Does economic freedom lead to greater tolerance?

Mostly, yes, although with some caveats (the headline of the piece doesn’t exactly capture this).  That is the topic of my latest column for The Upshot.  Here is one excerpt:

Niclas Berggren…and Therese Nilsson…have produced a fascinating series of papers on these questions, sometimes writing singly, sometimes together or with the collaboration of a variety of co-authors. Their most notable study is perhaps a paper they wrote together, “Does Economic Freedom Foster Tolerance?

…One of their most striking findings is that societies characterized by greater economic freedom and greater wealth do indeed exhibit greater tolerance toward gay people, a tendency suggesting that gay rights, including gay marriage, will spread globally as national economies liberalize and develop.

Some metrics of economic freedom count more than others:

This greater tolerance is strongly associated only with certain features of what has often been defined as economic freedom. For example, a smaller government, measured as a share of gross domestic product, is often included in so-called economic freedom indexes as an objective measure of freedom. But the data show that smaller government has a slight negative correlation with tolerance of gay people by heterosexuals. One implication is that many conservatives may be overly preoccupied with the size of government as a measure of how free societies actually are.

On the other hand, the data shows that when a society has impressive scores on property rights security and low inflation — two other components of economic freedom indexes — these characteristics are strongly and positively correlated with tolerance of gays. It’s possible that low inflation, and the behavior of a central bank, are stand-ins for the general trustworthiness of a nation’s government and broader institutions, and such trustworthiness helps foster tolerance.

The results for race are not nearly as strong, namely both freedom and prosperity are less clearly associated with higher levels of racial tolerance, although the correlation is still a positive one.

And there is this:

We are often told that education is an important remedy, yet it does not register as a meaningful factor in the cross-country data in this paper. Higher levels of education simply have not correlated significantly with higher levels of tolerance across countries.

Do read the whole thing.

Comments

This rings true: "Higher levels of education simply have not correlated significantly with higher levels of tolerance across countries" - this also holds for mixed race couples.

Me and my former gf, a china girl when I visited DC used to get stares (as opposed to California). The redneck factor. And here in southeast Asia the ladyboys are so common (every other house seems to have one, even some of my in-laws of my current gf's family) that nobody notices, whereas in DC I'm sure they would get picked on or stared at. It's the Puritanical tradition of the USA more than 'economic freedom' or education. The heavy hand of history as F. Braudel would say. That said, modern culture flows from the USA to the rest of the world, so the other day, on Philippine TV, they had a foreigner married to a ladyboy here, married of course in the West, since gay marriage is illegal here.

The thing about racial tolerance being less correlated to economic freedom than gay tolerance is interesting. But I wonder, are there any data about xenophobia, as distinct from racism? It's easy to imagine the good burghers of, say, the old Dutch Republic being very tolerant towards white people without extending that to others.

Dutch Republic, American Republic,....

I just think the whole premise is kind of stupid, tolerance and economic freedom are two different things... apples and oranges...

Isn't there a strong confounding factor re WEIRD societies. If you just looked at countries in Central Asia & Middle East or in Africa would you find the same correlation ?

Since economic freedom has been decreasing over time, at least here in the states, we should be observing gay tolerance decreasing.

Pretty much anyone who ever visited a campus knows that extensive education and outright bigotry are totally compatible.

Sadly, education is too often tantamount to brainwashing, particularly in humanities.

Yes, Marian but ON AVERAGE...

Much more significant than questionable associations between economic freedom and tolerance is this observation by Cowen about trust: "Another lesson from this data is that economic forces alone are not all-powerful. Both economic freedom and wealth have much closer associations with tolerance when a society exhibits high levels of trust, as measured by the attitudes that people report when surveyed. In other words, economic freedom, wealth and good human values seem to work together, although the causality is murky. Questions of trust occupy only a secondary position in economics and arguably deserve much more attention." In my comment yesterday I said that trade is the fuel for economic development and that commonality is the key to trade: common language, common culture, common religion, etc. Of course, commonality is just another way of describing trust: individuals, tribes, nations trade because they trust one another.

