Progress: Lecture by Johan Norberg

This is part of the DR Book Collection.

Image result for progress norbergSwedish intellectual Johan Norberg has penned a readable, optimistic, and data-driven book on the progress the world has made over the last 200+ years. As the title–Progress: Ten Reasons to Look Forward to the Future–suggests, Norberg focuses on ten aspects of human well-being. Each one has improved dramatically over the last couple centuries:

  1. Food
  2. Sanitation
  3. Life expectancy
  4. Poverty
  5. Violence
  6. The environment
  7. Literacy
  8. Freedom
  9. Equality
  10. The next generation

As I was listening to the Audible version in the car, the section on poverty really got to me, especially this part:

According to some statisticians, 28 March 2012 was a big day for humanity. It was the first day in modern history that developing countries were responsible for more than half of global GDP, up from thirty-eight percent ten years earlier. This convergence makes sense. If people have freedom and access to knowledge, technology and capital, there is no reason why they shouldn’t be able to produce as much as people anywhere else. A country with a fifth of the world’s population should produce around a fifth of its wealth. That has not been the case for centuries, because many parts of the world were held back by oppression, colonialism, socialism and protectionism. But these have no diminished, and a revolution in transport and communication technology makes it easier to take advantage of a global division of labour, and use technologies and knowledge that it took other countries generations and vast sums of money to develop. This has resulted in the greatest poverty reduction the world has ever seen.[ref]Norberg, Progress, Kindle edition, Ch. 4.[/ref]

Me when this part came up in the car.

If you want a fantastic summary of some of the greatest achievements in human history, check it out. You can see a lecture by Norberg in the video below.

TSA link collection

Just a reminder as you travel this holiday season: the TSA is a total waste of money.

The following lists are nowhere close to comprehensive. They are just the links I happened to save over time. The first two groups (Fools, Criminals) are only anecdotes and are a small sample over the course of many years. However, the third group (Incompetent) involves larger sample sets and speaks to the central question: Does the TSA keep us safe?

Fools:
TSA fires screener caught sleeping in Seattle – CNN, January 6, 2003
Florida teen detained because her purse had an image of a gun – Yahoo News, December 2, 2011
TSA subjects wheelchair-bound three-year-old to humiliating search – The Daily Mail, March 19, 2012
TSA Apologizes To Family After Clip of 3-Year-Old Girl in Wheelchair Goes Viral – Huffington Post, February 21, 2013 (Note this is a separate instance than the previous story.)
TSA Humiliated Double Amputee Marine – KTLA, March 22, 2013
TSA Agents Detained Nine-Year Old Boy Because He Had A Pacemaker – Reason, August 23, 2016
A panty liner triggers a TSA pat-down – Washington Post, March 30, 2017

Criminals:
3 ex-TSA workers plead guilty to theft – Seattle Pi, September 23, 2005
TSA Screener Arrested [after taking money from a passenger’s wallet] – TMJ4, October 14, 2006
Ex-TSA agent sentenced for role in pot smuggling scheme at LAX – Daily Breeze, March 25, 2013
6 Shockingly Childish Abuses of Power by Airport Employees – Cracked, April 22, 2014
Suit: Man held 20 hours after asking to file TSA complaint – San Diego Tribune, February 4, 2015
Video Shows Airport Security Tackling Cancer Patient With Disability – Huffington Post, August 12, 2016
A TSA agent who may have lied about a bomb threat can’t be sued – Los Angeles Times op-ed, August 26, 2017 (Passenger threatens to file a complaint against TSA agent, so TSA agent falsely tells police passenger made a bomb threat.)

Incompetent
Airport screeners fail to see most test bombs – Seattle Times, October 28, 2006
The Things He Carried – The Atlantic, November 2008 (Atlantic correspondent carries prohibited items on to multiple flights while investigating what the TSA can actually detect.)
TSA’s Program to Spot Terrorists a $200M Sham? – CBS, May 19, 2010 “The program is failing to catch terrorists. It’s never even caught one.”
Does the TSA Ever Catch Terrorists? – Slate, November 18, 2010
TSA Source: Armed Agent Slips Past DFW Body Scanner – NBC, February 21, 2011
The case for abolishing the TSA – Vox, May 26, 2014
Acting TSA director reassigned after screeners failed tests to detect explosives, weapons – CNN, June 2, 2015 (Note in both 2006 and 2015 the TSA failed to detect the relevant items over 90% of the time.)

The TSA is Still Really Bad at Evaluating Risk – Reason, December 21, 2017
Please, TSA Workers, Don’t Come Back – Reason, January 9, 2019

And just for fun:

See also the related DR post: TSA: A Cost-Benefit Analysis

The DR Book Collection: Catch-Up #2

This is part of the DR Book Collection.

I’m behind on my book reviews, so I’m once again going to forego the mini-reviews and instead post the books’ descriptions with an accompanying video.

