The Big Society, from England

by  Tyler Cowen in

Here is Wikipedia on The Big Society.  Here are my impressions:

1. It is nice to have a conservative movement which is pro gay rights and reasonably socially liberal, while still fiscally conservative.

2. Their person in charge of naming should be fired and sent to study Orwell.  The words "Big" and "Society" make each other sound much worse.  I would have preferred "The Small Non-Society," "The Small Society," or "The Big Non-Society," or "The Medium-Sized Hook-Up," among other options.

The only worse name I can think of is Big Society Bank.

3. From a distance, it seems that almost everyone in the UK hates the program.   

4. Most of the important market liberalizations in the Britain have come through expressions of centralized political power, but for market liberal ends.  Margaret Thatcher is the classic example, but you could go back to the repeal of the Corn Laws or for that matter the abolition of slavery.  The Big Society pretends to have found a new formula for British liberalization and I suspect they are simply misguided.

5. John Kay put it well: "The Big Society might in the end mean no more in practice than the encouragement of volunteers to supervise public libraries, just as stakeholding ended up only as the name for new tax breaks for private pensions. If an emphasis on hybrids is to make the transitions from sound bite to political philosophy to practical policy, the largest group of questions that need to be answered concerns the closely related issues of hybrid capital structure and governance. Faced with opportunities to review these issues in the establishment of new regimes for hospitals, schools or railways, the Treasury resisted giving answers, because to do so would make the transfer of autonomy to the newly established bodies real."

6. The Big Society may create lots of decentralized power structures with the worst aspects of the private and public sectors, and those structures may in the longer run thwart true liberalizing reforms.

7. Admittedly this is from a critical source, but I don't think it is a terribly biased article.  Doesn't this make it sound…lame?: "The initiatives being championed include a local buy-out of a rural pub, efforts to recruit volunteers to keep museums open, support to speed up broadband supply, and giving residents more power over council spending."  

8. Since they presumably have read both Bryan Caplan and Matt Yglesias, why would they push for direct election of police chiefs?  Is there any good argument for that practice?

9. I hate local councils.  Might the disproportionate reasonableness of the British population be partially related to the fact that they don't spend so much time in local politics?

10. The cutting and consolidating of benefits is the best part of the whole scheme.  It is long overdue.

11. The real UK economy is in any case badly ailing, and for reasons which have nothing to do with the current government.  Finance is a far iffier venture than in times past, the tax haven gains for London will persist but may not be a source of future growth, British manufacturing has long been weak, their fossil fuels have not so bright a future, and British pharmaceuticals seem to have hit a dry spell.  What do they make?  The economy is in for a tough time no matter what, and the policies done in the meantime will receive a bad name, whether they deserve it or not.

12. England probably has the worst health care policy in Western Europe.  Still, whatever payoff will come from the proposed NIH reforms probably will take quite a few years, even if all goes as planned.  It is difficult to drag a health care system out of its established pathologies.  In the meantime the system will cost more and make the preexisting faults of the British health care system, including its inequities, more visible.

13. Unlike David Leonhardt and some other commentators, I don't blame fiscal austerity for their output and adjustment problems; their monetary policy has been fairly expansionary and they are not in a liquidity trap.  Scott Sumner is the best commentator here.

As it stands, I don't see the whole thing ending well.  It's not targeting what are actually their biggest micro problems, which are increasingly polarized labor market outcomes, a paucity of competitive export sectors, and some deteriorating educational institutions, at multiple levels.  I don't much care whether a citizens group shows up and feigns a Tocquevillian approach to running the local library.

State tax revenue fact of the day, or “the new normal”

by  Tyler Cowen in

GDP has now recovered to pre-crash levels, but how about state revenue?

On average it has returned to 89% of peak levels.  In Louisiana it is about 72 percent of peak levels, the lowest figure in the group.  In North Dakota it is over 110 percent.  Only New Hampshire and North Dakota are above 100 percent of peak levels.

I take these numbers to be one measure (not the only measure) of how much we had been overvaluing our actual wealth, pre-crisis.

Here is the on-line version of the WSJ article, it does not reproduce all of the information in the paper edition, pp.A6-7.

What counts as enough progress?

by  Tyler Cowen in

Bruce Cleaver asks:

Pondering your thesis in TGS, (which has some evidence to back it up; the change in society from the early part of the 1900's to 1973 does seem sharper than subsequent change, irrespective of the status of median income),  I would ask you (in all seriousness) what changes/inventions now, today, if they were to exist, would cause you to say "The change from 1973 onward was just as sharp".  Flying cars? Affordable interplanetary space travel? Teleportation?