The key to all actions is expectation.

I find that headline so funny. Can you imagine the headline saying: Inequality has no effect on tolerance, but economic freedom does.

Inequality as an issue has been the driving force behind openly murderous regimes.

Isn't this an attempt to redefine tolerance as acceptance of the sexual picadillos of wealthy white men? They timed this paper perfectly, the Davos crowd can preen on it; I am tolerant, I have a black girlfriend in Ghana, a yellow boyfriend in Malaysia, a russian threesome in Moscow. And I fly my Brazilian jet to get there burning Arab fuel.

What you think homosexuality is something that only Europeans do? Perhaps only since Plato made it cool.

You mean there is no homosexual sex outside of marriage?

Whot?

If anything Plato made it really uncool in a sociery where it had been cool. And by it lets specify--homosexual relationships between wealthy men and prepubescent boys in exchange for gifts and patronage. You haven't actually read Plato have you?

Isn’t this an attempt to redefine tolerance as acceptance of the sexual picadillos of wealthy white men?
--
Gosh, no kidding?

(Actually, the sexual peccadillos of Hollywood types).

"Do read the whole thing." Not until you explain how the direction of causation is known.

When I saw the NYT Upshot article in my feed last night and read the article I wondered whether the headline writer read the article.

Gay tolerance is pushed by elites. Government is run by/for elited, so it's not surprising bigger government leads to more "tolerance."

Elites: You totally have the right to oppose same-sex marriage Mr. Eich. But are you sure you wanna do that?

Tick!

The Eich episode was a big ole -1 for American tolerance.

Economic Freedom indexes almost always measure low economic freedom for Vibrant and Diverse countries. Even if the countries have very small governments, very low taxes, and next to no welfare state, because they are so corrupt and often crime-ridden, they will have low economic freedom scores. Whereas "socialist" countries like Germany and Sweden come out near the top of the list. With this in mind it should shock no one that "economic freedom" is positively correlated with the celebration tolerance of homosexuality.

Clover,

Sweden ranks highly on economic freedom, as does Finland. Germany less so, but I would argue that they are neither vibrant nor particularly 'diverse'; and that that its recent economic growth is an artifact of the Euro which keeps its products priced artifically low relative to its major trading partners in the rest of the EU zone and the world. The smaller countries with the highest economic freedom, Singapore, and Hong Kong, also have lower corruption and stronger rule of law than the United States. By some measures, America's property rights are on par with Ghana...and this shows in the economy.

But while you are extolling the wonders of 'socialism' why did you cherry pick Sweden and Germany...why not France and Greece, since they are more virbrant and diverse due to socialism, no?

Kai

If you want to get a locational picture of tolerance in the US, you might want to look at the maps and data in "Dataclysm: Who We are When We Think No One's Looking" by Christia Rudder.

The book uses google search data, OkCupid data, and other search data linked by geography. You can guess where search terms for "n---" jokes is highest, the frequency of same sex partner searches differ by region (they don't), and other great items. Highly recommended for use of Big Data analysis.

So, if you say some states are more "economically free" than others, you might be interested in testing that against the data where the person doesn't know you are monitoring their searches, as opposed to questionnaires where respondents are aware of you.

Christian Rudder

Correct. Mistyped.

Given the significantly increased tolerance for gays during Obama six years as president, economic freedom has been increasing since Obama became president?

Must be, after all economic growth is up and unemployment is down. The market loves Obama.

Argentina and Brazil must be some serious outliers here, right?

Rather than economic freedom as leading to tolerance,

I would like to see some research on

Economic inequality leading to

Intolerance.

Does economic inequality, or closer economic equality, have an effect on tolerance?

At a guess: I would say there is no correlation outside of what could be explained by existing correlations between economic freedom and inequality. And I have no idea which direction that correlation goes.

Maybe, tolerance is more closely related to exposure. Maybe, in a society of greater economic freedom, more diversity is drawn in to exploit the opportunities. The greater the amount of exposure to that which is unusual, the more likely people become accustom to/numb to what was once unusual.

