Nussbaum on Sex Work

In all the dust of last month's prostitution debate, I somehow missed philosopher Martha Nussbaum's excellent op-ed, in which she espouses a view almost identical to the Howley-Wilkinson line.

Why are there laws against prostitution? All of us, with the exception of the independently wealthy and the unemployed, take money for the use of our body. Professors, factory workers, opera singers, sex workers, doctors, legislators — all do things with parts of their bodies for which others offer them a fee. Some people get good wages and some do not; some have a relatively high degree of control over their working conditions and some have little control; some have many employment options and some have very few. And some are socially stigmatized and some are not. However, the difference between the sex worker and the professor — who takes money for the use of a particularly intimate part of her body, namely her mind — is not the difference between a “good woman” and a “bad woman.” It is, usually, the difference between a prosperous well-educated woman and a poor woman with few employment options.


What should trouble us [about prostitution] are things like this: The working conditions for most women in sex work are extremely unhealthy. They are exploited by pimps, and they enjoy little control over which clients they will accept. Police harass them and extort sexual favors from them. Some of these bad features (unhealthiness, little control) sex work shares with other job options for low-income women, such as factory work of many kinds. Other bad features (police extortion) are the natural result of illegality itself.

In general we should be worried about poverty and lack of education. We should be worried that women have too few decent employment options and too little health and safety regulation in those that they do have. And we should be worried if men force women to do things sexually that they do not want to do. All these things are worth worrying about, and it is these things that sensible nations do worry about. But the idea that we ought to penalize women with few choices by removing one of the ones they do have is grotesque, the unmistakable fruit of the all-too-American thought that women who choose to have sex with many men are tainted, vile things who must be punished.

It's great to see one of the world's most important public intellectuals getting it right.

Accounting for Children

Let me emphasize that I'm not trying to discourage anyone from having kids, or another kid. I'm just really genuinely interested in the real net cost of kids to their parents in terms of lifetime happiness, consumption, status, etc. I think people should make hugely significant choices, like how many kids to have, with accurate information about those costs. If people want a bunch of kids anyway, despite the costs, then that's just evidence other considerations matter to them. And I'm a pluralist, so that's cool. But if people are rushing into these kinds of choices on the basis of bad or incomplete folk information, and they end up worse off than they might have been, by their own lights, then that's not good at all.

The Value of the Marginal Kid

Let me expand on a comment I left on one of Bryan's blog posts… I think I'm finally homing in on the argument between Bryan and me about kids. As far as I can tell, Bryan's hypothesis is one of these two propositions:

(a) Given any (non-silly) number of children greater than zero, there IS on average a net benefit to each parent from having one more child.

(b) Given any (non-silly) number of children greater than zero, there WOULD BE on average a net benefit to each parent from having one more child, if they applied the econo-strategies Bryan suggests.

I suspect Bryan's hypothesis is (b). In that case, finding out that (a) is false, as I suspect it is, would be suggestive but not dispositive. But I'm still not sure what evidence would help Bryan actually establish the counterfactual in (b).

It seems like Bryan needs to establish (a) in order to have a strong, Good Morning America-friendly starting point. Something like: “Science says kids are great, more kids are better, and here's how to make more kids better still!” But if he can't establish (a), he'll have to admit that in the normal case, having another kid is negative or neutral for one or both of the parents. So generally there is no selfish reason for the next kid unless you are able to successfully commit to and apply Bryan's clever economist strategies. That just feels a lot less exciting and bookworthy, even if true. But is it?

If ever there was an issue where one ought to expect the effects of Darwinian false consciousness, it would be the value kids. So, if this is supposed to be something like social science, it seems purely anecdotal evidence has to be taken with stiff skepticism. But then what non-anecdotal evidence does Bryan have in support of his counterfactual: that parents would selfishly benefit from the marginal kid were they to apply Bryan's strategies? And if you need to apply the strategies to make the selfish-meter tick upward at all, couldn't you get an even bigger upward tick by applying the same strategies to a smaller number of children?

