Category: Political Science

How much are Republicans and Democrats polarized really?

On the topic of income redistribution, if you just ask them how much should happen, on a scale of 1 to 7:

Perhaps the most striking evidence of polarization is that in the 1–7 scale, the modal response among Republicans is 1, and the modal response among Democrats is 7.

If you look at their actual behavior, Republicans for instance are only slightly more likely to contest an increase in their tax property assessments.  Or this:

One question in the online survey…asks about property taxes instead of federal taxes: “Do you consider the amount of property taxes you pay to be too low, about right, or too high?”…the share of Democrats responding that property taxes are too high (36.9 percent) is not much lower than the corresponding share of Republicans (42.9 percent).

Or if you ask people if they should pay lower property taxes, the difference is real but modest:

…the desired tax reduction is 28.46 percent for Republicans versus 23.42 percent for Democrats.

Or if you ask them how property taxes should be distributed across different income classes:

Democrats want to assign 25.92 percent of property taxes to the poorer household, and Republicans want to assign 25.71 percent to the poorer household…

The Democrats do favor somewhat more taxation for the wealthiest class of households.  Yet:

The results indicate that as the difference in home values increases, the modal respondent still desires proportional taxes.

The conclusion:

…Republicans and Democrats may say that they feel differently about income redistribution, but those differences disappear when facing real, high-stakes choices. We posit a different, yet still simple, explanation: partisan differences in preferences for redistribution are exaggerated by some, but not all, survey questions.

That is all from a new (May!) AER piece by Brad Nathan, Ricardo Perez-Truglia, and Alejandro Zentner, titled “Is the Partisan Divide Real? Polarization in Preferences for Redistribution.”  I have long thought that over time, membership in “the right wing” will be predicted more by “hatred of hypocrisy” than by many of the more traditional pro- free market values of times hence.

Why don’t nations buy more territories from each other?

Here is a rather underwhelming list of such purchases in recent times.  West Germany buys three islands from the Netherlands in 1963?  Pakistan buys Gwadar from Muscat and Oman in 1958.  America buys the Danish West Indies in 1916.  In 1947, though the Soviet Union bought part of Lapland in Finland to enable a hydroelectric plant.

We all know about the Louisiana Purchase.  But that’s it since 1916!?  Is Wikipedia failing us?  I don’t think so.

Are there really no good Coasean trades between the two Irelands?  Israel and the Palestinians?  Armenia and Azerbaijan?  How about Chile selling Bolivia a wee bit of coastline?  I can think of a few reasons why territory purchases are these days so hard to pull off.

1. Incoming revenue is subject to a fiscal commons effect.  Some crummy noble does not get to spend it on himself.  And voters take government revenue for granted in most cases, and so do not perceive an increase in their expected retirement benefits from selling land to foreign powers.

2. In earlier times, a lot of land transactions were motivated by “they’re going to take it from us anyway, sooner or later.”  Did Napoleon really think he could hold on to all that land?  No.  He wisely got out, though sadly subsequent French governments did not do “buy and hold.”  Not to mention the Florida Purchase Treaty and Guadalupe Hidalgo.  At least until lately, wars of conquest have been in decline and that has meant a corresponding decline in country-to-country land transactions as well.

3. First mass media and then social media have succeeded in making land boundaries more focal to the citizenry.  Say Northern Ireland today wanted to sell a single acre to the Republic of Ireland.  This would be seen as a precedent, rife with political implications, and it would be hard to evaluate the transaction on its own terms.  Trying to sell a county would be all the more so.  Just look at the map — should there really be so much of “Northern” Ireland to the south of ROI?  Donegal, Derry, etc. — status quo bias, are we really at an optimum point right now?

4. Contested territories today often involve low levels of trust.  Selling pieces of the Irelands back and forth is likely enforceable (but does ROI want any of it?), but an Israel-Palestine deal is not.  Israel prefers to simply move the goalposts by increasing the settlements in the westward direction.  What is really the gain from pressuring one of the Palestinian leaders to sign a piece of paper recognizing this?  Most likely it would ensure his assassination and simply enflame tensions further.  Both parties might prefer unilateral action over a deal.