Teleportation is not required, though it would…suffice.  Alleviating traffic congestion would have been a significant advance, though we are moving in the opposite direction.  Add in a cure for cancer, 3-D printing, seventy percent green energy, life expectancy of ninety-five, a Segway that people want to use, and higher graduation rates than we had in the late 1960s, and we are getting there.  Median family income of $90,000.  As it stands, it seems we will be getting 3-D printing, although I am not sure exactly when or for how many items.

Coming at this from another direction, a few years in the late 1990s genuinely did not exhibit "great stagnation" numbers and this is consistent with on-the-ground observations at the time.  Think of the last forty years, and imagine that thirty or thirty-five of them were like that period. 

The Lucas critique and twin adoption studies

by  Tyler Cowen in

It is odd to cite a twin adoption study, and its results, as a response to a methodological critique of…a twin adoption study.  Nonetheless, the paper Alex cites, and the associated graph, show very readily the problems in interpreting such studies.

If you check out the graph, for a variable such as "religious importance" it shows family transmissibility of about thirty percent, with varying estimates of transmissibility for other religious variables.  That is the result from a data set involving a) parents who try hard to transmit religion with some idea of what to do, b) parents who don't try very hard, and c) parents who try hard and have no idea of what is an effective technique, as they might be advised by a well-informed social scientist. 

Here's the key point.  The original "control" question we were debating was about a) alone, yet in response Alex is putting forth a measure of the marginal efficacy for a-c, namely including the families who aren't trying to transmit.  Obviously the marginal product of the informed, trying families should be higher than the average marginal product for the group as a whole.  At the very least we can take thirty percent as the lower bound here, not the best estimate of the effect we are trying to measure.

The Korean-American Protestant study finds transmissibility of religious fervor, through family influence, of two-thirds.  That paper does not control for genetics, and of course because of genetic similarity family influence will run especially easily and this figure is an overestimate of the net family effect.  You can think of two-thirds as the upper bound here.  If we had commensurable studies (not the case), we would have lower and upper bounds for trying-to-transmit families.

One way to think about the Korean study is to recognize that out of 100 Protestant children, parental inculcation "worked" for 66 of them.  The correct marginal product question is: without that inculcation, how many of those 66 kids would have found their way to a comparably observant religion?  Of course we don't know, but that's the right question to focus upon.

Twin studies encourage you to think in terms of a different question about marginal products: if you had those Protestant families adopt 100 kids, and try to inculcate the same religion, would 66 of them have ended up observant?  Very likely not.  Of course the two thought experiments are quite different, and they give you different measures of marginal product, most of all because there are non-linear interactions between parenting, peers, and genes.  Since most children are not adopted, it is the first thought experiment which gives the more accurate measure of marginal product of parental inculcation of religion. 

What about the religious variables which don't seem very transmissible at all?  Alex cites "born agains," drawing on the same paper.  But this interpretation again mirrors a major drawback of many interpretations of twin adoption studies, namely that they don't reconcile the cross-sectional and the time series comparisons.  Alex is walking a simple pitfall here, as does the paper he cites.

What does this mean in practice?  Born agains (or arguably, their revival) are a relatively recent phenomenon in the United States, dating from the 1970s.  (There is a similar revival in biblical literalism, although perhaps less extreme.)  The study takes adults from the mid-1990s.  That means you will have lots of "born again" descendents who had strongly below average prospects of having had "born again" parents.  The correlation will appear very weak, but this doesn't show the variable is not transmissible going forward.  We simply don't know, at least not from this data set.  

To put this final point another way, the father of Abraham was not a Muslim, and so back then the correlation was zero, but this does not show the family cannot transmit Islam in later periods of time.

I'd like to stress again that when it comes to Bryan's book, I agree with most of his points.  But on religion in particular I don't think Alex is making sound claims.

What are the incentives here?

by  Tyler Cowen in

Although inmate labor is helping budgets in many corners of state government, the savings are the largest in corrections departments themselves, which have cut billions of dollars in recent years and are under constant pressure to reduce the roughly $29,000 a year that it costs to incarcerate the average inmate in the United States.

