Illiberal Reformers

Monday, February 1st, 2016

Thomas C. Leonard’s Illiberal Reformers is hard to classify politically:

Among his revelations: The minimum wage was created to destroy jobs; progressives (including the founders of this magazine [New Republic]) really did hate small businesses and they were all way too enthusiastic about Germany’s social structure. But Leonard’s personal politics are hard to read, and at the very least he’s invested in progressivism, writing that it’s “too important to be left to hagiography and obloquy.”

The illiberal reformers of Leonard’s title are the first generation of American economists, born between 1850 and 1870. Late nineteenth-century tycoons, their hearts full of social gospel and their pockets full of other people’s labor, founded colleges like Cornell, Stanford, Johns Hopkins, The University of Chicago, and Vanderbilt. These new schools weren’t bound to the classical curricula of their New England predecessors, and they prioritized practical research and creating experts. They promoted the study of “political economy” — “economics” by 1900 — and the discipline took academia by storm.

The first generation of American economists were not laissez-faire capitalists, as an observer might reasonably imagine based on the current state of the field. In fact, they were anything but. “As Christians they judged laissez faire to be morally unsound,” Leonard writes, “and as economists they declared it functionally obsolete.” The British (think Adam Smith) model was unsuited for the era of railroads, labor unions, and scientific management. They much preferred the German idea of society as a single organism. Granted the premise that individuals were shaped by the nation and not the other way around, progressive economists had to decide who would run the country. These people had to be unbiased, scientific, brilliant, and out for the public good. The progressive economists decided on themselves.

In the early twentieth century, progressives displayed an open contempt for individual rights. In a 1915 unsigned editorial at this magazine, the editors ridiculed the Bill of Rights as a joke. “They insist upon invoking abstract principles, instead of trying to determine for concrete cases whether social control should supersede individual initiative…how can we discuss that seriously?” The doctrine of natural rights will “prevent us from imposing a social ideal.” The progressives were able to unite idealism and pragmatism via science and the administrative state. What good was democracy if people voted against their collective interest? What expertise did the average American have in managing a state or a race? Black Americans in particular could not be trusted with the ballot. “The progressive goal was to improve the electorate,” Leonard writes, “not necessarily to expand it.” Jim Crow laws suppressed turnout in the South, but it fell in the North as well. New York state’s participation went from 88 percent in 1900 to 55 percent in 1920.

How the War Was Won

Monday, January 18th, 2016

Many Americans see their own country as having won WWII. After the French and British failed to stop the Nazis, the Americans came in and did what they couldn’t do.

More sophisticated Americans point to the entire Eastern Front, where the Soviets lost more men fighting the Nazis than everyone else combined.

In How the War was Won, Phillips Payson O’Brien argues that our air-sea power won the war after all:

Those who laud the Soviet contribution do so within a paradigm that understands the contribution to victory through manpower. O’Brien cannot deny that the USSR engaged a larger percentage of the Wehrmacht than the Western Allies. His argument is that the Second World War was primarily a mechanized war. The production and destruction of equipment is what decided the war in spite of the human cost of 70 million dead (civilians included).

The production of air and sea weaponry far outstripped that of land weaponry. As such, O’Brien argues that the air-sea war was more significant than the fight on the ground. For instance, the German army received only between 30–35% of production when it was lucky. A plurality of production effort was generally aimed at air weaponry. For instance, in May 1943 40% of German production efforts were spent on aircraft. American, British, and Japanese production efforts were similar, with the UK spending approximately one half of its production efforts on aircraft from 1940 onwards. Naval production for each of these four nations also typically outstripped that of armoured fighting vehicles (AFVs) associated with the great land battles.

Air and sea power allowed for more efficient destruction of Axis equipment. This destruction could be achieved in three phases. “Pre-production” destruction prevented the Germans and Japanese from producing weaponry in the first place by damaging factories and destroying or preventing the arrival of raw materials. “Production” destruction meant destroying equipment as it was being assembled in the factories. “Deployment” destruction refers to equipment lost as it was in transit from assembly plants to the front lines. The Western Allies — mainly Great Britain and the United States — were primarily responsible for these equipment losses. The Russians did not maintain a very large navy, nor did they invest in many large, four-engined bombers to strike at the German economy.