Image result for annie mckee how to be happy at workAnnie McKee, How to Be Happy at Work: The Power of Purpose, Hope, and Friendship (Harvard Business Review Press, 2017): “”I’m working harder than I ever have, and I don’t know if it’s worth it anymore.” If you’re a manager or leader, these words have probably run through your mind. So many of us are feeling fed up, burned out, and unhappy at work: the constant pressure and stress, the unending changes, the politics—people feel as though they can’t give much more, and performance is suffering. But it’s work, after all, right? Should we even expect to be fulfilled and happy at work? Yes, we should, says Annie McKee, coauthor of the bestselling Primal Leadership. In her new transformative book, she makes the most compelling case yet that happiness―and the full engagement that comes with it―is more important than ever in today’s workplace, and she sheds new light on the powerful relationship of happiness to individual, team, and organizational success. Based on extensive research and decades of experience with leaders, this book reveals that people must have three essential elements in order to be happy at work: A sense of purpose and the chance to contribute to something bigger than themselves; A vision that is powerful and personal, creating a real sense of hope; Resonant, friendly relationships. With vivid and moving real-life stories, the book shows how leaders can use these powerful pillars to create and sustain happiness even when they’re under pressure. By emphasizing purpose, hope, and friendships they can also ensure a healthy, positive climate for their teams and throughout the organization. How to Be Happy at Work deepens our understanding of what it means to be truly fulfilled and effective at work and provides clear, practical advice and instruction for how to get there—no matter what job you have” (Amazon).

Image result for a short stay in hellSteven L. Peck, A Short Stay in Hell (Strange Violin Editions, 2012): “As a faithful Mormon, Soren Johansson has always believed he’ll be reunited with his loved ones in an eternal hereafter. Then, he dies. Soren wakes to find himself cast by a God he has never heard of into a Hell whose dimensions he can barely grasp: a vast library he can only escape from by finding the book that contains the story of his life. In this haunting existential novella, author, philosopher, and ecologist Steven L. Peck explores a subversive vision of eternity, taking the reader on a journey through the afterlife of a world where everything everyone believed in turns out to be wrong” (Amazon).

Image result for the christ who heals givensTerryl L. Givens, Fiona Givens, The Christ Who Heals: How God Restored the Truth That Saves Us (Deseret Books, 2017): “In a world increasingly prone to doubt, a foundation in Christ is the only sure basis of a durable discipleship. And for Latter-day Saints, the Jesus Christ revealed through the Prophet Joseph Smith is, in some very significant ways, a different kind of Christ than the Jesus of modern Christianity. The Christ of the restored gospel collaborated with Heavenly Parents for our salvation even before the foundation of the world, “does not anything” save it be for our benefit (2 Nephi 26:24), and is determined to patiently guide and nurture every one of God’s children into an eternal heavenly family. Most significantly, this Christ does not rescue us from a condition of original sin or depravity. Rather, He is primarily a healer of the wounds incident to a long-planned sojourn, one intended to immerse us in the trials, pains, and soul-stretching of this mortal schoolroom. He is not only the most remarkable being in the history of religious thought; He is, in fact, The Christ Who Heals” (Amazon).

Image result for origins tysonNeil deGrasse Tyson, Donald Goldsmith, Origins: Fourteen Billion Years of Cosmic Evolution (W.W. Norton & Co., 2004): “Our true origins are not just human, or even terrestrial, but in fact cosmic. Drawing on recent scientific breakthroughs and the current cross-pollination among geology, biology, astrophysics, and cosmology, Origins explains the soul-stirring leaps in our understanding of the cosmos. From the first image of a galaxy birth to Spirit Rover’s exploration of Mars, to the discovery of water on one of Jupiter’s moons, coauthors Neil deGrasse Tyson and Donald Goldsmith conduct a galvanizing tour of the cosmos with clarity and exuberance” (Amazon).

Image result for the council of fiftyThe Council of Fifty: What the Records Reveal About Mormon History, ed. Matthew J. Grow, R. Eric Smith (BYU Religious Studies Center, Deseret Book, 2017): “Three months before his death, Joseph Smith established the Council of Fifty, a confidential group that he believed would protect the Latter-day Saints in their political rights and one day serve as the government of the kingdom of God. The Council of Fifty operated under the leadership of Joseph Smith and then Brigham Young, playing a key role in Joseph Smith’s presidential campaign and in preparing for the Mormon exodus to the West. The council’s minutes had never been available until they were published by the Joseph Smith Papers in September 2016, meaning that the council has been the subject of intense speculation for 170 years. In this book of short essays, fifteen leading Mormon scholars explore how the newly available minutes alter and enhance our understanding of Mormon history. The scholars narrate and analyze the contributions of the records of the council to key questions, such as Joseph Smith’s views of earthly and heavenly governments; the presidential campaign; Mormon relationships with American Indians; explorations of possible settlements sites, such as Texas and California; the “lost teachings” of Latter-day Saint leaders of that era; and the leadership style of Brigham Young” (Amazon).

Image result for did jesus existBart D. Ehrman, Did Jesus Exist?: The Historical Argument for Jesus of Nazareth (HarperOne, 2012): “In Did Jesus Exist? historian and Bible expert Bart Ehrman confronts the question, “Did Jesus exist at all?” Ehrman vigorously defends the historical Jesus, identifies the most historically reliable sources for best understanding Jesus’ mission and message, and offers a compelling portrait of the person at the heart of the Christian tradition. Known as a master explainer with deep knowledge of the field, Bart Ehrman methodically demolishes both the scholarly and popular “mythicist” arguments against the existence of Jesus. Marshaling evidence from within the Bible and the wider historical record of the ancient world, Ehrman tackles the key issues that surround the mythologies associated with Jesus and the early Christian movement. In Did Jesus Exist?: The Historical Argument for Jesus of Nazareth, Ehrman establishes the criterion for any genuine historical investigation and provides a robust defense of the methods required to discover the Jesus of history” (Amazon).

