Agoraphilia

Are STEM Degrees Already Subsidized More?

2012-01-10T13:12:00.000-08:00

Alex Tabarrok argues in his ebook, Launching the Innovation Renaissance, that graduates with STEM (science, technology, engineering, math) degrees are more likely to create innovations that benefit the rest of society – and therefore they are relatively more deserving of educational subsidies than students in other disciplines. Here’s how Alex puts it:

Most importantly, graduates in the arts, psychology and journalism are less likely to create the kinds of innovations that drive economic growth. Economic growth is not a magic totem to which all else must bow, but it is one of the main reasons we subsidize higher education.

The potential wage gains for college graduates go to the graduates — that’s reason enough for students to pursue a college education. We add subsidies to the mix, however, because we believe that education has positive spillover benefits that flow to society. One of the biggest of these benefits is the increase in innovation that highly educated workers theoretically bring to the economy.

As a result, an argument can be made for subsidizing students in fields with potentially large spillovers, such as microbiology, chemical engineering, nuclear physics and computer science. There is little justification for subsidizing sociology, dance and English majors.

I think Alex is right; if we’re going to subsidize education, we should subsidize education that generates external benefits for society at large.

But I’m wondering if, in fact, we might already subsidize STEM degrees more than other degrees. Consider the following three factors that make STEM courses more costly to teach:

1. STEM professors are typically paid higher salaries. See, for example, this report from the Chronicle of Higher Education. The last table shows salaries by discipline, as a percentage of the average salary of English professors. Across all disciplines, the average salary is 13.4% higher than an English professor’s. But Engineering professors earn 25.2% more, Computer & Information Sciences 28.4% more. Mathematics is below average at 7.2%, but overall, STEM professors appear to get paid a good bit more than the average. Meanwhile, Fine Arts, Education, Communications, Philosophy, and Psychology are all below the average. (This makes sense, because STEM professors probably have better outside job opportunities and thus a higher opportunity cost.)

2. It’s easier to teach non-STEM courses in large lecture halls, whereas STEM courses often require smaller class sizes to be taught effectively. (I don’t know this with certainty, but I’ve been told as much by university administrators.)

3. When STEM courses are taught in large lecture halls, they require a larger number of teaching assistants to give the students the attention they need. (Again, I don’t know this with certainty, but it’s what I’ve been told.)

Putting 1-3 together, it seems pretty likely that STEM education is more costly to produce. And yet colleges and universities typically charge all students the same tuition regardless of major. True, STEM students may be charged nominal lab fees, but I doubt such fees make a large difference in percentage terms.

So when we consider how much students are charged relative to cost, it looks like STEM students might be getting the larger subsidy. Of course, I don’t know how high the optimal subsidy would be, so it’s possible the current subsidy isn’t large enough.

It’s also worth noting that professors in Law and Business Administration earn the highest pay differentials of all (59.5% and 50.9% above the average English professor), which would imply that these fields are getting among the highest relative subsidies. Econ professors also earn a high differential of 41.2%. Again, this is presumably driven by outside job opportunities. Unless we believe Law, Business Admin, and Econ generate strong positive externalities, maybe we should be charging students more to major in those fields.

Is there some factor I’m missing that would diminish the relative subsidy to STEM (or at least STE) degrees?

Quartering: A Forbidden M&M in the Bowl of Rights

2011-10-17T20:04:00.000-07:00

My most recent paper, “Property” in the Constitution: The View from the Third Amendment, 20 William & Mary Bill of Rights J. __ (2012) (forthcoming), explains how one of the most obscure provisions in the Constitution can help to clarify one of its most important terms. I may have more to say about that more general point later. Here, I want to highlight a connection between the 3rd Amendment’s restrictions on the quartering of troops in private homes and the rock band famous for such hits as Running with the Devil, Panama, and Jump.

