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Archive for January, 2005

Do You Deserve Your Income?

Monday, January 31st, 2005

Like Tyler and Alex, I find Elizabeth Anderson’s remarks about Hayek and desert to be rather cryptic. The argument, as far as I can make it out, is this:

(1) If P deserves x at t, then there is something P did prior to t in vittue of which x is deserved.
(2) One’s income is determined by the price of one’s labor on the market.
(3) The price of one’s labor is determined by the demand for one’s labor on the market.
So, (4) one’s income is determined by the demand for one’s labor on the market.
(5) Suppose x is P’s income.
So, to reiterate, (1) if P deserves x at t, then P did something prior to t in virtue of which she deserves x.
But, (6) P did not do anything to create demand for her labor on the market.
Therefore, (7) P does not deserve x.

That is, because you didn’t have anything to do with demand being what it is, you don’t deserve the price you command for your labor on the market.

There are a number of problems with this particular argument. The first problem is premise (1). I don’t believe desert is always backward looking. People can, for example, deserve love, not for anything they have done, but because of the way it could transform them. (Christians, do you hear me?) Similarly, people can deserve a chance or an opportunity, although they haven’t done anything yet to earn it. But let’s set that aside.

It strikes me that (6) just has nothing to do with anything relating to desert. What I did prior to t to deserve x (whatever the value of x is) was complete my end of a contract that was entered into voluntarily by the relevant parties within a system of just rules. It just doesn’t matter what I did to fix the particular value of x. If S agreed to pay me x for completing my end of a contract, and I complete my end of the contract, then I deserve x from S. THIS IS OBVIOUS and if an argument implies the contrary, then we have a ready reductio of the argument.

The question Anderson seems to raise is: how is it that I could possibly deserve, say, $67,456.84 per year rather than $23,764.45 per year when I have so little to do with determining the conditions under which my labor commands either amount?

And the answer is easy. The same way I can deserve a silver medal in Olympic tennis, even though I had so little to do with determining the existence of the Olypmics, or the rules of tennis, or the quality of my pool of competitors. My reward is fixed by a combination of my performance, chance, and the rules of the games. The existence of chance or my lack of responsibility for the rules simply does not bear on what I deserve in this context.

Do you know what’s annoying? Computer programmers who were making $90,000 per year because of the labor shortage in computer programmers, and who are now whining because they get $50,000, or can’t find work at all because of some eager low-cost chap in Bangalore. Why is this annoying? Because computer programmers don’t deserve to get any particular amount of money for their labor. They deserve to get whatever is specified by a fair contract within a just system of rules. If the number shifts, it has nothing to do with what the programmer deserves. The programmer, or whomever, deserves whatever the value of of the variable happens to be, but they don’t deserve that the value of the variable be anything in particular.

Some further thoughts.

Does Anderson’s argument imply that I would be making a fundamental mistake if I argued to my boss that I deserve a raise because everyone else doing the same job is being paid more?

How close does Anderson get to committing the Fundamental Redistributivist Error (the FRE), which is the very common but nonetheless logically horrifying error of inferring from the fact that P doesn’t deserve x to the conclusion that there exists someone who is morally authorized strip x from P. Somebody ought to write an article about the manifold expressions of FRE titled “How Not to Argue For Taxes.”

Now, I myself believe that there are conditions under which the state is legitimate, and under which it may justly redistribute holdings. However, I think it’s a lot harder to show that there is someone who is morally authorized to use coercion to take stuff than it is to show that people deserve what is specified in a fair contract when they complete their end of it.

Markets and Trust

Monday, January 31st, 2005

In his important paper on Endogenous Preferences, Samuel Bowles writes:

. . . Markets thus affect not only the demand for, but also the supply of cultural traits. Among these are reputations for trustworthiness, generosity, and vengefulness.

If markets require less trustworthiness, for instance, then you may get less of it.

. . . Thus where markets approximate the ideal complete-contracting assumptions of the standard model, the adverse consequences of lack of trustworthiness or generosity may be attenuated; but at the same time markets may militate against the evolution of these traits. Thus markets may undermine the reproduction of traits necessary for efficient market transactions in the absence of complete contracting

Notice anything peculiar about the reasoning here? Bowles follows the standard model and stipulates complete contracts, draws out a consequence of that model, and then says . . . what? That if that model both did and didn’t obtain we’d get a bad consequence, and then blames the bad consequence on the market. This is weird. Either we have complete contracts or we don’t. If we don’t, and we don’t, then we need trust. If markets enable contracts that enable gains that are impossible without markets, and trust is necessary to complete these contracts, then there may be higher payoffs to trust in market interactions than in non-market interactions, and we’d expect norms of trust to be reinforced by the presence of markets.

