Claim of the Day

Over the long run income is more powerful than any ideology or religion in shaping lives. No God has commanded worshippers to their pious duties more forcefully than income as it subtly directs the fabric of our lives.

I agree, which is why Virginia's right, and the main debate really is between dynamists, who want growth and the transformations is inevitably creates, and stasist, who don't. The quotation, by the way, is from Gregory Clark's forthcoming book Farewell to Alms: A Brief Economic History of the World. This a profoundly insightful work sure to raise ire and inspire further progress. Key claim: labor quality is the difference between rich and poor. Depressing claim: Sub-Saharan Africa has largely Malthusian conditions, so success in increasing health and life-spans has decreased the average material standard of living below hunter-gatherer levels. Biggest disappointment: seems evasive on the question of the cause of variations in labor quality. Why not culture? 

Well, in Clark's contribution to the Cato Unbound discussion of the relative importance of policy, culture, and institutions in economic development, he wrote:  

… attempts to introduce culture into economic discussions so far have been generally either ad hoc, vacuous, blatantly false, or void of testability. If culture is a key to growth, the fear is that economists will be reduced to rooting about in the intellectual undergrowth with people we hold in low esteem: qualitative sociologists and cultural anthropologists. Since we have no idea of how cultures develop, or how to change cultures, to admit the primacy of culture may be to admit the defeat of the entire economics project.

It is not surprising, then, that he does not admit the primacy of culture. I'm with my old Mercatus colleague Pete Boettke on this one.

Immigration Effects of Mexican Birth Dearth

Mexican birthrates are plummeting, according to GW economist Robert Dunn in The American:

Some politicians fear that we are being “Mexicanized.” In fact the opposite may be underway. NAFTA, our mass media, the more widespread use of English, and the large number of people going back and forth (legally or otherwise) mean that Mexicans are increasingly influenced by our culture, and that implies fewer babies. The United States also has a fertility rate of 2.1, but that is the same as it was in 1990. Mexico is becoming more similar to the United States, which must frustrate their nationalists.

The main point for the United States is that we have only a temporary problem with illegal immigration from Mexico. For another decade or a bit more we must attempt to limit such entry, but then the problem will fade like the smile on the Cheshire Cat. Lou Dobbs, Rep. Tancredo and their nationalistic friends can calm down and relax.

Then we expand NAFTA to include a common labor market and bring in low-wage labor from even poorer countries.

Fourth Way to Do What, Exactly?

Since I asked for it, I intend to reply to Reihan's long immigration post. I'm totally not stalling! It's just so long. In the mean time, let me ask a question about Reihan's ideas on the “Fourth Way.”

I do actually have broader thoughts on the Fourth Way, but I need time to organize them. Let me just say that the Fourth Way won't be just a phenomenon of the center-right. It is a reaction to the Third Way that will take Soho and Easterhouse forms, liberal and dirigiste forms. Broadly speaking, it will emphasize authority and security over cultural laissez-faire. It will be market-friendly, but in the sense that the market is strenuous, serious, and growth-enhancing, not emancipatory. It will be an awkward and problematic mix, but effective. 

Naturally, I think this sounds lousy—even slightly fascist. The obvious question: Effective for what? Who wants this?

And what's this?

… merely declaring this or that violation of economic or even civic freedom unconstitutional can't stop a determined democratic majority — our shared conception of political legitimacy, for better or for worse, is rooted in this majoritarian understanding. Movement towards juristocracy hasn't altered this fundamental dynamic. This represents a serious problem for the partisans of limited government — they must keep most of the public with them most of the time to achieve their objectives.

This is smudging the line between a fact and a seemingely related non-fact. True: there's no stopping the mob when it gets up a head of steam. False: our shared conception of political legitimacy is not majoritarian, as far as I can see. All but a few Americans just shrug and accept it when courts overturn popular laws as unconstitutional. And there is a firm sense that certain ideals—especially those embodied in the Constitution—rightly trump majoritarian will. So I don't buy this description of the broadly shared American sense of political legitimacy. Moreover, just about every American is a partisan of limited government; we just differ on what we'd like limited. Liberals don't need majorities hyped on the whole package of limitations on political threats to liberty. We need some group of people or other to be very jealous of each form of liberty, and the rest of the population to be not very strongly motivated to undermine them.