In the grand struggle to protect individual rights against government trespass, the Third Amendment plays a role akin to the provision, in Van Halen’s standard performance contract, requiring a bowl of M&Ms in band’s hospitality room with all the brown ones removed. Though sometimes touted as an example of rock star excess, the clause in fact served to test whether the band’s contractual partner, providing the concert venue, had read the terms of their agreement. Finding brown M&Ms backstage warned Van Halen to look out for more serious breaches, such as in the contract’s provisions on wiring, security, and ticketing.

Quartering serves as a forbidden M&M in the Constitution’s bowl of rights and violations of the Third Amendment signal more serious problems. Consider that the Third Amendment saw violation during the War of 1812, the Civil War, World War II, a 1979 New York prison guard strike, and Hurricane Katrina. Consider, and worry.

U.S. Supreme Court: “Private” = “Public”

2011-10-15T10:47:00.000-07:00

What does “private” mean in the U.S. Constitution? The word appears there only once, in the Fifth Amendment’s Taking Clause: “[N]or shall private property be taken for public use, without just compensation.” You might think that “private” means something like “not owned by the government.” The Supreme Court, however, evidently thinks it means something else.

My most recent paper, “Property” in the Constitution: The View from the Third Amendment, 20 William & Mary Bill of Rights J. __ (2012) (forthcoming; invited), discusses that and other linguistic perversions, all towards demonstrating that courts would do better to adopt the plain, present, public meaning of the text. Here, edited for your browsing pleasure, I describe the Supreme Court’s twisted interpretation of “private” in the Takings Clause.

In U.S. v. 50 Acres of Land, 469 U.S. 24 (1984), the Supreme Court held that the Takings Clause’s protection of “private Property” covers property owned by state and local governments. The Court admitted that “the language of the Amendment only refers to compensation for ‘private property,’ and one might argue that the Framers intended to provide greater protection for the interests of private parties than for public condemnees.” Id. at 31. The Court nonetheless went on to hold that “private” includes “public”:

When the United States condemns a local public facility, the loss to the public entity, to the persons served by it, and to the local taxpayers may be no less acute than the loss in a taking of private property. Therefore, it is most reasonable to construe the reference to ‘private property’ in the Takings Clause of the Fifth Amendment as encompassing the property of state and local governments when it is condemned by the United States. ibid.

We might well doubt the Court’s logic in equating inter-governmental transfers with takings of private property, as well as the truth of the claim that a taxpayer feels the loss of local public property as keenly as the loss of a home. We might likewise doubt the 50 Acres court’s invocation of U.S. v. Carmack,329 U.S. 230 (1946), a case the Court had decided nearly 40 years earlier. In fact, the Court in Carmack merely took note that the federal government had conceded its obligation to pay for taking locally-owned public property. Because the parties did not contest the claim, Carmack could hardly have decided it. The Court in 50 Acres of Land thus had only itself to credit or blame for giving “private” an extraordinarily broad meaning.

In retrospect, following the controversial holding of Kelo v. City of New London, 545 U.S. 469 (2005), we can see a sort of perverse logic at work in how the Supreme Court reads the Takings Clause. Whereas the Court in 50 Acres held that the protections afforded to “private Property” extend to public property, the Court in Kelo held that “for public use” extends to takings for private use done “pursuant to a ‘carefully considered’ development plan.” Id. at 478 (quoting 268 Conn. 1, 54, 843 A.2d 500, 536 (2004)).

Just as the Supreme Court thinks that “private” includes “public,” in other words, it also thinks that “public” includes “private.”

Pan Am and the Economics of Hot Flight Attendants

2011-10-11T19:18:00.000-07:00

A quick break from the economics of Aesop, so I can talk about the economics of ABC’s Pan Am before it gets canceled. Not that I want it to get canceled; I watched the pilot and liked it. But the Nielsen numbers say I should speak now while it’s still topical...