That members of market cultures are more trusting, by the way, seems to be a result of a set of cross-cultural experiments conducted by Bowles and others after the publication of his endogenous preferences paper.

The Tim Lee Social Security Calculator

Saturday, January 29th, 2005

Ygelesias, among others, is skeptical of the various pro-reform social security calculators. My colleague Tim Lee responds. Here’s a bit:

More to the point, even if you grant all of Matt’s objections, personal accounts still end up doing better. I whipped up a little calculator of my own, which does the math in a transparent fashion. Cato’s calculator says that if I start out at 25,000 at age 25, that I’ll end up with a stock portfolio of $406,000 and an annuity of $38,685. My calculator more or less duplicates that result. If we grant all of Matt’s objections and use a 4.2% rate of return (60% stocks at 5%, 40% bonds at 3%, with let’s say a higher .5% transaction cost), then my personal account still ends up being worth $310,000. And if we assume the annuity pays out a conservative 7%, instead of Cato’s assumption of 9%, I would still end up with an annual benefit of about $22,000. According to Cato’s calculator, Social Security would pay $15,748 for the same wage profile.

Check out the whole thing.

I’d Like to See More . . .

Friday, January 28th, 2005

ethnographic policy analysis. I want richly described accounts of the lives of people affected by policy changes before and after the change. How do they live? How do they represent the choices open to them? If the change shifts relative prices, how do they respond to the price change? If they change behavior in the face of changing prices, how do they conceive of their change of behavior? How do they justify and rationalize it. Do their mental models of the relevant domain change significantly? If so, do these changes spill over into areas not directly affected by the policy change at issue?

Why isn’t there more of this? I guess because anthropologists don’t generally think of changes in norms and cultural meanings having much to do with shifts in relative price.

Paging Dr. McCracken.

Social Security Bleg: PRAs and Socio-political Transformation

Friday, January 28th, 2005

Please cite by email or comments the best “bigthink” magazine and journal articles about social security reform. I’m especially interested in pieces that explore that claim that PRA’s, by creating a class of “worker capitalists,” will have a transformative effect on the economy, politics, society, and so forth. This is in my opinions the most interesting argument about PRA’s, but I’m not seeing anything that pays close attention to the claim, or attempts to substantiate it in detail. Please let me know if I’m missing something!

Big Day!

Thursday, January 27th, 2005

Sorry, nothing today. Today marks another year in my relentless march from womb to tomb.

How Much Does SS Screw You?

Wednesday, January 26th, 2005

Here are my results from Heritage’s Social Security Calculator:

You can expect to pay $350,881 in Social Security taxes over your working life for retirement and survivors benefits. For those taxes, you can expect to receive $2,467 a month in Social Security retirement benefits. Your rate of return under today’s Social Security is -3.56%.

However, if you had been able to invest your Social Security taxes in a Personal Retirement Account (PRA), you would have had a total of $1,401,434 when you retired. Your monthly benefits would have been $11,416. You lost $8,948 a month.

Now, what’s supposed to be the problem with this, exactly, especially when much poorer folk than me can also expect to be doing a lot better? Why are so many people so eager to oppose a program that makes almost everyone better off? I find it truly baffling.

More Trust Fund

Tuesday, January 25th, 2005

I found this explanation of the Social Security Trust Fund and its differences from a legitimate trust fund, by Heritage’s David John, to be useful.

How the Trust Fund Operates.Workers pay their Social Security taxes through their employers. Each employer periodically sends a lump sum payment to the U.S. Treasury that includes all of the income taxes and Social Security and Medicare payroll taxes paid by both the employer and its employees.

The Treasury both receives the payroll taxes (and income taxes that higher-income retirees pay on their Social Security benefits) and pays monthly benefits on behalf of the Social Security Administration (SSA). The money stays in the Treasury’s hands until it is either paid out as Social Security benefits or otherwise spent by the government. In fact, no money ever goes into the trust fund. Instead, the trust fund balance is the result of two accounting entries by the Treasury.

