Why are people conservatives or liberals?
I’ve long suspected that many political debates boil down to a relatively small number dimensions or core value judgments. And I believe these values often are rooted in basic personality.
George Lakoff tries to put some meat on these bones. In a nutshell, he sees conservatives as siding with a “Strict Father” model, and liberals as siding with a “Nurturant Mother” model.
Lakoff writes:
My findings indicate that the family and morality are central to both worldviews…What we have here are two different forms of family-based morality. What links them to politics is a common understanding of the nation as a family, with the government as parent. Thus, it is natural for liberals to see it as the function of the government to help people in need and hence to support social programs, while it is equally natural for conservatives to see the function of the government as requiring citizens to be self-disciplined and self-reliant and, therefore, to help themselves.
The linked essay presents the hypothesis in more detail. For more detail, buy Lakoff’s fascinating book, Moral Politics. Note, however, that he definitely sides with the liberal point of view. I would argue, in contrast, that liberals misapply what is good family policy to larger polities, where a stricter and more impersonal approach is appropriate.
My take: I’ve never met an intelligent person who couldn’t come up at least five good objections to Lakoff’s thesis. But Lakoff’s writings make more progress on a difficult topic than anything else I have read to date. They also explain, in my view, why libertarianism, in practice usually ends up closer to the right wing than to the left. “Individual responsibility” is a core moral intuition for most libertarians, and this puts them closer to conservatives, despite the considerable differences.
That all being said, let’s say you realized that your political views followed from your core personality. Let’s say also that personality is something that, in large part, you do not choose. Either you are born with it, or your upbringing shapes you from an early age. Shouldn’t that make you less rather than more confident of your political views? After all, it would be a mere genetic accident that conservative or liberal politics should feel as right to you as they do.
Alex the Statist?
It seems doubtful. Believe it or not, Brad DeLong rises to Alex’s defense and in the process makes a number of excellent points about the market for economists and the economics of predatory pricing.
Two perspectives on the American dollar
Shortly I am headed back from Poland to France, for one more day in Europe. I cannot help but wince at the especially high prices in France, compared to the United States. You may recall my mention of the five dollar chocolate bar; at home I could get the same for less than three dollars.
So a microeconomist might conclude that the U.S. dollar should rise over time. Arbitrage will cause people to buy more in the United States, helping out the dollar.
Or look at interest rates. You can pick and choose various comparisons, but overall they are not bearish for the dollar. That is investors do not expect the dollar to fall. Nominal interest rates on the dollar are low, but people are still holding dollars. So those investors presumably expect the dollar to appreciate.
Let’s bring the macroeconomist into the picture. He tells us that the United States has unsustainably high trade and budget deficits. The only way to clear these deficits, he says, is for the dollar to fall at least thirty percent. We will sell more exports, our trade balance will be restored, and our consumption binge will be checked. Long-run accounts will balance.
Could the macroeconomist be wrong? After all, someone has to be wrong.
If we are comparing the dollar and the Euro, I wonder whether the U.S. is really in a deficit position, all things considered. Even if our measured fiscal position is poorer (this depends who you compare us to), isn’t the American economic future brighter? We have better demographics, a more entrepreneurial culture, and arguably a more robust ability to reform and regenerate ourselves. The optimism of a population counts, though it doesn’t fully reveal itself on this year’s balance sheets.
So will the dollar rise or fall? Should we believe the microeconomists or the macroeconomists?
The nice thing about economics, of course, is that someday we will know. The problem with economics, of course, is that we don’t know now.
For an overview, here is a simple essay by Hal Varian on exchange rates. Niall Ferguson, a dollar pessimist, offers political commentary.
I am indebted to conversations with John Nye for some of the ideas in this post.
Average vs. marginal tax rates
Not long ago I asked whether the marginal or the average tax rate had more influence on economic behavior. Too often economists take the measured marginal rate as the true trade-offs faced by the individual.
The ever-insightful Randall Parker recently emailed me the following, in support of the point:
1) People in conventional regular jobs do not have total control over how many hours they work or their income. For lots of jobs it is all or nothing. Either you work full time or you don’t work at all. You are on a salary. What you make is what you make. The marginal tax rate for the next dollar doesn’t matter to you since you don’t have much control over whether you get a raise.