5. Land in general is far less valuable than in earlier times.  In theory, that could make it either easier or harder to sell land, but if some of the transactions costs (see above) are constant or rising in magnitude, that will make it harder.  Let’s say Colombia raised the funds to buy back part of the Darien gap — whoop de doo!  The country has plenty of empty land as it is.  The whole notion of Lebensraum, and I don’t just mean in its evil Nazi form, has taken a beating since World War II.

6. Russia and China block some deals that might make sense, or maybe America blocks them too.  Just run a Google search on “Arctic.”  China is doing the investing, but we won’t let them own it.  Russia doesn’t want America to own it.  Everything thinks Canadian control or ownership doesn’t amount to much.  Indigenous groups claim parts of it, but they cannot exercise effective control.  And so the whole region and issue festers and stagnates.

7. Consider a deal that does make sense: the U.S. buying Greenland from the Greenlanders and also Denmark.  Can we really in essence pay the 56,000 or so residents to give up their country and territory?  I am no expert on the politics there, but I suspect they are unwilling to vote their pocketbook.  (For one thing, I don’t see them posting a price on eBay or holding a garage sale.)  How about skipping the vote and just offering them free condos in Miami?  Let’s do it!  Still, you can see the problem.

What else?  And can you think of any current issues where a transactional approach might actually work?

How big a deal would a nuclear explosion be?

I am no longer so sure, as I outlined in my recent Bloomberg column:

Until recently, my view was that any actual use of a nuclear weapon, no matter the scale, would dramatically change everything. Nuclear use would no longer be considered taboo, and the world would enter a state of collective shock and trauma. Other countries around the world would start frantically preparing for war, or the possibility of war.

But recent events have nudged me away from that viewpoint. For instance, I have seen a pandemic that arguably has caused about 15 million deaths worldwide, yet many countries, including the U.S. haven’t made major changes in their pandemic preparation policies. That tells me we are more able to respond to a major catastrophe with collective numbness than I would have thought possible.

Of course I am referring to a smaller tactical nuclear weapon, as might be used against Ukraine.  India by the way lost five or so million people during the pandemic and they didn’t even fire their health minister.  And:

I also have seen Trumpian politics operate through the social media cycle. Former President Donald Trump did and said outrageous things on a regular basis (even if you agree with some of them, the relevant point is that his opponents sincerely found them outrageous). Yet the rapidity of the social media news cycle meant that most of those actions failed to stick as major failings. Each outrage would be followed by another that would blot out the memory of the preceding one. The notion of “Trump as villain” became increasingly salient, but the details of Trumpian provocations mattered less and less.

Might the detonation of a tactical nuclear weapon follow a similar pattern? Everyone would opine on it on Twitter for a few weeks before moving on to the next terrible event. “Putin as villain” would become all the more entrenched, but dropping a tactical nuclear weapon probably wouldn’t be the last bad thing he would do.

To cite the terminology of venture capitalist Marc Andreessen, the tactical nuclear weapon might stay “the Current Thing” for a relatively short period of time.

Let’s hope we don’t find out.

The end of history?

How a united Ireland would work is unclear: many voters in Northern Ireland are attached to free healthcare with the NHS, even though waiting lists for treatment are the worst in the UK, and hate the idea of paying €60 to see a doctor as is the case south of the border.

Here is more from the FT, the context is that Sinn Fein is now asking for a referendum within five years.

I Hate Paper Straws!

I am interviewed by James Pethokoukis at his substack Faster, Please! Here’s one Q&A:

JP: American political debates are generally more interested in redistribution than long-term investment for future innovation. What are the incentives creating that problem and can they be fixed?

A big part of the incentive problem is that future people don’t have the vote. Future residents don’t have the vote, so we prevent building which placates the fears of current homeowners but prevents future residents from moving in. Future patients don’t have the vote, so we regulate drug prices at the expense of future new drug innovations and so forth. This has always been true, of course, but culture can be a solution to otherwise tough-to-solve incentive problems. America’s forward looking, pro-innovation, pro-science culture meant that in the past we were more likely to protect the future.