(Hat tip to T. Greer.)

Comfort with Numbers

Thursday, December 31st, 2015

This summary of Superforecasting made one point that rang especially true to me:

The superforecasters rarely use sophisticated mathematical models to make their forecasts, but they are uniformly highly numerate. Comfort with numbers is a prerequisite for making good forecasts but fancy quantitative models are not.

The Point of Money

Tuesday, December 22nd, 2015

Spandrell reminds us that the point of money is to be a cognitive aid for remembering favors:

I did something for you, if I am not to be a sucker I’ll want to get something back from you eventually. So grab me that shiny shell you use as a wristband, so I can remember. David Graeber made a similar point on his famous book about Debt, which is pretty good if you get the fact that Graeber is a lame communist and adjust your skimming accordingly.

The problem is that this tech we use to remember favors leads us to spent huge amount of valuable labor in manufacturing shell accessories, beads, mining metal and wasting it in making coins. Whole empires were built, entire nations killed and enslaved in the process of looking for mines where perfectly good metal could be extracted to waste in making little coins with the face of a king to distribute so people can remember who made a favor to whom. That’s how it works though.

I am endlessly fascinated by this kind of evolutionary process where everybody runs around doing completely pointless stuff which nobody benefits from.

Small-Game Fallacies

Friday, December 11th, 2015

Game theorists study small games, with limited and precise rules, but applying their small-game conclusions to the “large games” of the real world can go terribly awry:

Most studies in experimental economics suffer from small-game/large-game effects. Unless these experiments are very securely anonymized, in a way the players actually trust, and in a way the players have learned to adapt to, overriding their moral instincts — an extremely rare circumstance, despite many efforts to achieve this — large-game effects quickly creep in, rendering the results often very misleading, sometimes practically the opposite of the actual behavior of people in analogous real-life situations. A common example: it may be narrowly rational and in accord with theory to “cheat”, “betray”, or otherwise play a narrowly selfish game, but if the players may be interacting with each other after the experimenters’ game is over, the perceived or actual reputational effects in the larger “games of life”, ongoing between the players in subsequent weeks or years, may easily exceed the meager rewards doled out by the experimenters to act selfishly in the small game. Even if the players can somehow be convinced that they will remain complete strangers to each other indefinitely into the future, our moral instincts generally evolved to play larger “games of life”, not one-off games, nor anonymous games, nor games with pseudonyms of strictly limited duration, with the result that behaving according to theory must be learned: our default behavior is very different. (This explains, why, for example, economics students typically play in a more narrowly self-interested way, i.e. more according to the simple theories of economics, than other kinds of students).

Small-game/large-game effects are not limited to reputational incentives to play nicer: moral instincts and motivations learned in larger games also include tribal unity against perceived opponents, revenge, implied or actual threats of future coercion, and other effects causing much behavior to be worse than selfish, and these too can spill over between the larger and smaller games (when, for example, teams from rival schools or nations are pitted against each other in economic experiments). Moral instincts, though quite real, should not be construed as necessarily or even usually being actually morally superior to various kinds of learned morals, whether learned in economics class or in the schools of religion or philosophy.

Small-game/large-game problems can also occur in auditing, when audits look at a particular system and fail to take into account interactions that can occur outside their system of financial controls, rendering the net interactions very different from what simply auditing the particular system would suggest. A common fraud is for trades to be made outside the scope of the audit, “off the books”, rendering the books themselves very misleading as to the overall net state of affairs.

[...]