Senator John Ensign, Republican of Nevada, introduced a bill last month to require all low-security prisoners to work 50 hours a week. Creating a national prison labor force has been a goal since he went to Congress in 1995, but it makes even more sense in this economy, he said.

Not that this could ever affect parole or imprisonment decisions…  I prefer a situation where each prisoner costs the state government a good deal.

The full story is here.

On-line juries

by  Tyler Cowen in

Is your spouse hogging the new car? Or refusing to do the dishes? Now you can take your dispute to an online jury of your peers at a new website called JabberJury.com.

Fast Company calls the website “The People’s Court for the Facebook generation,” while a press release dubs it “a true people’s court.” It’s the brainchild of Chicago entrepreneurs Kevin Wielgus and Angelo Rago, who came up with the idea after Rago settled an argument with his girlfriend by asking bar patrons to weigh in. The dispute: Did his girlfriend have a right to be mad when he refused to visit her father in the hospital? (He was suffering from hemorrhoids, not a life-threatening disease.)

Recent cases posted at the website raise age-old questions such as: Are dogs superior to cats? What’s the need for all those decorative pillows on the bed? And what’s the big deal about chewing with your mouth open?

The full article is here, and for the pointer I thank Eapen Thampy.

How to think about refugee policy

by  Tyler Cowen in

Dave Bieler, a loyal MR reader, asks:

I see that you've provided some commentary on Marginal Revolution about refugee situations, but I'm curious to know what you think about refugee policies – i.e. what is the role of government? What is the role of private insitutions? How can different types of institutions and organizations improve or make worse various situations? Do you have any thoughts or links to articles or books? I think it would make for an interesting blog post!

This question may be more relevant soon, although Muslim refugees from the Middle East do not have the best chances of getting into America.  I have read that one small town in Sweden has taken in more Iraqi refugees than has the entire United States.  Here is Wikipedia on refugees.  I hold a few views:

1. Refugees are deserving of migration toleration when possible, but they are not more deserving than equally destitute non-refugees.

2. Refugees nonetheless capture the imagination of the public to some extent, albeit for a very limited period of time.  Their beleaguered status provides a useful means of framing, to boost migration for humanitarian reasons.  When it comes to private institutions, refugee issues may be a useful way of raising funds, again for humanitarian aid, although again refugees should not be privileged per se, relative to other needy victims.

3. Legal treatment of refugees is inevitably arbitrary and unfair.  There is not and will not be a clear set of rational standards for who gets in and who doesn't.  There are better and worse standards at the extreme points, but don't expect this to ever get rigorous, not even at the level of ideal theory.

4. There always exists some pool of refugees who will help the migration-accepting country, even if you do not believe that about all pools of refugees.  Let's take in some Egyptian Copts, who possibly are in danger now.  Some groups of African migrants have done quite well in the United States and we can take in more oppressed women from north Africa.  In other words, "immigration skepticism" may redirect the direction of refugee acceptance, but it need not discriminate against the idea of taking in refugees.

5. Optimal refugee policy is most of all an exercise in public relations, as ruled by the idea of the optimal extraction of sympathy.  Explicit sympathy from the public cannot be expected to last very long.  In the best case scenario, sympathy for the refugees is replaced by fruitful indifference, so as to avoid "refugee fatigue."

See my earlier remarks on sovereignty.  Here is an argument against admitting refugees; I don't agree with it.

The Pippi Longstocking essay and gay adoption in Sweden

by  Tyler Cowen in

Thanks to Jayme Lemke, it has fallen into my clutches; the previous summary reference was here.  The essay by Henrik Berggren and Lars TrägÃ¥rdh, is interesting throughout.  It has useful insights on Sweden, statism, how collectivism and individualism interact, what architecture reflects, and why many things are not always as they seem.  Here is one good passage with a different slant than what I already covered:

While it is obviously true that gay marriage remains a highly controversial issue in the US, what is often over-looked is that adoption of children by gays is not prohibited but indeed rather common.  In Sweden the opposite is true: gay marriage or partnership is today relatively uncontroversial (although an opposition of course exists there as well), where the adoption of children by single or couples gays remains a problematic issue.

One way of understanding this difference is to see that while in the US marriage is a highly public matter, and the family a sacred institution, children are by and large seen as a kind of private property, or something to which every adult individual has a right.  In Sweden, on the other hand, the family is a private matter, while it is the child who is the public matter.