We could solve many more of our problem if both sides stowed some of their cultural agendas to focus on areas of agreement. I think, for example, that we could solve the climate change problem with a combination of a revenue neutral carbon tax and American ingenuity. Nuclear, geo-thermal, hydrogen–these aren’t just clean fuels they are better fuels! Unfortunately, instead of focusing on innovation we get a lot of nonsense about paper straws and low-flow showers. I hate paper straws and low-flow showers! There is a wing of the environmental movement that wants to punish consumerism, individualism, and America more than they want to solve environmental problems so they see an innovation agenda as a kind of cheating. Retribution is the goal of their practice.

In contrast, what I want is for all of us to use more water, more energy and yes more plastic straws and also have a better environment. That’s the American way.

Subscribe to Faster, Please! for more.

The nuclear bunker culture that is Finnish

With its brightly coloured slides, trampolines and tunnels, the soft play area at the Hakaniemi Arena, near the centre of Helsinki, looks much like any other. The difference is that it lies 25m below ground in a cavernous space hollowed out of the Precambrian bedrock beneath the city, and is designed to withstand nuclear, biological and chemical attacks.

The clambering children may not realise it, but they are in one of the safest playgrounds on earth.

Most of the time, this is a family-friendly sports centre. Above ground, the only visible clue to its second identity is a small orange and blue triangle on the wall by the entrance that states: “VÄESTÖNSUOJA SKYDDSRUM”, or “defence shelter”. In the event of an emergency, the arena would revert to being the Merihaka bomb shelter, a subterranean living quarters where up to 6,000 people could exist for weeks, or even months…

Helsinki alone has more than 5,500 bunkers, with space for 900,000 people. Finland as a whole has shelter spaces for 4.4 million, in more than 54,000 separate locations.

Here is more from The Telegraph, via the excellent Kevin Lewis.

My Conversation with the excellent Chris Blattman

Here is the audio, transcript, and video, we did this one face-to-face.  Here is part of the summary:

What causes war?…Chris and Tyler also cover why he doesn’t think demographics are a good predictor of a country’s willingness to go to war, the informal norms that restrain nations, the dangers of responding to cyberattacks, the breakdown of elite bargains in Ethiopia, the relationship between high state capacity and war, the greatest threats to peace in Ireland, why political speech isn’t usually a reliable indicator of future action, Vladimir Putin’s centralized motives for invading Ukraine, why he’s long on Colombia democratically — but not economically, why more money won’t necessarily help the Mexican government curb cartel violence, the single-mindedness necessary for bouldering, how Harold Innis’s insights about commodities led Chris to start studying war, how the University of Chicago has maintained a culture of free inquiry, and more.

And from the dialogue:

COWEN: If you look at the marginal cases — since there are some wars — there’s a bunch of cases, even if unusual, where someone is right at the margin. At the margin, what are the factors that are most likely to account for the explanatory variation in whether or not a country goes to war?

BLATTMAN: For me, the one that people talk the least about that strikes me as the most important is how concentrated is power in the country. What’s holding back someone from considering all of the implications of their actions on other people, should they decide to take their society to war?

It’s maybe the most important margin in history, and it’s maybe the one that no one of my tribes — which are political economists — think and talk the least about. It’s the one that — in journalism, people leap to psychological explanations, and they try to understand the psychology of leaders, but they don’t try to understand the way in which they’re constrained. So, it’s this combination of the most important and the most ignored.

COWEN: So federal societies are less likely to go to war?

Interesting throughout.  And I am very happy to recommend Chris’s new and important book Why We Fight: The Roots of War and the Path to Peace.  And here is my earlier 2018 Conversation with Chris.

What should I ask Leopoldo López?

