Club Troppo

Many years ago, Robert M. Pirsig’s hippy cult novel Zen and the Art of Motorcycle Maintenance was one of my favourites.  A few weeks ago I discovered he’d written a sequel in 1991 called Lila: An Inquiry into Morals.  I’ve been reading it as a break from seemingly interminable marking of student essays and exams (now mercifully finished).

Like many a 70s hippy (including me), Pirsig seems to have mellowed and discovered the virtues of market capitalism as he aged, framing it with his trademark notion of Zen “Quality”. 

I found several interesting things about the passage from Lila reproduced over the fold.  One is that Pirsig seems to be channeling Austrian theoreticians (especially Hayek and Popper) without overtly referencing them or seemingly even being aware of their existence.

The other interesting angle, and the main reason for this post, is that it encapsulates a lot of my own thinking about human social and economic organisation especially the role of entrepreneurialism and innovation.  The need to avoid stifling innovation as the primary engine of capitalism’s remarkable success was Hayek’s principal answer to those who argued for socialism or even a strong social democratic welfare state.  I attempted to provoke discussion on this topic in a previous post, but it ended up being sidetracked by a prolonged argument about the virtues or otherwise of the libertarian LDP’s election policies.   It seems to me that the more general issues that Pirsig raises are much more interesting.  In particular, if we accept the general thrust of his argument (as I do), what does that say about optimal forms of social, economic and political organisation (particularly when social and economic activity should be regulated and what form regulation should take)?  And optimal in what sense?

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The following paragraph is an abstract of the paper “The Effect of Employer Access to Criminal History Data on the Labor Market Outcomes of Ex-Offenders and Non-Offenders” by Keith Finlay

Since 1997, states have begun to make criminal history records publicly available over the Internet. This paper exploits this previously unexamined variation to identify the effect of expanded employer access to criminal history data on the labor market outcomes of ex-offenders and non-offenders. Employers express a strong aversion to hiring ex-offenders, but there is likely asymmetric information about criminal records. Wider availability of criminal history records should adversely affect the labor market outcomes of ex-offenders. A model of statistical discrimination also predicts that non-offenders from groups with high rates of criminal offense should have improved labor market outcomes when criminal history records become more accessible. This paper tests these hypotheses with criminal and labor market histories from the 1997 cohort of the National Longitudinal Survey of Youth. I find evidence that labor market outcomes are worse for ex-offenders once state criminal history records become available over the Internet, and somewhat weaker evidence that outcomes are better for non-offenders from highly offending groups. Results for ex-offenders demonstrate the presence of imperfect information about criminal records by employers. The non-offender results are consistent with statistical discrimination by employers. Estimates may be confounded by a short sample period and ongoing human capital investments, but the research design provides a unique setting for testing theories of statistical discrimination.

Should we publish these records or not?

I put the above up immediately I saw the abstract. Now I’ve seen another abstract that is equally relevant to the issues of discrimination in the labour market - and who should suffer it. It’s closer to my heart, because I detect a ‘lemons’ effect at the bottom end of the market, something I’ve observed in my own behaviour as a hirer of labour.

Beyond Signaling and Human Capital: Education and the Revelation of Ability by Peter Arcidiacono, Patrick Bayer, Aurel Hizmo
In traditional signaling models, education provides a way for individuals to sort themselves by ability. Employers in turn use education to statistically discriminate, paying wages that reflect the average productivity of workers with the same given level of education. In this paper, we provide evidence that education (specifically, attending college) plays a much more direct role in revealing ability to the labor market. We use the NLSY79 to examine returns to ability early in careers; our results suggest that ability is observed nearly perfectly for college graduates but is revealed to the labor market much more gradually for high school graduates. As a result, from very beginning of the career, college graduates are paid in accordance with their own ability, while the wages of high school graduates are initially completely unrelated to their own ability. This view of ability revelation in the labor market has considerable power in explaining racial differences in wages, education, and the returns to ability. In particular, we find no racial differences in wages or returns to ability in the college labor market, but a 6-10 percent wage penalty for blacks (conditional on ability) in the high school market. These results are consistent with the notion that employers use race to statistically discriminate in the high school market but have no need to do so in the college market. That blacks face a wage penalty in the high school but not the college labor market also helps to explains why, conditional on ability, blacks are more likely to earn a college degree, a fact that has been documented in the literature but for which a full explanation has yet to emerge.

