Shout it from the rooftops, Protestant Uber freedom edition

by on September 28, 2016 at 3:42 am in Data Source, Law, Travel | Permalink

Our findings provide empirical evidence that ride-sharing services such as Uber significantly decrease the traffic congestion after entering an urban area.

Here is the paper, by Li, Hong, and Zhang, via the excellent Kevin Lewis.  Kevin also directs our attention to this paper by Arye Hillman & Niklas Potrafke:

Simple correlations show that Protestantism is associated with economic freedom, Islam is not, with Catholicism in between. The Protestant ethic requires economic freedom. Our empirical estimates, which include religiosity, political institutions, and other explanatory variables, confirm that Protestantism is most conducive to economic freedom.

By the way, here is my earlier column on the benefits of Uber, one product of economic freedom.  By the way, do not try this driverless car trick at home.

1 Millian September 28, 2016 at 4:10 am

Rich countries are correlated with more economic freedom; poor countries with less; a wide cross-section of countries around the world are neutral. Tell us what we don’t know, IFO institute!

2 prior_test2 September 28, 2016 at 5:03 am

‘The Protestant ethic requires economic freedom’

Strangely, Weber would have to rewrite his book at this point. The formerly backward Catholic areas of Bayern and Baden-Württemberg are the current economic powerhouses of Germany, both in terms of technology and in terms of success. The best example is truly the Bavarians, who seem in general to remain proud of things like defying the German Verfassungsgericht so as to keep hanging crucifixes in public school classrooms. Though as a sop to ecumenical perspectives found in such a secular society as Germany’s, the mandatory display of a crucifex in all public school classrooms in Bavaria could be satisfied by displaying a cross instead. (German only – https://de.wikipedia.org/wiki/Kruzifix-Beschluss )

3 moritz September 28, 2016 at 6:20 am

This is a common misconception. Wuerttemberg turned protestant in 1534 and has been a centre of protestant learning ever since (google Tuebinger Stift). The old territories of Franconia, which were merged with Bavaria in 1806, and until the 20th century were more industrialised than the more rural Bavarian lands, were heavily protestant, including the ancient cities of Nuremberg, Bayreuth and Erlangen.

4 prior_test2 September 28, 2016 at 5:05 am

Ah, that Kevin Lewis synergy again – nice to see how to a Bloomberg columnist is learning to play at the next level of influencing public policy.

5 bjk September 28, 2016 at 6:05 am

The hyping of Uber is relentless. Whoever is running their PR operation is a total pro. Here’s an idea – take it public already so you don’t have to keep hyping it so relentlessly.

6 carlolspln September 28, 2016 at 6:21 am

Cowen is an angel investor.

7 Josh September 28, 2016 at 6:40 am

Seriously, I’m sick of our servants thinking they should make a decent wage. Hooray for uber (and Protestantism) for doing away with such considerations.

8 MOFO September 28, 2016 at 10:19 am

Thankfully we have you to tell them what a decent wage is. Clearly they are incapable of deciding that on their own.

9 Josh September 28, 2016 at 12:31 pm

If they are so unhappy, why don’t they just quit and get their families evicted from their homes?

10 MOFO September 28, 2016 at 12:53 pm

Really? You think these people have only two options? Drive for Uber or live on the streets? Good to know that your omniscience extends not only to what people should be making but also to the the totality of their choices.

11 Josh September 28, 2016 at 2:29 pm

This is it a post about uber drivers per se. Think “Straussian as they say around here.

12 Floccina September 28, 2016 at 4:34 pm

Median income will always afford the median home.

13 Thomas September 28, 2016 at 9:04 pm

Not true in Manhatten, SF, Toronto (?) and maybe other places. It would be true in a closed economy without generational wealth inequality.

14 RightLight September 28, 2016 at 11:39 am

Why should they? A lot of these taxi drivers are immigrants to this country. If they are so in demand, they shouldn’t require a government oligopoly. If they don’t like it, they can always go back and enjoy the “decent wages” in their native, non-protestant countries.

15 Josh September 28, 2016 at 12:39 pm

Right. It’s bad enough that why have openish borders flattening the labor supply curve, we can’t even organize to keep our standards of living high. This isn’t about über and cabbies, this is about Protestantism and the removal of moral considerations from economic activity.

16 Sam the Sham September 28, 2016 at 1:41 pm

I’m very happy that you’re able to afford servants, Josh – I am not. As a working-class stiff myself, I would prefer that my wages not be negotiated for me, I can do that just fine on my own.

