Category: Political Science
The Big Society, from England
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”
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 are the incentives here?
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.
How to think about refugee policy
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
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.
Labor history bleg
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?
What can parents influence?
I had been meaning to pen a longer response to Bryan Caplan (he is the one with "a theory of everything" in this area, not I, his theory just happens to have few variables), but I'll focus on two of his claims, as they are indicative of the larger disagreement:
Parents strongly affect what you say your religion is, but have little long-run effect on your intrinsic religiosity or observance. I don't discuss language, but it's pretty clear how a twin or adoption study would play out: You can make your kid semi-fluent in another language with a lot of effort.
Both claims are false, at least at many commonly available margins.
Take Jews. If a group of children are born to Orthodox, Conservative, Reform, or liberal parents, their later religious observance will be predicted by both peers and parental upbringing. (Perhaps genes are a factor too.) An Orthodox Jewish boy, with Orthodox parents, growing up in an otherwise non-Orthodox Jewish community of peers, is more likely to stay Orthodox than a Reform Jew from the same community is likely to become Orthodox. And that of course correlates with levels of observance. I have no formal study to cite, but can I just stamp my feet and scream this is true? Because it is. You can imagine numerous variants on this tale, even if it isn't true for all religious denominations.
Bryan has a tendency to concede environmental factors by noting something like "Of course parents can lock a kid in the closet and affect him that way." He is less likely to admit that a lot of less extreme influences can matter too and that those influences are missed by twin adoption studies, for whatever reason.
Or take language. Yana speaks Russian. She learned Russian from Natasha (her mother, and it wasn't hard for her to speak Russian at home), and note that Yana left Moscow before she was two years old. This is again a common pattern. The parents matter, even though in most American families you won't see enough cross-sectional variation (most people speak English at home) to always pick this up. Travel around India for more examples of this phenomenon.
Presumably the twin studies have in their data sets Jews and possibly some Russian immigrants as well. And yet the twin studies, with their ultimately macro orientation, miss micro mechanisms such as these. Parents can matter more than the studies suggest.
By treating those studies as an epistemic trump card, Bryan is led to make claims which are indefensible on the face of it. I stick by my earlier points. The evidence Bryan is citing for twin adoption studies is simply…the studies themselves. Where is consilience when you need it?
Why do millionaires love New Jersey?
Erik Brynjolfsson looks at the data and asks: why do millionaires love New Jersey? My answer: because it's really, really nice!
Especially if you are old. You don't have to live in New York or Philadelphia, and yet you have access to at least one of those cities, possibly both if you buy in Edison. You can have a splendid house in a nice, leafy neighborhood with reasonable public services, a socially excessive amount of parking, and good restaurants.
For smart young people, however, the nice parts of New Jersey are very much a net exporter. The young ones can't afford the nice homes, they want the sex and excitement of the big city, or they want a higher standard of living in some less crowded part of the country. That in turn makes the nice parts quite "mature", which in turn attracts more old people; have you ever visited Montclair or Upper Saddle River or the nice parts near Princeton? These towns are perfect for 59-year-old, slightly boring millionaires (NB: I am not saying that Krugman is boring).
I left New Jersey at age seventeen, never to return, not to live that is.
The economics of travel visas
Bob Lawson and Jayme Lemke write:
This paper examines travel visa restrictions in 188 countries. We measure travel visa requirements (1) facing foreign visitors into a given country and (2) facing citizens of a given nation traveling abroad. Our analysis shows that countries are more likely to impose visas on foreign visitors when they are large, but less likely when they are rich and economically free. Citizens from richer and more populous countries face fewer travel visa requirements when traveling abroad. Countries are less likely to impose visa requirements on similar nations.
What is the state employee union wage premium?
How much does collective bargaining matter? On Twitter, Will Wilkinson asks for data. I find this web site specifying the average Virginia state employee to be earning $50,298. Rortybomb says that for Wisconsin the comparable number is $48,267.
Yet Wisconsin had collective bargaining for state employees and Virginia does not. Of course this comparison is a gross one and it is not holding constant the composition of each work force, seniority, cost of living differences, and it also does not seem to pick up possible differences in benefits. Furthermore it does not consider the 48 other states. Yet, crude as this one-to-one comparison may be, it is more empirically sophisticated than most (all?) other discussions I have seen.
This David Blanchflower and Alex Bryson paper (see pp.9-10), using 1980s data, finds a union wage premium, for state employees, of 14.5 percent, with the premium being strongest for unskilled workers, as is the case in the private sector as well. (NB: I am not sure if they are adjusting for differential benefits but I think not.) Alan Krueger tells us that the union/non-union wage gap is smaller in the public sector than in the private sector ("overwhelming evidence").
I'm not pushing any particular answer, I'd just like to put the question on the table. What else do you all know?
Addendum: from Adam Ozimek: "The regression coefficients on page 8 of the report show that the union wage premium is between 15% to 16%, while the public sector wage discount is around 11%, meaning unionized public sector employees are paid 4% to 5% wage premium." Adam also provides further references and discussion.
The new federalism, New Hampshire style
A lot of governors don't want high-speed rail and at least one state is wondering whether it wants a new hospital:
New Hampshire Public Radio ran a story yesterday about Governor Lynch's request that hospitals in the state stop building new facilities. Normally, governors never miss an opportunity to encourage new business in their state, because in most markets, greater investment leads to better services or lower prices. Finally, policy makers understand that the normal rules don't apply in health care:
[T]hese facilities are driving up utilization and driving up health care costs. Those are costs that we all see in our ever-increasing health insurance premiums. To that, I say enough.
That is from Andrew Samwick. This shows how deeply the current system of both health care finance and American federalism is broken. It is not that the governor was suddenly persuaded by…Robin Hanson. Instead, the shadow value of "money to spend as the governor wants it spent" is rising rapidly and old political equilibria are falling away, in Wisconsin too.
In a nutshell
What do twin adoption studies show?
"A case in point is provided by the recent study of regular tobacco use among SATSA's twins (24). Heritability was estimated as 60% for men, only 20% for women. Separate analyses were then performed for three distinct age cohorts. For men, the heritability estimates were nearly identical for each cohort. But for women, heritability increased from zero for those born between 1910 and 1924, to 21% for those in the 1925-39 birth cohort, to 64% for the 1940-58 cohort. The authors suggested that the most plausible explanation for this finding was that "a reduction in the social restrictions on smoking in women in Sweden as the 20th century progressed permitted genetic factors increasing the risk for regular tobacco use to express themselves." If purportedly genetic factors can be so readily suppressed by social restrictions, one must ask the question, "For what conceivable purpose is the phenotypic variance being allocated?" This question is not addressed seriously by MISTRA or SATSA. The numbers, and the associated modeling, appear to be ends in themselves."
Bahrain no fact of the day
Bahrain's security forces are the backbone of the Al Khalifa regime, now facing unprecedented unrest after overnight shootings. But large numbers of their personnel are recruited from other countries, including Jordan, Pakistan and Yemen.
Tanks and troops from Saudi Arabia were also reported to have been deployed in support of Bahraini forces.
Precise numbers are a closely guarded secret…
Here is more, yet no numbers. The implied prediction is that they are willing to shoot.
Better than the filibuster?
To avoid a vote on a proposal to limit collective bargaining rights in the state of Wisconsin, 14 legislators have fled the state, to an undisclosed location. I am not sure if there is a precedent for this. The reason they crossed state lines was to dodge the Wisconsin police.
It turns out that "Republicans hold a 19-14 majority, but they need at least one Democrat to be present before voting." The link is here and for the pointer I thank Brian Hooks.