A Leftist Defense of Religious Institutions

Jonathan Sacks has a wonderful piece in the New York Times discussing in the fundamental role of religion in society. Most surprisingly, it comes from a place that seems to usually be the fertile ground of leftist movements: the need for communal bonds. As he writes,

A result is that we have two patterns of reaction in the brain, one focusing on potential danger to us as individuals, the other, located in the prefrontal cortex, taking a more considered view of the consequences of our actions for us and others. The first is immediate, instinctive and emotive. The second is reflective and rational. We are caught, in the psychologist Daniel Kahneman’s phrase, between thinking fast and slow.

The fast track helps us survive, but it can also lead us to acts that are impulsive and destructive. The slow track leads us to more considered behavior, but it is often overridden in the heat of the moment. We are sinners and saints, egotists and altruists, exactly as the prophets and philosophers have long maintained.

If this is so, we are in a position to understand why religion helped us survive in the past — and why we will need it in the future. It strengthens and speeds up the slow track. It reconfigures our neural pathways, turning altruism into instinct, through the rituals we perform, the texts we read and the prayers we pray. It remains the most powerful community builder the world has known. Religion binds individuals into groups through habits of altruism, creating relationships of trust strong enough to defeat destructive emotions.

The argument against religion tends focus on its most prominent, conservative strains. Most of this comes from public misconceptions, and a general inability of the largely non-religious left to understand religious people. Religions and their membership are not monolithic entities, which is the same trap that we fall into when we talk about "Republicans" or "gun owners." This is a serious logical fallacy, and it lacks a honest estimate of empirical data. I'm not arguing that religion is a perfect thing, and there are flaws in our current religious institutions. Both of these things are normal for any liberal who believes in the importance of social institutions and the role they play in shaping and structuring political life.

But you can't look at the data on charity giving, volunteerism and general social work and then blithely conclude that religion is on the whole bad. Taking costs and benefits into account, the opposite seems to be true. In the way that it encourages strong in-group behavior, religion seems to do much more good than bad. Across a wide series of measures, it seems that highly religious people are simply better citizens. They volunteer more often, donate more to charity and tend to have a greater level of involvement in non-religious social institutions. Extremely religious people are also more committed to traditional left-wing values, like egalitarianism and social justice, than non-religious people. Most of the work against poverty around the world is led by Catholic organizations.

The argument about the crucial role of religion in American civil society was put forward by Putnam and Campbell (who are probably better known for the book Bowling Alone). The authors recognize that the current poor state of America's religious institutions can largely be attributed to the way that the conservative movement has become deeply intertwined with certain religions. The problem is not religion, but religion that has been radicalized by certain political actors who have encouraged groups to become more fervently ideological and less open to the wide variety of political ideas supported by religious doctrine.

The same communities that are inspired by faith play a strong role in moving forward progressive ideas as well. Look, for example at any Unitarian Universalist website, and how they both encourage strong in-group activism (with things like charity and volunteerism) while also striving to limit the negative sides of in-group behavior (intolerance in particular).

Religion is a fundamental part of human life, and there has yet to be a secular set of traditions and communal bonds that come close to replicating the effect of religion (you don't see atheists and agnostics getting together in a large group every Sunday). But, like any other human institution, religion is also subject to cycles of growth, decline and renewal. A recognition of these fundamentals will do the left good, as religion can be reformed over the next decades to be a tool to enrich our communities and strengthen civil society.

Sacks' argument also leads me to a more general thought. When our lefties here rant about religion, maybe it's not the content of belief that they find problematic but instead the consequences of group behavior. Leftists tend to sympathizes with those people victimized by society's power structures, so maybe it's not surprising that they would be unhappy with a type of organization that clearly delineates insiders from outsiders. Maybe instead of seeking the end of religion, which human history shows to be a completely vain endeavor, those on the left should try to make sure that religions are more inclusive. 

Surprisingly, inclusive religious systems do not emerge through the promotion of a single state religion (or atheism), but through a shared set of secular institutions that then allow individual religions to compete and flourish. Like previous arguments about elections, we know that higher levels of competition tend to also lead to higher levels of public involvement. In turn, this should bring us towards the positive social benefits discussed above. Religion may not solve every problem, but it can make some issues less severe. Religious competition within a secular framework can help get us there.

A Detour into Gun Law, pt. 3

The previous post mentioned that the gun law debate in the US, since it's such an emotional issue, tends to stir up plenty of misconceptions as well. I'll briefly address two of them here.

First, people often tend to think that guns are commonly held throughout the US. This is not as true as you might think. Ownership of firearms in the US seems to follow a power law distribution (although maybe not a very strong one). A very small minority owns a lot of guns and a lot of households maybe have a rifle or nothing at all. This is how you arrive at a situation where there as many guns as there are people in the US, but where just over a third of households actually report having one.

Chart via Ezra Klein's Wonkblog.

I also mentioned earlier that the rate of homicides in the US due to firearms is declining. While this remains true, my fault was in not looking at the causes for why it was falling. The Wall Street Journal reports that the number of people wounded by guns jumped up by nearly 50 percent from 2010 to 2011, but improving medical technology has made massive strides in keeping people alive.

This, again, follows common sense. As the number of guns in the US has increased, so has the number of people getting injured by guns. The same can be said for cars, tricycles or any other ridiculous instrument we use to harm ourselves all the time.

But the fact that gun violence is not declining makes me reconsider my original position. If the rates of people getting shot and surviving is climbing that quickly, maybe people really will want to actually change gun laws. There's a good question about how much change is needed to actually make a difference, but it seems like it might be enough to spur people out of apathy.

A Detour into Gun Law, pt. 2

My previous post on this topic discussed some of the incentives contributing to America's gridlock on gun control law and the way we react to tragic events like those in Connecticut. My conclusion is similar to that of Gregory Gibson, a longtime gun control advocate who became involved in the issue about the murder of his son. As he writes in The New York Times,

In the wake of Galen’s murder, I wrote a book about the shooting. In it I suggested that we view gun crime as a public health issue, much the same as smoking or pesticides. I spent a number of years attending rallies, signing petitions, writing letters and making speeches, but eventually I gave up. Gun control, such a live issue in the “early” days of school shootings, inexplicably became a third-rail issue for politicians.

I came to realize that, in essence, this is the way we in America want things to be. We want our freedom, and we want our firearms, and if we have to endure the occasional school shooting, so be it. A terrible shame, but hey — didn’t some guy in China just do the same thing with a knife?

While the incentives are obviously powerful, another key issue is how we as a public frame this debate. Needless to say, since it is such an emotional issue, there is a lot of fallacy, bluff and bullshit. It is much better to look at this issue through the framework of public cost and benefit.

Switzerland gets pointed out as some example where high gun ownership can exist with low crime rates. But this is a statistical error* Crime in Switzerland is already incredibly low, since it is not a social basket case like the US. But the presence of so many guns there makes the rate of fatal violent crimes higher than it would be otherwise. Research from criminologists at the university of Zurich confirms this.

To understand the effect of guns, you need to control for all other variables. Most people aren't willing to do that.

Statements about "gun laws not working" also often try to date the enactment of certain gun control laws and then assess levels of violence after. There are plenty of examples of this on other websites. This is also a mistake, because they do not take the effort of comparing how the gun laws actually affect ownership. Plenty of gun rights activists are correct to say that some gun laws haven't done anything to reduce gun ownership; this is an especially challenging issue when you only change the laws in a single jurisdiction. In broader studies, we have seen, over and over, that more gun ownership is correlated with higher rates of violence. So gun laws that do reduce ownership do work.