When I try to figure out what's going on with Reihan, my first guess is that he thinks he's doing a kind of non-ideal theory that takes the constraints of status quo public opinion seriously. He's trying to formulate an ideological position that can bring together standing constituencies in American politics to effect real political change to best approximate his (obscure to me) set of ideals. But then his comments on democratic legitimacy and the alleged related problems for defenders of liberty make me think this isn't exactly what he's doing. Maybe I don't grasp what it is that Reihan really wants politically — what he thinks a “fourth way” would be effective for — just because he changes his mind a lot. But I sort of suspect that his first-best ideal theory is obscure not because he doesn't really have one, but because it wouldn't actually be very attractive to Americans if described plainly, and what he's doing is looking for marketing angles to get the package of policies (each one of which may indeed be attractive to some group of Americans or other) that together are supposed to roughly add up to his ideal  to 51 percent. At which point, I guess, we just have to accept it, even it turns out to be a gross violation of core American ideals of substantive liberty, since our shared sense of political legitimacy is allegedly majoritarian?

Maybe that's not right. Let's see… I guess I keep getting stuck on this: Does Reihan really think that an awkward and problematic politics of authority, security and cultural control aligned with strenuous, serious, growth-enhancing but not liberating markets (I swear that's what I just read!) is actually in high in demand among real American voters? Because if he does, then that's just plain weird. Or does Reihan think that given the right leader with the right rhetoric behind the right policies, it would be possible to get Americans behind that kind of politics? That might be true, but if so, it's sort of terrifying. Which raises the question: Why would you want to do this? Which leads to the deeper question: what reasons do we have to favor the values such a politics would serve. But I'm not clear on what those values are, much less the reasons we might have to favor them.   

No doubt I'm getting Reihan's intentions and opinions all wrong here, and I welcome his correction and illumination. But I do puzzle over why it's so hard to get a good bead on what he really thinks about what a good society looks like. Maybe it's all in the book!

Also, the new, less editorially coherent American Scene looks great and is a lot of fun to read. Congrats!

Rizzo on Inequality

Mario Rizzo has an excellent letter in the Financial Times:

Sir, Lawrence Summers' article “Harness market forces to share prosperity” (June 25), on reducing income inequality, leaves several critical questions unanswered.

First, why should we care that income inequality is increasing? Was the previous distribution of income more just, simply because it was more nearly equal? Second, neither Professor Summers nor anyone else has a comprehensive understanding of the causes of recent trends in income distribution. In general, it is a bad idea to look for solutions to a “problem” whose causes we do not understand. Third, the whole idea of “sharing prosperity” seems to imply that prosperity is some kind of aggregate to which we all have some claim, much like members of a family. What justifies looking at society as a family? If it is, Prof Summers can just send me a monthly cheque without the need for legislation.

Finally, Prof Summers uses a shameful rhetorical trick. By suggesting a “solution” that steers a middle ground between excessive regulation and doing nothing (as if we do not redistribute income now), he appears to be very reasonable. Perhaps it is even more reasonable, however, to think through the rhetoric of increased redistribution before inventing new policies.

Mario J. Rizzo,
Department of Economics,
New York University

Trammeling Capitalism to Keep the Reds Out

The hysterical Harold Meyerson:

None of us have thought sufficiently about how the belief in untrammeled capitalism could lead to foreign governments, whatever their agendas, controlling more and more of the American economy.

God forbid foreign governments have a stake in the success of the American economy, aligning their incentives with ours. But if this becomes a serious problem, patriots can always band together and finance hostile takeovers! Perhaps the fine Americans who patrol our southern border between FoxNews segments can entice Michael Milken out of retirement to lead the charge against the dark overlords of Red China.