For an economist, the most fascinating aspect of Pan Am is the highly attractive flight attendants -- or rather, stewardesses, since the show is set in the early 1960s. If you’re young enough, you might think that’s just TV. But I’m just old enough to remember flying in the 1970s, and I recall stewardesses who really were, in fact, hot. Okay, I was too young to understand the concept of “hot” -- but I was definitely aware that I was being attended by some very pretty young women.

Not so anymore. Flight attendants aren’t necessarily unattractive now, but they’re no more fetching than people in any other service profession that doesn’t get tips. And what’s changed? In a word, deregulation.

Prior to airline deregulation, which was passed in 1978 and completed over the next few years, airfares had been set by the Civil Aeronautics Board (CAB). For many routes, those airfares were simply too high. As predicted by a simple supply-and-demand model, airlines were willing to offer more flights at these high prices than customers were willing to buy. Under normal market conditions, that would lead to falling prices. But since the airlines legally could not compete on price, they competed on quality instead. They offered better service, better food, and... wait for it... more attractive stewardesses.

When deregulation came along, however, it became apparent that as much as male customers might have enjoyed the eye candy, they weren’t willing to pay for it. Higher quality might seem like a good thing, but it’s really only good if the benefit exceeds the cost. More attractive staff can command higher wages. The airlines could have continued to pay them, if the higher quality had attracted more customers. But as it turns out, most people just wanted to get where they were going, fast and cheap. Deregulation fueled a democratization of air travel, making what once was a luxury item available to nearly everyone. The number of people who fly at least once a year has more than doubled since 1978, while the population has grown by about 40%. These new customers have flocked to the airlines with no-frills or low-frills service, a trend that continues to this day (JetBlue, anyone?).

And y’know what? That’s a good thing, yet another efficiency gain from deregulation. There are plenty of other ways to see attractive women.

Aesop Econ: The Grasshopper and the Ants

2011-09-21T15:02:00.000-07:00

Here’s one I remember from childhood:

THE ANTS were spending a fine winter’s day drying grain collected in the summertime. A Grasshopper, perishing with famine, passed by and earnestly begged for a little food. The Ants inquired of him, “Why did you not treasure up food during the summer?” He replied, “I had not leisure enough. I passed the days in singing.” They then said in derision: “If you were foolish enough to sing all the summer, you must dance supperless to bed in the winter.”

Wow. There’s so much econ in this fable it’s hard to know where to start.

Obviously, we’re looking at a problem of intertemporal choice. The insects must decide how much effort to exert during an earlier period (summer) to prepare for a later period (winter). Exerting effort entails a present cost in terms of forgone leisure, but a future benefit in terms of consumption. The optimal choice depends on the magnitude of the subjective costs and benefits, as well as the chooser’s rate of time preference -- that is, how much he values the present relative to the future.

To a behavioral economist, the fable involves myopia or hyperbolic discounting. To simplify greatly, the grasshopper places too much weight on the present simply because it’s the present. If asked during the spring to choose his summer behavior, the grasshopper might plan to work harder. But then the lazy days of summer arrive, and suddenly he decides to kick back. This is known as time inconsistency, and it is often regarded as evidence of cognitive bias or irrationality.

To a neoclassical economist, however, this is clearly a fable about moral hazard -- the tendency to take greater risks when shielded against the consequences. No one knows whether the coming winter will be mild or harsh, and so they must choose between storing up food or taking a gamble. The grasshopper’s failure to work during summer might well be a rational response to the expected assistance of others in the event of a harsh winter.

And this raises the specter of the Samaritan’s Dilemma. People of a kind and decent disposition don’t wish to allow others to suffer, especially if helping them would be a small sacrifice. But providing charity may foment moral hazard, thereby leading to more people needing help.

The Samaritan’s Dilemma featured prominently in the most recent Republican presidential debate, in which Wolf Blitzer posed a tough question to Ron Paul:

A healthy 30-year-old young man has a good job, makes a good living, but decides: “You know what? I’m not going to spend $200 or $300 a month for health insurance because I’m healthy, I don’t need it.” But something terrible happens all of a sudden, he needs it. Who’s going to pay if he goes into a coma, for example? Who pays for that?