So, to understand the effect of gun control, look at how they influence ownership (the ultimate causal factor), not the actual timing.

Thee principals are a start of a process to trying to remove the emotional and ideological content of the debate. What's more, they really just confirms common sense. Guns are dangerous, and we should expect that the effects of the "evils of the world" would be magnified in their presence. In other words, we pay a "gun violence premium" above the already anticipated rates. This is obvious, and it's not worth trying to debate the issue on these grounds.

Via Ezra Klein's Wonk Blog.

That's not to say that the people owning guns might not benefit in other ways, but gun violence is the price we pay as a society for higher gun ownership rates; in a similar vein, motor vehicle accidents are part of the price we pay for everyone owning cars. If we think that the current levels of declining gun violence in the US are acceptable, based on improvements of some social factors (like access to abortion), then we should just learn to live with it. Otherwise, the answer is reducing the freedom of gun owners and engaging in gun buyback/ seizure programs.

If the political sacrifice is acceptable, implementing the actual program is pretty easy. Australia shows how. As the Nieman Center at Harvard explains, "In the 18 years prior to the Port Arthur massacre, Australia experienced 14 mass shootings; in the subsequent 16 years, there have been none." If you want it, there's a solution.

* It also ignores that fact that gun ownership rates have been plummeting there once they matched gun control laws to the Shengen system. For example lots of people have guns, but it's damn near impossible to get access to any ammo.

A Detour into Gun Law, pt. 1

Many social issues are kept at arm's length on this forum, and the role of guns in society is definitely one of them. I have a very strong personal belief on this issue, but I see no gain of trying to force it onto others. The contours of the debate over the last few years, each time whipped up by another more horrific event, show how little progress can actually be gained from this process. To put things very bluntly: there isn't anything that can be done right now, no matter how upset everyone is.

Nonetheless, the issue can be analyzed through the lens of political economy. The first obviously, is incentives. The strength of one side's adherence to ideology and the asymmetry of the benefits and burdens will pretty much guarantee that the status quo continues for a very long time. The long history of political economy has shown that a well-organized an aggressive minority can easily trump the will of the minority when sacrifices are not shared evenly on both sides. 

Think about the subsidies to individual companies/ industries. These could represent millions of dollars of revenues for these companies, at a cost of only pennies to individual tax payers. It's obvious to see how the side of subsidies wins these debates. They're just far too motivated.

There's also a very distinct political incentive problem too. (The threat of) gun control tends to be a very high priority issue among low-income whites, and Democrats are terrified of alienating this group any further. There's enough divide in the opinions on gun control that they wouldn't really benefit from pushing for more, since the only time we talk about it is after events like these and no one really cares during the rest of the year. The party that is supposed to address this issue has very little to gain, politically, by pursuing the law while it has lots to lose. This is another reason to believe that nothing will happen.

Public views on gun laws, via Mother Jones.

So the bad news is that nothing is really going to happen with US gun laws. On the other hand, the good news is that the public response to mass shootings follows the typical pattern of the availability heuristic. We are (rightly) outraged and upset over what happened in Connecticut, but mass shootings are a small problem in a world that is flawed in many profound ways. Our reaction tends to be disproportionately large.

We should be thankful of the fact that a mass shooting remains rare enough to make us this upset.110 people have died this year from these sorts of events, but they are an incredibly small portion of the 8,000 or so that will die to gun violence this year. To put things in perspective, 30,000 or so will have died from traffic accidents in 2012, and 2 million will die from things like inactivity. The odds of getting struck by lightning are still three times higher than the odds of dying in a mass shooting.

And while the US is has a high gun violence rate, it is not that violent of a country, in the grand scheme of things (although its much more violent than most of the OECD). We should be relieved to remember that. We are not northern Mexico or Brazil, and the murder rate is the US is still just a small portion of that in Kazakhstan and Russia.

Despite the advanced world's most lax guns laws and the highest concentration of guns, the US has become less violent in recent years. The murder rate is about half of what is was in the 80s. We can hope that the movement for limited drug legalization will cause that to continue to fall.

Most Americans think of freedom as some completely unalloyed good thing. Events like this show that it's not. We pay a price for our incredibly lax gun laws, just as we would pay a price for lax drug laws and open borders. As a whole, Americans seem to be willing to pay that price and unwilling to go through the intensely freedom-limiting process of a national gun buyback and strict carry laws. You may personally disagree with that, but that's life in a democracy.

Until we see a broader cultural change away from the social and economic liberalism of the last 30 years, we're not going to see any change on gun control laws. I don't see that happening anytime soon. My advice on days like today is the same as that of the Libertarian Party (even though I couldn't be any further away from them on this issue): don't overreact to terrible news like this, be thankful for the freedom that you have, recognize its costs and honor the dead in whatever way you find appropriate.  It's not as bad as it initially seems, and we shouldn't whip ourselves into a frenzy over something that won't happen

Worried about Education Attainment? Fix Healthcare Spending!

The BBC starts chiming in on American decline. This time, the focus is on education attainment.

An integral part of the American Dream is under threat - as "downward mobility" seems to be threatening the education system in the United States.

The idea of going to college - and the expectation that the next generation will be better educated and more prosperous than its predecessor - has been hardwired into the ambitions of the middle classes in the United States.

But there are deep-seated worries about whether this upward mobility is going into reverse.

Andreas Schleicher, special adviser on education at the Organisation for Economic Co-operation and Development (OECD), says the US is now the only major economy in the world where the younger generation is not going to be better educated than the older.

The fears about declining education attainment are overblown, but their hearts are in the right place. Most of this stems from the fact that the US was once the most educated country on earth, which is no longer true. While it still remains highly educated and ahead of places like the UK at the secondary level, a slight decline is starting to emerge. Jared Bernstein was clearly pissed off by this chart, which the OECD released a couple years back and continues to update each year.

Original via the OECD. Linked from Jared Bernstein's blog.

The causes of this change are clear. Over the last twenty years, the US has been steadily eliminating its public support for higher education, and the increases in personal cost have gone up at a rate roughly proportional to the decreases in state funding. Despite what many would have you think about wildly out of control "costs," education is becoming more "expensive" mostly because we've decided to stop supporting it with public money.

Economic theory would say that this is a terrible mistake. Education provides substantial positive externalities; the benefit to society as a whole exceeds the personal benefit that a person receives from an education. This means that it will never be sufficiently supplied by private actors, since the price of education matches the private marginal benefit, not the public benefit. It's government's responsibility to intervene in these situations. Health care costs are the driver of these declines in education spending. State budgets have been particularly hard hit by increasing medical expenses (they provide most of medicaid, for example), and there is no indication that this trend will decrease. This is a nice example of the inter-connectedness of many policy issues. While someone might not think that universal healthcare is an economic issue (this tends to be the right's anti-Obamacare argument), state spending on health can crowd out state spending on other programs, having clear economic effects.

By foregoing education investments for immediate healthcare expenses, we are entering a spiral of forsaking the future for the present. As the linked OECD report points out, for men, each public dollar invested in higher education yields 5 dollars in public benefits (tax dollars, decreases in transfers). While the rate is quite a bit lower for women, the US has one of the highest benefit/ cost ratios for education in the world. Short-sighted thinking and our foolish attachment to private healthcare system is causing us to leave low-hanging fruit in the tree.