First, the Treasury estimates how much of the aggregate tax receipts are Social Security taxes and “credits” the Social Security trust fund with that amount. Then the Treasury “subtracts” the total amount paid in monthly Social Security benefits from the trust fund balance. No money actually changes hands; these are strictly accounting entries.

Any “money” remaining in the trust fund is converted into special-issue Treasury bonds, which are really nothing more than IOUs. In addition, the Treasury pays interest on the trust fund’s balance by crediting the trust fund with additional IOUs. These are also strictly accounting entries, and again no money changes hands. After crediting the trust fund with the proper amount in IOUs, the government spends the extra Social Security tax collections just like any other tax revenue–to finance anything from aircraft carriers to education research.

At the end of 2002, the Social Security trust fund had a balance of $1.22 trillion. During 2003, the Treasury received $544 billion in Social Security taxes and paid out $406 billion in Social Security benefits. Therefore, the trust fund received $138 billion in these special-issue Treasury bonds, resulting in a trust fund balance of $1.36 trillion at the end of 2003.

Why the Social Security Trust Fund Differs from Real Trust Funds. Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only “invested” in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. As the Congressional Research Service noted in a report on May 5, 1998:

When the government issues a bond to one of its own accounts, it hasn’t purchased anything or established a claim against another entity or person. It is simply creating a form of IOU from one of its accounts to another.

According to the Office of Management and Budget under the Clinton Administration in 1999:

These [trust fund] balances are available to finance future benefit payments and other trust fund expenditures–but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. [Emphasis added.]

In short, the Social Security trust fund is really only an accounting mechanism. The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs. For that reason, the most important date for Social Security is 2018, when taxpayers must begin to repay the IOUs, not 2042, when the trust fund is exhausted.

The point is, if the government abolished the trust fund and threw all the special issue securities in a big pit and burned them tomorrow, the financial picture of Social Security would be exactly the same.

[Should we call those who tout the massive assets of the trust fund "trust fundamentalists"?]

Kiesling vs. Rosen on Egocasting; Dissertation Assignment Desk

Sunday, January 23rd, 2005

Lynne Kiesling dismantles Christina Rosen’s Republic.com qualms about “egocasting.” Check it out.

The issue of informational fragmentation and social coherence is an issue I’m putting on the “to do” list. Hmm, I guess I really should have a bigthink “to do” list. No doubt it is too much, and too hard, for me to do. So think of it as a bigthink assignment desk. If you’re game, go for it!

  • Rebut: unrestricted liberty to choose the content of one’s entertainment, news, art, children’s education, etc., threatens the existence of a common culture, which is necessary to maintain a viable liberal social order.
  • Understand: how institutional change alters behavior by changing preferences and belief systems, and not simply by changing relative prices (i.e., get a grip on likely processes of endogenous preference change), and how to apply this rigorously and in a non-ad hoc way to policy analysis without the ability to resort to traditional notions of efficiency.
  • Defend: Behavioral economics does not provide an argument for regulation or paternalism, unless we think of regulation and paternalism as the implementation of market institutions that economize on (neo-classical) “rationality.”
  • Clarify: the difference between “social engineering” in the rationalistic or constructivistic sense, and institutional design in the Madisonian/Buchanan sense; how dynamic renegotiation of constitutional contract/institutional structure politically resembles “regulation,” but how, once in place, changes are robustly self-regulating, “ecologically rational.”
  • Illuminate: how it is possible to distinguish between norms or social practices that have an adaptive function in preserving the main properties of a desirable social order and mere self-reinforcing equilibria, which may be opressive or illiberal, without resorting to rationalist/constructivist fallacies. The possibility of being a principled selective or progressive conservative; i.e., the inherent interdepedence of conservatism (rightly understood) and liberalism (rightly understood).
  • Investigate: what, if any, are the policy implications of “happiness research”? What, if any, are the implications for implicitly or explicitly hedonist or eudaimonist theories of efficiency, or of the good?

Oh, and there’s more. I’m just not thinking of it right now. Did you not drop out of grad school? Well, you know where to come for dissertation topics!

Pulling a Hopkins

Friday, January 21st, 2005

In honor of intellectually squeamish MIT biologist Nancy Hopkins, I officially propose the following addition to the vernacular:

pull a Hopkins
intr. v.