This 30-year-old man is the grasshopper, and we are the ants. Aesop’s ants take the position of Ron Paul: “Well, in a society that you [sic] accept welfarism and socialism, he expects the government to take care of him. … But what he should do is whatever he wants to do, and assume responsibility for himself.” I find it interesting that so many people -- who presumably heard this fable in their childhood and thought it wise – found Paul’s answer reprehensible.

Paul also advocated private charity as an alternative to government. Yet private charity, too, creates the potential for free-riding by the irresponsible. So there is a tension in Paul’s position. John Goodman explains how the tension can be resolved:

[P]rivate sector charitable activities are never run like government entitlements. If you are away from home and lose your wallet, the local Salvation Army will give you a meal and a place to sleep and maybe even some cash. But they will not do this day after day, night after night. It’s probably fair to say that all private charities seek to give aid without encouraging dependency.

Aesop’s ants follow a similar policy; they do not refuse the grasshopper aid outright, but instead inquire as to how the grasshopper’s situation arose. Of course, charitable discretion is not a perfect answer. There is always the risk of denying help to the deserving, and also the risk of giving help to the undeserving (what if the grasshopper had lied?). But if you grasp the Samaritan’s Dilemma, you realize there is no perfect answer; that’s why it’s called a dilemma.

Aesop Econ: Hercules and the Wagoner

2011-09-14T10:14:00.000-07:00

A CARTER was driving a wagon along a country lane, when the wheels sank down deep into a rut. The rustic driver, stupefied and aghast, stood looking at the wagon, and did nothing but utter loud cries to Hercules to come and help him. Hercules, it is said, appeared and thus addressed him: “Put your shoulders to the wheels, my man. Goad on your bullocks, and never more pray to me for help, until you have done your best to help yourself, or depend upon it you will henceforth pray in vain.”

Self-help is the best help.

This might be a story of simple laziness (or in economic terms, a strong preference for leisure over effort). But here’s what I wonder: what made the carter think Hercules might come and help? What led to such an odd expectation? I suspect the carter, or people he knows, must have tried this strategy before -- and with success. Hercules’ words lend some support to this hypothesis: never more pray for help without first trying yourself, or henceforth pray in vain. Though it’s not entirely clear, it sounds like Hercules might be known for lending a hand in situations like this.

For that reason, I read this as a story about disincentives to work. Such disincentives come in four primary forms: punishments for working; reduced rewards for working; rewards for not working; and reduced punishments for not working. The last of these is what’s in play here. Knowing that help from Herc is forthcoming, people become less inclined to exert effort themselves.

Work disincentives are a common topic in current policy debates. One example is unemployment insurance. The purpose of such insurance is to help those who cannot find jobs. The worry is that unemployment payments discourage people from seeking and taking jobs. Of course, the claim is not that all unemployed people, or even a great number of them, fall into this category -- only that some unknown number do. (I personally know at least three people who fit the bill and have told me so.) And then the question is whether the gain from helping those who genuinely need help outweighs the loss from those who don’t.

Getting back to Hercules, the question is what policy he should adopt. If he helps everyone who seems to need help, he will encourage dependency by some. If he refuses to help anyone, then some poor souls may be stuck in ruts indefinitely. So Hercules adopts the intermediate policy of demanding people try self-help first before begging his assistance. And then the question will become: how many of those he helps are really trying?

Aesop Econ: The Two Dogs

2011-09-09T18:31:00.000-07:00

A MAN had two dogs: a Hound, trained to assist him in his sports, and a Housedog, taught to watch the house. When he returned home after a good day’s sport, he always gave the Housedog a large share of his spoil. The Hound, feeling much aggrieved at this, reproached his companion, saying, “It is very hard to have all this labor, while you, who do not assist in the chase, luxuriate on the fruits of my exertions.” The Housedog replied, “Do not blame me, my friend, but find fault with the master, who has not taught me to labor, but to depend for subsistence on the labor of others.”