A comparison with Canada, one of the highest educated countries in the world, shows how drastically our broken health care system has distorted policy priorities. Even up to the middle of the 1970s, Canada and the US had relatively equal levels of health care spending per capita. As Aaron Carroll, points out, the US now spends almost twice as much as Canada; the US's outcomes aren't any better either.

From Adam Carroll at The Incidental Economist

That spending gap comes back to bite Americans in the form of lower education attainment. That gap comes back in the form decrepit infrastructure. That gap comes back in the form endless budget debates and government gridlock. America's broken healthcare system, and the weird incentives and ideology that perpetuate this mess, is the black hole at the heart of our public policy problems. Without further drastic change, every single policy decision will slowly get sucked into it, until we let it consume us all.

Screw the Theory! Raise the Minimum Wage!

Opponents to minimum wage increases tend to rely on a familiar trope. Citing classical economic theory, they claim with full certainty that any increase to the minimum wage will immediately lead to unemployment and hurt the working poor. I'll let the National Federation of Independent Businesses* fill in the details, 

NFIB opposes any increase in the current federal minimum wage. Mandatory wage increases hurt not only small businesses, but their employees as well. Big corporations do not have to absorb the cost because most minimum-wage jobs are offered by small businesses. It has not been proven to reduce poverty or narrow the income gap and puts a stranglehold on America's top job creators: small businesses. The overwhelming majority of economists continue to affirm the job-killing nature of mandatory wage increases: mandatory minimum-wage increases end up reducing employment levels for those people with the lowest skills.

I'm going to leave the whole myth of small business aside for now, even though it's a badly overused political trope. Regardless, the NFIB is far from the be all and end all of this debate. There's plenty of small business associations that favor a minimum wage increase, and small businesses are not America's primary employer of low wage workers. Despite the fact that more than half of Americans work in firms with less than 500 employees, about 2/3 of the 1.5 million minimum wagers work in massive corporations. Since smaller employers are often looking for longer relationships and higher productivity from their employees, a lot of small businesses owners highlight the fact that they pay much better wages than their bigger competitors. A minimum wage increase would push this trend further.

Believe it or not, a minimum wage increase has shown to have stimulative effects as well. While increasing wages will increase costs, they'll also bring in more revenues. A lot of these community businesses, and especially those that have to really worry about labor, serve people who are at the bottom of the income scale. The benefit of increasing the disposable income of their customers more than outweighs the additional costs.

The bigger concern in the economic theory is usually employment, as higher wages make the marginal cost of adding another worker higher. But empirical evidence seems to point the other direction. The increase in spending brought on by higher wages encourages many businesses to hire more, and economists have proven that there is almost no negative employment effect due to minimum wage increases. This is one of the chief reasons that Bloomberg, of all publications, strongly supports a much higher minimum wage.

Last but not least, the minimum wage is an important tool for addressing inequality. Economists at MIT have pointed out that at least a third of the inequality gap that emerged over the last three decades can be attributed to an erosion of the minimum wage. This could be a part of the story why states with higher minimum wages had higher rates of growth, since, as the IMF points out, increasing inequality dampens growth.

Scare tactics come up a lot in our political debate. Just look at all the nonsense surrounding the estate tax debate. But this is another instance where these threats ring hollow. Despite loud claims to the contrary, higher minimum wages spur spending, don't decrease hiring and provide a base for stable, long-term growth. Every day that we let go by without a permanent, inflation-indexed minimum wage correction is a day where we sacrifice public good for the interest of a select few. We can do better.

*NFIB is a great example of modern-day newspeak. While they claim to represent small businesses, and they are often brought up in shallow news pieces in this role, they are, in fact, a highly partisan policy group. While they were part of the US Chamber of Commerce for awhile, they branched off because the Chamber wasn't conservative enough. In other words, they are the perfect gasbag for this blog to argue with.

No One Pays the Estate Tax

Considering the current debate over the Bush tax rates, it's time, once again, to address the issue of who actually pays it. Every liberal agrees that the "death tax" shouldn't be punishing farmers and small businesses, but this is an issue rife with misunderstanding. We shouldn't be surprised. The estate tax concerns touchy subjects like the sanctity of family and inheritance. We are naturally inclined towards supporting our heirs; part of us all find it morally repugnant to see our modest life's work taken away from us on death.

This is why this issue is so easily exploited by those with a particular agenda. While we all want to leave something behind, we also all recognize the fundamental unfairness of someone like Paris Hilton living off inherited wealth for her entire life, only to pass on that undeserved gain to another undeserving person after her. We praise Warren Buffet for giving his children only a modest amount of money and donating the rest to charity. We are a people of equal opportunity after all.

So it's these two things that have to be balanced when discussing this issue, and it's why the attacks on the tax are often so misguided. The economist Robert Frank back in 2007 called the estate tax "the closest thing to a perfect tax we have." Here's why,

Our basic goal is to pay for government services with a tax system that is as efficient, fair and painless as possible. On all counts, it is difficult to imagine a better tax than the estate tax. Every dollar we collect from it is one less dollar we need to collect from some other tax that is worse in at least one of these dimensions.

Among the important advantages of the estate tax is that it has virtually no negative effects on incentives. High income tax rates may discourage effort or investment. But who would become a slacker merely to avoid estate taxes? Because the estate tax enables income tax rates to be lower than they would otherwise be, it actually increases the incentive to invest and take risks.

Another attraction of the estate tax is that it works like a lawyer's contingency fee. Injured parties who could not otherwise afford access to the legal system can try to recover damages because lawyers are willing to work without pay if their client does not win. Similarly, the estate tax enables us to enjoy valuable public services that we would be happy to pay for if we knew we would end up wealthy, but that we might be reluctant to demand otherwise. With the estate tax, the surcharge kicks in only if we are lucky enough to be one of life's biggest winners.

The estate tax also provides an incentive for charitable giving, which reduces the need to pay for many public services with tax money. Recent estimates by the Brookings Institution and the Urban Institute suggest that its repeal may reduce such giving by as much as $15 billion a year. Finally, having estate taxes means paying lower taxes while we are alive, and taxes are generally more painful to the living than the dead.

Some opponents complain that the estate tax imposes an unreasonable burden on the owners of small businesses and farms. But inheritances of less than $1.5 million ($3 million for married couples) are currently untaxed, an exemption that will rise to $3.5 million ($7 million for couples) by 2009. Far fewer than 1 percent of heirs will ever pay a penny of estate tax; most of the revenue from estate taxes comes from inheritances larger than $10 million.

Many parents say they dislike the estate tax because they fear it will prevent them from doing all they can to assure that their children are financially secure. Yet current exemption levels allow parents to leave their children more than enough to start a business, finance a premium education, buy a large house in a good school district, and still have several hundred thousand dollars left for a rainy day.

If the estate tax is such a terrible tyranny afflicting the helpless farmers of America, how can someone like Robert Frank claim that fewer than 1 percent of heirs ever pay it? Well, in case you haven't figured it out already, the fear of an estate tax crippling of small farmers and businesses, while having emotional merit, is largely overblown. As the IRS's website points out, farmers get to immediately claim a million-dollar exemption on their farm. On top of that, they can claim all of their debt as an exemption as well. For most family farms being passed on to a married couple (which doubles the exemption), that already pushes the exemption up to around 10 million dollars, assuming about a 30 percent debt level, which most farmers would kill to have. This is the threshold that Frank mentions, and it shows how quickly the actually taxable amount disappears.

