single peers.
  4. These two trends reinforce each other. Growing up with both parents increases your odds of becoming highly educated, which in turn leads to higher odds of being married as an adult. Both the added education and marriage result in higher income levels. Indeed, men and women who were raised with both parents present and then go on to marry enjoy an especially high income as adults. Men and women who are currently married and were raised in an intact family enjoy an annual “family premium” in their household income that exceeds that of their unmarried peers who were raised in nonintact families by at least $42,000.
  5. The advantages of growing up in an intact family and being married extend across the population. They apply about as much to blacks and Hispanics as they do to whites. For instance, black men enjoy a marriage premium of at least $12,500 in their individual income compared to their single peers. The advantages also apply, for the most part, to men and women who are less educated. For instance, men with a high-school degree or less enjoy a marriage premium of at least $17,000 compared to their single peers.

These findings (among others) led Larry Kudlow to write elsewhere, “While restoring economic growth may be the great challenge of our time, this goal will never be realized until we restore marriage. In short, marriage is pro-growth. We can’t do without it.”

Check it out.

 

New Brookings Essay Series

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The Brookings Institution has an essay series on character and opportunity. As the site describes it,

This essay collection contains contributions from leading scholars in the fields of economics, psychology, social science, and philosophy. It provides a kaleidoscope of views on the issues raised by a policy focus on the formation of character, and its relationship to questions of opportunity. Can ‘performance’ character be separated from ‘moral’ character? Should we seek to promote character strengths? If so, how?

Definitely worth checking out.

Five Books on War

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poppy-fields

Reflecting on Armistice Day, that is, Veteran’s Day, I want to recommend two memoirs, two novels, and one stage play dealing with war. Something a little outside the obvious choices.

 

Bugles and a Tiger – John Masters.

John Masters was one of the last British officers in India, where his family had served for generations. In the book he relates how he became an officer in a Gurkha regiment, how he came to love his men, and how he himself grew into a man. For Masters, this meant honour and loyalty. He bitterly regretted not defending a subordinate early on in his career. “I discovered now that being ashamed of yourself is worse than any fear.  Duty, orders, loyalty, obedience – all things boiled down to one simple idea:  whatever the consequences, a man must act so that he can live with himself.” The Gurkhas were mercenaries from Nepal, and their wives were frequently loose. Masters explains that he resisted the temptation by remembering that to act on it would be to betray the trust of his men. The depiction of his first assignment in the Afghan frontier in the 1930s is superb. Masters was a warm, intelligent, and sensitive writer who never lost track of how every person is an individual.

 

Quartered Safe Out Here – George MacDonald Fraser.

George MacDonald Fraser was nineteen when he was sent to fight the Japanese in the jungles of Burma. Genteel and academically inclined, he was the youngest in a section of very hard men from the

In one incident, MacDonald Fraser had been made to carry a large, unlabelled tin of fruit, and fallen down a ravine. After being nearly blown up by a Japanese ambush because of his youthful stupidity, he brings the fruit tin back to his unit. The ‘gastronomes’ and ‘Epicureans’ expect to add some fruit to their condensed milk, and are not at all pleased to discover that the tin contains carrots in brine.

The book is a powerful window into the experience and mentality of soldiers during war. MacDonald Fraser freely admits that the campaign in Burma was nasty, ugly, and brutal. He really has no patience for what he terms “virtue for mere appearance’s sake,” and explains very persuasively how attitudes were different in his generation.

 

The White Guard – Mikhail Bulgakov.

This is first and foremost a deeply spiritual book. It is also semi-autobiographical. The novel tells the story of a family in Kiev during the chaos of Russian Civil War, and portrays the collapse of old values, embodied by the officer’s ethos. People abandon their honour for self-preservation and their ideals for opportunism, and it is all subtly shown to be the outward manifestation of a massive spiritual crisis leading up to Judgment Day. Bulgakov is my favourite Russian writer and his ability to tell a story is unrivalled. One of the most moving passages involves the officer of a cadet unit. When the cadets are abandoned by the rest of the army during battle for the city, the officer commands them to rip off their insignia and flee for safety. He dies covering their flight with a machine gun, and this sense of duty- honour- is shown to be love, and ultimately godly.

 

The Good Soldier Schwejk – Jaroslav Hasek.

Without this book there would be no Catch-22, or any other book on the absurdity of military service and war. Schwejk is a middle-aged Czech in 1914, when they still (unhappily) belonged to the Austro-Hungarian Empire. He joins the army, it seems, with the sole purpose of making it a laughing-stock. He plays the good-natured fool, but always manages to subvert Austria’s oppressive authority. For example, when he receives a draft notice, Schwejk claims to suffer from rheumatism, but insists on being pushed to the recruiting center in a wheelchair. Along the way, he brandishes his crutches shouting patriotic victory slogans. Schwejk’s deliberate misadventures are vastly entertaining, and Hasek was one of Eastern Europe’s masters of the absurd.

 

Journey’s End – R. C. Sherriff.