Children are not to be blamed for the faults of their parents.

Aesop takes this for a story about parental duty, but I see a story about specialization according to comparative advantage.

Both hunting and house-watching are valuable activities. Now, it may well be that the Hound could guard the house as well as the Housedog. But that doesn’t mean the Housedog is useless. On the contrary, his presence allows the Hound more time to go hunting, thereby increasing the household’s overall productivity.

Imagine what would happen if the Hound and Housedog split their time between the two activities, perhaps by swapping places at lunch. Suppose the Hound can catch ten game birds per day versus the Housedog’s four, and they are equally good at guarding the house. By splitting their time, they would catch a total of seven birds per day, i.e., five from the Hound’s half-day plus two from the Housedog’s half-day. But by specializing according to their respective comparative advantages (the Hound in hunting, the Housedog in guarding), they get ten birds, for a gain of three. The Housedog enables that gain by guarding the house; does he not also deserve a share of the spoils?

Aesop Econ: The Charcoal-Burner and the Fuller

2011-09-06T12:25:00.000-07:00

My Amazon Kindle app came with a free copy of Aesop’s Fables (translation by George Fyler Townsend), which I began reading a few days ago. Aside from being charmed by their brevity and deceptive simplicity, I was also struck by how many of the stories involved economic concepts -- some obviously, others subtly. So I thought it might be fun to do a series of blog posts analyzing Aesop’s Fables from an economic perspective.

To start, here’s a fable called “The Charcoal-Burner and the Fuller.”

A CHARCOAL-BURNER carried on his trade in his own house. One day he met a friend, a Fuller, and entreated him to come and live with him, saying that they should be far better neighbors and that their housekeeping expenses would be lessened. The Fuller replied, “The arrangement is impossible as far as I am concerned, for whatever I should whiten, you would immediately blacken again with your charcoal.”

Like will draw like.

This is a story about negative externalities. Were the charcoal-burner and fuller to move in together, the charcoal-burner’s trade would impose unwanted costs on the fuller’s. How might this problem be addressed?

In a traditional Pigovian analysis of the situation, the coal-burning’s harmful side effects might be regarded as justifying a correction. Perhaps the government ought to impose a tax on burning charcoal; the optimal tax would be set equal to the marginal external cost in terms of blackened garments. That would induce the charcoal-burner to consider the full costs of his choices, and therefore to reduce his charcoal-burning to the efficient level.

But Aesop’s story presages a more sophisticated Coasean analysis. As Ronald Coase observed, externalities are reciprocal in nature. To permit the burning of coal would harm the fuller -- but to restrict the burning of coal would harm the coal-burner. The presence of both activities is necessary for the externality to exist. And this draws our attention to the possibility of averting the harm by means other than reducing coal-burning. According to the least-cost avoider principle, an externality should be reduced or prevented by the party who can do so at the lowest cost. In the case at hand, the fuller can avoid the externality by not moving in with the charcoal-burner in the first place.

In most modern externality analysis, the story begins with two parties or activities that are already in conflict. But Aesop properly chooses to start his story before the conflict comes to be. Moreover, Aesop (like Coase) reminds us that externality problems can, at least sometimes, be solved or avoided by the interested parties themselves.

What is Originalism Good For?

2011-09-02T08:18:00.000-07:00

Originalism--the theory that we should Interpret the Constitution according to the public meaning of its words at the time of its ratification--serves important instrumental goals. It promises to give relatively clear and objective definitions to crucial but contestable terms, such as “cruel and unusual” or “due process of law,” by recurring to the linguistic usage of those who ratified the Constitution. That interpretive process, though hardly easy, at least protects us from the sort of judicial casuistry that threatens to drain all fixed meaning from the Constitution’s words.