Now, as for moral considerations from economic activity, I don’t know how it is possible to escape them. If “You don’t work, you don’t eat” contains moral implications, “If you don’t work, you still get to eat” also contains moral implications. The question becomes who is deciding what is moral. The freer the market, the more the moral judgment becomes democratized, and the more state intervention, the more the moral judgment is left to politicians. Let me repeat that last phrase, the more the moral judgment is left to POLITICIANS.

17 Josh September 28, 2016 at 2:27 pm

There used to be intermediate institutions between the individual and the state, some of which were economic.

18 Sam the Sham September 28, 2016 at 2:45 pm

Are you talking about guilds (the medieval equivalent of unions), or trading cartels, or what?

While those specific things I mentioned were largely negative on economic growth, I do believe that the modern West has abandoned some ancient knowledge, and has been too hasty in dismissing certain institutions, so by all means I’m up for re-learning some of what has been lost. Eg, whatever your views on faith are, Church and sunday schools were institutions that served to strengthen neighborhood bonds and teach basic ethics. It is one thing to dismantle them, but they have not been replaced with anything… and moral relativism is starting to fill the void, which I view as extremely unhealthy.

19 Josh September 28, 2016 at 3:42 pm

Guilds, which were different from modern trade unions in important ways, not the least of which is that they were expressed my Christian in purpose (not that I mean to dismiss the important structural differences, but I haven’t he time right now).

As for the rest of your comment, here here.
Preach.

20 RightLight September 28, 2016 at 2:04 pm

Protestantism has little to do with economics. The correlation with economic development, like so much else, comes down to ethnicity.

I’m a Trump supporter and I’m no fan of complete laissez faire. Still, restricting how many people can drive taxis is not the way to get a high standard of living. It benefits taxi drivers, sure, but at the cost of causing unemployment for those who can’t get taxi medallions and higher prices for those people who use taxis, who are not primarily servant enjoying rich people. Imagine if we restricted the number of people who could be teachers, truck drivers, restaurant workers, engineers, ect. If we shouldn’t do that, why should we restrict the number of people who can drive taxis?

21 Josh September 28, 2016 at 2:25 pm

Allow me to rephrase. Capitalism is not Protestant, but is the result of the Protestant reformation. Capitalism became the self-understanding of the west after Christendom.

22 mulp September 28, 2016 at 3:08 pm

How does Trump differ from Reagan?

Why isn’t America Great given the dominance of Republicans in making laws based on American Exceptionalism and liberty has increased massively over the past four decades?

Would Texas be a center of technology if not for Federal policy, land grant colleges being the start, but reinforced by pork barrel spending from FDR to LBJ – it’s not the Johnson Space Center for nothing.

Oil has been classic resource curse for Texas without massive government restrictions on the oil market to prop up oil prices. If the Texas Railroad Commission had gradually inflated it’s $3 price floor in the 50s and 60s, OPEC would likely not have existed, or if it did, would not have had the impact. In 1970, the TRRC setting the price floor at $8-10 through gradual annual inflation adjustment from 1950 to 1970 would have been both increased US capacity while decreasing demand. Without the oil conflicts in the Mideast in the 70s, then the 80s onward would have been different. And that would have eliminated the 80s Texas oil driven crash and the current Texas oil driven downward pressure on the economy.

Oil prices did not crash in the 80s or in the past two years because of the EPA. Coal has not crashed due to the EPA. Coal industry job losses were far higher in Appalachia while Reagan was president than while Obama has been president.

Why doesn’t Trump promise to ban all oil imports by executive order in his first 30 days in office if imports kill jobs? Based on five years of oil production growth while Obama has been president, phasing out oil imports over five years is feasible and the price of gasoline and heating oil would not go above $4 a gallon.

23 Sam the Sham September 28, 2016 at 2:25 pm

I’m not sure what economic development has to do with ethnicity, please elaborate. Caveat: I view human biodiversity, or whatever the genetics = fate school of thought, to be largely bunk. Genetics matter, but culture matters more (and I’d put religion as a subset of culture).

24 RightLight September 28, 2016 at 3:04 pm

I think it’s largely genetics. In the Eastern Bloc, they knew the countries of Western Europe were richer, but it was taboo to consider the obvious explanation. I see the situation with Europe and Africa to be the same. The Catholic countries include many of the more poor non-European countries and within Europe it includes the Latin nations while protestant Europe is largely Germanic/Finnic. Whether or not you think it’s not causal, can you deny that the correlation between economic development and ethnicity is much stronger than the correlation between economic development and religion? Look at South Germany, Austria, ect.