And then there is the issue of the ability of ordinary people to successfully apply those strategies. How good are most couples at effective Coasean bargaining? (Why aren't they already doing more of it?) Can conservative, Christian middle-American women actually get away with outsourcing a lot more of their childcare without facing social ostracism from their mom-peers? And so on. I remain concerned that Bryan so far has established little more than an argument to the effect that it is possible to make an additional child suck less if you can manage to apply certain principles. I think this is both indisputable and boring.

Now, it is always open to Bryan to argue in terms of the non-monetary, non-happiness, non-revealed preference value of the next kid. I think we all agree that having kids are meaningful, for example. But I'm not aware of good measures of meaningfulness, and I'd be surprised to find evidence that, say, people with three kids have more meaningful lives than people with two. There is of course always the route of the sentimental moralist, who can appeal to our powerful gut conviction that children (and America and Jesus) are simply WONDERFUL, but that is where even broad-minded economists, like Bryan, rightly fear to tread.

Then again, maybe Bryan does have evidence for (a). But he's already conceded that the evidence isn't there in the happiness data. And there is an obvious downside to an extra kid in terms of lifetime consumption, especially given the income penalty for moms. So what else does he have in mind?

America: Actually Quite Poor!

I read Kevin Phillips cover article [$$$] in this month's Harper's, and thought he was completely crazy. First of all, I was amazed that they printed an article largely about one of my pet interests, the methodology of the Consumer Price Index, which I thought was a bit too esoteric for a general readership. But I was really baffled by Phillips' claim that the CPI massively underestimates inflation. Phillips thinks the Boskin revisions were a big mistake, despite the fact that they were very conservative, and most economists who know about this that I have talked to think the problem goes in the opposite direction. Tyler is his usual ambassadorial self in his blog review of Phillips' book Bad Money when he says:

Either the current market estimate of inflation is the best estimate available, or you know that it is wrong and you will be a very rich man.  I find the former scenario more plausible.

But thankfully he really lays it out there in his comments:

A lot of the Phillips book is simply economically illiterate. For sure America has its economic problems, but they are not the ones identified in *Bad Money*

Perhaps it is time to convene an Overcoming Bias colloquy about how it is that estimates of the trend in real wealth can be so massively divergent.

Choice Architecture and Paternalism

I'm trying to get clear on what Sunstein and Thaler mean, and it's not easy, since they basically make up their own private language, and then act puzzled by the idea that some people might be a little confused by what they have in mind.

So a “choice architect” is basically anyone that organizes “the context in which people make choices.” This is so immensely broad as to be almost useless.

If you design the form that new employees fill out to enroll in the company health plan, you are a choice architect. If you are a parent, describing possible educational options to your son or daughter, you are a choice architect. If you are a salesperson, you are a choice architect.

And if you invite people to a party where alcohol is available, the music is bumpin', and the lights are low, you are choice arcitecht. Everyone is a choice architect some of the time.

So what's the relationship between 'choice architect' and 'paternalist'? Is everyone a paternalist, too? It looks like it. According to S&T:

The paternalistic aspect [of libertarian paternalism] lies in the claim that it is legitimate for choice architects [i.e., everybody] to try to influence people's behavior ino order to make their lives longer, healthier, and better. … In our understanding, a policy is “paternalistic” if it tries to influence choices in a way that will make choosers better off, as judged by themselves. [Emphasis theirs.]

The designers of the user-friendly iPod, whom S&T tag as “choice architects,” presumably leave iPod users better off by their own lights, and therefore count as nudging libertarian paternalists. And who's against usable interface design?! And if the host of a party turns down the lights, that's paternalistic choice architecture if it influences some of the guests' behavior in a way that makes them better off, as judged by themselves.  This all very weird.

First, this has nothing to do with 'paternalism' as English speakers use the word. On their definition, giving someone accurate and easy-to-follow directions to the nearest gas station is paternalistic. But it isn't, so they are using words wrong. To put it another way, S&T imply that it is not possible to provide helpful guidance to another person without being paternalistic. But it is possible. So they're speaking literal nonsense. QED.