1. to become faint or nauseated upon hearing a statement contrary to one’s ideology or dogma.
2. to leave the room, usually dramatically, because of such faintness or nausea.
3. to feign such faintness or nausea as part of a ploy to establish or reinforce a social convention about the limits of acceptable discourse.

e.g.: “I pulled a Hopkins when I heard Bob say that, even though it has never worked, communism is ‘a good idea.’”

Historical source:

“I just couldn’t breathe because this kind of bias makes me physically ill. I would’ve either blacked out or thrown up.” - Professor Nancy Hopkins, in response to Harvard President Larry Summer’s conjecture that women are scarce in certain mathematical disciplines because of genetic differences between the sexes.

Foreign Aid and How to Make a Difference

Friday, January 21st, 2005

As you probably know, I’m a critic of development aid. Why? Well, for one thing (and there are many other things), it’s a massive waste of money. For a taste, let me quote myself quoting William Easterly in an article I wrote a while back on globalization and capitalism (or just skip down to the end of the post for some ideas about effective ways to express your altruistic impulses):

Adebe is an impoverished Ethiopian man. There’s a pothole the size of a Toyota in the street facing his house. He’d like to have it fixed before it devours his bicycle, his dog, or his four-year-old daughter. So what does it take to fix it?

According to William Easterly of the Center for Global Development, formerly of the World Bank, it takes, well, a lot.

In his paper, “The Cartel of Good Intentions: Bureaucracy Versus Markets in Foreign Aid,” Easterly lays out the mind-numbingly complex process. Unlike you and me, Adebe can’t just phone the Division of Public Works, or call his city council member. Fixing his pothole is an arduous, time-consuming journey of Godknows- how-many steps, an alphabet soup of acronym and bureaucracy as lovely as the process of bovine digestion, or sausage production.

It all starts, in Easterly’s words, like this:

Adebe somehow communicates his desires to “civil society representatives” and/or non-governmental organizations (NGOs), who allegedly articulate his needs through the government of Ethiopia (itself dominated by one minority ethnic group) to the international donors. The national government solicits a “poverty reduction support credit” (PRSC) from the World Bank and a Poverty Reduction and Growth Facility (PRGF) from the International Monetary Fund (IMF) … To get loans from the IMF and World Bank, the government completes a satisfactory poverty reduction strategy paper (PRSP), in consultation with civil society, NGOs, and other donors and creditors. The government prepares the PRSP in light of the fourteen-point Comprehensive Development Framework (CDF) of the World Bank . . .

That’s just the kick-off. Then there are more meetings, more bureaucratic hurdles to jump, more reports to file, and many, many more acronyms. The matter of Adebe’s pothole—as provincial as it may seem—turns out to be a massive international affair involving highly paid suits in posh Washington suites.

Easterly continues:

If the international lenders and donors approve the PRSP and release new funds to the national government, then government will allocate the money in accordance with the NDP, ADLI, CRSP, MTEF, CDF, PRGF, PRSC, and PRSP, after which the money will pass through the provincial governments and the district governments, and the district government may or may not repair the pothole in front of the poor person’s house.

Adebe might as well just pray.

The process isn’t cheap, either. The cost of paper-shuffling alone could have fixed Adebe’s pothole many times over. Easterly notes that “it takes $3521 in aid to raise a poor person’s income by $3.65 a year.”

However, it remains quite true that a few extra dollars is worth a lot more to most people on earth than it is worth to you. So you should give, but in a focused way. You should give directly to good causes with a minimum of bureaucracy where your money is likely to have a big effect. Last year I gave to the Fistula Foundation. A very small amount of money can help heal a women with a horrifying injury. (See how you feel when you just read about a fistula, and then think about what it must be like to have one.) I plan to give to them again this year.

Megan McCardle brings to our attention what I think is another good opportunity for giving. One of Megan’s former U of Chicago classmates has set up an educational fund to support the tuition of elementary school students in s single school in his remote hometown village in China. Apparently, $40 is enough to send a kid to school for an entire year. Liang Qiao, who set up the fund, promises that 100% of the money will go to the kids. The kicker is that Liangqiao is dying rapidly of cancer. His lifelong dream was to set up an education fund is his village, which he had intended to do on his own. But since he is going to die soon, he’s asking for our help.

This is an excellent way to spend your money. Investing in the human capital of children in a poor but high-growth country like China is a very good bet. Money given by a local to a single local school is likely to have a concentrated effect with little waste. And dying men, unlike the World Bank, aren’t likely to skim off the top. I am going to send $40. How about you? Will you send a kid to school this year?