25 rayward September 28, 2016 at 6:56 am

We learned several weeks ago that the number of Uber drivers on the road actually goes down, not up, at peak pricing times. Maybe that explains the reduction in congestion. Protestantism has long been correlated with economic growth; as for economic freedom, I suppose it depends on the meaning of economic freedom. Robert Wright’s explanation for the economic growth is that the spread of Christianity promoted trade because people of different cultures had something in common, religion, to instill a level of trust to support trade between them. On the other hand, maybe Jesus did teach the prosperity gospel: get rich, my children, and you shall be saved.

26 Axa September 28, 2016 at 8:24 am

5 causes are discussed on the article. You just mentioned one: surge pricing.

Other cause: “Take San Francisco as an example, ride-sharing services are found to reduce car ownership, encourage more judicious and selective use of cars for particular trip purposes.” There is less congestion because people becomes conscious of mobility costs, then people travels less. If some customers are happy with less distance traveled, this is good. For the rest of customers, sorry.

Another possible cause is better capacity utilization. The app connects the driver with the customer and eliminates the wandering of taxis around streets to find a random customer. But, this is just “urban transportation requested through app”, not Uber.

27 BC September 28, 2016 at 7:10 am

“Our findings provide empirical evidence that ride-sharing services such as Uber significantly decrease the traffic congestion [and carbon emissions] after entering an urban area.”

The corollary is that regulations that inhibit Uber, such as taxi regulations and labor regulations, are bad for the environment and climate change.

28 Thomas September 28, 2016 at 9:10 pm

This is the key. Nail the left on environment vs. special interest group. But, we’ve already seen the left’s celebration of the loss of the Brown v. Board and 14th amendment Vellara case in California. Teacher’s Unions > Disparate Racial Impact in Schools -> Votes + money +power > Principle -> Cabbies > AGW.

29 DG September 28, 2016 at 8:27 am

This paper has no credible identification strategy. Their instruments are awful and this paper will not get into a top 5 econ journal.

The only paper with a credible identification strategy in the Uber debate is Cohen et al.: http://www.nber.org/papers/w22627

30 Chip September 28, 2016 at 8:36 am

Protestantism represented the primacy of the individual – through his personal relationship with god – at the expense of his subordinate relationships with kings, the church and the state.

The question is whether the decline of this personal relationship with god will see the state reemerge as a guiding influence.

The evidence in the west suggests yes.

31 anon September 28, 2016 at 9:27 am

The Nordic countries as cautionary tales?

32 chuck martel September 28, 2016 at 10:44 am

The Scandinavian Protestant regions of the US are also the areas where municipal liquor stores and Sunday blue laws are most commonly found. The Protestants’ primacy of the individual doesn’t extend to individuals that aren’t Protestants and their concept of economic freedom doesn’t extend to non-believers.

33 Chip September 28, 2016 at 4:34 pm

You’re looking for absolutism in a relativistic world.

Political and economic freedom correlates strongly with Protestant countries and cultures.

34 chuck martel September 28, 2016 at 5:22 pm

There is indeed a correlation between Protestants and crony capitalists, it’s true. At the same time, their economic freedom is tempered by socialism and the welfare state.

35 charlie September 28, 2016 at 9:15 am

The standard computer traffic measuring site (IRIX, google maps, etc) don’t measure every road in a city; they measure the main arteries.

In DC, Uber/ridesharing has made congestion worse on actual city streets. Cars pulling over of no reason, waiting for riders double and triple parked, doing u turns. Certainly I’d like the see the insurance claims of Uber drivers since every car I’ve seen is bearing scars from impacts — although it may be they are not reporting them.

Not sure if that would be picked up by the traffic measurements.

And in a metro area that may or may not get subsumed out.

One of the reasons we had taxi medallions is we didn’t want 100% of the cars of the road to be taxis. The only place that was the case was probably midtown Manhatten.

36 Slocum September 28, 2016 at 9:42 am

“In DC, Uber/ridesharing has made congestion worse on actual city streets. Cars pulling over of no reason, waiting for riders double and triple parked, doing u turns.”

And how does this differ from taxis?