The causal arrow probably goes in the other direction, considering economic tolerance and trust is a particular case or subset of generalized tolerance and trust.

These studies are a great example of how annoying social sciences are. They looked at 65 countries. It's immediately obvious that 65 countries you look at would matter a lot.

"But the data show that smaller government has a slight negative correlation with tolerance of gay people by heterosexuals."

The survey asks if one would prefer not to live next to homosexuals. That may be an interesting question, but is utterly insignificant next to where the government is on the spectrum between officially sanctioning homosexual marriage and stoning to death people suspected of homosexual thoughts or acts.

The question itself is also problematic, at least as a proxy for "tolerance." If gays prefer to live next to other gays, does that make them intolerant?

*which 65 countries you look at

Lord Kames (Henry Home) predicted as such three centuries ago i.e. commercial societies engender a softening of manners as everyone learns to rub along for the same of material progress.

What's so great about tolerance? What is it that your tolerating?

--

We are often told that education is an important remedy, yet it does not register as a meaningful factor in the cross-country data in this paper. Higher levels of education simply have not correlated significantly with higher levels of tolerance across countries

This is a surprise? Is there any place in the world where Monovox prevails more thoroughly than academe (other than newsrooms, perhaps)?

I'm a bit baffled by all the confusion here. It's pretty obvious that economic freedom does not "lead to" greater tolerance; instead, economic freedom and tolerance are both the result of high intelligence. Countries with greater degrees of economic freedom also have higher mean national IQ levels (http://www.sciencedirect.com/science/article/pii/S0160289607000207), and more intelligent people generally tend to be more tolerant overall (see for example Ian Deary at http://pss.sagepub.com/content/19/1/1.short), and also display many other socially desirable characteristics that foster a strong and healthy economy (less corruption, less tribalism, etc.). Is T.Cowen genuinely unaware of these facts? Or maybe the NY Times demands a certain level of meekness in its thinky opinion pieces?

Well said, Steve.

economic freedom and tolerance are both the result of high intelligence.

Tolerance of what?

Sometimes, like Fischer Black, I don't want to look at the data - they're contaminated and unrepresentative - I want to think about the logic. If I live in a community consisting of my own kind of people, and commerce forces me to interact with other kinds of people *to our mutual benefit*, I am very likely to become more tolerant. The key is commerce and mutual benefit. Other kinds of interaction may not produce the same result because there is no structural benefit to offset the distaste of dealing with people I don't like.

I don't know if free economies promote more tolerance, but they do make it less relevant.

In the public arena where we divide into factions and very visibly lobby the government for special consideration of our pet issues over another group's, tolerance is required just to prevent people from taking to the street with baseball bats, or from passing laws that oppress disfavored groups.

In the marketplace, I have no idea whether the product I bought was made by a Christian, a Muslim, a gay person, a woman, or any other member of a minority group. I can't tell whether the supply chain contains people from my tribe or yours.

In addition, discriminatory behavior that limits the pool of applications for a job, or which limits the suppliers I can buy from or the market I can sell to will be punished because my competitors are under no such limitations.

This is why Israel can do business throughout the middle east, even with people who in public say they hate Israel and want it destroyed.

So rather than enforcing tolerance on everyone, maybe we should make sure our institutions minimize the impact of intolerance on minorities. The market does that quite well.

"One implication is that many conservatives may be overly preoccupied with the size of government as a measure of how free societies actually are."

Right, because whether <10% of the population can marry one another is more important a component of freedom than whether the government controls >50% of the economic life of 100% of the population.

The inescapable implication is that libertarians have become overly preoccupied with relatively minor issues as measures of how free societies are. You don't have to be opposed to gay rights to want things kept in perspective for God's sake.

I think when we use freedom than it can lead to so much stuff but all are good in my view. I mostly believe that if we are doing well it reflex on everything we do. I am fairly successful in trading at the moment and all credit given to OctaFX brokers since without their free 8 USD no deposit bonus I would never be able to start off my career and now I am fully satisfied with the results.

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