To praise originalism for relative certainty and objectivity is not to say that its definitions always comport with our own, however, or that they hold constant from one place in the Constitution to another. Consider “cruel and unusual,” for instance. So long as they do not lapse into what Scalia called a “faint-hearted” devotion to principle, originalists must admit that it is not unconstitutional to publicly flog or brand criminals. Originalism thus gives us a very clear answer, and one untainted by any contemporary bias (indeed, entirely divorced from modern sensibilities), to the question of what “cruel and unusual” means. It may not be quite the answer the average person—or the average criminal—expects, but originalism does not pretend to play to the crowd.

Nor does originalism, despite its certainty and objectivity, always give words consistent interpretations. In the case of “due process of law,” for instance, originalism suggests that a different meaning applies each of the two times the phrase appears in the Constitution. Why? Because each such appearance dates from a different ratification process, in a different era, in which “due process of law” meant different things. Perhaps it would not be fair to thereby criticize originalism for inconsistency on that count; the same interpretative process applies to each appearance of “due process,” after all. But it does drive home the point that originalism does not care about reading the Constitution in the same way that an ordinary subject, using ordinary English, would read it today.

Originalism has another instrumental virtue: It tends to generate such substantively attractive results as limited government, the rule of law, and respect for individual rights. For that, we can credit not just the sound political judgments of the Founders but also, and more generally, the supermajoritarian constraints imposed on Constitutional ratification. Because the ratification process has to satisfy so many parties, who have many conflicting interests, the Constitution and its amendments tend to support universal values. Contemporary judges, because they do not face those similar constraints, risk following the twists and turns of case law toward unlimited government, arbitrary laws, and disregard for individual rights. Originalism, by recurring to the Constitutional meanings that won ratification, offers a way (though not the only or necessarily best way) to stave off that ugly outcome.

[The above comes from my forthcoming paper, Originalism and the Consent of the Governed: A Critique and a Cure, which I’ve submitted for presentation at the Third Annual Originalism Works in Progress Conference.]

Volokh on the Constitution's Plain, Present, Public Meaning

2011-08-12T14:29:00.000-07:00

My friend, Eugene Volokh, has posted some thoughtful comments on my consent-based approach to reading the Constitution. His excellent questions show one benefit of looking for the plain, present, public meaning of the Constitution: It gives us a fresh look at a document we risk treating as putty for judges or as a dead historical artifact.

I won't pretend that a consent-based approach to reading the Constitution solves all our interpretive problems--especially hard problems like those Eugene raises--but every theory struggles with the text. Looking for the plain, present, public meaning of the Constitution offers at least another way to tackle the problem. I'd argue, further, that it offers us the best way to maximize the consent of the governed.

Eugene cites a "number of terms that either don’t have a 'plain, present, public meaning' apart from either their originalist or precedential meaning," such as those in the First Amendment or other, well-known parts of the Constitution. I appreciate that observation--though again I emphasize that precedent-based "living" constitutionalists and originalists struggle with the same passages. I won't bother, here, to try to answer each puzzle that Eugene offers, as I am more interested in describing a methodology than I am in dictating particular results. I have opinions about such things, to be sure, but I'm no judge.

How should real-world judges interpret constitutional words or phrases that the public understands to have a specialized meaning (e.g., "establishment of religion") or no discernible meaning at all (e.g., "writ of habeas corpus")? The same way they would interpret and construct a contract in similar circumstances: interpreting legal terms as such, taking heed of their context, and constructing uncertainties against the drafting party (the U.S. federal government, here) and in favor of the adhering party (citizens and residents of the U.S.).