Furthermore, the estate tax is only incurred on money past the exempted amount. So, let's take the family farm with the deductions I mentioned. Going back to the 2009 level of a 3.5 million dollar per exemption, deductions for farming, deductions for debt and a 45 percent tax rate, per person, a family farm worth 12 million dollars would pay 180,000 dollars in taxes. They're paying an estate tax rate of 1.5 percent. (Math here)

How big is a 12 million dollar farm? Farmland in the US average about 2,000 dollars per acre in 2011.  At that rate, a farmer would have to own 6,000 acres before being subject to the estate tax. In comparison, the average farm in the US had about 500 acres. You need to have a farm that was 12 times the size of the average farm before you'd be forced to pay a whopping 1.5 percent estate tax. If you imagine a 30 percent estate tax to be a real bite, you would need a farm worth 235 million dollars to actually pay that rate (and you'd pay 70.5 million dollars). That's a farm with 117 thousand acres, a mere 236 times the average farm. At that point, I don't think they would qualify as a small farmer anymore.

This is why we say no one pays the estate tax. Under Clinton, with lower exemptions and higher rates, only a couple thousand people paid estate taxes each year. The CBPP says that there wasn't a single instance of a family farm being sold to pay estate taxes before 2001, when all of this death tax hullaballoo started. If they go back to 2009 levels, which is what Obama has been asking for (3.5m, 45% rate on assets above the cutoff), only 110 small farm and business estates would be affected.


While emotionally satisfying, the concern that farmers will be burdened by the estate tax is largely a ruse. The estate tax affects only the most well-off in America, and it helps fund the government while avoiding taxes that are much worse. Now you might be a part of that group and not find this very fair, and I sympathize with that. But let's not make up sad sack stories about poor farmers to make a case for us, when most Americans would reject the idea of defending 100 million dollar inheritances.

A Fresh Look at Left-Libertarianism

Due to the influence of Ron Paul (and his intellectual pantheon: Rothbard, Mises, Hayek, etc.), the version of libertarianism discussed in the US is almost always rightist. Ron Paul and Gary Johnson both spent some time in the Republican primary, and most other prominent libertarians (the Kochs, Rand Paul, Paul Ryan) tend to associate themselves with the right side of the American political spectrum.

But many libertarians would be quick to point out that their political philosophy does not fit easily into the left-right divide. And they'd be right; there's a huge branch of left-libertarianism that we almost fully neglect. While this in practice comes close to what most of us would call Anarchism, that is also a term that has been reshaped to fit leftist and rightist agendas.

I'm not a left libertarian; it's a fact that a representative government provides a greater number of public goods more efficiently that any other form of organization. But the recent discussion of Walmart, Obamacare and working conditions in general led to a pretty interesting left-libertarian idea: you can almost eliminate the need for state coercion by instituting a system of universal workplace democracy.

While equal worker ownership would be ideal, I still think that you could accomplish pretty much the same thing through full unionization. Why would you want this? Because, if workers and management are deciding working conditions voluntarily, you can remove the need for a state to regulate working conditions. You would obviously still need a robust legal system, with a large focus on arbitration, but the overall system would become considerably less complex and much more flexible. It follows the same principal of local governance (a principal libertarians love to insert into just about every debate): each company decides what's best for them, with workers and managers maximizing their collective benefit within the resources they have available.

For someone like me, there is another reason to focus on this style of workplace governance: it's more efficient and ultimately results in more growth. Since 1991, OECD countries with higher union representation have had greater growth. This is supported by an emerging body of research emerging that refutes the classical "economies of scale" argument for strict hierarchy: larger and more centralized organizations promote complexity, shirking and rent-seeking, making them less efficient.

But you're really interested in maximizing liberty, you'd go a step further and make sure that compulsions to work were less harsh. Providing things like health care and a pension would give people the opportunity to experiment, create and move between workplaces that they didn't want. It's both freedom in the negative sense (avoiding compulsion at the workplace) and in the positive sense (being able to do what you truly want). Either way, you can get there by taking on some left-libertarian ideas.

...Because Focusing on Wal-Mart is Distracting from the Real Issue

I keep getting worried that the real point of the debate is being lost by this exclusive focus on Walmart. The problem isn't one company. The problem is an inability for anyone in our mainstream national dialog to recognize the importance of handling distributional outcomes. This is a purely government issue, and it's ludicrous to expect anything other than a government solution to this problem.

We have liberals pissing and moaning about Walmart employees receiving income support from the Federal government, which is exactly what we would want in absence of a higher minimum wage. Walmart's on board, and so are a bunch of other companies. Jesus, Mitt Romney even favors a steadily increasing minimum wage. Why is this not getting done?

Save your outrage for fact that our minimum wage is half the rate it should be, with the ludicrous assumption that it needs to be updated every couple of years by legislation. Just raise the thing to 14 dollars an hour already and index it to inflation. You'll have solved the problem permanently, while addressing a source of about a third of America's growing inequality problem.

And it will prove, definitively, that government call solve things like the "Walmart problem," even when most people didn't realize that it could.

Leave Walmart Alone

In a 17-point Twitter manifesto (my how things have changed), Peter Suderman blows up a lot of the nonsense surrounding the public opinion of Walmart. Here's some highlights (but, seriously, it's only 17 tweets; everyone has time to read that).

1. Walmart’s customer base is heavily concentrated in the bottom income quintile, which spends heavily on food.



2.The bottom income quintile spends about 25 percent of income on food compared to just 3.5 percent for the top quintile.



3.So the benefits of Walmart’s substantially lower prices to the lowest earning cohort are huge, especially on food.



4. Obama adviser Jason Furman has estimated the welfare boost of Walmart’s low food prices alone is about $50b a year.



5.Walmart’s wages are about average for retail. Not amazing. But not the worst either.

His argument in favor of Walmart's business structure is fundamentally sound. By providing prices that are as much as 39 percent less than the competition, Walmart is able to provide substantially more benefits than its critics can recognize. Furman estimated that Walmart's low prices are essentially the equivalent of a 6.5 percent increase in income for the bottom quintile.

But Walmart's wage are low, and no one denies this. In fact, they've been steadily falling, both on an hourly and weekly basis, over the last thirty years. They've also been responsible for the overall decline in wages throughout the retail sector.

Image from Doug Henwood at lbo-news.com 

At the same time, there is very little room to increase the associates' wages without altering prices and hurting the rest of the poor that Walmart serves. 

This leads us to something that is anathema for most libertarians to admit. Since the entire industry faces pressures to lower wages, there isn't a "market solution" to this issue. Nor should there be one. When Walmart alone can be credited for 50 percent of the US's productivity gains over Europe over the last three decades (with supply chain innovations accounting for another 25 percent), the argument about "reorganizing" or "abolishing" Walmart starts to look pretty silly.

Worker organization would be great for job-place democracy, something I've long supported. But it doesn't make sense to force the company into providing comprehensive health insurance, and Obamacare might actually exacerbate the problem. Walmart is redesigning labor agreements that will decrease the amount of insurance plans it provides, while those employees that do have health insurance will see their premiums rise. There's a good chance that these costs will be translated into higher prices, making Obamacare, oddly, into a silent tax on other poor people.

The only way around this problem is more government. Healthcare needs to be provided/ managed independently of companies; we can do this through single-payer or a subsidized mandate, depending on your preference for financing the program. This should be accompanied by stronger subsidies on food and housing, and perhaps even a Latin America-style direct transfer program to encourage people to be active about lifting their families out of poverty.