There is no war play more powerful than this. Since 2014 is also the 100th anniversary of the First World War, it would be a disgrace not to mention Journey’s End. Ten years ago I visited a good friend in London who took me to the West End to watch a revival of Sherriff’s play. I was absolutely floored. The play is set in an officer’s trench in 1918, several months before war’s end. By this point, the cast has practically seen it all. They are four years into a war where going over the trenches is almost guaranteed to be a death sentence. The boredom is excruciating, but who wants to replace it with action? What they are all trying to do is to escape from the realities of war. Some plant flowers, some read, and some drink. Raleigh, a new, very young officer arrives at the front to serve under Stanhope, a man who is dating his sister, and whom he worships. Stanhope knows that as an officer, his duty is to stand by his men, and his obligation to society requires that he display nerves of steel. He refuses to take leave in order to escape danger like others are doing, but he has become an alcoholic. He is deathly afraid of letting people down. Raleigh is excited to be selected for a raid behind enemy lines, but when almost everyone else is killed, his naïve enthusiasm is gone, and he is killed shortly after. The play intersperses the horrors of war with flashes of brilliant, dark humour, and deals with topics from food to love to honour and cowardice. None of the characters are caricatures, and Sherriff is not preachy. The British comedy, Blackadder Goes Forth, is actually a tribute to the play, which is where it gets most of its ideas and characters.

Happiness Is Not Utility

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2014-11-14 City and Rural Area Happiness

In recent years, economists and policy makers have started to measure happiness (“subjective wellbeing”) and design policies to maximize it. In a paper for Vox, researchers point out that happiness isn’t the same thing as utility or welfare. This means that a government’s attempts to maximize happiness may work to undermine social welfare.

In a series of novel experiments and surveys, Benjamin et al. (2011, 2012, 2013) conduct surveys about actual or hypothetical choices people make and measure the expected happiness associated with each choice. They find that actual choices and happiness-maximising choices are positively correlated. But they are not identical. Respondents are prepared to sacrifice happiness in furtherance of another objective, such as a higher income (Benjamin et al. 2011).

The researchers conducted their own research into choices people make about where to move and confirmed the basic finding: people are willing to move to unhappy places if there is an economic incentive to do so. This means that happiness is only one variable that people are trying to maximize in their lives. They have other goals. Income might be one but, as the researchers note, other ideals like “freedom, nobility, and self-respect” might also play a role.

This isn’t just academic. It’s actually another stern lesson about the limits of centralized planning to improve our lives. Underlying this entire discussion is one simple fact: no one actually knows what human beings are trying to maximize. The concept of “social welfare” is undefined, and so efforts to use policy to maximize it are suspect, at best. A better aim is probably to try and maximize freedom so that people will be best able to maximize their own welfare as they choose to define it, rather than relying on some universal definition being imposed society-wide.

New NBER Study on Minimum Wage

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On the heels of Nathaniel’s latest minimum wage post, I thought I’d point to a brand new NBER working paper titled “More Recent Evidence on the Effects of Minimum Wages in the United States.” As one summary explains,

For years, [David] Neumark has battled claims by other economists, such as University of Massachusetts professor Arindrajit Dube, that minimum wage hikes have no effect on employment. This latest paper offers more evidence that employment prospects for teenagers are diminished most by the minimum wage. 

Even though teenagers are generally not relying on minimum wage income for living expenses, jobs give teenagers their first opportunity for work experience that is crucial for becoming a productive worker later in life. For disadvantaged teenagers, a minimum wage job can develop skills that provide an opportunity to move out of the lower-class.

While state and local minimum wage increases deprive some of jobs, even more young people would be out of work if the federal government increased the minimum wage nationwide. Income levels and cost of living vary widely between states. The hourly median wage varies from a high of $37.59 in Los Alamos County, New Mexico, to a low of $10.81 in Brownsville-Harlingen, Texas. The federal minimum wage is an attempt to impose an oversimplified, cure-all prescription to the complex and diverse causes of poverty.

…Neumark’s new paper shows once again that flashy sound bites such as “Raise the Wage” make for quick political slogans, but raising the minimum wage will continue to price teens out of jobs.

The minimum wage, like other price controls, has unintended consequences.

 

Hacked Photos and Conservatives

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2014-11-07 FTND JLaw

Compromise and innovative solutions are both more likely when a problem is seen as important but not intrinsically partisan. Unfortunately, Democrats have decided to try and turn women’s issues into a partisan issue by declaring a Republican “war on women,” and an overwhelmingly liberal media has been complicit in legitimizing this narrative. I’m not going to commit the same mistake in reverse: I understand that many social liberals (1) care deeply about these issues and (2) have perspectives and ideas that can be part of a common-ground, consensus-building approach.

Instead, let’s look at how a socially conservative voice reacted to the hacked photo scandal. I’m using the word “scandal” intentionally because there is a scandal, and the scandal was the fact that so many people went out and looked for nude photos of Hollywood stars that had been illegally and immorally stolen from their private phones. Fight the New Drug–the anti-porn site I’ve cited frequently before–was clear on this point from the very start:

Note that we don’t use the word “leaked photos” in this post. That’s because the term “leaked” is a soft, misleading word that implies that these photos somehow found their way onto the internet by the celebrity or someone close to them. Not the truth. These photos were illegally hacked and stolen, unknowingly to those violated.