Image result for all-or-nothing marriageEli J. Finkel, The All-or-Nothing Marriage: How the Best Marriages Work (Dutton, 2017): “Eli J. Finkel’s insightful and ground-breaking investigation of marriage clearly shows that the best marriages today are better than the best marriages of earlier eras. Indeed, they are the best marriages the world has ever known. He presents his findings here for the first time in this lucid, inspiring guide to modern marital bliss. The All-or-Nothing Marriage reverse engineers fulfilling marriages—from the “traditional” to the utterly nontraditional—and shows how any marriage can be better. The primary function of marriage from 1620 to 1850 was food, shelter, and protection from violence; from 1850 to 1965, the purpose revolved around love and companionship. But today, a new kind of marraige has emerged, one oriented toward self-discover, self-esteem, and personal growth. Finkel combines cutting-edge scientific research with practical advice; he considers paths to better communication and responsiveness; he offers guidance on when to recalibrate our expectations; and he even introduces a set of must-try “lovehacks.” This is a book for the newlywed to the empty nester, for those thinking about getting married or remarried, and for anyone looking for illuminating advice that will make a real difference to getting the most out of marriage today” (Amazon).

Image result for divine fury mcmahonDarrin M. McMahon, Divine Fury: A History of Genius (Basic Books, 2013):Genius. With hints of madness and mystery, moral license and visionary force, the word suggests an almost otherworldly power: the power to create, to divine the secrets of the universe, even to destroy. Yet the notion of genius has been diluted in recent times. Today, rock stars, football coaches, and entrepreneurs are labeled ‘geniuses,’ and the word is applied so widely that it has obscured the sense of special election and superhuman authority that long accompanied it. As acclaimed historian Darrin M. McMahon explains, the concept of genius has roots in antiquity, when men of prodigious insight were thought to possess—or to be possessed by—demons and gods. Adapted in the centuries that followed and applied to a variety of religious figures, including prophets, apostles, sorcerers, and saints, abiding notions of transcendent human power were invoked at the time of the Renaissance to explain the miraculous creativity of men like Leonardo and Michelangelo. Yet it was only in the eighteenth century that the genius was truly born, idolized as a new model of the highest human type. Assuming prominence in figures as varied as Newton and Napoleon, the modern genius emerged in tension with a growing belief in human equality. Contesting the notion that all are created equal, geniuses served to dramatize the exception of extraordinary individuals not governed by ordinary laws. The phenomenon of genius drew scientific scrutiny and extensive public commentary into the 20th century, but it also drew religious and political longings that could be abused. In the genius cult of the Nazis and the outpouring of reverence for the redemptive figure of Einstein, genius achieved both its apotheosis and its Armageddon. The first comprehensive history of this elusive concept, Divine Fury follows the fortunes of genius and geniuses through the ages down to the present day, showing how—despite its many permutations and recent democratization—genius remains a potent force in our lives, reflecting modern needs, hopes, and fears” (Amazon).

Image result for against empathyPaul Bloom, Against Empathy: The Case for Rational Compassion (HarperCollins, 2016): “We often think of our capacity to experience the suffering of others as the ultimate source of goodness. Many of our wisest policy-makers, activists, scientists, and philosophers agree that the only problem with empathy is that we don’t have enough of it. Nothing could be farther from the truth, argues Yale researcher Paul Bloom. In AGAINST EMPATHY, Bloom reveals empathy to be one of the leading motivators of inequality and immorality in society. Far from helping us to improve the lives of others, empathy is a capricious and irrational emotion that appeals to our narrow prejudices. It muddles our judgment and, ironically, often leads to cruelty. We are at our best when we are smart enough not to rely on it, but to draw instead upon a more distanced compassion. Basing his argument on groundbreaking scientific findings, Bloom makes the case that some of the worst decisions made by individuals and nations—who to give money to, when to go to war, how to respond to climate change, and who to imprison—are too often motivated by honest, yet misplaced, emotions. With precision and wit, he demonstrates how empathy distorts our judgment in every aspect of our lives, from philanthropy and charity to the justice system; from medical care and education to parenting and marriage. Without empathy, Bloom insists, our decisions would be clearer, fairer, and—yes—ultimately more moral. Brilliantly argued, urgent and humane, AGAINST EMPATHY shows us that, when it comes to both major policy decisions and the choices we make in our everyday lives, limiting our impulse toward empathy is often the most compassionate choice we can make” (Amazon).

Is Occupational Licensing a Barrier to Interstate Migration?

The question and title of a brand new NBER working paper. The authors find (according to the earlier, ungated version) that “the relative interstate migration rate of state-specific licensed occupations is 36 percent lower than that of others” (pg. 16). The authors explain,

We compared the relative within- and between-state migration rates of members of 22 licensed occupations to those of others using data from the American Community Survey. Our empirical strategy compared the relationship between licensure and migration between states and a far distance within state, which controls for unobservable characteristics that influence the propensity of licensed occupations to move out of their local area. First, we found that that migration across states for licensed individuals is reduced, but the size of reduction varies across occupations. Quasi-nationally licensed occupations do not show any limitations on their interstate geographic mobility. Second, using a causal model we find evidence using the reciprocity agreements for lawyers that the adoption of these agreements increases migration of lawyers into a state.

Economists have long held that restrictions on geographic mobility limit the ability of the labor market to operate efficiently. Within this context, occupational licensing provisions that restrict job entry through interstate migration could also be a barrier to economic opportunity and labor market efficiency. Specifically, the paper has empirically examined whether occupational licensing statutes limiting occupational entry from other states influence interstate migration. 