A related error is the pure-information fallacy: treating an economic institution purely as an information system, accounting only for market-proximate incentives to contribute information via trading decisions, while neglecting how that market necessarily also changes players’ incentives to act outside of that market. For example, a currently popular view of proposition bets, the “prediction markets” view, often treats prop bets or idea futures as purely information-distribution mechanisms, with the only incentives supposed as the benign incentive to profit by adding useful information to the market. This fails to take into account the incentives such markets create to act differently outside the market. A “prediction market” is always also one that changes incentives outside that market: a prediction market automatically creates parallel incentives to bring about the predicted event. For example a prediction market on a certain person’s death is also an assassination market. Which is why a pre-Gulf-War-II DARPA-sponsored experimental “prediction market” included a prop bet on Saddam Hussein’s death, but excluded such trading on any other, more politically correct world leaders. A sufficiently large market predicting an individual’s death is also, necessarily, an assassination market, and similarly other “prediction” markets are also act markets, changing incentives to act outside that market to bring about the predicted events.

The Lure of Luxury

Thursday, December 10th, 2015

Paul Bloom explores the lure of luxury:

What drives people to possess so much more than they need?

Maybe they have good taste. In her wonderful 2003 book The Substance of Style, Virginia Postrel argues that our reaction to many consumer items is “immediate, perceptual, and emotional.” We want these things because of the pleasure we get from looking at and interacting with high-quality products — and there is nothing wrong with this. “Decoration and adornment are neither higher nor lower than ‘real’ life,” she writes. “They are part of it.”

Postrel is pushing back against a more cynical theory held by many sociologists, economists, and evolutionary theorists. Building from the insights of Thorstein Veblen, they argue that we buy such things as status symbols. Though we are often unaware of it and might angrily deny it, we are driven to accumulate ostentatious goods to impress others. Evolutionary psychologist Geoffrey Miller gives this theory an adaptationist twist, arguing that the hunger for these luxury goods is a modern expression of the evolved desire to signal attractive traits — such as intelligence, ambition, and power — to entice mates: Charles Darwin’s sexual selection meets Veblen’s conspicuous consumption.

[...]

There is a further explanation for our love of such goods, which draws upon one of the most interesting ideas in the cognitive sciences: that humans are not primarily sensory creatures. Rather, we respond to what we believe are objects’ deeper properties, including their histories. Sensory properties are relevant and so is signaling, but the pleasure we get from the right sort of history explains much of the lure of luxury items — and of more mundane consumer items as well.

[...]

Our beliefs about the hidden nature of things influence the most seemingly sensory experiences, such as the taste of food and drink. Protein bars taste worse if they are described as containing “soy protein,” ice cream tastes better when labeled “high fat,” and cola is rated higher when drunk from a cup with a brand logo. Neuroimaging studies reveal that areas of the brain associated with pleasure are more active if you believe that you are drinking expensive wine. Perhaps the most troubling finding was reported in a working paper called “Can People Distinguish Pâté from Dog Food?” The answer is no: if you grind up a product called Canned Turkey & Chicken Formula for Puppies/Active Dogs in a food processor and garnish it with parsley, people cannot reliably distinguish it from pork liver pâté.

The depth of pleasure, and, in particular, the importance we give to history, applies to many domains, including food, artwork, and luxury goods. From this perspective, the lure of such goods is not limited to their utility or beauty or to our beliefs that possessing them will impress people. Part of the lure is that we believe these items have a certain sort of history. The pleasure we get from these objects is genuine and aesthetic, not mostly sensory.

Read the whole thing.

Cliff Asness

Thursday, November 26th, 2015

Tyler Cowen interviews investment strategist Cliff Asness, who earns his geek cred in quant style:

Even the most insane billionaire cannot afford a hundredth of what frigging Tony Stark or Bruce Wayne have. It’s infuriating.

I’ve done well. I’m not the most insane out there. But if I wanted to go build a Batcave at my house, it would take approximately 600 times my wealth, and everyone would know about it.

I also enjoyed this light-hearted passage:

Cowen: Now, I think I’m interested in this issue, as I think you are. Extreme performances or performers, and it’s measured most readily in sports. So Gretzky is a kind of extreme outlier. In basketball, you could say Kareem Abdul?Jabbar who would be in the series as an outlier. Maybe Michael Jordan.

In sports or some other area of your choosing, which is the extreme outlier which strikes you as the most amazing? And you just say, “oh my God, I can’t believe there’s a Wayne Gretzky,” or a fill?in?the?blank-there for me, other than Gretzky.