It's not acceptable for millions of retail employees to live in poverty, but it's not Walmart's responsibility to get them out of it either. It's the rest of us that share that burden, one which we can only solve by working through our shared institutions.

Update: 11/27/12 9:03 Am

The issue with raising wages of the poor that work at Walmat, without increasing them for everyone else, means that the non-Walmart poor are hurt by their relative decline in wages once Walmart increases prices.

You can get around this problem with with a national minimum wage increase. That way, everyone that relies on Walmart's low prices gets a wage increase (relative to everyone else in society), and it doesn't matter too much if Walmart increases prices. Oddly enough, it's something that Walmart supports.

That also just reaffirms the point. Forcing Walmart, individually, to increase their wages won't get us anywhere. A broader, government-backed effort is needed.

Individuals are Bad Representatives of Political Parties

A lot of discussion has erupted after the Republican Party's miraculous ability to snatch defeat from the jaws of victory for a second set of elections. While the Senate was easily winnable in 2010, a set of Tea Party fanatics threw away shoe-in races. While no President should be electable with employment over 8 percent during much of the campaign, extreme positions adopted by Mitt Romney to apease the base had the same effect.

Clearly, something needs to change. Andrew Bacevich, a Professor of International Relations and History at Boston University, has some suggestions.

First, conservatives should claim the environmental movement as their own. Preserving the natural world should be a cause that all conservatives embrace with gusto. And, yes, that includes the issue of climate change.

Second, conservatives should lead the way in protecting the family from the hostile assault mounted by modernity. The principal threat to the family is not gay marriage. The principal threats are illegitimacy, divorce, and absent fathers. Making matters worse still is a consumer culture that destroys intimate relationships, persuading children that acquiring stuff holds the key to happiness and persuading parents that their job is to give children what the market has persuaded them to want.

Third, when it comes to economics, conservatives should lead the fight against the grotesque inequality that has become such a hallmark of present-day America.

Call me old fashioned, but I believe that having a parent at home holds one of the keys to nurturing young children and creating strong families. That becomes exceedingly difficult in an economy where both parents must work just to make ends meet.

Flattening the distribution of wealth and ensuring the widest possible the ownership of property can give more parents the choice of raising their own youngsters rather than farming the kids out to care providers. If you hear hints of the old Catholic notion of distributism there, you are correct.

Finally, when it comes to foreign and national security policies, conservatives should be in the forefront of those who advocate realism and modesty. Conservatives should abhor the claims of American dominion that have become such a staple of our politics. Saving humanity is God’s business, not America’s.

Sure, we need a strong military. But its purpose should be to defend the country, not to run the world. And anytime Washington decides it needs to fight a war, then popular support should going beyond cheering. That means higher taxes to pay for the war and an army drawn from all parts of American society – to include Domers – to fight it.
I don’t seriously expect the Republican Party to show the least interest in any such ideas. But that’s because the actually-existing Republican Party is anything but conservative.

Obviously, there is little reason to believe that the Republican Party is going to embrace these concepts with open arms. Change is hard, after all. But I think these comments lead to a much larger conclusion. 

We all wear several hats in life - brother, friend, lover, mustache aficionado - but few places make this distinction more obviously than American electoral politics. We're all affiliated to "teams," and yet we're all individuals at the same time. What's more, we're supposed to be voting for members of a distinct political party while assessing them based on their own particular quirks at the same time. 

You see this all the time in our debates. As an Obama nut-hugger, I'm always thrown into the position of defending activist foreign policy that I mostly disagree with. Ron Paul fans have to defend a predatory form a lassiez faire that they don't really believe, since this is associated with the Koch Brothers kind of Libertarianism. And moderate Republicans are immediately thrown to the wolves whenever we need to rant about that obscure monster called "conservatives."

I don't think any of us should take these things personally. In the realm of politics, by becoming affiliated with any particular body, we inevitably stand for more than what we find important, or even believe. It's important to remember than within the major tents, many different views can flourish. The history of conservationism, which dates back all the way to Teddy Roosevelt, is an important part of the history of the American right. We wouldn't have things like our National Park System, the Forest Service or the Sierra Club if it wasn't for environmentally-minded Republicans. It's a little silly that this fact is now completely ignored in our mainstream political debate.

But it's also important to assess the current state of the tents. It's not unfair to say that the current Republican Party, as represented by its platform, deviates in important ways from some of the common-sense beliefs of its members and of the society at large. The focus of the party is narrowing to match its base, becoming more preoccupied with the very limiting concerns of older white men. As The National Review puts it, the activist and donor base is fully in charge, and these people have very little in common with the rest of America. The same problem consumed the Democratic party in the middle of the 80s, leading it to some of the most embarrassing defeats in modern politics.

It's not unfair to say that the Republican party, as it closely follows the interests of several corporate donors, is hostile to the environment. It's not unfair that they're policies are hostile towards women, even though few Republicans are not genuinely misogynistic. It's not unfair to say that the party's Mellon-ist economic policies cater almost entirely to the rich, even though average Republicans care a lot more about their jobs and the wages of their middle-class friends (although I would argue that, since economics is often counter-intuitive, they don't always recognize what benefits them and what doesn't). It's even not unfair to say that the party benefits from racism and uses it as a part of its campaign strategy, even though the overwhelming majority of Republicans are not racist. As Lee Atwater famously said,

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”

The party is more than the sum of its members, and an individual member isn't always a great representation of the party. Parties can drift far away from what their members actually believe in. And at this point, I'm certain that this is exactly where we're at with the Republicans. The "our actions determine our reality" mentality of the Republican party, best exemplified but its complete denial of basic science, has alienated enough of the nation, including its own members, that they're in for a reckoning.

At this point, the party is dead in the water for any national election. Gerrymandering was the only reason they hung on to the House, and it only gets worse for Republicans from here. Maybe we won't see Republicans embody the things that Dr. Bacevich recommends, but a shift back to the center is long overdue. The party can't survive without a dramatic overhaul, and neither can the country.

Republicans Can Actually Improve Obamacare

After the Supreme Court decision to uphold the ACA, David Frum came forward with a list of four ways that conservatives can work to improve the bill. Two of his ideas are especially good: drop the employer mandate and allow for more flexibility in plans. As he explains,

2) We should quit defending employment-based health care. The leading Republican spokesman in the House on these issues, Rep.Paul Ryan, repeatedly complained during floor debate that the Obama plan would "dump" people out of employer-provided care into the exchanges. He said that as if it were a bad thing.

Yet free-market economists from Milton Friedman onward have identified employer-provided care as the original sin of American health care. Employers choose different policies for employees than those employees would choose for themselves. The cost is concealed.

Wages are depressed without employees understanding why. The day when every employee in America gets his or her insurancethrough an exchange will be a good day for market economics. It's true that the exchanges are subsidized. So is employer-provided care, to the tune of almost $200 billion a year.

3) We should call for reducing regulation of the policies sold inside the health care exchanges. The Democrats' plans require every policy sold within the exchanges to meet certain strict conditions.

American workers will lose the option of buying more basic but cheaper plans. It will be as if the only cable packages available were those that include all the premium channels. No bargains in that case. Republicans should press for more scope for insurers to cut prices if they think they can offer an attractive product that way.

I might disagree with some of his statements (like on taxes earlier in the article), but at least they're realistic ideas worth considering. Obamacare would be better if we did the two things he mentioned. It would also be better if we followed the Republican governors' suggestions to implement national exchanges. Bravo.