Can Swede readers attest to this?  This short BBC bit seems to confirm.  Gay adoption was legalized in Sweden in 2002, but in 2000 16 children were put up for adoption in Sweden.  As in the Netherlands, it seems that Swedish gays are not always encouraged to adopt abroad, given that the source countries often object.  There is now a Swedish film comedy about gay adoption.

You can find the essay in this unorthodox and stimulating book.  

Response to Alex on parenting and religion, and a bunch of other points on twin studies

by  Tyler Cowen in

Alex is right on one point, that Bryan's book is very important and everyone should read it.  Otherwise, his discusson of Yana indicates that both genes and upbringing matter, which is my point — that both matter.  He mistakenly cites that example against me, rather than against Bryan, who claimed upbringing and inculcation do not matter for language. 

Orthodox Jews are clearly a case where parenting matters for the religion and religiosity of the kids, not just the abstract fact of having the parent or the possible genetic transmission of general religious fervor.  Orthodox Jewish parents are effective, in part, because they inculcate the religion in their children.  Or look at the data on Korean Protestants.  I could spend a whole day finding credible studies on this question and they are not restricted to a few extreme points (though they also don't cover everyone, and probably strict inculcation of Unitarianism won't work).  There is overwhelming evidence that parenting often does transmit religious observance and if twin adoption studies do not show that it is a sign of their limitations.

In the comments, Cournot (not Augustin) nails it:

Tyler is not rejecting the studies. He's rejecting Caplan's interpretation.

Imagine this were a drug and the trials showed that the drug clearly reduced fever in a stat sig group.

However a number of non-statistically significant side effects were observed. Some patients died, got rashes, or became crippled. We also have anecdotal evidence and even some good theory that there may be weird interactions with some subpopulations, but to date no good studies showing these effects have been conducted.

Should I assume that it's safe to take these drugs? I think not.

Indeed, doctors often warn us of side effects even though most of the side effects don't show up as statistically significant in clinical trials.

Tyler is just saying some of the side effects of parenting on kids may well be significant and until clearly proven otherwise, it is unsound to ignore non-statistical anecdotal evidence [TC: there is plenty of statistical evidence also] just because the major studies don't show any effects.

And here is Richard A.:

The Body-Mass Index of Twins Who Have Been Reared Apart

We conclude that genetic influences on body-mass index are substantial, whereas the childhood environment has little or no influence. These findings corroborate and extend the results of earlier studies of twins and adoptees. (N Engl J Med 1990; 322:1483–7.)
http://www.nejm.org/doi/full/10.1056/NEJM199005243222102

IOWs, the reason why white kids of today are much fatter than white kids of the 50s and 60s is due to genetic influences and environment has little or no influence

This shows that the twin studies are flawed.

If that doesn't convince you, ponder the Zoroastrians, an extreme minority in most of the places they have lived.  Parents inculcated religious observance for centuries, yet now that pattern of replication seems to be falling apart and the religion and way of life is in danger.  In other words, now we are viewing the time series evidence (as does Richard A. in the case of body weight).  Parental inculcation can matter a lot, or not so much at all, depending on circumstances.  The very size of that variation suggests two points: a) cross-sectional evidence alone won't pin down the proper genetic component, for instance studying this group today, rather than across time, would overestimate the genetic influence, and b) if the transmissibility can change so quickly we are pushed away from genetic explanations, though of course without abandoning them altogether.  Genes are still very, very important.

In contrast, what do you expect for the heritability of IQ over the generations?  Lead poisoning and the like aside, I expect estimates of that heritability don't change much over time at all.  That is more closely tied to genetics, and the time series evidence confirms it.

Labor history bleg

by  Tyler Cowen in

C.R., a loyal MR reader, writes to me:

I'm writing with a small favor, I was wondering if you could recommend (or ask for recommendations on MR) for a good history of labor unions in the US. I know a lot has  been written especially from the left labor economists, but I don't have the knowledge to sort out the good from the bad. I'm interested in it from a historical perspective (origins and accomplishments) and a current political analysis perspective (what are reasonable claims about the costs&benefits of modern union membership).  The case in Wisconsin has really grabbed my attention and I'm curious about unions as a case study of the creation, growth and changes of institutions.

I know where to go for the standard economics of labor unions, if you wish start with the surveys in Journal of Economic Perspectives (on-line and free) and then go to the Handbook of Labor Economics.  But what about labor history?  What is the best way to approach this often controversial topic?