But what I think you’re missing here is the unseen. What you see is Uber cars on the street. What you *don’t* see are the people who would be driving themselves but for Uber. So if Uber reduces congestion it does so mainly by option value. That is, people are more willing to walk, bike or take transit — and perhaps live without owning a car entirely — now that they know they have a quick, convenient, reliable, affordable option to order a ride when needed.

37 Jeff R. September 28, 2016 at 10:58 am

Not being a DC resident, I can’t really say whether Uber has increased or decreased congestion, but I suppose it’s possible that if lots of people are foregoing using the Metro for door to door car rides, its possible this would make congestion worse. Then, of course, you have to factor in that the Metro, as has been discussed on this site several times, has been rapidly falling apart the last few years, so you’d expect more traffic congestion even without Uber showing up on the scene.

38 (Not That) Bill O'Reilly September 28, 2016 at 11:09 am

Metro ridership is down and continues to fall, so yes, worsening congestion is more likely a product of decrepit rail infrastructure. Uber appears to just be picking up the slack, presenting an availability error for charlie to fall into.

39 Andrew M September 28, 2016 at 12:08 pm

But Uber riders aren’t circling the block searching for a free parking space. At certain times of day and in certain places, circling drivers account for a lot of traffic.

40 kevin September 28, 2016 at 9:51 am

Ive never heard this arguement “One of the reasons we had taxi medallions is we didn’t want 100% of the cars of the road to be taxis”. I cant think of anything wrong with all the cars on the road being taxis. What you really dont want is excess supply on the road since it imposes a negative externality on everyone else–traffic. That is the reason I’ve always accepted for medalions

41 Slocum September 28, 2016 at 10:16 am

The limited supply and flat-rate pricing have made the chances of being able to get a taxi late Saturday night very low, so taxis never provided the necessary option value for people to avoid driving their own cars. Uber allows people to walk, bike or take transit knowing that if a storm hits or it gets too late and they miss the last bus, etc, they won’t end up stranded. But if cities start killing surge pricing on the grounds of ‘price gouging’, they may well destroy the value of Uber — if drivers can’t make extra, they won’t drive late on weekend nights or in bad weather, and Uber cars will become as unavailable as taxis.

And, BTW, I assume you know that the ‘limit medallions to avoid congestion’ is a bogus ‘Baptists and Bootleggers’ argument. The real reason to limit medallions was to protect the taxi cartel against competition and drive up the value of medallions (which were selling for over $1M in NYC before Uber).

42 kevin September 28, 2016 at 10:37 am

I agree with everything you said, but don’t see how it relates to “we don’t want 100% of the cars of the road to be taxis”. Unless your argument is really we don’t want 100% of cars on the road to be flat-rate pricing, in which case I agree, but there’s no inherent reason taxis/medalion owners must charge flat rate-pricing. Those two arguments are slightly different

And of course, the actual reason medallions are so heavily regulated–lobbying–isn’t the stated reason for medalions

43 Slocum September 28, 2016 at 10:58 am

No, sorry, you’re right about that. I’ve never heard that argument before either. And, of course, unlimited medallions wouldn’t have caused that anyway . To get to 100%, you’d have to ban non-taxis. And if had such a ban, 100% of cars on the roads would then be taxis — regardless of the number of medallions.

44 (Not That) Bill O'Reilly September 28, 2016 at 10:48 am

Is worsening congestion in DC a product of Uber, or is it a product of WMATA’s descent into complete unreliability on major routes, with Uber simply picking up the slack?

45 Pshrnk September 28, 2016 at 11:41 am

“we didn’t want 100% of the cars of the road to be taxis”

Why not?

46 Alain September 28, 2016 at 10:50 pm

You have no idea how they measure traffic.

If you thought about it you would realize how wrong you are.

47 anon September 28, 2016 at 9:33 am

Reformations happen over time, and before you know it, the Catholics are where the Protestants were.

I am not an expert on Islam, but something a little looser and less theocratic has to be going on in Dubai. And I would say Dubai did a bit better in 2016 than ISIL.

Things evolve, and I would not call theocrats recent winners.

48 Hazel Meade September 28, 2016 at 10:54 am

Simple correlations show that Protestantism is associated with economic freedom, Islam is not, with Catholicism in between.

This can be largely explained by the back that former Spanish colonies make up about 40% of all Catholics globally. That’s one country that has had a disproportionate influence on the political culture of a large number of Catholics. What would Catholicism correlate to if German Catholics had colonized 80% of the Americas? Or French Catholics?