…Our analysis examines the migration of individuals. For many, migration is not an individual decision; instead, it is a choice made on the basis of overall household or family well-being. As our analysis is limited to individuals we observe in an occupation after their move, we miss a potentially important effect of licensure on those making interstate moves: individuals who are forced out of an occupation or of the labor force entirely as a result of moving between states. An example is so-called “trailing spouses”, who move based on their partner getting a better job in another state, and if they were in a licensed occupation prior to the move, may have to switch careers as a result. The effect of licensure on career changes or labor force exits made as a result of household migration is potentially important, and as we cannot identify individuals affected by these phenomena in the ACS, we leave their analysis for future research (pgs. 27-28).

Or, as one of the researchers summarizes in a previous paper,

Johnson and Kleiner’s (2015) more comprehensive analysis of…licensed occupations shows that, after controlling for demographic characteristics, individuals in these regulated occupations have lower interstate migration rates than their peers in other occupations, while the rate at which they move within states is similar. To establish whether or not licensing is behind these differences, the authors perform a difference-in-difference analysis using changes in state licensing laws. State policies on accepting those who fulfill licensing requirements in other states as qualified to practice in their state (called endorsement) and on forming agreements with other states on establishing licensing requirements (called reciprocity) are amended often. For example, for lawyers, Johnson and Kleiner find that states that adopt these more flexible policies have higher migration rates compared to states with no such policies. They find that for these…licensed occupations, the additional costs placed on migration have restricted the movement of individuals in licensed occupations, accounting for part of the decrease in overall migration within the United States.

Taken together, these studies on interstate migration support the view that regulation may limit the number of practitioners in a country and that a policy of reducing barriers to interstate migration would provide benefits to workers and consumers. The ability to move across state lines with fewer impediments and have permission to work would allow individuals to more easily go to where there are jobs. This is particularly important because the growth in wage variation may make it more advantageous to move across state lines (Moretti 2012) (pg. 5).

As legal scholar Ilya Somin quipped on Facebook, this is “[a]n extremely important issue that does not get anywhere near as much attention as it deserves. These barriers victimize consumers and also prevent many workers from moving to areas with greater opportunity.”

You Are Not Morally Superior

From NPR:

Image result for i'm such a good person gifA new study by Ben Tappin and Ryan McKay, forthcoming in the journal Social Psychological and Personality Science, follows previous work in finding that the tendency towards self-enhancement — towards judging ourselves “better than average” — is particularly acute in the moral domain. We think we’re more sociable and cooperative than average, but we’re especially inclined to think that we’re more honest and fair. The study takes a step beyond prior work, however, in trying to quantify the extent to which this moral self-enhancement might be justified.

The argument goes something like this. Not all self-enhancement is unjustified, because people have more information about themselves than they do about others…For their sample of 270 adult participants, Tappin and McKay quantified the extent to which self-enhancement was potentially justified by developing a model that took into account people’s judgments about themselves versus others across a range of 30 traits, the actual differences between self versus others in ratings for those traits, and people’s judgments about the desirability of each trait. Based on this analysis, they could estimate the extent to which self-enhancement was simply a consequence of making an uncertain inference about others, and the extent to which self-enhancement reflected a systematic bias to over-attribute desirable traits to oneself.

The analysis revealed that by and large, moral self-enhancement isn’t a simple consequence of drawing inferences from limited information. Whereas self-enhancement regarding social traits — such as sociability or warmth — could be entirely explained by the component of their model based on uncertain inference, moral self-enhancement went well beyond what could be justified in this way. In other words, the extent of people’s moral self-enhancement appears to be unjustified.

So why do we have such inflated egos?

Image result for i'm a good person gifOne possibility is that we over-attribute positive traits to ourselves because the hit in accuracy is compensated by a boost in wellbeing. Thinking of ourselves as honest and warm, this story goes, could make us feel better about ourselves and our lives. And given that moral characteristics are especially key to identity, the effect could be greater for moral traits than for traits of other kinds.

Consistent with this idea, the researchers found that the magnitude of unjustified self-enhancement for social traits (such as sociability and warmth) was positively associated with self-esteem. But for moral traits (such as honesty and fairness), this wasn’t the case: There was no association between the magnitude of unjustified self-enhancement for moral traits and participants’ self-esteem.

A second possibility is that people aren’t overestimating their own moral virtue, but instead underestimating the moral virtue of others. In this view, the hit in accuracy that comes from regarding others less favorably than ourselves is compensated by a decreased probability of making a costly error: the error of assuming another person will be honest or fair when they’re not. Mistakenly assuming that another person is sociable or warm, by contrast, is less likely to be deadly.

In other words, we lie to ourselves to make us feel better or we have seriously misjudged everyone else. Neither speaks well of us.

A Nation in Stagnation

There have been a bevy of depressing articles over the past few days that I haven’t seen tied together yet, but which I think do share a common theme. Here are the stories, which I’m just pulling from the top of my head.

1. The GOP’s moral authority is disintegrating.

The Republican Party is doing harm to every cause it purports to serve. If Republicans accept Roy Moore as a United States senator, they may, for a couple years, have one more vote for a justice or a tax cut, but they will have made their party loathsome for an entire generation. The pro-life cause will be forever associated with moral hypocrisy on an epic scale. The word “evangelical” is already being discredited for an entire generation. Young people and people of color look at the Trump-Moore G.O.P. and they are repulsed, maybe forever…

The rot afflicting the G.O.P. is comprehensive — moral, intellectual, political and reputational. More and more former Republicans wake up every day and realize: “I’m homeless. I’m politically homeless.”