The super-rich aren’t super-smart says Ezra Klein. While it might be comforting to believe that that income differences represent differences in knowledge and skill, it’s just not true:

The massive gains in wealth in this country are apportioning to a small slice of rich people at the very top of the income distribution, not the broad mass of skilled, college-educated workers who hoped they were buying into the economic ruling class but, in fact, are just the new middle. We’ve built an economy where the riches go not to those with the most knowledge, but the most money.

Matt Yglesias isn’t convinced. He points to a 2007 report by Jared Bernstein and Larry Mishel which shows that college graduates still earn significantly more than those with only high school. There "was a huge run-up in the wage premium in the 1980s" writes Yglesias, and "that hasn’t declined at all." So in other words, differences in human capital still explain a great deal of the inequality in incomes.

Of course Yglesias admits that "it’s a mistake to monomaniacally focus on educational attainment as the only factor driving inequality" and the Bernstein and Mishel paper he links to makes that point clear. But he insists that the college wage premium endures partly because of "inadequate preparation for students from disadvantaged backgrounds and screwy priorities on the part of institutions of higher education".

In a follow up post Klein points out that income inequality kept increasing even when growth in the college wage premium stalled:

If inequality is a simple function of educational attainment, then the economy remains a relative meritocracy, and reversing the trend is a simple matter of sending more people to school (though, as Matt does point out, that’s easier said than done). If not, then it’s a function of any number of forces, ranging from globalization to tax rates to corporate culture, that speak to deeper inequities in our economy, and might require more direct government intervention.

Klein and Yglesias are largely arguing past each other. Klein focuses on spectacular increases in income at the very top of the distribution while Yglesias pays more attention to differences nearer the bottom. Klein doesn’t explain how reining in incomes at the top would help those with incomes at the bottom, and Yglesias doesn’t claim that the rich could become super-rich if only they got a better education (for an amusing take on the plight of the merely rich, watch this video).

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"If everyone had enough, it would be of no moral consequence whether some had more than others", says Harry Frankfurt. Skepticlawyer agrees. In a recent post on ‘progressive fusionism’ she suggests combining Frankfurt’s ‘doctrine of sufficiency’ with Amartya Sen’s capabilities approach. But what does ‘enough’ mean?

Libertarians have long struggled against the crudest form of egalitarianism — the demand that everyone’s income should be the same. This was the egalitarian ideal that animated Edward Bellamy’s 19th century utopian novel Looking Backwards. Bellamy dreamed of a society which was both meritocratic and egalitarian — a society where all workers were motivated to do their best and all were paid the same (with no rewards for inherited ability).

Hayek spotted a fatal flaw in Bellamy’s vision — without a price mechanism there would be no way to coordinate economic activity. And with a price mechanism there would be no way to maintain equality of income (or reward in proportion to talent and effort ).

While number-crunching sociologists and economists still focus on gini coefficients, egalitarian philosophers who follow John Rawls embrace positions which are immune to Hayek’s criticism. Rawls’ influential version of egalitarianism allows inequality as long as the social arrangements that produce it improve the prospects of the least advantaged. This is why some libertarians think that it might be possible to combine Rawls’ philosophy with Hayek’s economics. This is the ‘progressive fusionism’ skepticlawyer refers to in her post.

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I’ve been puzzling about international humanitarian interventions lately, in part because my daughter Bec is in the middle of a uni assignment on the subject, but mostly because as I write this Robert Mugabe continues to terrorise and impoverish his own people in Zimbabwe while the equally odious military junta in Burma sits on its collective hands while its people starve and die of rampant but readily preventable diseases in the wake of Cyclone Nargis.  

Why can’t someone intervene and prevent these appalling tragedies happening before our eyes on TV?  The answer is fairly clear: the modern international law embodiment in UN treaties of the pragmatic notion of national sovereignty enshrined in the Peace of Westphalia 1648 together with a lack of any sufficient immediate self-interest in intervening on the part of any capable nation or group of nations.

The Just War doctrine might already provide international legalistic cover for a humanitarian intervention in Burma, and might well do so in Zimbabwe too in due course.  Once the Presidential election run-off occurs and Mugabe intimdates his way back into the Presidency the situation there will demonstrably be one of last resort (one of the necessary elements for Just War that certainly wasn’t present in the case of Bush’s Iraq intervention, even if we generously assume that it could properly be labelled “humanitarian” in the first place).  However, the Just War doctrine contains a Catch 22 at its core.  A war or humanitarian intervention imposed by coercion can only satisfy the Just War doctrine if it flows from a “right intention”:

Force may be used only in a truly just cause and solely for that purpose—correcting a suffered wrong is considered a right intention, while material gain or maintaining economies is not.