49 Hazel Meade September 28, 2016 at 10:56 am

s/back/fact

50 celestus September 28, 2016 at 12:33 pm

In addition, the mirror image of this point is that Britain had a disproportionate influence on the political culture of a large number of Protestants (“disproportionate” might even be an understatement). And if you think British political culture goes back to the Magna Carta…

51 TMC September 28, 2016 at 1:45 pm

Also, Catholics do a lot of charity work in poor areas. Causation seems to be reversed here.

52 Dd0000 September 28, 2016 at 12:03 pm

“Simple correlations show that Protestantism is associated with economic freedom, Islam is not, with Catholicism in between.”

Another study which is absolutely meaningless when IQ (the actual causal mechanism) is accounted for.

53 SPENCER September 28, 2016 at 1:03 pm

The article compares Protestants, Catholics and Muslims.

How do the Buddhist and Confucius of East Asia fit into the analysis?

54 Silas Barta September 28, 2016 at 1:14 pm

That’s your takeaway? Not “cities are severely underpricing peak hour road usage”?

So there’s congestion? Price it, for everyone. Don’t make it an Uber thing.

55 mulp September 28, 2016 at 2:17 pm

It is priced, in the time spent stuck in traffic.

Chose a different time to start work, etc, and you don’t pay the cost of congestion.

56 Silas Barta September 28, 2016 at 2:58 pm

Right, and the Soviets priced bread — it’s the time you spend in the bread lines!

Don’t eat bread, and you don’t have to wait in line, problem solved.

MR trolls: it’s easier than thinking!

57 mulp September 28, 2016 at 2:03 pm

When I was a kid in the 50s, Republicans were anti-Catholic Protestants.

Today, Republicans are dominated by Catholics, or by evangelicals who are even more anti-liberty than Catholics.

The Supreme Court today is entirely Catholic or Jewish with zero Protestants.

Republicans are today the bastions of restrictions commerce, denying customers freedom, often based on who the customer identity is, or denying people jobs based purely on identity. Quoting Catholic and Islamic authoritarian leaders in their justification.

Along comes Francis and Republicans damn him for failing to back exclusion of people based on identity – Francis is too willing to grant individual (economic) liberty.

I speak from the memory of the 1960 presidential campaign and the commentary I heard in school by fellow 7th and 8th graders, plus the discussions my dad, the pastor had in the church youth group, plus the reaction of church leaders to my dad inviting a rabbi to talk with us kids to talk religion. And this was in a Quaker church which was at the heart of protestant religious liberty from the start of the nation. Quaker history centers on religious liberty and tolerance.

So, I find it ironic in the intolerance of Republicans as WASPs of Catholics in the 50s and 60s, and now Republican intolerance as Catholics.

58 Thomas September 28, 2016 at 10:45 pm

Anti-catholic bigotry. Anti-baptist bigotry. Part for the course for every left is from president Obama to Farkeley Rosser.

59 Keith September 28, 2016 at 3:46 pm

The relationship between Protestantism and freedom is more direct. Protestantism is united by a belief in Sola Fide; faith alone. This means that your forgiveness is entirely determined by faith in Jesus, and society has no say in whether you’re forgiven. This clearly lends itself to notions of individual liberty, particularly through the Scottish Enlightenment.

So…we’re slowly learning that Protestantism generates economics freedom, and ethnic homogeneity generates social trust….will Tyler convert to full Trumpism by election time?

60 BDub September 28, 2016 at 3:56 pm

Would Atheism fall farther out than Protestantism on the economic freedom scale, one wonders.

61 Keith September 28, 2016 at 4:00 pm

Ayn Rand is essentially atheistic Protestantism.

62 Andy September 28, 2016 at 5:42 pm

Didn’t Max Weber settle the issue of protestantism and capitalism almost a century ago?

63 anon September 28, 2016 at 6:22 pm

Related news just in … Trump in Iowa: “Raise your hand if you’re NOT a Christian conservative. I want to see that. There’s a few of them. Should we keep them?”

64 scineram September 29, 2016 at 1:33 am

What about atheism, the fastest(?) growing religion in the West?

65 Ariel September 29, 2016 at 3:37 am

“Protestantism is associated with economic freedom, Islam is not, with Catholicism in between.” :
“Was Weber wrong?” – Becker & Woessmann QJE 2009 – http://qje.oxfordjournals.org/content/124/2/531.short

66 Jon September 29, 2016 at 6:02 am

The piece on religion and economic freedom—another piece of useless and vacuous piece of garbage that only proves that someone can calculate correlations. So what?

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