And while I prefer a different mechanism for financing and providing health care (as a single-payer system has proven, time and again to be far more efficient that a private system), I appreciate the sentiment from at least one Republican who says that at least we do need to do something about the uninsured. Even though I consider the employer mandate to be a crappy mechanism, it's much better to have it as a part of insuring 30 million Americans. The benefits of the ends, in this situation, far outweigh the costs of the means.

But help me with a messaging issue, please. How can anyone convince Americans that ending employer mandated insurance is a good thing, when literally every right-wing media outlet is kicking up a shit-storm about how "you'll lose your health insurance."  

If employer-based coverage is such a bad thing, why would the right make such a huge deal of forcing democrats to make sure it stays? This was the key attack that derailed Hillarycare, Democrats' attempt to fix this problem back in the 90s. And it's why Obama, time and again, has to go back to this silly idea of "you can keep your [employer-provided] health insurance," even though that's probably false for a lot of people.

Look, employer-based health insurance is going the way of the dinosaurs, mandate or no mandate. Avik Roy estimates that the Fortune 100 will save more than 400 billion dollars by dropping coverage and paying the "fine." Many others will follow suit. The CBO already estimated that in the first 5 years after Obamacare is implemented, employers covering 5 to 20 million people will drop their coverage.

Why not? The incentives are already there, and they'd be even stronger without the employer mandate. This shouldn't bother anyone. Remember, as David Frum said, it's a good thing for employers to be getting out of the insurance business. Let government provide the safety net, and let employers focus on business. It's a far more normal arrangement anyway.

The "fine" will just turn into another way of paying for this, a hidden tax that we'll get through because the Grover-Norquist types would go apoplectic otherwise. And the irony of all this is that it's probably the best deal that these employers could get. If anyone takes the time to look at the bill, this alternative will cost them far less than actually providing health insurance, and it was far less than most other ideas for maintaining the current system. The current mandate will allow for a gradual transition to a better, more rational health insurance system. Win-win.

But this issue about repeal and the blind opposition to the bill needs to be dropped right away. The ACA is part of sweeping reforms of entire, broken medical system (6 out of 7 doctors say it needs fixing). We can't get there until one side drops all of this repeal nonsense and starts looking for actual solutions. While the ACA is doing some work towards improving outcomes, cost is one area that the right has plenty of room to contribute on. The ABIM Foundation gets the ball rolling. Is anyone else gutsy enough to pick it up?

Papa Johns, Denny's and the Morality of Obamacare

Matt Yglesias leads us to the (hopefully short-lived) phenomenon of business owners kicking up a storm and raising prices because of Obamacare. As he writes,

The No. 1 consequence of Obama’s re-election is that it essentially guarantees his signature health care law will be implemented. And not everyone is happy about it. Zane Tankel owns about 40 Applebees franchises. He says that as a result of the law’s penalties on employers who don’t offer health insurance to their workforce “we won’t build more restaurants, we won’t hire more people.” John Metz owns about 40 Denny’s outlets, several Dairy Queens, and is the brains behind the Hurricane Grill & Wings chain is even blunter. He says he’ll be tacking a 5 percent surcharge onto customers’ bills in order to defray the costs of Obamacare.

If you’re not happy about that surcharge, he’s got an answer for you. Cranky customers “can reduce the amount of tip they give to the server, who is the primary beneficiary of Obamacare.”

Due to the nature of American partisanship, these little tantrums aren't receiving any condemnation outside of the usual sources. It's a little disappointing. As Heather Knight in the San Francisco Chronicle points out, the only purpose that these price increases serve is to pad the wallets of these business owners. The exact same thing happened in San Francisco a few years back, when it passed a similar law. As she writes, "In addition, 101 of the 172 employers who levied surcharges on customers' bills to pay for employee health care said they didn't spend all that money on health care."

While it's a little anachronistic to point out, condemnations of avarice date back all the way to the Bible, whose authors found greed and inequality disruptive to a functioning society. I find it painfully ironic that the right, who claim to embody traditional Christian values, find it so very convenient to justify behavior of guys like Tankel and Metz. Then again, the right seems to have a bit of reality problem these days, so I shouldn't be surprised.

Conservatives and libertarians tend to think that they're maximizing freedom when they advocate lasseiz faire. That's obviously not true, and any decent student of John Rawls would be able to point that out. Equality and freedom cannot exist independently of one another. When we sacrifice equality, we also sacrifice freedom. As Daniel Little writes,

The core idea is that Rawls believes that his first principle establishing the priority of liberty has significant implications for the extent of wealth inequality that can be tolerated in a just society. The requirement of the equal worth of political and personal liberties implies that extreme inequalities of wealth are unjust, because they provide a fundamentally unequal base to different groups of people for the exercise of their political and democratic liberties. As O'Neill and Williamson put it in their introduction, "Capitalist interests and the rich will have vastly more influence over the political process than other citizens, a condition which violates the requirement of equal political liberties."

Rawls is often misread as a supporter of total equality, a type of east coast Marxist that thinks that people only go into business to altruistically provide for others. No one said that. Rawls would say its fine to make your own money.  His that you can accept differences in wealth as long as it doesn't lead to suffering among the poor. When the average CEO makes 10 million dollars a year, and yet tens of thousands of people still die each year due to a lack of health insurance, you fail that test. A society that unequal is morally reprehensible.

Rawls' moral argument is also supported by the research of economists, psychologists and sociologists that focuses on well-being and happiness. There is nearly conclusive evidence that people aren't happier because they're richer. After a certain sustenance level, additional income earned brings almost zero additional happiness. People don't want to be rich. They want things like freedom, the opportunity to spend time with their families, finding a sense of meaning in their work. In short, they want more leisure, that all-encompassing economic term for the many things that we find good in life. Because leisure is such a valuable thing, people actually work less once they start to make more money. None of this is controversial among economists.

While studies of well-being provide the broadest understanding of money and happiness, you see the same thing among entrepreneurs. Most people start their own business to get a sense of personal fulfillment, and less than 20 percent of small business owners identified "getting rich" as a motivating factor. Entrepreneurs go out on their own because they enjoy the risk. They want to leave some sort of legacy, gain recognition, or get rid of their annoying boss. There are countless stories of consultants, lawyers and bankers leaving their high paying jobs to go take up artisanal barbecue, fashion design or some other relatively low paying job, just because it makes them happy.

An entrepreneurial society and a sense of economic justice are not mutually exclusive. In fact, they're conducive to one another. A stronger safety net actually encourages people to take the risk to try something on their own. Not only can we live in a country where we don't worry about suffering at the hands of inequality, we can live in a place where people have more opportunities to get the kind of entrepreneurial freedom so many desire.

To get there, you need to drop the nonsense that says greed is good and inequality is fine. No one wants to take away someone's opportunity to make an honest living. The right has invented a false dichotomy in order to let a limited number of people actually profit from depriving others of their freedom. By praising inequality and raging against social justice, they don't support liberty. They support feudalism. It's time we all started to recognize it for it actually is.

The Social Security Problem

Ryan Grim does everyone a favor and points out that Alan Simpson, one of the supposed luminary atop the two-head Bowles-Simpson monster, has a bit of a reality problem. This time, it comes from the actual expected life spans of most Americans. As he writes, 

HuffPost suggested to Simpson during a telephone interview that his claim about life expectancy was misleading because his data include people who died in childhood of diseases that are now largely preventable. Incorporating such early deaths skews the average life expectancy number downward, making it appear as if people live dramatically longer today than they did half a century ago. According to the Social Security Administration's actuaries, women who lived to 65 in 1940 had a life expectancy of 79.7 years and men were expected to live 77.7 years.
"If that is the case -- and I don’t think it is -- then that means they put in peanuts," said Simpson.