However, given the range of costs involved in any such intervention it’s highly unlikely that any nation would ever intervene to mitigate even the worst humanitarian tragedies (like those occurring in Zimbabwe and Burma at present) unless the action coincided at least to some extent with its own national self-interest.  But that would instantly negate reliance on the Just War doctrine.  The only humanitarian intervention I can think of in modern times (other than a UN-approved one) that could arguably be said to conform to the Just War doctrine was that of the NATO countries in Bosnia and then Kosovo in the 1990s, in the face of intractable and disgraceful UN inertia.

Of course, humanitarian intervention approved by the UN would successfully sidestep any such conundrum about international legality.  However, UN approval for intervention in the absence of at least grudging consent by the incumbent regime in the target country (e.g. Sudan in relation to Darfur) is highly unlikely, almost however odious and democratically illegitimate that regime may happen to be.  Tribal autocracies and mafia-like kleptocracies are a significant UN voting bloc, and when you add the votes of less toxic regimes of smaller countries which understandably suspect the motives of the West given its past record of cynical and self-interested behaviour towards weaker nations, and veto-wielding emergent superpowers Russia and China who resent the bullying imperialist pretensions of the US and its close allies, the prospects of ever achieving a Security Council resolution authorising any humanitarian intervention to which the incumbent regime doesn’t agree are very remote. 

For a while it looked like NATO might develop into something resembling a legitimising multi-national grouping that might have had both the will and military and economic strength to undertake humanitarian interventions.  However its unity was spectacularly fractured by the events leading up to Bush’s Iraq invasion.  Moreover, with the benefit of hindsight it was always inevitable that the diverse interests of its member nations would eventually cause a rift once the unifying impetus of the Communist threat was removed.

Similarly, both the willpower and any perceived international legitimacy that the “anglosphere” might once have possessed as a vehicle for humanitarian interventions was smashed by the duplicity and cavalier recklessness of the Bush/Blair/Howard Iraq intervention.

Is there any answer that could feasibly facilitate urgent humanitarian interventions in situations like the current crises in Zimbabwe and Burma?  In the short term I can’t think of one, except perhaps the possibility of a NATO rapprochement between Europe and the US if Obama is elected President.  However an old post I wrote way back in 2004 while reflecting on the aftermath of the Iraq intervention at least contains some relevant thoughts.  I’ve recycled an extract over the fold:

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Previous tatooed breasts scales of justice deep-sixed to avoid bad taste distraction from a post intended to provoke serious discussion …

John Greenfield is a conservative blog commenter who occasionally fulfils a useful function, rather like a canary in a coal mine.  He can always be counted on to trot out a stereotypical Tory response to any issue, but sometimes that reveals basic misunderstandings which might well be shared by other more sophisticated conservatives not so impervious to rational arguments.  So it was with John’s comment about my previous post on charters of rights:

None of the statists has been able to argue why we need a Bill of Rights. I am sorry, but the argument “everyone else has got one” doesn’t wash.

In fact (and leaving aside the fact that I was talking about a legislated charter of rights not a constitutionally entrenched Bill of Rights, a distinction that seemed completely to escape John), the purpose and effect of a charter of rights is almost the exact antithesis of John’s assumption.  it is an “anti-statist” measure designed to limit excessive power of the political arms of government, albeit preserving parliament’s sovereign power to legislate to remove, suspend or limit rights in a democratically acccountable manner whenever governing politicians wish to do so and think they can make a sufficiently persuasive case of necessity to the voting public to avoid being kicked out at the next election. Most libertarians are strong advocates of bills or charters of rights precisely because they limit excessive governmental power and enhance individual freedoms.

The kneejerk opposition to a charter of rights by many conservatively-minded Australians evinces historical and constitutional “deafness”.  The entire edifice of liberal democratic constitutionalism which Australia’s system of governance exemplifies is premised on the need for multiple checks and balances on excessive power.  The principle dates back at least to the 17th century when the British discovered the hard way that anyone with excessive and unchecked power was apt eventually to use it as an instrument of oppression and unfreedom. 

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What shape is the income distribution of Andrew Leigh’s dreams? Even he doesn’t know. "I don’t have a strong sense of what the right level of inequality is", he writes. "Indeed, I’m not even sure I have the right intellectual framework for answering the question."

The question is Andrew Norton’s. In the comments threat of recent post on ‘progressive fusionism’ he writes:

…‘progressives’ tend to think that there is a correct distribution of resources that can be decided in advance. However, in practice they tend to be very vague about what this correct distribution would actually look like. Andrew Leigh, for example, has written much about inequality of income, always with the assumption that less inequality is the correct outcome, but never saying what level of inequality would satisfy him.