(The donation is not tax-deductible, but you’re bigger than that. And if the informality and non-institutional nature of this makes you wary, keep in mind that it is the informal and non-institutional nature of this that is likely to make it effective. If you feel tentative, drop me a line and I’ll forward you the email Megan forwarded to me.)

Inauguration Speech: Trotskyite Christian Big-Government Libertarianism

Thursday, January 20th, 2005

I was surprised by the international focus of Bush’s speech. And I doubt that there has ever been an inaugural speech that mentions ‘freedom’ and ‘liberty’ more often. (I count 27 instances of ‘freedom’ and 15 instances of ‘liberty’ in the speech). I ardently hope that the universal and eternal longing for liberty will awaken in the breasts of all the world’s billions, and that the flame of freedom will burn bright over every nation, etc., etc., Nevertheless, I found Bush’s bold proclamation of universal liberation somewhat troubling. Whatever he actually means, it sounds expensive and dangerous. That said, I admire the sentiment, and a pledge of solidarity with the world’s oppressed can by itself have a powerful effect.

The striking thing about Bush’s speech is the rhetorical thematic coherence it lends to his entire package of policies. Bush’s vision is one of liberation. Here’s my take on the argumentative structure underlying Bush’s speech…

God gives each person intrinsic dignity and worth, and freedom is required for the full expression of that dignity and worth. Morality requires that we respect others’ intrinsic worth not only by not trespassing against their liberty but also by securing the conditions of the full expression of their human dignity. Furthermore, freedom is interdependent. We are not fully free until all are free. So we must strive for the liberation of those abroad both because morality demands it, and because the full expression of our own freedom requires it. The United States is special because we have, more than any other nation, realized a system of freedom, and thus a system of respect for human dignity. Yet the work of America is not complete. Our system of freedom remains only partial. So we must attempt to bring to fruition the task of devising a system that fully respects the dignity and worth of each individual. The social expression of freedom is ownership, and the fulfillment of the promise of America lies in expanding ownership. We owe this to ourselves. Moreover, we also owe it to the rest of the world, for the American example of freedom is the most powerful force for human liberation.

You’ve got to give it Bush, he’s got “the vision thing.” And it is, on the surface, a coherent and compelling vision. I particularly like the implied idea that we can respect the intrinsic worth of oppressed foreigners by implementing personal retirement accounts. Nevertheless, despite the overwhelming volume of rhetoric about freedom, Bush’s speech paints a picture of a muscular and powerful American state willing to project itself out into the world as a missionary for liberty, which, I fear, does not bode well for liberty at home.

[Update: I think Sullivan says it well:

There were times when the liberty theme became repetitive. And, of course, the relationship of rhetoric to reality is, as always with Bush, problematic. How do you reconcile the expansion of freedom with Bush's expansion of government? How do you square domestic freedom with the curtailment of civil liberties in a war on terror? How do you proclaim that America is a force for freeing dissidents, when the government now has unprecedented powers to detain anyone suspected of terror across the globe and subject them to coercive interrogation techniques that the government will not disclose? Perhaps these questions do not need to be answered in an inaugural address. But they linger in the air, even as Bush's eloquence and idealism lifts you up and gives you hope.

]

The Forecasting Debate and the Brittleness of PAYGO

Wednesday, January 19th, 2005

I’ve become frustrated with what I’ll call the “forecasting” debate over social security. And my frustration has turned around into an additional argument against the PAYGO system.

It is now clear to me that the forecasting debate works by choosing your favored assumptions about growth, aging, immigration, etc., extrapolating into the future, and then arguing either that we are “headed for an iceberg” or that there is no iceberg, or at least there is no iceberg that can’t be evaded with marginal tinkering.

However, the fact remains that no one knows what the growth rate is going to be in ten years. No one can tell you whether there will be a huge jump in life expetancy due to technological innovation in 20 years. No one can tell you whether President Jeb Bush will usher in a new era of mass immigration. Maybe those fascistic millenials will have six kids per pair!

Whatever the case may be, whether or not social security-as-we-know-it is sustainable depends on a lot of what we don’t know and can’t know. We can and should try to see what the future will look like if certain trends continue, given various different assumptions. Yet, we don’t know how to assign probabilities to the assumptions or to the possible futures. It is likely that some unpredictable exogenous factor will render any such assignment moot.