2. Police can gun down unarmed civilians literally begging for life on their hands and knees now.

Last week, in “A Police Killing Without a Hint of Racism,” I wrote about Daniel Shaver, an unarmed man killed in a hotel hallway while begging for his life. At the time, the man who shot him, former Officer Philip Brailsford, was on trial for second-degree murder, and body-cam footage of the killing had yet to be released.

Now, that chilling, deeply disturbing video is available. The relevant portion begins at the 12 minute 50 second mark. Be forewarned: An innocent human is killed.

The video is not easy to watch. I did, and I’m not posting it here. In the end, the police officer was found not guilty of either murder or manslaughter. During the trial, the officer testified that he had no regrets, and that ““If this situation happened exactly as it did that time, I would have done the same thing.”

3. The media has lost its mind and its integrity

FRIDAY WAS ONE of the most embarrassing days for the U.S. media in quite a long time. The humiliation orgy was kicked off by CNN, with MSNBC and CBS close behind, with countless pundits, commentators and operatives joining the party throughout the day. By the end of the day, it was clear that several of the nation’s largest and most influential news outlets had spread an explosive but completely false news story to millions of people, while refusing to provide any explanation of how it happened.

The common theme I see running through all these stories is this: the degradation of our national institutions.

In all our panicked rushing from one sensational story to another, what I’m really worried about is the longer-term effects on the institutions that make up our nation. I don’t know how long police forces that treat their citizens like enemy combatants expect to enjoy public support, but the answer is certainly not “forever.” I don’t know what short-term victory the GOP thinks is worth selling its soul. Probably not the presidency and certainly not Roy Moore’s senate seat. And the same goes for the mainstream media and the American left which–instead of allowing Trump’s vast repository of lamentable qualities and poor decisions–feels the need to squander their credibility on conspiracy theories.

The finer points of each of these three stories can be discussed at length, and should. None of them represents a seismic cataclysm alone. None are without precedent.

But that, I guess, is the saddest part. These are just examples in long-running trends.

I don’t think more hysteria or drama will help. But I do think it’s worth taking a moment to realize there are things at stake beyond the short-term consequences, and that at a certain point the tribal, partisan struggles begin to tear the social fabric itself asunder.

Doing Right Is Profitable

Image result for board meeting

At least according to a report by the non-profit research organization JUST Capital. As detailed in Forbes,

JUST Capital polls, on a continuous basis, more than 50,000 Americans, asking them over and over again a series of simple questions on what makes for a just company: Is pollution important? Are wages important? Do benefits matter?

These polls determine how JUST Capital measures corporate justness. The metrics range from worker pay and worker treatment, to leadership and ethics, job creation, customer treatment, supply chains and environmental performance. JUST Capital then proceeds to apply these metrics to individual companies to determine the most just companies in the nation — the 100 highest-ranking in measures of fair and responsible corporate behavior within its ranking of the largest 897 publicly-traded firms in the U.S.

Here’s what its most recent study found: Stock market indexes based on the leaders of JUST Capital’s 2016 rankings outperformed the Russell 1000 index throughout the decade ending in 2016 within a range of 1-4 percentage-points.

Most of these companies also:

• Generated 3.5% higher 5-year Return on Invested Capital.

• Pay roughly 20% more workers a living wage

• Have almost 17% more women board members

• Created 1.8x more jobs in America

• Provide employees more flexible working hours and paid time off

• Pay 8x fewer consumer-related fines

• Recycle about 3x more waste in % terms

• Are 2x more likely to have sound supply chain policies

• Donate about 2x as much of their profit to charity

The piece concludes,

What this all amount to is more than simply an exhortation to the American private sector to “do the right thing.” It’s not just a wake-up call to “do what’s best for your company long-term” but most importantly, it will do what will get this country booming for the top 20 percent of Americans as well as Wall Street. Our markets need the sort of demand our American consumers can fulfill with money they’ve earned — we need their spending power to drive all the growth we’re capable of creating. And to spend, they need to earn. Enlightened CEOs will making sure their employees will earn fair wages importantly because they are the true value creators of the 21stcentury.

At the Ethical Systems blog, they mention Milton Friedman’s (in)famous 1970 essay in connection with this report:

In 1970 Milton Friedman wrote a now famous essay in the NY Times Magazine declaring that the social responsibility of business is to increase its profits.  Since then, writers and researchers have been debating whether this accurately reflects the responsibilities of business in society.  In the decade since the Global Financial Crisis these debates have become particularly critical, with some participants questioning the basic principles of free market capitalism and whether they serve our current societal needs.

But what if the best way to do right by shareholders was to run a socially responsible business?

What’s funny is that Friedman wouldn’t object, as he clarified in a 2005 Reason essay. Comparing his and Whole Foods’ John Mackey’s philosophy, Friedman writes,

Here is how Mackey himself describes his firm’s activities:

1) “The most successful businesses put the customer first, instead of the investors” (which clearly means that this is the way to put the investors first).

2) “There can be little doubt that a certain amount of corporate philanthropy is simply good business and works for the long-term benefit of the investors.”

Compare this to what I wrote in 1970:

“Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.

“To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government….