You can’t boost or lower your income much in a given year. The alternatives that would give you more control are too risky or lower in income per hour worked or unappealing in some other way.2) People in entrepreneurial pursuits often have far less predictability of income. It is hard to work harder or less hard in a given year as a reaction to marginal tax rates because you just do not know how many of the deals you are working on will close by the end of the year or when various billables out there will generate a check in your in-box. Believe me on this one if you haven’t been in this position. It is a real situation for lots of people.
3) You can’t predict in advance what your tax burden will be. Hey, only the tax expert can figure it out. How much will you get to keep? You’ll find out when he tells you. Kinda hard to behave during the work year as if you are responding to a known marginal tax rate at any given point.
4) Customers won’t let you respond to a known marginal tax rate. Again, this is a variation on the theme of a lack of control. You make deals early in the tax year and earn income at a low marginal tax rate. Then as the year goes along you keep a smaller fraction of what you earn. What to do about it? Laze off. Take a trip. Oh wait, your customers won’t let you. Still want them to be there in January when the marginal tax rate drops again? Well, you have to work hard to service their needs in the last 6 months of one year to get the lower tax rate income of the first six months of the following year. This means you have to work at a high marginal rate to get the low marginal rate income. Thinking of your tax rate as an average then makes more sense, doesn’t it?
5) On an even longer time scale people choose their careers at the beginning in part based on what they will make. If an economy has a high marginal tax rate then that can be an incentive to choose a less demanding and lower income career path. In that scenario it may make more sense to go for high job security since you could be faced with a tax schedule where you get more after-tax income making say, $50,000 for two years in a row than making $200,000 one year and $0 the next year.
I’d expect a shift toward lower marginal tax rates to most heavily impact career choices. So the impact would gradually increase as more people managed to retrain for higher income careers.
The bottom line: If you want to encourage private economic activity, don’t focus obsessively on measured marginal tax rates. True marginal rates tend to move closely with the size of government more generally. I’ve said it before and I’ll say it again: government spending is a better measure of our fiscal burden than marginal tax rates.
My thanks again to Randall for writing. And while you are at it, read Randall’s post on how trade protectionism makes us fatter and less healthy.
Addendum: Here is a useful recent piece on what the Laffer curve was all about, by Laffer himself.
Sand dreams and spontaneous order
One of my dreams is to go to Niger. In the meantime I will have to be satisfied reading the excellent Sahara: A Natural History, by Marq de Villiers and Sheila Hirtle. No student of spontaneous orders can ignore the following passage:
Obviously [sic], dunes are formed because jumping sand bounces more easily off hard surfaces than off soft ones, so that more sand can be moved over a pebbly desert surface than over a smooth or soft one. Even a slight hollow, though, or a rock, will reduce the amount of sand that the wind can carry, and a small sand patch begins. Very quickly, this patch will trap more sand. When the patch is big enough, it begins to change the wind velocity about it. The winds decrease near the surface and deposit more sand on the patch. Quickly, the dune is built up.
If the conditions are right, the dune will grow rapidly: In days it will be taller than a man, and in just a few weeksit can reach sixty-five or one hundred feet, and keep growing. Over time, the windward slope eventually adjusts itself, and the wind velocity close to the sand increases to compensate for the drag imposed by the sandy surface. The smooth leeward slope steepens until the wind can’t be deflected down sharply enough to follow it, leaving a “dead zone” into which the sand falls. When this so-called dispositional slope reaches the natural slope angel of dry sand (about thirty-two degrees), the added sand cascades down the slope, now called the “slip face.” The dune has stopped growing — there is no gain or loss of sand — though it continues to move forward as a whole, slowly, ponderously, relentlessly.
It turns out that driving on sand is an art, and no one can avoid getting stuck in the long run. Fortunately (to my surprise) most of the surface of the Sahara is rock rather than sand.
Here is a lecture on spontaneous order and sand. Here is advice on how to build a better sand castle.
Every now and then someone is inclined to think that this kind of analysis holds the key to either business cycles or stock market crashes. It has yet to come through, but in the meantime I will keep dreaming of Niger.
Markets in everything, for the newspaper fanatic
I usually read six newspapers a day, and enjoy every one of them (can you guess which six?). But what to do on vacation, especially when traveling abroad? I hate reading papers on-line, plus I left all my passwords at home. And Polish newsstands are of varying quality.