I will be doing a Conversation with him, do read his whole Wikipedia page but here is part of it:

Leopoldo Eduardo López Mendoza (born 29 April 1971) is a Venezuelan opposition leader. He co-founded the political party Primero Justicia in 2000 with Henrique Capriles and Julio Borges and was elected mayor of the Chacao Municipality of Caracas in the regional elections held in July 2000. He is the National Coordinator of another political party, Voluntad Popular, which he founded in 2009…

In September 2015, he was found guilty of public incitement to violence through supposed subliminal messages, being involved with criminal association, and was sentenced to 13 years and 9 months in prison.

He served seven of those years and now is free and has left Venezuela.  He is also an economist, with a Kennedy School background, and has written a book on energy issues.

So what should I ask him?

How can we improve the NIH?

The NIH’s extramural research is systematically biased in favor of conservative research. This conservatism is a result of both institutional inertia, concerns by the NIH leadership that the organization could lose the support of Congress, and efforts by NIH beneficiaries to maintain the status quo.

The extramural grant distribution process, which is run through peer review “study sections,” is badly in need of reform. Though there is considerable variability among study sections, many are beset by groupthink, arbitrary evaluation factors, and political gamesmanship. The NIH may be hamstringing bioscience progress, despite the huge amount of funds it distributes, because its sheer hegemony steers the entire industry by setting standards for scientific work and priorities.

Most problematic, the NIH is highly resistant to reform. Many proposals have been shot down during discussion phases, or scaled back before implementation. The NIH’s own internal review board has been inactive since 2015, as mentioned at the start of this report section. Still, many of the NIH’s problems are likely a natural product of being a $40 billion+ per year government bureaucracy.

That is from Matt Faherty, and here is 33,000 or so words more on why the NIH is a good idea, what is wrong with the NIH, and how to improve it.  It is by far the best piece written on the NIH, and if it were to count as a book would be on the year’s “best of” list.

The piece is based on extensive interviews, and here is one reflection of that:

An anonymous comment on an NIH article reflected the sentiments of the most negative interviewees: 

“It is well known that NIH ‘confidentiality’ [of the primary reviewer to the grant applicant] is anything but, and a young PI risks career and reputation if they shoot down big names (not all, but there is a mafia of sorts). I’ve sat on panels, I’ve seen the influence from afar. Young PIs fall over themselves to get it good with the power brokers. I’ve seen young PIs threatened when they mentioned quietly that Big Boss X has data that is wrong. Some fields are worse than others, but it is overall a LOT uglier than most would believe.”

As for two meta-points, a) it is striking how little quality analysis of the NIH has been done, and b) how many of the respondents to this current work feared consequences for their careers, some responding only on an off the record basis.  I am proud to have supported this work through Emergent Ventures.

Optimism about the threat of nuclear war

From an email from Trey Howard, I won’t impose further double-indent on it:

“I recently came across the pessimistic Edward Luce column you retweeted, and wanted to offer some trends that I think point in the opposite direction. I offer these as someone who was much more worried about nuclear war in the first 2 weeks of the war, before the factors below became apparent.