“In each of these…cases, there is a strong temptation to rationalize these actions as an exercise of ‘social responsibility.’ In the present climate of opinion, with its widespread aversion to ‘capitalism,’ ‘profits,’ the ‘soulless corporation’ and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest.

“It would be inconsistent of me to call on corporate executives to refrain from this hypocritical window-dressing because it harms the foundations of a free society. That would be to call on them to exercise a ‘social responsibility’! If our institutions and the attitudes of the public make it in their self-interest to cloak their actions in this way, I cannot summon much indignation to denounce them.”

…Finally, I shall try to explain why my statement that “the social responsibility of business [is] to increase its profits” and Mackey’s statement that “the enlightened corporation should try to create value for all of its constituencies” are equivalent.

Note first that I refer to social responsibility, not financial, or accounting, or legal…Maximizing profits is an end from the private point of view; it is a means from the social point of view. A system based on private property and free markets is a sophisticated means of enabling people to cooperate in their economic activities without compulsion; it enables separated knowledge to assure that each resource is used for its most valued use, and is combined with other resources in the most efficient way.

Of course, this is abstract and idealized. The world is not ideal. There are all sorts of deviations from the perfect market–many, if not most, I suspect, due to government interventions. But with all its defects, the current largely free-market, private-property world seems to me vastly preferable to a world in which a large fraction of resources is used and distributed by 501c(3)s and their corporate counterparts.

Does Increasing the Minimum Wage Raise Prices?

Image result for minimum wage

According to a new job market paper, yes:

Minimum wage laws in the US typically institute a schedule of increases rather than one-off hikes. After the corresponding legislation is passed, the minimum wage increases in steps over several years to the final value set in the law. Especially the later steps are known long in advance, and firms may increase prices in anticipation of higher future minimum wages. To take this possibility into account, we estimate the minimum wage elasticity of grocery prices at the time future increases become known and when they are implemented. We collect legislation dates for every increase, and show that these dates capture a salient event at which people get information about future minimum wage hikes. We combine this data with monthly store-level price indices for about 2000 grocery stores during the 2001–2012 period, which we construct from grocery store scanner data. We find robust significant effects on grocery prices at the time of legislation, but not at the time of implementation of minimum wage increases. Our baseline estimate of the overall minimum wage elasticity of prices in grocery stores is about 0.02. The average minimum wage legislation increases binding minimum wages by about 20% over several years. Our estimates suggest that such an increase raises grocery prices by 0.4% over three months around the time legislation is passed, long before the final level of the new minimum wage is implemented. During these three months, price inflation in grocery stores almost doubles relative to its average rate.

In a second step, we estimate the minimum wage elasticity of grocery store cost using county-sector level data from the Quarterly Census of Employment and Wages and sectorlevel data on grocery stores’ labor cost share. We find that the minimum wage elasticity of costs is about the same size as the minimum wage elasticity of prices. Our results thus suggest a full pass-through of all future cost increases at the time minimum wage legislation is passed. This forward-looking behavior is qualitatively consistent with the predictions of pricing models with nominal rigidities.

Finally, we calculate the welfare cost of grocery stores’ price response based on consumption data from the Consumer Expenditure Survey. We show that low-income households are disproportionately affected, since they spend a larger share of their expenditures at grocery stores. In particular, the price response of grocery stores alone undoes at least 10% of the nominal income gains of the poorest households. For other income brackets, this number ranges between 3% and 13%. Overall, the price response reduces the nominal gains for all households, but also makes minimum wage increases less redistributive in real than in nominal terms (pgs. 1-2).

In short, the cost of minimum wage increases are passed on to consumers. What’s worse, poor consumers are hurt the most.

Do the Poor Eat More McDonald’s?

According to the CDC, no. A 2017 study came to the same conclusions. As the authors explain at Vox,

Our research, recently published in the journal Economics & Human Biology, examined this assumption by looking at who eats fast food using a large sample of random Americans. What we found surprised us: Poor people were actually less likely to eat fast food — and ate it less frequently — than those in the middle class. And the poor are only a little more likely to eat fast food than the rich.

In other words, the guilty pleasure of fast food is shared across the income spectrum, from rich to poor, with an overwhelming majority of every group reporting having indulged at least once over a nonconsecutive three-week period.

…What we learned from our research is that pretty much everyone has a soft spot for fast food. We analyzed a cross-section of the youngest members of the baby boom generation — Americans born from 1957 to 1964 — from all walks of life who have been interviewed regularly since 1979. Respondents were asked about fast-food consumption in the years 2008, 2010 and 2012 — when they were in their 40s and 50s.

…The data also show middle earners are more likely to eat fast food frequently, averaging a little over four meals during the three weeks, compared with three for the richest and 3.7 for the poorest.

They continue:

Another problem with the stereotype about poor people and fast food is that by and large it’s not actually that cheap, in absolute monetary terms.

The typical cost per meal at a fast-food restaurant — which the US Census calls limited service — is over $8 based on the average of all limited service places. Fast food is cheap only in comparison to eating in a full-service restaurant, with the average cost totals about $15 on average.

Moreover, $8 is a lot for a family living under the US poverty line, which for a family of two is a bit above $16,000, or about $44 per day. It is doubtful a poor family of two would be able to regularly spend more than a third of its daily income eating fast food.