Try NewspaperDirect.com, which delivers print-on-demand copies of your favorite paper directly to your hotel. Here is Poland I am enjoying the American edition of USA Today, and reading about the NBA Playoffs in depth. But hey, if the Lichtensteiner Volksblatt is your thing, you can get that too.
Lawsuits in everything
Get this one: a guy blames his school for not catching his plagiarism sooner.
An argument for genetic engineering
Soon we will have cows that are immune to mad cow disease. We’re not about to engineer cows on a large scale, and probably we don’t need to; my interest is in how this upsets the usual spectrum of ecological worries. I’ve found that people who fear mad cow disease also tend to fear genetic engineering of animals. But now, which way to turn? It reminds me of those reports saying we need not fear global warming, because we will run out of oil in the meantime!
My favorite Polish things
My favorite Polish novel: Solaris, by Stanislaw Lem. Don’t worry if you hate science fiction, this is possibly the best novel ever penned about erotic guilt and the nature of personal identity.
My favorite Polish music: My traditional favorites have been the Chopin Etudes and the Polonaise Op.40. But arguably the Mazurkas hold up best over time. Here is a recent Chopin CD that will blow you away.
My favorite Polish movie: Kanal, directed by Andrzej Wajda. A European movie of great depth with a plot as gripping as Hollywood.
My favorite Polish TV show: The Decalogue, episode four. This audiovisual classic is now available in its entirety on DVD. In the fourth episode, a daughter receives an envelope from her father, with the written instructions: “Don’t Open This Until I Die.” I leave the rest up to your imagination.
I’m enjoying my time here very much, soon I will be in Kracow.
Addendum: Let’s not forget the goose in cranberry sauce, the pork knuckle pate, the wild boar with dumplings, the sour soup with sausage, the duck with cherry sauce, or the wonderful Brazilian restaurant they have here. Polish food in Brazil is fantastic, so now they are returning the favor, all to the benefit of me.
Econometrics and New Yorker fiction
What kind of stories get published?
Ms. [Katherine] Milkman, who has a minor in American studies, read 442 stories printed in The New Yorker from Oct. 5, 1992, to Sept. 17, 2001, and built a substantial database. She then constructed a series of rococo mathematical tests to discern, among other things, whether certain fiction editors at the magazine had a specific impact on the type of fiction that was published, the sex of authors and the race of characters. The study was long on statistics…the thesis segues to the “Kolmogorov-Smirnov Two-Sample Goodness of Fit Test” and the “Pearson Correlation Coefficient Test.”
And what is the main conclusion?
…male editors generally publish male authors who write about male characters who are supported by female characters
More generally:
Under both [fiction] editors the fiction in the magazine took as its major preoccupations sex, relationships, death, family and travel.
Are you surprised? And what does the magazine say?
“I was personally riveted by the whole thing,” said Roger Angell, a writer at The New Yorker who worked as a fiction editor during part of the period scrutinized by Ms. Milkman. He spent a significant amount of time talking to Ms. Milkman and helped connect her with other people at the magazine. He was charmed by the results but worries they may sow confusion.
“Some unpublished writers are going to read this and say, `I now know what I have to do to get published in The New Yorker,’ and it’s not helpful in that way,” he said. “In the end we published what we liked.”
Here is the New York Times story.
The bottom line: Expect to see more of this kind of analysis in the future. In the longer run I expect all of the humanities disciplines to have a quantitative branch.
A serious health care proposal
Brad DeLong argues that the government should pick up all health care costs above $50,000. Among other things, this would diminish the incentive for HMOs to neglect sick patients or try to push them off the books. It also would provide comprehensive catastrophic insurance. By lowering the cost of private insurance, it will lead more people to be insured, which will lower governmental costs elsewhere in the system. Being on the run in Poland, I don’t have the ability to offer a full analysis. But it’s one of the best economics posts I’ve read in the blogosphere in a long time.
One question I have is how many of these expenditures are worth subsidizing at all. A big chunk of our health care bill is spent in the last year or two of life, without always bringing much of a payoff. A second question is what would happen to cost control at these higher levels of expenditure. In particular what would happen to cost care as we approached the $50,000 threshold?