  1. Putin has been willing to revise his objectives. The Russian army fell back from Kyiv, did not launch an amphibious assault on Odessa, and has not attempted to storm the Azovstal steelworks. All of these indicate that Putin is receiving some objective information about the poor performance of his military, and is revising his plans accordingly.
  2. Putin’s objectives are amorphous. What does it mean to de-nazify Ukraine? What does control of “the Donbass” mean exactly? These kinds of objectives are susceptible to BS-ing for the domestic audience. They are not like “Kill Zelensky” or “Capture Kyiv”. They permit Putin an off-ramp at any time he wants to declare victory.
  3. NATO is unwilling to intervene directly. If anything, I have heard less chatter about no fly zones since the first two weeks of the war.
  4. Putin has not escalated to chemical weapons, despite having an opportunity to use them effectively on the Azovstal works.
  5. NATO has limited the supply of weapons to short range weapons that a) do not require a complex supply chain of trainers and contractors close to Ukraine or b) are unlikely to cause mass casualties in Russia itself (airplanes, tactical ballistic missiles). This seems likely to continue for the foreseeable future. For all the breathless talk of “heavy weapons” being shipped to Ukraine, it is hard for me to imagine that Russia sees T-72 tanks, towed howitzers, or M113 personnel carriers from the 1970s as tilting the balance. They have thousands of comparable weapons in storage.
  6. Russia has not attempted to interdict the flow of weapons inside NATO countries. Not even “plausibly deniable” things like train derailments or warehouse fires. This is all the more remarkable when you consider that the GRU committed attacks in NATO countries in the years before the war started.
  7. Putin is not threatened at home. If anything, support for the invasion seems to have increased. The Russian economy has not collapsed as some predicted, and this will bolster support for him.
  8. Russia continues to make payments on its foreign debt. To me this indicates a long-term outlook and is not the kind of thing one would do if contemplating murder-suicide at a national level.
  9. Russia has not increased the readiness of its strategic nuclear forces (like putting SSBNs to sea).
  10. Russia is actively recruiting foreign mercenaries and seems likely to order a general mobilization soon. Some people see this as a sign of escalation, but I think it is more likely that Putin realizes that he needs more bodies to garrison captured territory. Additional conscripts will eventually allow some of the BTGs in action to rotate away from the front lines. It will increase his perception that time is on his side. More troops will make it less likely that Ukraine can inflict a decisive defeat on Russian forces in the Donbass (which might really precipitate tactical nuclear weapon use).
  11. Russia is taking over administration of infrastructure in captured territory, and is preparing residents to switch to the ruble. These are long-term thinking measures consistent with a power planning to occupy and administer new territory (which they would not want to irradiate).
  12. Putin thinks that the political winds are on his side. Viktor Orban being re-elected, Le Pen performing better than her prior showing, and the coming midterms in the USA all point to populations becoming impatient at the high inflation and constant drumbeat of scary news coming out of Ukraine. Of course, the biggest break for him would be Trump 2024…

I disregard all public statements from Russia (whether from state TV, Putin himself, or lesser officials). There is never going to be a situation where the Russians say “relax, we aren’t going to use the nukes”. They want to keep us guessing. I look at the trends above instead.

Many of these trends are bad news for Ukraine and the west in general, but they are factors that make nuclear war less likely. As you said on a recent podcast “things are never as bad or as good as you might think.””

TC again: That’s it, have a cheery day!

The equilibrium, a continuing series

Under both Republican and Democratic administrations, the Federal Trade Commission has consistently ranked in the top five for staff satisfaction among medium-size government agencies, according to annual government surveys. But that changed in 2021, the year Lina Khan, a favorite of progressives, took the helm with plans to overhaul how the antitrust agency operates and turn it into a more aggressive bulwark against corporate consolidation, especially in the tech sector.

In the government’s November survey of the 1,100-person FTC, about half of whom responded, 53% of employees said senior leaders “maintain high standards of honesty and integrity,” down from 87% in 2020. And 49% of respondents had a “high level of respect” for senior leaders, down from 83% in 2020. Overall satisfaction with the agency dropped by a third, to 60% from 89%.

The “overall trends are not where we want them to be,” Khan said…

Here is the full piece. You may recall I predicted this from the beginning…

Toward a simple theory of why tech employees are so left-leaning

That is the topic of my latest Bloomberg column, here is part of the explanation:

Another hypothesis concerns meritocracy. The top tech companies are very meritocratic in that they try to hire the very best programmers, engineers and managers, if only because so much money is at stake and these companies are sufficiently profitable that they can afford top talent.

Yet a meritocracy of intellect does not itself constitute a corporate culture or common set of values for employees. A series of meritocratic hires will come from a variety of backgrounds and cultures; it’s not as if they all went to Eton together. Those meritocratic hires thus may want some additional layer of shared culture — and the enterprise of tech, so often based on the manipulation of abstract symbols, does not provide it.

Wokeism does. In fact, this semi-religious function of woke ideology may help explain what many people perceive as the preachy or religious undertones to woke discourse.