So how should a ‘progressive fusionist‘ answer the question? The Cato Institute’s Will Wilkinson suggests that a new alliance of progressives and classical liberals might combine John Rawls’ ideas about justice with Friedrich Hayek’s ideas about markets. From this perspective, it’s not possible to decide on a correct distribution in advance. That’s because the question isn’t a purely philosophical one. On its own, Rawls’ theory doesn’t tell you what shape the income distribution should be.

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Under John Howard, the Liberal Party embraced a form of big-spending conservative social democracy, says Andrew Norton. The most formidable opponents of limited government are conservatives. In a comment on Andrew’s blog, Winton Bates wonders whether this might lead to a realignment in Australian politics.

Andrew says that the answer is no. However bad the Liberals have been under Howard, Labor is likely to be worse. Because "the basic instinct of Labor’s constituency is to favour spending" the party is unlikely to champion the cause of small government.

But maybe Bates’ question about realignment isn’t about whether classical liberals will start voting Labor, maybe it’s about whether classical liberals will maintain their alliance with conservatives. If so, what’s at stake is the intellectual alliances that form around think tanks and political magazines rather the electoral strategies of political parties.

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If you haven’t seen or read Obama’s speech on the Reverend White, you should.  Or if you’re stretched for time, Clive Crook edits it down to the best bits - which are still pretty extensive. He really isn’t just a pretty face.

There’s been something of a libertarian theme at Club Troppo this week, what with Fred Argy’s rather unlikely characterisation of Kevin Rudd as a libertarian on any topic other than shameless self-promotion, and my snarky comment about libertarians’ self-confessed lack of attraction for women.

Jason Soon suggested I was being sexist, but strangely completely omitted any reference to the gross sexism of Pommygranate’s own post that provoked my comment in the first place.  In fact I simply made the perfectly reasonable assumption (in light of Pommygranate’s concession) that the intellectual attraction of libertarianism seems to be largely confined to a particular type of nerdy bloke, and that therefore women would probably only be induced to join for reasons of romance.

Tim Lambert leapt in helpfully with a hat-tip to the perfect libertarian woman. 

In light of that sequence of events, I’ve decided to do what I can to assist the lonely libertarians by preparing an algebraic summary of their views in the hope that some suitable women might be  impressed by the intellectual subtlety of libertarian thought:

TAXATION = THEFT

PROPERTY = SACRED

PRIVATE = GROUSE

PUBLIC = EVIL + INCOMPETENT

WELFARE = BLUDGERS

POVERTY = YOUR OWN FAULT

WEALTH = RICHLY DESERVED

DECREPIT + DAMAGED = PRIVATE CHARITY

GLOBAL WARMING = SINISTER (LEFT + GREEN) CONSPIRACY

Have I missed anything?  As an equal opportunity and deeply civil centrist blog, please feel free to add your own algebraic caricatures of other political persuasions in the comment box.

Update - Helen “skepticlawyer” Dale has a thoughtful response at Catallaxy.   I should point out that I didn’t really have in mind moderate libertarians like Jason Soon and Helen, who really should label themselves as “liberal” (as Andrew Norton does) rather than “libertarian”.  I had in mind the extreme Randian or Nozickian types for whom the above algebra is an accurate summary not a caricature.

I want to return, hopefully with whatever wider perspective a few weeks brings, to Paul Keating’s inflammatory remarks about the late right wing pundit Paddy McGuinness.  We should keep in mind for a start, as Peter “Mumble” Brent implicitly noted at the time, that McGuinness himself wasn’t averse to sledging recently deceased political adversaries, often in ways every bit as vicious as Keating’s attack on him:

On the subject of speaking ill of the dead, here’s Paddy on the then recently departed James McClelland (1999) and Jim Cairns (2003).

McGuinnness’s attack on Diamond Jim McClelland, deserved or otherwise, was especially savage.  In those circumstances the argument that one should show public restraint to spare the feelings of the deceased’s family has less force than it otherwise might.

The problem with Keating’s remarks was not so much their savage intent, but the fact that for PJK the essence of McGuinness’s execrable nature was his refusal to give due credit to Keating’s economic genius!  Bob Carr’s comments about McGuinness were almost as negative but exhibited a rather wider, less self-absorbed perspective,  and hence didn’t attract the same level of opprobrium.

However, should we heed pious injunctions to post-mortem restraint in any event? 

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I’ve just been asked by the Department of PM&C to nominate someone to go to the 202o Summit. Who should I nominate - and why?