But frustrations about the futility of the forecasting debate point to a deep flaw in the design of social security: the system is fragile. Brittle, even. The fact that the projected sustainability of social security is so sensitive to fairly small changes in growth rates, demographic change, unemployment rates and is a sure sign that it is extremely poorly designed policy.

Advocates of status quo-ish approaches are stuck arguing that the future’s going to thread the needle of conditions under which the system is viable. Now, I don’t know, and neither do they, whether their favored forecast will become reality. But it remains that a well-designed institution should be robust under a broad range of future conditions. Our PAYGO system just isn’t. Small differences in the rate of growth, rate of increase of life expectancy, and so on, shouldn’t make or break the system. Of course, there is no system that can reliably withstand dramatic changes in any variable. But we should at least aim for a system that is fairly adaptive and robust against moderate changes in growth, population, employement, and aging.

UN Millenium Project

Wednesday, January 19th, 2005

From the NYT:

“We’re talking about rich countries committing 50 cents out of every $100 of income to help the poorest people in the world get a foothold on the ladder of development,” said Professor Sachs, who was appointed to lead the project by Secretary-General Kofi Annan in 2002.

Sachs no doubt understands that “countries” don’t have income. People who live in countries have incomes. So “we’re talking about” the state apparatus in charge of “rich countries” appropriating 1/2% of their citizens’ incomes, and transferring it to the UN, an institution of extremely doubtful moral legitimacy, who will then distribute the money in the form of development aid, a strategy for creating prosperity about as successful as the use of leeches for the treatment of leukemia. Great.

And this is the sort of reporting that is not quite reporting:

Britain itself has pledged to double aid by 2013 to 0.7 percent of its national income. The United States, which currently allocates less than 0.2 percent for aid, has not made a comparable pledge.

It is hard to imagine that the author does not intend us to think, “Why not?”

Why not, indeed. Well, why is the “allocation” of the United States government more significant than the money voluntarily allocated by residents of the United States through remittances and charitable giving to aid efforts? See today’s Cato Commentary by Ian Vasquez.

I’ve begun to think that in some sense the state is parasitic on the cognitive limitations of the media. It’s an old chestnut that the development of science largely involved evacuating magical intentional agents from our explanatory schemes. If something happens, the easiest explanation for humans to understand is that someone made it happen because they wanted it to happen. Explanations are like stories, and convincing stories have characters who do stuff. The media has to tell a story, and the simpler the better. Nation-states, it turns out, are like giant people who can do stuff and make things happen. So if people are mired in poverty, what can be done! Have the League of Magical Giants sprinkle manna on the heads of the downtrodden! This is a story even a journalist can understand. However, the story where millions of individuals give small amounts of money to intermediary institutions, who administer funds to projects helping poor people on the ground . . . well, millions of people isn’t a good character, and all those different charities and institutions doing different things with their bits of money is hard to follow.

So journalists write about magical giants, reinforce the idea of the nation-state as magical giant in the minds of readers, and the individuals of the exploitative political class prosper.

The Moral Case for Social Security Privatization

Wednesday, January 19th, 2005

I have only begun to plumb the depths of Cato’s resources on Social Security. In the process, I ran across this excellent paper, “The Moral Case for Social Security Privatization,” by Daniel Shapiro. It turns out that Danny made most of the arguments I’ve been trying to formulate back in 1998. It’s time for this paper to get the attention it deserves.

Here’s a taste:

The most important arguments for Social Security privatization are moral, not economic. Privatization would not be justifiable if it were economically beneficial but morally suspect.

However, a privatized Social Security system meets moral criteria far better than does our current, bankrupt, pay-as-you-go system. A privatized Social Security system gives individuals more freedom to run their lives, is fairer, provides more security, and creates less antagonism between generations, fostering a greater sense of community.

In fact, privatization is defensible not only from the classical 1iberal or libertarian perspective, based on maximizing individual choice and liberty, but from virtually every perspective in political philosophy. Egalitarians, who frame their arguments in terms of fairness, welfare theorists who frame their arguments in terms of economic security, communitarians who frame their arguments in terms of community, and anyone who frames an argument in terms of whether average citizens understand the institutions or programs which they are asked to support, should all support privatization.

Lincoln: A Man’s Man

Saturday, January 15th, 2005

I am endlessly amused by Gore Vidal’s claim that the United States exists because Abraham Lincoln had “an early puberty.”