That does not lead to simply following Supreme Court precedents. I doubt that Kelo would come out the same way under that approach, for instance, nor that "Property" would end up with a different meaning each time it appears in the Constitution. Note, too, that the approach I describe leaves room for considering original meaning, which we should treat as something akin to "course of dealing" in the contract context. By borrowing the methodologies of contract law, a court can come as close as possible to finding the plain, present, public meaning of popularized constitutional phrases and uncommon terms such as "writ of habeas corpus." Perfection remains elusive, here as with other approaches to the Constitution. But this approach offers the best guarantee of preserving the consent of the governed.

The Hard Question

2011-08-11T12:17:00.000-07:00

Consent to constitutional governance varies by degrees and from person to person. Different levels of consent give different levels of justification. The hard problem is justifying the use of political violence against someone who expressly objects to it.

We respect the right to defend against a tort even absent the tortfeasor's express agreement, true. Everyone impliedly consents to the fundamental principles of tort law; they offer background rules for human conduct on which all socialized people depend. Our implied consent to tort law counts for a lot. It trumps merely hypothetical consent to the contrary, for instance. Some people offer fancy theories about that to which we would consent (usually something that benefits them). The implied protections of tort law trump such arrogant presumptions.

How, then, can a statist justify initiating coercion? Note that tort law boasts only a moderately powerful justification--one founded on implied consent. Express consent has greater power to justify. Therefore, the implied consent justifying tort law gives way before express consent, as when sparring partners tap fists before attacking each other. (Funny thing I've noticed about the BJJ studio I frequent: Lots of fighting; smiles all around.)

Have we expressly consented to constitutional governance? Some individuals undoubtedly have, such as those who have sworn oaths to uphold the Constitution. Perhaps run-of-the-mill citizens and residents show their implied consent to the authority of the U.S. federal government simply by not emigrating. And eloquent arguments have been made that the Constitution, if interpreted well, merits our hypothetical consent. See, e.g., Randy Barnett on the presumption of liberty.

Against those measures of consent, we hear polls suggesting that "consent of the governed" has fallen to a new low. We hear strong arguments that mere residency implies nothing about political allegiance, and philosophical claims that nobody would agree to a system of institutionalized coercion.

Consent weighs on both side of the scale measuring the justification of constitutional governance, both for and against. I cannot answer for anyone else about justifying the Constitution; you must answer for yourself. But with graduated consent theory, I offer you a way to tackle the question.

(With thanks to Sasha Volokh for stimulating discussion.)

Original Meaning v. Consent of the Governed

2011-08-09T12:56:00.000-07:00

At the Constitution's ratification, original meaning and consent coexisted. But with the advent of a new generation, the Founder's consent faded and died. To justify constitutional governance of the living requires the force of their living consent.

How can we win the consent of the governed? Only imperfectly, to be sure. The Constitution is not a contract. But we can best justify it by reading it as if it were a contract. More specifically, we should regard it as a standard form adhesion contract offered by the federal government to prospective subjects. The feds don't offer a terrible deal, as such things go. Those who attended the ratification debates accepted the offered Constitution, after all. But their choices do not very well bind us--not, at least, if justification relies on consent.

A court interpreting a standard form agreement would adopt the same approach. Suppose, for example, that Hertz first rolled out its standard form contract in 1953. Among other things, the contract said Hertz would provide a "safe" vehicle. The new contract was proposed to many various consumers and won the assent of many, thus bringing it into effect. But Hertz cannot cite that ratifying consent as binding on me; it must win my assent anew. And any court worth its salt will, if asked to interpret the contract between Hertz and me, inquire as to the public meaning of the words as of when I signed. Hertz cannot, in other words, cite the original meaning of the contract to try to fob off on me a car that has no seatbelts. That might have been "safe" in 1953, but it is not within the reasonable public meaning of the word, now.

By extension, we should reject Scalia's claim that the Constitution today permits public flogging because that would not have been considered among the "cruel and unusual punishments" banned by the 8th Amendment at the time of its ratification. Instead, we should look for the plain, present, public meaning of those constitutional terms. We--and not the long-dead founders--face the lash. therefore our consent--or lack thereof--should control.