Asness: I have no sense if this is actually accurate. But actually, no one could measure this. It can’t be accurate. You’re not going to believe what I’m going to say. Cirque du Soleil.

Cowen: Please explain.

Asness: When I sit there and watch Cirque du Soleil, which both my wife and I like, I literally walk out and go, “nobody can do this.” And I don’t think they are cheating.

Cowen: They’re not cheating, right?

Asness: But watch it again. It’s like a Looney Tunes show, where Daffy Duck dives from up there into a little thing of water down here, and he doesn’t die. I don’t know how they do it.

Everything else, the crash of ’87 was a 20 standard deviation event. Nothing. Wayne Gretzky, pretty good. The Cirque du Soleil people —

Cowen: Off the charts.

Asness: This story was from Vegas, and it’s not staying in Vegas. But, I was in Vegas, and I was exercising. I know you find that hard to believe, but I was.

The Cirque du Soleil people were in the gym, and you don’t want to ever do that. It is one of the most demeaning, humbling experiences.

[laughter]

Asness: They exercise exactly as — they did this thing where they just keep leaping over each other, and they go around in a circle, and they did it for like half an hour. And I’m sitting there on the StairMaster on a three.

Servants without Masters

Friday, November 20th, 2015

Singapore’s government has an extensive guest-worker system — which creates some dynamics Harold Lee found jarring:

There, in the flesh, was a middle-aged Filipino woman who was just there to attend to my needs, as a guest of the family. I was expected to ask her to wash my clothes, for example, and prepare whatever I wanted for breakfast. And for all my admiration of the political needle-threading of Singaporean immigration policy, this situation completely freaked me out. It made me intensely uncomfortable to have someone hanging around just to attend to my needs, and tell them to do menial chores for me.

And yet, when I thought about it, I realized that I had no problem with janitors or baristas doing dirty work for me. My emotional reaction was not really about being an American with sturdy frontier values of self-sufficiency. I was perfectly happy to farm out menial work — as long as it was done by a faceless worker in a uniform, rather than a single person I was expected to have a relationship with. This incongruence was one of the major lessons I took from my trip to Singapore. Even after I returned to the Land of the Free, I kept being struck by the ease with which I blithely accepted the service of servants as long as they were framed as business transactions with dehumanized service workers.

And I noticed that the same blind spot applied in the other direction, in people’s attitudes towards submission towards superiors. The very word “submissiveness” tends to raise people’s hackles in our culture, but in fact we are happy to accept it — if and only if it’s submission to a faceless institution, rather than to someone’s personal authority. In an old-school apprenticeship, the master essentially runs your life for seven years and can bring you back if you run away, possibly with a flogging for good measure. This seems incredibly coercive today, and is probably one of the reasons apprenticeship and other forms of demanding mentorship are in short supply. But at the same time, it’s considered completely unremarkable for someone to go into nondischargeable debt to go to grad school and work hard to satisfy every whim of their professors. For a more barbed example, it’s considered entirely unremarkable for a woman to be submissive to her boss, but sounds terribly suspect to expect her to be equivalently submissive to her husband.

[...]

It’s a sort of inverse Confucianism — a system where authority can only be exercised by people who deliberately do not engage in one-on-one superior-inferior relationships.

This reminds me, oddly enough, of George Fitzhugh‘s very Southern view of slavery as the best form of socialism.

Three Levels of Moral Beliefs

Wednesday, November 11th, 2015

Our basic problem, Hayek explains, is that we have three levels of moral beliefs:

We have in the first instance our intuitive moral feelings, which are adapted to the small person to-person-society, where we act toward people that we know and are served by people that we know. Then we have a society run by moral traditions, which unlike what modern rationalists believe are not intellectual discoveries of men who designed them, but they are an example of a process that I now prefer to describe by the biological term of group selection. Those groups that quite accidentally developed favorable habits, such as a tradition of private property and the family, succeed but they never understood this. So we owe our present extended order of human cooperation very largely to a moral tradition, which the intellectual does not approve of because it had never been intellectually designed. And it has to compete with a third level of moral beliefs; the morals that intellectuals design in the hope that they can better satisfy man’s instincts than the traditional rules do. And we live in a world where the three moral traditions are in constant conflict: The innate ones, the traditional ones, and the intellectually designed ones…You can explain the whole of social conflicts of the last 200 years by the conflict of the three moral traditions.