Do I care if Lincoln indulged in man-love? Of course I do! It’s delicious. However, unlike the Jaffaites, it matter not a bit to me whether or not the rumors are true.

Social Security and “Moral Values”

Friday, January 14th, 2005

I really liked this Jonathan Rauch piece in National Journal. His conclusion:

The 2004 exit polls suggested, to many conservatives, that “moral values” won the election for Bush. It may seem odd, then, that his boldest post-election priority is not abortion or gay marriage or schools, but Social Security. The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones.

That’s right. I’m planning to write a couple longish essays on the moral dimensions of Social Security reform, which I think are far more significant than the immediate economic dimensions.

The strategy of the left is to try to spike reform on the model of the right’s demolition of Hillarycare. The big difference, as far as I can see, is that Hillarycare was popular at the outset, but not because it struck the ordinary Joe as some kind of moral advance, but because it seemed like free stuff. The anti-nationalization coalition I think effectively destroyed that idea that anyone would really get a good deal from it, and, perhaps more importantly, plucked several resonant American moral notes about independence, autonomy, and choice.

It seems that the pro-reform coalition in the present case faces broad skepticism about changing social security. However, other than scare tactics about market Russian roulette, the only moral arrow in the quiver of the left is a dull social democratic conservatism about preserving a moribund social insurance scheme. The case depends implicitly on the rather bizarre and unmotivated notion that taking care of each other means offloading responsibility onto the political class. I don’t think this tune really sings in the heart of Americans, no matter how “populist” the arrangement. The “save the New Deal” trope lost its luster long ago. So I don’t know how well it will fly. The best thing anti-reformists really have going for them is that people are risk averse and are wary of change.

On the other hand, the reformers have a moral message about ownership, independence, choice, and equality that I think may prove popular. A problem for the left in the Hillarycare debacle was that they had no adequately resonant response to the moral argument of the anti-nationalizers (not to mention the practical arguments). I don’t think they have an adequately resonant moral response in this case, either. So their success really depends on their ability to effectively plumb the depths of mammalian fear. Risky schemes! Grandma on cat food! Rapacious moneybag bankers!

Remitting Disaster

Friday, January 14th, 2005

I’ve got a new piece up at Reason Online linking the effectiveness of remittances as development aid, Bush’s temporary worker program, and help for the victims of the South Asian tsunami.

Shuffle Game

Thursday, January 13th, 2005

Will and Amber and playing a fun game, this is what I got:

Stormy Weather, Jimmy Luxury & the Tommy Rome Orchestra
Options, Pedro the Lion
Highly Evolved, The Vines
Tears Are in Your Eyes, Yo La Tengo
If We Can Land a Man On The Moon Then Surely I Can Win Your Heart, Beulah
Gotta Get Away, The Offspring
Joe #1, Fugazi
Another One Bites the Dust, Queen
We Got the Beat, The Go-Go’s
In Da Club, 50 Cent

How about you?

DeLong’s New Song?

Wednesday, January 12th, 2005

I’m pleased to see that Brad DeLong has endorsed the general principles of the President’s (still indeterminate) plan for social security reform. DeLong is worried that the President’s proposal will turn into some kind of monstrosity, given Bush’s record, which is fair enough. It seems that DeLong is basically saying that he would endorse something like personal accounts if only it was proposed by a Democratic president. If he is saying that, it’s pretty interesting, given the heated vehemence of his prior attacks on personal accounts and their advocates.

Bush on Social Security

Tuesday, January 11th, 2005

I’ve just returned from the President’s well-staged event kicking off the administration’s push for social security personal accounts. I’ve got a lot to do, so no analysis now. I’ll just say that I think Bush is hitting the right notes.

When Men Were Men and Women Were . . .

Monday, January 10th, 2005

As I predicted to myself, I’m catching heat for my banal generalization that “men need women to be women and women need men to be men…” Julian and Amber each have a go. Perhaps the claim is less mysterious if more specific. I’m saying that, in general, men prefer women who are more typically feminine and women prefer men who are more typically masculine. Yes. Wow. Femininity and masculinity have both natural and cultural components. Its tricky sorting out which is which. In any case, there’s nothing normative about statistical trends of either “natural” or “cultural” preferences.