Simpson speculated that the data presented to him by HuffPost had been furnished by "the Catfood Commission people" -- a reference to progressive critics of the deficit commission who gave the president's panel that label.

Told that the data came directly from the Social Security Administration, Simpson continued to insist it was inaccurate, while misstating the nature of a statistical average: "If you’re telling me that a guy who got to be 65 in 1940 -- that all of them lived to be 77 -- that is just not correct. Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true," said Simpson, who will turn 80 in September.

It's worth referring to some of the data that Simpson is aggressively trying to refute. Few would disagree that life expectancy for those people that reach sixty-five has changed in any meaningful way, especially for the poor that actually depend on social security. As Aaron Carroll shows, almost all gains in life expectancy come for those at the upper end of the income spectrum.

It's even more weird to be considering this a major demographic change, or even a demographic problem, because we've known about the baby boomers for an incredibly long time. The HuffPost article points out that Social Security's demographic problems were identified in 1983, and the government was aware of changing demographic trends as far back as 1946. The cost side of changing demographics was fully accounted for in the '83 recommendations of the Greenspan commission.
So to reiterate, no one was surprised by changing demographics, and in fact, nothing about Social Security's "problems" can be attributed to demographic change. Instead, you seem to have a much different and unanticipated problem. Exploding inequality has seriously hurt the amount of revenues that can be generated. Everyone should know that the FICA tax that funds our social programs is capped at 110,000 dollars; i.e. money earned after that point is no longer taxed. This was recently pointed out by the Congressional Budget Office.

As wages have remained stagnant since the beginning of the 1980s, FICA has lost the ability to generate the kinds of revenue that the Greenspan commission anticipated. Simply removing the cap would go a long way towards eliminating the problem. This completely eliminates the need for means testing the program. If you want to reduce the proportional benefits received by the rich, who most would argue don't need social security, just have them pay more into the system.

The current attack on social security really isn't anything new than the greater trend of reduced transfer programs over the last 30 years. Even as income inequality reaches historically unprecedented levels, we have been doing even less to try and counteract it.

Policies that redistribute income have been under attack for a very long time. And there's no surprise where the motivation comes from. I'll let Lee Atwater conclude this little piece,

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… “We want to cut this,” is much more abstract than even the busing thing, uh, and a hell of a lot more abstract than “Nigger, nigger.”

Just Make It Competitive

Or: the piece in which I try to make an argument in favor of partisanship.

Alternet has a very nice article on liberals' inability to connect with Southern white men. This communication gap is far from inevitable, and its to liberals' own detriment that they cannot find ways to bridge the divide. As Lynn Stuart Parramore writes,

What liberals and progressives don’t seem to understand is that you don’t counter a myth with a pile of facts and statistics. You have to counter it with a more powerful story. And that’s what Obama and the Democrats have repeatedly failed to do. White Southern men want a story that makes them feel proud of America and what it can accomplish. I’m troubled when I hear lefties heap scorn upon the South, partly because I know that the antagonism is precisely what the Mitt Romneys of the world hope for. They want to divide us and keep those regional antagonisms stoked so that the cynical Southern strategy continues to work. Every time a San Franciscan or a New Yorker rails against “rednecks” in the South, he has done Karl Rove’s work for him.

I have argued before that there is an ancient strain of populism in the South – particularly in places like North Carolina – that Democrats could tap into to speak to the white Southern man in terms that might appeal to him. But the truth is, the Democrats have been marinating in their own pro-business snake oil for so long that they have often forgotten what they might have in common with the unemployed mill worker or the Wal-Mart check-out guy. FDR did not make that mistake. He turned on the electricity at my granddaddy’s tobacco farm and I can tell you that the man, as conservative as he may have been, never forgot it. Instead of hating the white Southern man, why can’t Democrats take a little more time to talk about what they actually might do for him?

This should be a powerful argument for most people interested in electoral politics, and it's even more appealing in the abstract (racism is easier dismissed when it's not experienced).  Unfortunately, the standard liberal response to the idea of "reaching out to the south" tends to take on some form of reeducation. "If we can just teach them not to blindly follow [insert hated conservative movement]," they say, "America would be such a better place."

Unfortunately, this line of thinking avoids an important, yet somewhat ticklish, issue: our political system, and the country in general, derives enormous benefit from disagreement. While most of us might find much of conservative thought distasteful, especially the racist, feudalistic sides of it, there's a strong argument out there that says partisanship actually benefits the electorate as a whole.

How? Since, we don't truly have a dominant coalition, our major parties must find ways to attract the interests of various groups. No party will allow itself the become a permanent minority, which provides a large amount of incentive for our politics to evolve. Even under a two-party system, there is probably enough incentive to compete to bring as many different groups into politics as possible. Hence, you all of the sudden have a conservative "wave" over immigration policy and a whole series of thought pieces on how they can better connect with Latinos.

Contrast this to a political system like Italy's, which is so fractured and chaotic that a huge portion of political decision-making becomes about protecting each other and lavishing favor's on each other's constituencies. This can be thought of as a form of cartelization, which works towards reducing competition between different parties in favor of incumbents. While we might often find the competition between our two parties distasteful, there's clearly worse alternatives.

I don't want to blithely conclude that two-party systems are better than multi-party. There doesn't seem to be any evidence either way. More importantly, I think we should be concerned about how our political system encourages large amounts of competition, which has the effect of increasing accountability and expanding political inclusion.

In this sense, a Republican party (regardless of ideology) that caters to only a very small segment of society is a bad idea. I think we should be relieved that there is at least some prominent party members discussing ways of expanding its appeal. "Growing the base" has been one of the best things to have happened to Democrats, regardless of your personal opinion of Robert Rubin.

In the end, we should be hoping for ideas that translate across interest groups (conservative hindus! liberal rednecks!), which would continually open up opportunities for competition and party evolution. This also provides a framework for more Democrat outreach, especially places like the South. North Carolina is considered by most to be a swing state, and it could serve as the launching pad for liberal outreach throughout the region. No coalition is permanent, and Republicans will eventually make inroads with currently "safe" liberal voting blocs like Latinos and African-Americans. Democrats should be planning to do the same.

That also leads to an argument of expanding franchise in the US, but I guess I'll leave for another time.

Everyone Please Support the Rolling Jubilee

This is such an incredible idea. If anyone has a few dollars to spare, please consider this remarkable cause. Not only is it good for indebted Americans, it's great for the country.


You can learn more about the Jubilee here.

The Persistence of Institutions

After the election, this photo started making the rounds on Facebook. There's an even more detailed version out there as well, but this gets the basic story across.



The map is a great example of "the persistence of social and economic institutions," a term that is commonly found in the work of Acemoglu and Robinson. The most accessible versions of this idea can be found in the books Why Nations Fails or The Economic Origins of Dictatorships and Democracy. Interest readers might also want to check out check out Institutions, Institutional Change and Economic Development by Douglass C. North. Unfortunately, it's hard to find a digital copy of the North book (or any of his books for that matter). It might just want to take a look at Economic Performance through Time, a publicly available article he wrote on the topic.