Another tack… They express a sufficient condition for paternalism here. They don't say a policy or action isn't paternalistic if it doesn't makes people better off by their own lights, but the suggestion of an “only if” hangs out there, and I think they want it hanging out there. Paternalism is nice! Paternalism cares about getting people's buy-in. Except… it doesn't. The attempt to make you better off by my lights, not yours, is what a competent English speaker has in mind if she accuses me of being “paternalistic” — and that's whether or not she assumes paternalism necessarily involves coercion, an assumption S&T call a “misconception”, despite the fact that most dictionaries and the history of Western thought generally insists on conceiving it that way. If you open up the little box that is the concept ordinarily expressed by the English word 'paternalism', you will find indifference to the endorsement or buy-in of those “influenced” by paternalistic efforts. But if you learned the meaning of the word from S&T, you'd think that was wrong!

The tone in Nudge is chummy and agreeable and sunnily ameliorist. Which makes you feel a bit like an axe-grinding killjoy bent on hair-splitting “semantics” when you insist on pointing out that they spend the entire book more or less inverting the normal meaning of certain politically-loaded words. But I really do insist on pointing it out, because these brilliant guys are native English speakers and they've got to know that the meanings of words matters. So you're left wondering why they are so determined to play dumb about their own language.


The New York Times reports that a bunch of ex-military on-air “analysts” are in bed with both military contractors and the Bush administration:

Records and interviews show how the Bush administration has used its control over access and information in an effort to transform the analysts into a kind of media Trojan horse — an instrument intended to shape terrorism coverage from inside the major TV and radio networks.

Analysts have been wooed in hundreds of private briefings with senior military leaders, including officials with significant influence over contracting and budget matters, records show. They have been taken on tours of Iraq and given access to classified intelligence. They have been briefed by officials from the White House, State Department and Justice Department, including Mr. Cheney, Alberto R. Gonzales and Stephen J. Hadley.

In turn, members of this group have echoed administration talking points, sometimes even when they suspected the information was false or inflated. Some analysts acknowledge they suppressed doubts because they feared jeopardizing their access.

This is what governments do. Republican governments. Democratic governments. They spend their subjects' money shaping their subjects' opinions, so that they can spend more of their subjects' money.

No doubt most of the talking head generals and colonels believe sincerely that they were acting in the best interests of the people they have devoted their lives to serving. It is simply that we “civilians” do not really know what we need to know in order to decide wisely for ourselves, and so public opinion needs to be massaged a bit to generate political support for policies that truly do protect us. If the well-meaning soft paternalism of concerted propaganda and financial self-interest happen to coincide, then all the better. Our guardians will only be better motivated to guard us! (And, really, after a lifetime of service, don't they deserve to get theirs?) Crucially, no one here is forcing anyone to support the administration's policies. It's just a bit of a nudge, from people who know better.

It's Better To Earn It

From WSJ's Wealth Report:

PNC Wealth Management recently polled about 1,500 Americans with $500,000 or more in investible assets and found that 69% of respondents made most of their fortune through work, business ownership or investments. Only 6% made their wealth by inheriting it, while 25% made it through a combination of inheritence and earnings.

What’s most interesting is that the survey found some major differences in the two groups’ attitudes about money — and their responses didn’t always break down along predictable lines:


LUCK — Fully 37% of earners agreed that “the money I have made so far has come from being at the right place at the right time.” Among heirs, the number was 25%. I guess the heirs don’t subscribe to Warren Buffett’s “lucky sperm” theory.

HAPPINESS– Fuly 76% of earners agree that “my financial success lets me feel less stress and worry,” compared to 50% of heirs. Half of all earners agree that “as I have accumulated more money in my life I have become happier,” compared to a third of heirs.

I especially like the luck result. It's hard work getting born to the right parents.

[HT: Free Exchange]