The post goes on to directly address those who “are judgmental and [say] that if the women hadn’t taken these photos in the first place, that they wouldn’t be in this position.” A lot of people took this position, and I think there was an unspoken perception that it was predominantly conservatives who would leap to blaming the victims. But FTND–a very conservative group–demonstrates that victim blaming isn’t a partisan issue, or at least that it need not be one.

The story got a little more interesting after Vanity Fair released an interview with Jennifer Lawrence.[ref]She was one of the stars who was victimized by the attack[/ref] In the article, Lawrence wrote–probably in an offhand way–that “either your boyfriend is going to look at porn or he’s going to look at you.” That was the line that prompted the open letter response from Fight The New Drug. The letter starts by emphasizing again that Lawrence bore no guilt whatsoever for the hacking of her phone[ref]I realize it’s obvious when you write it like that, but apparently not everyone grasps the obviousness.[/ref] The letter then goes on:

We’re sorry that society has been “pornified” and that we are living in a culture that thinks that hacked and stolen photos of naked people are something to seek out, cheer for, laugh about, and spread around. With a society that thinks a woman is only as good as her body, it’s easy to see why you would feel like your boyfriend would turn to porn even when dating a talented and beautiful woman like yourself.

Think about this question, Jennifer. Should any person ever have to feel that they need to give their partner something because if they don’t then their partner will turn away and get it from someone else?

That’s a pretty damn good question, if you ask me. And I think the point it raises is a very important one, and one that conservatives are perhaps uniquely able to draw attention to. As Lawrence told Vanity Fair, she had people she knew personally who looked at the pictures online. To me, that is one of the most disturbing details of the entire story. We’ve reached a point as a society where our appetite for voyeuristic photos has reached a point where even people who personally know the victim of this “sex crime”[ref]Lawrence’s own words.[/ref] apparently see nothing wrong with participating themselves.

On the other hand, however, that incredible moral blindness does have a kind of twisted logic to it. Lawrence framed the central problem with the theft as being one of violated consent:

It does not mean that it comes with the territory. It’s my body, and it should be my choice, and the fact that it is not my choice is absolutely disgusting.

She’s absolutely right that no one has any right whatsoever to look at sexual photos that are stolen. But what about the implied other side of that coin: do we really have a moral right to look at sexual photos that aren’t stolen? I don’t think that we do. I think that it’s a horrible myth to believe that, just because a woman gives consent to have sexual photos taken and publicized, that she is somehow empowered. There is an intrinsic violation in using the image of another human as a means of sexual gratification. Sexual imagery is always dehumanizing, not just when the photos are stolen.

No one has any excuse to look at the stolen photos of Lawrence (or the other stars), but I–along with FTND–question whether any one should be looking at sexually explicit photos of any kind. Once you accept that pornography is OK, the moral blindness sets in. Once you are living in a paradigm where it is acceptable and routine to treat human beings as means to ends and that it is OK to sexually objectify anyone, you’re already starting down a slippery slope. And, as we’ve learned, no matter how much consent should matter it is reduced to little more than a speed bump in that paradigm.

New Manhattan Institute Report on Inequality

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Inequality expert Scott Winship
Inequality expert Scott Winship

Scott Winship at the Manhattan Institute has a new study[ref]A summary can be found here.[/ref] out on inequality and prosperity. His key findings are:

1. Across the developed world, countries with more inequality tend to have, if anything, higher living standards. The exception is that countries with higher income concentration tend to have poorer low-income populations.

2.  However, when changes in income concentration and living standards are considered across countries—a more rigorous approach to assessing causality—larger increases in inequality correspond with sharper rises in living standards for the middle class and the poor alike.

3.  In developed nations, greater inequality tends to accompany stronger economic growth. This stronger growth may explain how it is that when the top gets a bigger share of the economic pie, the amount of pie received by  the middle class and the poor is nevertheless greater than it otherwise would have been. Greater inequality can increase the size of the pie.

4. Below the top 1 percent of households—and prior to government redistribution—developed nations display levels of inequality squarely in the middle ranks of nations globally. American income inequality below the top 1 percent is of the same magnitude as that of our rich-country peers in continental Europe and the Anglosphere.

5. In the English-speaking world, income concentration at the top is higher than in most of continental Europe; in the U.S., income concentration is higher than in the rest of the Anglosphere.

6. Yet—with the exception of small countries that are oil-rich, international financial centers, or vacation destinations for the affluent—America’s middle class enjoys living standards as high as, or higher than, any other nation.

7.  America’s poor have higher living standards than their counterparts across much of Europe and the Anglosphere, while faring worse than poor residents of Scandinavia, Germany, Austria, Switzerland, the Low Countries, and Canada.

 

Check it out.