My obscure point, in reference to the Kipnis article, is that the blank slate view, which was hegemonic in the humanities and social sciences until the rise of sociobiology, at best entirely fails to help us understand ourselves by assuming that sexual preference and sexual identity is entirely cultural, and at worst causes a lot of grief by causing people to bang their heads pointlessly against an unbending reality.

I find that I have been, quite perversely, made to feel guilty by blank slate ideology for having preferences for women who are, in many ways, traditionally feminine, and for preferring certain traditional gender roles. Indeed, I feel like I have been, in some ways, ideologically estranged from components of my masculinity by my tentative attitude toward my own preferences. I had been made to assume that they were cultural, elective, and possibly wrong. It’s quite strange that one can feel positively transgressive by acquiescing to nearly universal preferences. Now, I am eager for others to pioneer new modes of living, and to surprise us by revealing with their lives well-lived that norms we thought were deep were in fact shallow. But I am personally risk averse and want to maximize my chances for deep satisfaction as a human and a mammal, and I think the best bet is living largely within the old mode. In any case, that’s what my gut tells me. I think this is what most people’s guts tell them. And, yes, this is also how oppression perpetuates itself. So I vow to do my utmost to root out the genuinely harmful. But I will not ruin my life speculating about injustice.

The point regarding Kipnis, then, is that I have every intention of maintaining my preferences for women who are beautiful, feminine, and who desire to be mothers, and I am not about to be sorry for it. And I do not believe I am alone. And so, yes, if feminism as an ideology requires that men do not have these preferences and that women do not tend to wish to satisfy them, then feminism is in trouble.

Now, I also intend to maintain my preference for extremely intelligent and ambitious women. Julian writes, ” . . . neither Will nor I would find interesting or attractive someone who fit some kind of 1950s archetype of femininity . . .,” but I think I would, insofar as intelligence and ambition are allowed. June Cleaver as Secretary of State? Yes, please.

The universal aspect of femininity that Kipnis I think was lamenting was women’s propensity to go through pains to make themselves attractive to men. I am, of course, against stuffing girls like foie gras geese. So whether or not we can approve of a particular cultural instance of the tendency to ornament and improve one’s appearance according to the prevailing cultural norm depends on the nature of the prevailing cultural norm. But objecting to the tendency as such is futile. I, for one, am an advocate of lipstick, pearls, and tight sweaters, whether they appear in 1955 or 2005. Sue me.

I was also NOT saying that if you are a women and you find you prefer to be a bit more mannish than typical, or you’re a man and find that you cry at Extreme Makeover: Home Edition, or whatever, then there’s something wrong with you. Nor was I saying that guys who like butch girls or girls who like femme guys are in any sense wrong. If the prevailing gender norms get you down, then by all means, buck the norms. Find your own way. And if the elective norms are harmful, then fight them. But don’t get surprised when you find most people defending norms that are norms precisely because of the pattern of revealed preferences across the culture. Think of us as witless sheep, if it makes you feel better.

Munger on Democracy

Monday, January 10th, 2005

Mike Munger, chair of the political science department at Duke, has a nice article over at the Library of Economics and Liberty about what democracy is and is not.

Could We Grow Out of the Social Security Crisis?

Friday, January 7th, 2005

Sure. If we had fantastic rates of growth, we could zero out the deficit and have huge surpluses in a fairly short amount of time. And we might also make medical discoveries that extend life expectancy 150 years, in which case Social Security would be in REALLY big trouble. (Raise the retirement age to 200?) It’s a wash!

Oxygen is My Achilles Heel!

Friday, January 7th, 2005

Ain’t ideology grand? Laura Kipnis:

Heterosexuality always was the Achilles heel of feminism because the asymmetries involved usually took the form of adequacy for one sex, inadequacy for the other. And so things seem to remain: You may hear a lot of tough talk about empowerment and independence in women’s culture today, except you hear it from women shopping for baby-doll outfits or getting Brazilian bikini waxes and double-D cup breast implants. (”I’m doing it for myself.”)

Wouldn’t you think that if heterosexuality is your Achilles heel, you’re in big, big trouble. This isn’t far from saying, “My ism would work out great, if only people didn’t like eating and laughing.” Anyway, the asymmetries between the sexes have nothing to do with adequacy and inadequacy, unless you understand inadequacy as kind of dependence, in which case, we’re all inadequate, just asymmetrically so. Men need women and women need men. More controversially, men need women to be women and women need men to be men. And if you don’t know what that means, or know and object to it, then life among the humans may turn out to be tough for you.

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