The principle criticisms of liberal individualist society is that it is selfish:

The altruism is an instinct we’ve inherited from small society where we know for whom we work, who we serve. When we pass from this—as I like to call it—concrete society where we are guided by what we see, to the abstract society which far transcends our range of vision, it becomes necessary that we are guided not by the knowledge of the effect of what we do but with some abstract symbols. The only symbol that takes us to where we can make the best contribution is profit. And in fact by pursuing profit we are as altruistic as we can possibly be. Because we extend our concern to people who are beyond our range of personal conception. This is a condition which makes it possible even to produce what I call an extended order; an order which is not determined by our aim, by our knowing what are the most urgent needs, but by an impersonal mechanism that by a system of communication puts a label on certain things which is wholely impersonal. Now this is exactly where the conflict between the traditional moral—which is not altruistic, which emphasizes private property, and the instinctive moral which is altruistic, come in constant conflict. The very transition from a concrete society where each serves the needs of others who he knows, to an extended abstract society where people serve the needs of others whom they do not know, whose existence they are not aware of, must only be made possible by the abandonment of altruism and solidarity as the main guiding factors, which I admit are still the factors dominating our instincts, and what restrains our instincts is the tradition of private property and the family, the two traditional rules of morals, which are in conflict with instinct.

David Sloan Wilson notes that Hayek departs from orthodox economics:

Hayek places economics on an evolutionary foundation, including our genetically evolved adaptations to life in small-scale society, cultural evolution based on unplanned variation and selection, and intentional thought processes that result in planned variation and selection.

Discussions of Hayek, he argues, are therefore discussions of economics from an evolutionary perspective:

This will come as a surprise to a lot of Hayek enthusiasts, who manage to endorse his view of economics, deny evolution, and maintain a pious stance toward religion all at the same time. This absurd combination of beliefs is what passes for economic discourse in the popular sphere — and economic experts who know better somehow allow it to happen.

Wilson seems compelled to treat religion as primitive superstition and contrast it against the useful products of cultural evolution, which is amusing if you’ve been reading about Moses the Microbiologist (in The Paleo Manifesto) and fasting in Eastern Orthodox Christianity.

Good News Is Unplanned

Monday, November 2nd, 2015

Good news is unplanned, according to Matt Ridley’s The Evolution of Everything — which discusses the evolution of government:

States emerged from protection rackets in which a gang monopolizing violence demanded payment of goods and services — taxes — in exchange for promises to defend local farmers and artisans from predation by rival gangs. “Tudor monarchs and the Taliban are cut from exactly the same cloth,” summarizes Ridley.

But two to three centuries ago, the fractured polities of Western Europe provided an open, speculative space where novel ideas about property rights, free trade, freedom of religion, freedom of the press, and limits on government could mutate and grow. Where those bottom-up conceptual mutations took hold, technological innovation sped forward, incomes rose, and civil liberties were recognized. Once established, liberal societies are veritable evolution machines that frenetically generate new mutations and swiftly recombine them to produce a vast array of new products, services, and social institutions that enable ever more people to flourish. So far liberal societies are outcompeting—in the sense of being richer and more appealing—those polities that are closer to the original protection rackets.

“Perhaps,” Ridley hopefully suggests, “the state is now evolving steadily towards benign and gentle virtue.” He adds, “Perhaps not.”

Rodrik Should Have Known

Wednesday, October 21st, 2015

Economist Dani Rodrik found his father-in-law on trial in Turkey on trumped-up charges of leading a coup, and the trial led him to re-examine what makes “real” democracy possible:

When do democracies generate not just electoral majorities but also protection of rights for minorities, equality before the law — the kinds of things that were missing in the Sledgehammer affair?