Many have argued that the poor don’t have access to healthy food. But as one writer notes,

Government data also shows that people on food stamps purchase soda (#1) and bag snacks (#4) at higher rates than non-SNAP households. It certainly seems possible that these unhealthy items are being purchased in larger quantities than they would absent food stamp (or “EBT”) income.

Now, there is an old argument that suggests that poor people eat unhealthy food because they cannot afford to eat healthy food. But I’ve always found this argument unpersuasive.

The America Farm Bureau Federation says the price of eggs, arguably the healthiest food on the planet, is $1.32 per dozen. Other highly nutritious foods – beans, rice, and bananas, to name a few – are similarly inexpensive. It seems more likely that most welfare recipients choose to eat unhealthy food because it’s easy (no prep), tastes good, is designed to be addictive, and they have the resources to buy large quantities of it thanks to their monthly government benefit.

Nonetheless, would access to healthier foods make a difference? Not really, according to the research. As Slate reports,

Obesity levels don’t drop when low-income city neighborhoods have or get grocery stores. A 2011 study published in the Archives of Internal Medicine showed no connection between access to grocery stores and more healthful diets using 15 years’ worth of data from more than 5,000 people in five cities. One 2012 study showed that the local food environment did not influence the diet of middle-school children in California. Another 2012 study, published in Social Science and Medicine, used national data on store availability and a multiyear study of grade-schoolers to show no connection between food environment and diet. And this month, a study in Health Affairs examined one of the Philadelphia grocery stores that opened with help from the Fresh Food Financing Initiative. The authors found that the store had no significant impact on reducing obesity or increasing daily fruit and vegetable consumption in the four years since it opened.

Earlier research suggesting that better fresh-food access improves diet and would therefore improve the health of people living in poverty was drawn from small samples or looked at store availability in narrow geographical slices—often without information about how or where the people who lived there shopped. “They never link the neighborhood characteristics to actual individuals,” explains Helen Lee, author of the Social Science and Medicine study. “Without that, all you have is speculation.”

Lee also notes in her study that, on closer inspection, food deserts don’t actually exist in the U.S., at least not as a national problem—on average, poor neighborhoods have more grocery stores than wealthier neighborhoods. Even before Obama’s Healthy Food Financing Initiative was announced in 2010, studies suggested that the food desert explanation for obesity wasn’t right. A report from Department of Agriculture researchers presented to Congress in 2009 also showed more grocery stores in poor neighborhoods. In 2012, USDA researchers crunched the data again and found once more that low-income neighborhoods had more—not fewer—grocery stores.

What’s more, the poor ignore “proven weight-loss strategies, relying instead on quick fixes like diet pills.” As The Atlantic explains,

For a new study published in the American Journal of Preventive Medicine, researchers from Concordia University looked at the incomes and health habits of more than 3,000 children and teens between the ages of 8 and 19 and more than 5,000 adults over the age of 20.

At least two-thirds of the study subjects reported attempting to reduce food intake or exercising in order to lose weight in the past year. Despite these efforts, the adults in the study gained an average of three pounds, while the youths gained about 12 pounds. The people in the lower income brackets gained about two pounds more than those in the highest one.

One reason for the disparity might have to do with the tactics they used to try to shed pounds: Compared to adults making $75,000 or more, those making less than $20,000 were 50 percent less likely to exercise, 42 percent less likely to drink a lot of water, and 25 percent less likely to eat less fat and sweets. And adults making between $20,000 and $75,000 were about 50 percent more likely to use over-the-counter diet pills, which aren’t proven to work.

The data for the young people were similar: The poorest among them were 33 percent less likely to exercise, but they were twice as likely to skip meals as the richest ones. Skipping meals, too, isn’t a sure-fire way to slim down.

The piece offers this more likely explanation:

…[I]t might be that the stressful lives of poor people make sticking to a diet and exercise plan more difficult. It’s hard to exercise when you live in an unsafe neighborhood. Stress leads to emotional eating. You can’t plan for gym time when you only know your work schedule three days in advance. 

An emerging body of research helps explain how the stress of poverty hampers the decision-making process. A study in Science last year found that poverty equates to a mental burden similar to losing 13 IQ points. Another study just published in the Journal of Personality and Social Psychology found that people who experienced economic uncertainty gave up on solving a difficult puzzle faster.

As Maria Konnikova wrote in the New York Times, living an unpredictable, erratic life can erode self-control: “If we’re not quite sure when the train will get there, why invest precious time in continuing to wait?”

Often, low-income people aren’t sure what tomorrow will bring. So why waste time trying to diet?

 

Are Democrats Outdoing Republicans When It Comes to Family Values?

Not really, despite what Nicholas Kristof has recently claimed. As W. Brad Wilcox of the University of Virginia explains,

Here, Kristof is indebted to a book by family scholars Naomi Cahn and June Carbone, Red Families v. Blue Families, which makes the case that blue states have more successful and stable families than do red states. Arkansas, for instance, has one of the highest divorce rates in the nation, whereas Massachusetts has one of the lowest.

…But this state-based argument obscures more than it illuminates about the links between partisanship and family life for ordinary families in America. Scholars and journalists who have bought into the idea that red Americans are hypocrites on family values because some red states do poorly when it comes to family stability are committing what is called the “ecological fallacy” of conflating the family behaviors of individual conservatives with the family behaviors of states dominated by conservatives.