Anyway, on to institutions. Let's start with a definition, this comes from North:

Institutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interactions. In consequence, they structure incentives in human exchange, whether political, social or economic. Institutional change shapes the way societies evolve through time and hence is the key to understanding historical change.

If institutions are the rules of the game, organizations are the players. While organizations develop and must act within the institutional framework of a society, they also have the potential to shape institutions as well.

We need these two things because the world is a complex place and the challenges we face are larger than what one person can solve. By establishing informal and formal constraints on behavior, institutions give us clear guidelines on how we should act and interact with each other. It doesn't matter too much whether these rules are explicit (in laws) or implicit (in norms), since both guide and direct behavior in ways that is beneficial to us and socially desirable.

Trade is a good example. Many anthropological researchers have found that pre-modern societies often have elaborate rituals in place before beginning any trading session. These are designed to reduce the threat that one side would kill each other. This would be an instance of institutions (here the rules from the ritual) guiding behavior in a collectively beneficial manner.

Although institutions change, they are often very stubborn. This is especially true of extractive economic institutions that are designed to channel the effort of the masses towards the benefit of a limited few. By creating political institutions that are exclusive (and political and economic institutions reflect one other), an elite can use the government along with less explicit forms of power to transfer wealth upwards. These systems tend to persist over time because they give people incentives to stay at the top. Politics may change the elite, but the system rewarding the elite remains essentially unchanged.

Acemoglu and Robinson argue that this is why you see remnants of feudalism is Russia persisting to this very day. This is why Mexico continues to have corrupt elections favoring its elite (something that I remember you posted about recently), and this is why the South continues to favor a distinct set of economic and political policies that favor rich white men over any other group. All of these modern behaviors reflect long-standing institutions that stretch all the way back to their serf-, colonial- and slave-filled pasts.

It's also a good reminder that change, while possible, remains hard. It takes much more than simply changing the politics of today; you must change the institutional framework too. It makes sense why you would be frustrated with "things always staying the same," since the institutions are not shifting much just because we elected some new guy.

Maybe I'm too much of an optimist, but this election is exciting because I see the potential for institutional change. You major social policies about to go into place (Obamacare being number one), along with a significant demographic change and a badly discredited reactionary counter-ideology (the Rove meltdown will be airing in the Quinn residence regularly for the next several years). There's hope that we can now see the kind of generational shifts that can continue to provide more social, political and economic inclusion for many years to come.

Living With Scarcity

A friend recently brought up the Club of Rome, and their arguments on the end of growth. While I was dismissive of this organization in the past, I didn't know that they revisited the original model. Recent reviews of their forecasts were essentially right.

Their statements on the coming era of scarcity are visible everywhere. The challenges of technology, debt, demographics, energy and climate are perfectly real and serious. We will have to structure economic policy to address them directly, which would be a huge step forward from the last decade of putting our heads in the sand. The key is probably something you've mentioned, but didn't focus too much on: social change.

The question of ordering a society under conditions of low growth (I won't go so far as to say no growth, since we do have favorable institutions and the possibility for productivity gains) most likely boils down to how dramatic of a change is necessary. The classic American liberal idea of an active government pushing significant investment and leading public-private partnerships is, in itself, a very significant change in social organization from what we have already. It means providing more public goods and broader safety net, while foregoing the extreme rewards of our current meritocracy.

I'm not sure if it's enough, or even politically feasible (yet). But we can avoid those issues for now.

With relatively low population growth combined with greater international movement of labor, I'm not sure if you will need relatively high economic growth in order to provide a generously high standard of well-being in the US. Demographic change will eventually stabilize and people can adjust to life of more intense scarcity. This can be managed with better efficiency: pretty boring things like urbanization, better public transportation, collaborative consumption and broader recycling efforts can stretch the resources we have far past their current "limits." You don't need to look very far to see shocking amounts of waste in America, and I wouldn't be surprised if much of the 21st century is about dealing with it.

You can see the beginning of this age of efficiency already. Solar power production follows moore's law; it won't be too long until it's cheaper than coal. Scientific American says that in 10 years, solar will cost half of what we pay for any current energy source. This is what I mean by growth through efficiency. There's also some crazy ideas about using bacteria to produce tremendous amounts of energy, which was one of the weird projects that got included in the stimulus.

Breakthroughs like this will become more normal in the future, but none of this will be possible without the three basic principals I kept hammering on about in a previous post: experiment, invest in technology and innovate. Not to belabor the obvious, but social reorganization is obviously an innovation too.

Questions like this always remind me of the end of the buggy and the beginning of the car, often generally referred to as the great horse manure crisis of 1894. All transportation at the end of the 19th century was animal powered, which meant that cities were bustling with tens of thousands of horses. This form of transportation produced millions of tons of manure every day, so much that urban life was quickly becoming intolerable. Predictions about the future of London in 1894 imagined a city with feet of horse shit covering every inch of public space.

Of course, we found a solution to this problem, even though extermination by manure seemed like a perfectly reasonable forecast at the time. Businesses have already learned the importance of resource efficiency, it seems likely that we can apply the same ideas to society as well. Despite the fact that our problems become larger and more complex with each passing year, humanity always increases its capacity to solve them. The solutions might be more radical than saying trust the market to solve everything, but they'll be uncovered and put into place, regardless. It's the nature of progress.

Karl Rove and the Limits of Belief

A lot of things came to a forefront during the previous election, but few were as fun to witness as the final moments of Republicans' long war on science and empiricism. Rachel Maddow has the laundry list of various conservatives "issues" that have shown the party's strong opposition to reality.

Followers of this blog should be able to recognize, by now, that I don't believe in being divisive (too much), and I don't believe in belittling or insulting others. But, at the same time, I don't accept, prima facie, mendacity, duplicity or a willingness to hide real problems under an ideological framework. I've spent more time than you can imagine talking to "liberals" about the lunacy of marxist and socialist parties and their ideas. You might find this surprising, given the framework of the national debate, but it is actually true.

But, unfortunately, I see the same commitment to principal over fact in the Republican party. It bothers me deeply, and I am very pessimistic about a party that has committed to denying science, legislating religion and refusing to acknowledge the need for change and modernization. We can be upset about how fractious the current political debate has become, but we can't get anywhere when one side of the argument encourages an echo chamber of things that just aren't true.

And if you think I'm missing something, look at the Republican attack on Nate Silver and other people who use quantitative analysis of the polls (all of whom exactly predicted the outcome months in advance).  Look at Karl Rove sitting on camera arguing with Megyn Kelly that you "can't call the election yet."

These are symptoms of an underlying divorce from reality, of a group of people who look me in the face and say that evolution isn't "real" because the Bible told them so. It's the same group of people that deny climate science because some crank they found in some corner of the web. It's the same group of people that will post any nonsense about GMOs or vaccines or agenda 21 or any other pet cause that leaps away from the world because they "believe."

I hope the election might do a bit to purge this instinct. It's bad for the country, and we have serious problems that need to be solved. We have problems from climate, resources, technology, health care cost, inequality, debt, demographics and global power that cannot be addressed by simple ideological answers. And yet, one party bases most of its messaging about how most of these things aren't even real. How can we solve a problem when they talk like that?

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Pretty much all of this can be summarized in the discussion by Joe Scarborough and David Frum, both Republicans, that echoes the same points I'm trying to make about the Republican party. David Frum's conclusion: "Republicans have been fleeced and exploited and lied to by the conservative media complex." They've stopped talking about reality, and we all need to fix it.