This post will be moderated strictly. Suggestions should be serious and I hope you’ll provide good reasons. Of course there will be people who want to express an opinion about the Summit itself, and for that reason I’m creating an accompanying post inviting discussion on that topic. But in this thread, please concentrate on the proposed subject. And links to other blog discussions of the subject (good nominees, not whether it’s a good idea or not) would be most welcome also.

My own idea would be to try to think of someone who has some good concrete ideas about specific things we should do in the world of government policy - and so lower down the list would come

• people who’s analysis and views about our current circumstances might be very astute, but who might not (necessarily) be expected to produce particularly outstanding suggestions for policy. By way of illustration - and illustrious illustration at that, I’d put Inga Clendinnen in this category even if I might be quite wrong - that is that in addition to being an extraordinarily acute observer of our world she’d be good at suggesting good policy changes.
• people who are pretty interesting and capable of coming up with worthwhile ideas but who already have plenty of exposure to put those ideas.

If you want to nominate anyone right now - including yourself - just go to this website where you can do so (unaccountably the most efficient form of data transfer they’ve got is the email of a Microsoft Word document. Perhaps the option of a feedback form might have saved them some time arranging the data at the back end.)

Only marginally related to the post, but a great image just the same - from turtblu on Flickr

Readers with prodigious memories may recall a post I wrote a couple of years ago about the work of psychologist Jonathan Haidt on the cognitive basis for human morality.  Haidt has developed a model he calls “social intuitionism”.  Here’s my amateur summary from the 2006 post:

Haidt and Bjorklund [Haidt's then co-author] are decisively in the intuitionist camp, though  basing  their arguments very much on empirical research in cognitive psychology (including their own research).   Their theory certainly seems (at least to this non-expert)  solidly grounded in current cognitive science research.   They claim that human moral behaviour emanates from a set of moral intuitions that are hard-wired into the brain and therefore identifiable across all human cultures, albeit that their precise shape is strongly influenced and moulded by social and cultural factors during a child’s development.   They also argue that the initial moral flash of intuition that precedes every individual moral “decision” may be modified by social factors at the time.   However, that social influence is anything but a process of intellectual reasoning in the vast majority of cases.   The process is  little more than the outworking of our desire to fit our moral decision-making into a consensus of the community or peer group of which we  see ourselves  as part: the morality of the herd.

The vast majority of what passes for moral “reasoning” is in reality no more than post hoc justification of decisions actually already reached on an intuitive basis, a conclusion that doesn’t look promising for idealistic political theories like  Habermas’s  concepts of “communicative rationality” and “deliberative democracy”.   That won’t come as  a  huge  surprise to  readers of political blogs, a domain where (like political discourse generally)  bloggers and commenters mostly just  shout past each other (however civilly)  from entrenched, predetermined positions.

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Photo by Ohmann Alianne on Flickr

Anyone familiar with the findings of political scientists like Philip Converse, about the spectacular combination of profound ignorance and political disinterest of most voters, will be unsurprised by this story on Yahoo! News: 

LONDON (AFP) - Britons are losing their grip on reality, according to a poll out Monday which showed that nearly a quarter think Winston Churchill was a myth while the majority reckon Sherlock Holmes was real.
 
The survey found that 47 percent thought the 12th century English king Richard the Lionheart was a myth.

And 23 percent thought World War II prime minister Churchill was made up. The same percentage thought Crimean War nurse Florence Nightingale did not actually exist.

Three percent thought Charles Dickens, one of Britain’s most famous writers, is a work of fiction himself.

Indian political leader Mahatma Gandhi and Battle of Waterloo victor the Duke of Wellington also appeared in the top 10 of people thought to be myths.

Meanwhile, 58 percent thought Sir Arthur Conan Doyle’s fictional detective Holmes actually existed; 33 percent thought the same of W. E. Johns’ fictional pilot and adventurer Biggles.

Similarly, close to a majority of Americans believe in “creation science”.  Although these sorts of beliefs don’t bear directly on our democratic choices, the work of Converse and others consistently shows equally profound levels of general ignorance about political parties, belief systems, issues and policies.  It makes you wonder why our governments aren’t even more inept or corrupt than they actually appear to be, if the people who elect them are so deeply stupid.  Political scientists like Samuel Popkin explain the conundrum by positing the proposition that people substitute “heuristics” or shortcuts to deal with political information overload, and that this works tolerably well, while others like Michael Schudson argue that people rely on trusted “monitorial citizens” such as influential media columnists or radio shockjocks to tell them how to think and vote.

More recently, this relatively rosy view about how democracy works has been somewhat undermined.

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