Month: January 2011

Jeff writes:

The government in Egypt is cutting off communications networks, including mobile phones and the Internet.

The decision to get out and protest is a strategic one.  It’s privately costly and it pays off only if there is a critical mass of others who make the same commitment.  It can be very costly if that critical mass doesn’t materialize.

Communications networks affect coordination.  Before committing yourself you can talk to others, check Facebook and Twitter, and try to gauge the momentum of the protest.  These media aggregate private information about the rewards to a protest but its important to remember that this cuts two ways.

If it looks underwhelming you stay home.  And therefore so does everybody who gets similar information as you.  All of you benefit from avoiding protesting when the protest is likely to be unsuccessful.  What’s more, in these cases even the regime benefits enabling from private communication, because the protest loses steam.

Now consider the strategic situation when you lines of communication are cut and you are acting in ignorance of the will of others.  The first observation is that in these cases when the protest would have fizzled, without advance knowledge of this many people will go out and protest.  Many are worse off, including the regime.

The second observation is that even in those cases when protest coordination would have been amplified by private communication, shutting down communication may nevertheless have the same effect, perhaps even a stronger one.  There are two reasons for this. First, the regime’s decision to shut down communications networks is an informed one.  They wouldn’t bother taking such a costly and face-losing move if they didn’t think that a protest was a real threat.  The inference therefore, when you are in your home and you can’t call your friends and the internet is shut down is that the protest has a real chance of being effective.  The signal you get from this act by the regime substitutes for the positive signal you would have gotten had they not acted.

The other reason is that this signal is public.  Everyone knows that everyone knows … that the internet has shut down.  Instead of relying on the noisy private signal that you get from talking to your friends, now you know that everybody is seeing exactly the same thing and are emboldened in exactly the same way.  This removes a lot of the coordination uncertainty and strengthens your resolve to protest.

I would add that today's autocracies hire consultants who advise them on how to best stifle political dissent.  Clumsy errors are less common than in times past.  That increases the likelihood that the Egyptian government sees these protests as very serious indeed.

Lane Kenworthy thinks there is much more to be done.  For instance:

Early education (preschool, child care), beginning at age one, is a very good idea. Not all states have full-day kindergarten; few have preschool for four-year-olds; none have much in the way of public funding of education for kids age one to three.

Paid parental leave is available in only a few states and covers a relatively short period.

Sickness insurance: ditto.

Unemployment insurance covers too few of us.

Unemployment insurance should be supplemented by or folded into a new wage insurance program.

Social assistance benefits have been decreasing steadily over the past generation.

If markets are now structured in such a way as to severely limit real earnings growth for those in the bottom half of the distribution, we may need to massively expand the EITC.

We ought to do more for children, working-age adults, and elderly persons with assorted physical, cognitive, emotional, and social disabilities.

These questions could and should be debated with thousands of pages.  But, in the meantime, may I offer my little squib/splat of doubt?

At what wealth level are these protections supposed to arrive?  Now?  One also wonders which risks are considered to be insurable at the individual and family level, either through insurance proper or through social norms, savings, and other voluntary institutions.  What will be the implicit marginal rate of taxation on earning additional income in this new arrangement?  Has it been estimated?  What will happen to the savings rate?  What coercions will accompany these protections?  What will the pressures be, legal or otherwise, to send your kid away at one year of age?  Will job creation for women go down if there is mandatory paid parental leave?  Probably so. Will women end up better off?  Quite possibly not.  How many people would count as falling under these disabilities?  Is this all to be financed by higher taxes on the rich?  We probably can't even pay for our current bills in that manner.  If it is all done by VAT, how many people would prefer to have the government spend the money for them, as opposed to spending it themselves?  Just asking.  How about just sending the needy people some cash?  What is the likelihood that such benefits will, in the longer run, discourage our willingness to take in immigrants, the most effective form of aid we know?

Another way to ask the question is to look for the low-hanging fruit, when it comes to social welfare.  Let's take Social Security as more or less given, though it will see marginal adjustments.  Are the big gains to be had from some new social welfare program, or from showing that Medicare and Medicaid and other regulated health care institutions can work better than the public health systems of other wealthy nations, without running the United States into insolvency? 

In my view it is the latter, and I don't think that fruit is hanging especially low.  Can we agree on a truce, and first improve the programs we already have?  Will the new programs have the problems of the old?

If I were to pick some other piece of low-hanging fruit, I would cite the still-neglected problem of pandemic preparation.

On the Kenworthy post, here are comments from Matt.