James Poulos comments on the same passage with this perplexity:

If John Gray is right, the last refuge of libertarians may be our culture (what's left of it). But, as Rorty could never quite admit, cultural libertarianism means publicizing our ironies and privatizing our truths. And the staggering volume of transactions that take place in an open identities market is the most untrammeled of capital markets yet.

 (1) John Gray is wrong.

(2) It is a publicly accesible truth that “publicizing our ironies and privatizing our truths” doesn't actually mean anything.

(3) “After a brief mid-afternoon surge, 'postmodern conservatism' ends the day down 12 points on the untrammeled identity markets.” WTF?!

Nonsensically delicious!

I Think I Like This Book

I've only just begun, but I think I'm ready to recommend The Happiness Myth: Why What We Think Is Right Is Wrong by Jennifer Michael Hecht.

Hecht has a fine pluralistic sensibility and a knack for getting distance from otherwise invisible cultural assumptions by relating them to historical precedent. She's already convinced me that contemporary body obsessions aren't superior to corseting. Of course, I liked this bit:

hecht.jpgIt is a modern myth that money cannot make you happy. We all say that it can't, but, given one wish, a lot of us would go for cash. We certainly opt for money over many other pleasures in structuring our real lives. Part of the reason is that what you can buy with money today you used to be able to get for free—social contact and play that can fit neatly into your life. Shopping, television, shows, and sports are not deep, but neither were the common social contact and play that kept people happy in the past.

Good stuff.

Moral Senseless!

My reaction to this online “Moral Sense Test” (take it now if you don't want “science” to be tainted by prior knowledge of the experiment) was basically the same as Munger's (who freaks out about the fact that Drezner assigned any fines at all):

THE PREMISE OF THE TEST IS THAT GOVERNMENT SHOULD FINE PEOPLE FOR ACCIDENTS, AND TAKE THE MONEY AT GUN POINT FOR USE IN THE GENERAL FUND!

These are TORTS, not criminal offenses. It is important that the victims do not receive the payment. An average of $129? GOTT IN HIMMEL! I had an “average payment of $0.00! I thought that several of the scenarios (like the peanuts in the allergist's office) were clear negligence, and that there was a cause of action for a law suit. Any allergy sufferer knows, or should know, that peanuts can be deadly, and in an allergist's office one expects to encounter people with…..ALLERGIES!

But not a fine! Why put government in charge of collecting fines when one private person harms another accidentally? You are in favor of criminalizing private mistakes, when there is a private remedy. There is no deterrent effect here, and no pretense of making the damaged party whole.

(Sorry for the yelling. Mike is, well, special, and can't help it.)

I really, really hope that this is one of the experiments that pretends to be one thing while really studying another. For example, I hope they are really studying how many people are so morally stunted that they are willing to have the government fine people for causing pain through mostly unforeseeable, mostly non-negligent accidents, and not even as compensation to the persons pained! Or maybe they're studying how people's ordinary good moral sense can be railroaded into sharing some set of idiotic assumptions by embedding them in the instructions of an “experiment” run by “scientists” at a trusted brand-name institution like “Harvard.” Let's hope! (I would like to hear from Mixing Memory Chris on this one. Chris?)

Random thought about online experiments. I bet “Harvard” has a moralized aura for many people, it being the bastion of “right-thinking East Coast haute bourgeousie liberalism.” Do volunteers, seeing “Harvard” seek to please the moral arbiters therein? Seek to screw them over? Would you get the same results if the test was hosted at Bowling Green State? At Oral Roberts? 

The Conservative Radical

Excellent advice from Robin Hanson on how to be an effective radical:

This freethinker strategy of being radical on every possible dimension pretty much guarantees that something will go very wrong with at least one of these dimensions. 

To have the best chance of succeeding in a radical project, you should instead choose just a few related dimensions on which to make radical choices, and then make conservative conventional choices on all the other dimensions.  This strategy minimizes the chance that some other project dimension will go badly wrong and take down your central radical idea with it.

This is is basically why we have to wear jackets and ties at the Cato Institute.