The proposal can be viewed in one of two lights. From one perspective, it will bring catastrophic care to many who are otherwise uninsured. From another perspective, we already have too much catastrophic care, at the expense of prevention and healthy lifestyle habits. Government catastrophic insurance will lead to price controls, either explicit or implicit, and rationing. Catastrophic care will decline, but in a way that might be beneficial. This latter alternative is not politically appealing, but we cannot rule it out as the relevant scenario.
But read Brad’s post and make up your own mind. Health care reform is an area where no one (i.e., you, the reader, and me, the writer) should feel they already have a pat or satisfactory answer.
The myth of free trade Britain?
Was nineteenth century Britain really a free trade wonder? Just how entrenched is protectionism in French national history?
John Nye offers some provocative answers:
Britain preached the gospel of free trade and France was cast in the role of the sinner, but there was little truth in this stereotype. France did have more protected products than England did but the average level of French tariffs (measured as total value of duties divided by total value of imports, cf. Figure 1) was actually lower than in Britain for three-quarters of the nineteenth century.2 In other words, tariffs had a smaller impact on French trade than British duties had on Britain’s trade. The French, while eschewing free trade, and openly rejecting the Anglo doctrine of open markets, actually succeeded in making their trade more liberal and more open than that of the more vocal British. The master of this was Napoleon III–Bonaparte’s nephew–who throughout the 1850s promoted the most radical liberalizing reforms of the French economy, all the while insisting that France was only interested in moderate reform.
The revisionism continues:
Indeed, it was not British unilateral tariff reduction that moved the world to freer trade. Despite the belief that is still common today that British exhortation opened the doors to European free trade in the late 19th century, it was the 1860 Treaty of Commerce, promoted by the Napoleon III and concluded between Britain and France, that really ushered in the age of nineteenth century “globalization”. British demands for unilateral tariff reduction usually fell on deaf ears.
Might this advantage of bilateralism be true more generally? If so, it would mean that a serious U.S. free trade agreement with Japan would be the best outcome imaginable for promoting free trade.
Read the whole thing, and don’t miss the illustrative chart.
Beauty and Brains
Last week, Alex wrote about how smart people live longer. Today, we learn that smart people may be better looking too!
Satoshi Kanazawa of the London School of Economics and his colleague, Jody L. Kovar, assert that beautiful people also tend to be smart people — and vice versa.
In the July issue of Intelligence, the sociologists offer a theory to explain the confluence of beauty and brains. Their argument, in a nutshell: Intelligent men achieve higher status and marry beautiful women, who pass their genes on to their disproportionately attractive and smart kids, who win mates who are good-looking or brainy, and so on. Or at least that’s what they put forth in the journal article, “Why Beautiful People are More Intelligent.”
Here is the full story. Here is a home page for one of the researchers. But wait…he’s the same guy who says that marriage ruins male productivity.
Addendum: I just stumbled upon Randall Parker’s treatment of the same study.
The largest known prime number
We just found a new one, and it has seven million digits. Here is the bottom line:
Mersenne primes are an especially rare type that take the form 2^p-1, where p is also a prime number. They are named after a 17th Century French monk who first came up with an important conjecture about which values of p would yield a prime. The new number can be represented as 2^(24,036,583)-1. It is the 41st Mersenne prime to have been found.
Here is the full story.
Note also that the number was found by a consortium of private computers, designed to exchange spare computing power:
GIMPS volunteers download a piece of software that runs in the background on their computer. A central server distributes different prime number candidates to each machine, which use spare processing power to test whether it is a genuine prime or not.
Here is more information, plus how to volunteer. Or perhaps you would prefer to search for alien lifeforms.
Blogging from Poland
My time in Paris is over and I’ve arrived safely in Poland. I’ve found exactly what I’d expected. It is a modestly bustling economy, but not setting the world on fire. The slowdown of the last two years appears to be over. Corruption is low for a transition economy, social capital appears to be high, and there is an emerging middle class. The government has serious fiscal problems, but then again they probably should be running deficits, though not at 51 percent of gdp as they are doing. Overall it is hard to see them not turning the corner. If you would like an illustrative lesson as to how the world is a better place than it was twenty years ago, Poland is exhibit B after China as exhibit A.
I might add that Warsaw has excellent food, arguably the best in Eastern Europe after Budapest.
I’m blogging just across from the famous statue of Copernicus. Did you know that he offered one of the earliest statements of the Quantity Theory of Money?