You might wonder why this shared culture is left-wing rather than right-wing. Well, given educational polarization in the U.S., and that major tech companies are usually located in blue states, it is much easier for a left-leaning common culture to evolve. But the need for common cultural norms reinforces and strengthens what may have initially been a mildly left-leaning set of impulses.

Developing such a common culture is especially important in tech companies, which rely heavily on cooperation. The profitability of a major tech company typically is based not on ownership of unique physical assets, but on the ability of its workers to turn ideas into products. So internal culture will have to be fairly strong — and may tend to strengthen forces that intensify modest ideological proclivities into more extreme belief systems…

Further pieces of the puzzle are explained in the column.

On Nebraska (from the comments)

Seven-year Nebraskan here: Nebraksa is a well-governed semi-socialist polity effectively managed by competent antihero big businesses). This is all largely based out of business-Mecca Omaha. Business/govt relations are rather close. Governor Ricketts is brother to TDAmeritrade founder Joe Ricketts, Warren Buffet weighs in on the Omaha mayoral elections [1], real-estate taxes go to schools, [2] etc. There’s a tremendous amount of business/professional culture to match, and also a hometown/togetherness ensuring academia and healthcare are well-provisioned. CWT guest Ben Sasse best demonstrates these qualities. This comes at a cost of stopping taxation arbitrage -> eventual taxing of the burbs (Omaha annexing the wealthy Elkhorn suburb was the most notable political fight), the gradual Omaha-ization of Nebraska. Smaller counties struggle, and indeed some younger friends tell stories of their county struggling to keep the lights on when Bass Pro Shop dropped the store there. But one thing is certain – Omaha marches on.

Omaha has an effective moat (a business-only, low-arts town w/ awful weather) against a more radical political activist crowd that might ruin the flow of Omaha. Other companies are taking note – Google is building a new data center here, for instance.

This is all deliberate. Put yourself in enough fancy enough Nebraskan rooms and you will hear about how this is done – scholarships, targeting double-income-no-kids (DINKs) with things like dog parks, regular hosting of brief entertainment to draw crowds (CWS and Olympic trials) but not enough to draw the worst types of audience (drunk NFL fans). Omahans accordingly have an eagle eye for their city – ask them about Conagra’s HQ move and they will spend half an hour explaining to you how they were wronged.

Alas, the signs of Omaha experiencing larger business-town problems are sort-of on the way. For one thing, Omaha businesses were notably less woke when Trump was elected, and far more woke now, reflecting a greater influence of federal politics/topics, although it is hard to tell whether our businesses influence politics or our politicians influence our businesses. For another, the typical issues of more prominent cities are here – WestO, NorthO and SouthO are three different entirely towns divided by race/income pretty clearly. First National Bank of Omaha holds the original copy of the Louisiana Purchase, which ought to be visible to the public at a museum if you could ensure that BLM rioters wouldn’t destroy it. (Un)fortunately, the LP is hidden at the top of the building in a high-security office…

The real problem that Omaha faces is that while SF’s top guns are in their early thirties-fifties, Omaha’s leaders are in their early seventies to late nineties, and there is no guarantee that the next generation is up to the task. Culture changes when new people come in with new ideas, and there is no guarantee that Omaha’s next generation doesn’t ruin it for everyone.

I do find it odd, and perhaps a little too prescient, that some Omaha employers fitted their employees with emergency preparedness plans/WFH gear shortly before the pandemic, but this isn’t the point. The point is that Nebraska is an extremely intriguing place. The fact that there are only this many comments suggests MR audience does not take Nebraska seriously enough.

[1] https://jeanstothert.com/warren-buffett-endorses-mayor-stothert/
[2] https://omaha.com/news/state-and-regional/govt-and-politics/effort-to-revamp-nebraska-school-aid-ease-property-taxes-ends-for-now/article_98379cde-8b68-11ec-be12-affd05439f05.html
https://en.wikipedia.org/wiki/Elkhorn,_Omaha,_Nebraska

That is from Harvey Bungus.