By some measures, democracy has never been healthier. Electoral democracies account for more than 60 percent of the world’s nations, up from roughly 40 percent in the late 1980s. In practice, though, most of those democracies “fail to provide equal protection under the law,” according to a recent essay that Rodrik published with another economist, Sharun Mukand. To understand why, they examine three kinds of rights. Political rights rest on the strength of numbers. Property rights have the wealth of elites behind them. But civil rights typically benefit a relatively powerless minority, who lack wealth or numbers. For that reason, “a truly functioning liberal democracy that provides civil rights is going to be a very, very rare phenomenon,” Rodrik says. The question isn’t why democracies slide into illiberalism. That’s what you should expect. The interesting question — and one of the key puzzles that his new work tries to solve — is why some democracies manage to remain liberal. What makes the emergence of civil rights possible in societies where, on the face of it, those rights don’t have a strong constituency?

Rodrik’s new scholarship also tackles a second, related puzzle: one about narratives. His foray into Turkish politics pushed him to reconsider a deeply established tradition in economics, one that views policy outcomes in terms of vested interests. These are the powerful groups, like companies or trade unions, that advance their agendas through the political sphere. Rodrik realized there was something missing from scholars’ models of political and economic life: ideas.

Take the liberal intellectuals in Turkey. Their interests and Rodrik’s were the same: a more democratic country. But they bought into a different narrative, he says, one that made them “tools” of the government. They legitimized Sledgehammer for middle-class Turks and the West. It’s not an outcome that vested interests can explain.

“My argument here is not to deny that there are organized groups that have disproportionate power in the policy-making process,” Rodrik says, “but to make the argument that the manner in which these groups define what is in fact in their interest depends on all sorts of things having to do with their ideas, with the stories they’ve constructed, and with how they view their own identity.”

[...]

On a less abstract level, Sledgehammer changed another aspect of Rodrik’s thinking. He no longer trusts much of what he reads in the newspaper. The professor had long been skeptical of economics stories. He now feels similarly wary about coverage of political developments in foreign countries. The reason: If you hadn’t known the reality in Turkey, he says, it was simple to accept the usual liberal explanations of what was happening.

“It’s very easy to read these stories, and they resonate with your own worldview as a liberal,” Rodrik says. “And you’re likely to believe it. I wouldn’t say that it turned me into a conservative. But it made me much more skeptical and much more cautious about what one might say is the standard Northeastern-Ivy League-elite-liberal-establishment narrative about how the world works. It’s made me extremely skeptical of what I read in The New York Times, and The New York Times’s take on what’s happening in different countries. In a way, I should have known.”

How Cheap Can Energy Storage Get?

Wednesday, October 21st, 2015

How cheap can energy storage get? Pretty cheap, since lithium-ion batteries appear to be on a typical learning curve:

The Electric Power Research Institute (EPRI) reviewed a variety of data to find that lithium-ion batteries drop in price by 15% per doubling of volume.

Winfriend Hoffman, the former CTO of Applied Materials, and one of the first to apply the learning curve concept to solar, similarly finds a 15% learning rate in large format lithium-ion batteries

Bloomberg New Energy Finance (BNEF), meanwhile, uses more recent data, and finds a 21.6% learning rate in electric vehicle batteries. In fact, the learning rate they find is strikingly similar to the learning rate for solar panels.

So the range of estimates of from 15% to 21%. How cheap does that suggest lithium-ion battery storage will get?

How-Cheap-Can-Lithium-Ion-Batteries-Get-Energy-Storage

If you’re informed on wholesale electricity prices, the prices above may sound ridiculously high. Wholesale natural gas electricity from a new plant is roughly 7 cents per kwh (though that doesn’t include the cost of carbon emitted). How could batteries priced at 25 cents per kwh, or even 10 cents a kwh, compete? Particularly when you also have to pay for electricity to go into those batteries?

The answer is that batteries don’t compete with baseload power generation alone. Batteries deployed by utilities allow them to reduce the use of (or entirely remove) expensive peaker plants that only run for a few hours a month. They allow utilities to reduce spending on new transmission and distribution lines that are (up until now) built out for peak load and which sit idle at many other hours. In a world with batteries distributed close to the edge, utilities can keep their transmission lines full even during low-demand hours, using them to charge batteries close to their customers, and thus cutting the need for transmission and distribution during peak demand. And batteries reduce outages.