…Indeed, when we look not at states but at counties in the United States, we see that counties that lean Republican across the country as a whole have more marriage, less nonmarital childbearing, and more family stability than counties that lean Democratic. In fact, an Institute for Family Studies report I authored found, “teens in red counties are more likely to be living with their biological parents, compared to children living in bluer counties.” So, even at the community level, the story about marriage and family instability looks a lot different depending on whether or not one is looking at state or county trends. At the county level, then, the argument that Red America is doing worse than Blue America isn’t true.

Finally, when we turn to the individual level, the conservatives-are-family-values-hypocrites thesis really falls apart. Republicans are more likely to be married, and happily married, than independents and Democrats, as Nicholas Wolfinger and I recently showed in a research brief for the Institute for Family Studies. They are also less likely to cheat on their spouses and less likely to be divorced, compared with independents and Democrats. So, Donald Trump is the exception, not the norm, for Republicans.

He continues,

When it comes to family stability, Republican parents are less likely to be divorced. In fact, Republican parents who have ever been married are at least 5 percentage points less likely to have been divorced, compared with their fellow citizens. The 2017 American Family Survey also indicates Republicans are less likely to have their first child outside of marriage, compared with Democrats and independents. So, contra Kristof, it’s actually Republicans, not Democrats, who are more likely to enjoy a stable, happy family life anchored around marriage…When American parents are separated by whether or not they have a college degree, it turns out that Republican parents have about a 10-percentage-point advantage in the likelihood that they are in their first marriage. In both college-educated communities and less-educated communities, then, it looks like Republican parents are more likely to be raising their children in their first marriage…[E]ven [when] we limit our focus to whites, we still see that white Republican parents are more likely to be in their first marriage. Specifically, 62 percent of white Republican parents are in their first marriage, compared with 54 percent of white Democratic and 44 percent of white independent parents…When we break out parents by those who attend religious services frequently (several times a month or more) versus parents who attend infrequently or never, Republicans still have an advantage in both the more religious and less religious groups. In fact, in both groups, Republican parents are more likely to be in first marriages than their fellow citizens. Moreover, even after controlling for religiosity, as well as education, race, ethnicity, region and age, the data indicate that Republican parents are still more likely to be in their first marriage, compared with Democrats.

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“[B]ecause married parents are more prosperous and less dependent on government for their financial security,” he writes, “[Republicans] are less likely to gravitate to the Democratic Party and more likely to gravitate to the party of small government and lower taxes. Indeed, counties with large numbers of lower-income single parents are more likely to lean Democratic, partly because the Democratic Party supports policies designed to provide them with more financial security. The figure below is illustrative of the link between family structure and voting at the county level in 2016.”

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Wilcox highlighted this last point in a City Journal article back in July:

The problem with the progressive approach to poverty is that it denies the importance of culture and character to household prosperity—especially when it comes to marriage…Wendy Wang of the Institute for Family Studies and I recently co-authored a report, The Millennial Success Sequence, which demonstrates and quantifies the extent to which early life choices correlate with personal affluence. Though young people take a variety of paths into adulthood—arranging school, work, and family in a dizzying array of combinations—one path stood out as most likely to be linked to financial success for young adults. Brookings scholars Ron Haskins and Isabel Sawhill have identified the “success sequence,” through which young adults who follow three steps—getting at least a high school degree, then working full-time, and then marrying before having any children, in that order—are very unlikely to become poor. In fact, 97 percent of millennials who have followed the success sequence are not in poverty by the time they reach the ages of 28 to 34.

Sequence-following millennials are also markedly more likely to flourish financially than their peers taking different paths; 89 percent of 28-to-34 year olds who have followed the sequence stand at the middle or upper end of the income distribution, compared with just 59 percent of Millennials who missed one or two steps in the sequence. The formula even works for young adults who have faced heavier odds, such as millennials who grew up poor, or black millennials; despite questions regarding socioeconomic privilege, our research suggests that the success sequence is associated with better outcomes for everyone. For instance, only 9 percent of black millennials who have followed the three steps of the sequence, or who are on track with the sequence (which means they have at least a high school degree and worked full-time in their twenties, but have not yet married or had children) are poor, compared with a 37 percent rate of poverty for blacks who have skipped one or two steps. Likewise, only 9 percent of young men and women from lower-income families who follow the sequence are poor in their late twenties and early thirties; by comparison, 31 percent of their peers from low-income families who missed one or two steps are now poor.

…Young men and (especially) women who put “marriage before the baby carriage” get access to the financial benefits of a partnership—income pooling, economies of scale, support from kinship networks—with fewer of the risks of an unmarried partnership, including breakups. By contrast, millennials who have a baby outside of marriage—even in a cohabiting union—are likelier to end up as single parents or paying child support, both of which increase the odds of poverty. One study found that cohabiting parents were three times more likely to break up than were married parents by the time their first child turned five: 39 percent of cohabiting parents broke up, versus 13 percent of married parents in the first five years of their child’s life. The stability associated with marriage, then, tends to give millennials and their children much more financial security.

In a Hoover Institute interview, Yuval Levin commented, “Today’s progressivism–for all of its talk of communitarianism and of ‘we’ and of ‘You didn’t build that’–the purpose of it really is to liberate the individual from dependence on other people. It is in fact based on a very radical individualism that at the end of the day wants total moral individualism and is willing to abide some economic collectivism to get there.”[ref]On the flip side, Levin points out that American conservatives tend to borrow their political rhetoric from the most radical individualists in the revolutionary tradition (e.g., Jefferson, Paine), despite being more family-based in practice.[/ref] The data above seem to confirm this suspicion.