To roughly estimate the value that batteries provide, look at the gap between the peak retail prices customers pay at the most expensive hours of the day versus the cheapest retail power available throughout the day. In a state like California, that’s a difference of almost 20 cents per kwh, from peak-of-day prices of more 34 cents to night time power that’s less than 14 cents. That difference is an opportunity for storage.

Another opportunity is the difference between the cheapest wholesale power price – wind at 2 cents per kwh – and peak of day wholesale prices from natural gas peaker plants, which can be over 20 cents per kwh. Again, the gap is close to 20 cents per kwh.

Open Borders and the Welfare State

Thursday, September 24th, 2015

Milton Friedman said that you can’t have a welfare state and open borders, but Alex Tabarrok disagrees:

What we think of as the welfare state encompasses many different programs, many of which are not handouts. Social Security for example is mostly a forced savings program. For these types of insurance programs there is no problem at all as, for the most part, a person has to work and pay into the program to get money out of the program. For programs like schooling there is also no problem–even if the schooling is provided free to immigrant children–because the schooling leads to higher wages later in life which are taxed. In these cases, the immigrant children are really just receiving a loan which they will have to pay back from their own earnings later in life. The story for basic health is similar. Thus, the only cases where there is a worry about excessive transfers from citizens to immigrants is in pure handouts or health benefits to say the elderly. In these cases, I would simply say that such benefits are not available to immigrants or only available after five years or some such time period.

Commenter Peter Schaeffer notes that the fiscal impact of Middle-Eastern immigration has been extensively studied in Sweden, Norway, the Netherlands, Germany, the UK, etc.:

A report just came out in Norway showing that each Middle-Eastern immigrant costs taxpayers $700,000 (net).

The Trouble With Kids Today

Tuesday, September 22nd, 2015

Charles Murray reviews Robert Putnam’s Our Kids, which covers the same ground as Murray’s own Coming Apart, but with very different policy prescriptions:

But let’s face it: my strategy does not have more chance of working than Putnam’s does. The parsimonious way to extrapolate the trends that Putnam describes so well is to predict an America permanently segregated into social classes that no longer share the common bonds that once made this country so exceptional, accompanied by the destruction of the national civic culture that Putnam and I both cherish.

Not Post-Industrial

Sunday, September 20th, 2015

Our modern economy is only post-industrial, Henry Dampier argues, because we outlawed and then offshored anything dirty, without actually eliminating it:

In America, the educated classes tended to strip workers of dignity except as victims exploited by cruel capitalists, in need of rescue by the intellectuals. The intellectuals then proceeded to make the means by which those laborers eked out independence and property illegal in the name of ‘rescuing’ them. Dignity came to be conferred by education and having the right intellectual-opinions rather than by acting out the ethic of work, saving, and religious duty.

In the name of equality, actually being a good person according to the past measuring-stick of virtue no longer mattered. You could have dignity and still be worthless or a malefactor by the old rubric, so long as you had the right opinions or were a member of one of the ever-proliferating victim groups.

In this the democratic revolutions just created a new class of ‘enlightened’ masters deigned to continually liberate the ever-propagating new classes of ‘slaves.’ First it was the actual bonded slaves, then it was the laborers, then it was the women, then the blacks, then the colonized, then the homosexuals, and now the bigamists and barnyard-lovers.

The value is not in the actual liberation, but in the sense of meaning and motivation created by each new ‘liberation.’ Since actual equality is impossible, what changes are the stories about equality and the pretensions to it.

Yet despite all the pretensions to historical progress, many things continue as they have before, with perceptions changing much more than the underlying reality. Because it’s not possible for men to be women and women to be men, you can’t actually change one into the other — but you can demand that everyone pretend as if it’s possible. It’s quite the same with the ‘post-industrial economy’ and the ‘information age’ — it hasn’t been possible to abolish factories, but it has been possible to pretend as if it’s been mostly accomplished.