(Justification does rely on consent, by the way, but the relationship is not a black-and-white one. See, Graduated Consent in Contract and Tort Law: Toward a Theory of Justification, 61 Case Western L. Rev. 17 (2010). If you're in a rush, you can find a slightly earlier version, download-ready, here.

The Constitutional Meaning of “Property” and the Rule of Law

2011-08-08T12:07:00.000-07:00

Although the U.S. Constitution uses “Property” four times, it nowhere defines the term. What does it mean? I’ve been grappling with that question this summer, and been surprised to find commentators and cases arguing that “Property” counts as different things in different places. On some accounts, for instance, the word means only land in Article IV, § 3, general common law property in the Takings Clause, and all that plus welfare entitlements in the Fourteenth Amendment’s Due Process Clause.

Giving constitutional property so many different definitions threatens the rule of law. An average citizen, using ordinary English, would not likely read “Property” to stand for something different each time the word appears in the Constitution. Yet both leading theories of constitutional interpretation—originalism and “living” constitutionalism—invite that sort of confusion. Both theories avow that the meaning of "Property" or another constitutional term can change from place to place because of historical accidents (in the case of the former) or Supreme Court decisions (in the case of the latter).

I thank my friend and fellow law prof, Eugene Volokh, for discussing some of these matters in an extended email exchange. He recently quoted some of his thoughts about how constitutional words—he uses “Place” and “Law” as examples—can change depending on context. He makes sound observations. In fact, I'll go Eugene’s examples one better. Consider the word, "it," which means "House" in Art. § 5, "Bill" in Art. I, § 7, cl. 2, "Writ of Habeas Corpus" in Art. I, § 9, cl. 2, "State" in Art. I, § 10, cl. 2, and so forth.

We should expect such semantic flux if, as Eugene rightly says, the Constitution is written in ordinary English. Query, though, whether the four appearances of "Property" in the Constitution appear in contexts that give it four (or even, on one accounting, five!) distinct meanings. I think not, though I remain open to persuasion otherwise.

Eugene's observations do nothing to save originalism or living constitutionalism from the charge that they offend the rule of law, however. The rule of law does not suffer if we read words in their constitutional context because ordinary speakers of ordinary English can figure out that “it” means "House" in one place and "Writ of Habeas Corpus" in another. But originalism and living constitutionalism raise a different problem, given that they base constitutional meaning on historical usage (in the first instance) or Supreme Court precedents (in the second). Only specialists in constitutional law—and not even all of them—have the expertise to engage in that sort of decoding process. Did you know, for instance, that “Property” includes government entitlements in the Fourteenth Amendment but not in the Fifth? If so, I doubt you figured it out from reading the Constitution, alone.

How do we fix this problem with both originalism and living constitutionalism? By rejecting those theories for one that gives the Constitution’s text its plain, present, public meaning. For more, see my paper, Graduated Consent in Contract and Tort Law: Toward a Theory of Justification, 61 Case Western L. Rev. 17 (2010), a slightly revised version of the download-ready, Graduated Consent Theory, Explained and Applied, Chapman University School of Law, Legal Studies Research Paper Series, Paper No. 09-13 (March 2009) [PDF format].

Ratification may be necessary to make a Constitutional term effective in the first place, but it is not sufficient to make an original meaning binding on subsequent generations. People today, using ordinary English, almost certainly regard public flogging as unconstitutionally cruel and unusual punishment. In contrast, Justice Scalia has argued that an originalist (such as himself) should (and does) regard public flogging not as unconstitutional but simply, "stupid." That he can offer so tepid a criticism of something almost any citizen would regard as beyond the pale demonstrates the salient gap between an originalist approach and a consent-based one. (Living constitutionalism's abuse of ordinary English makes it susceptible to a similar critique.)

Copyright Erodes Property℠

2011-07-14T11:01:00.000-07:00

Copyrights and patents differ from tangible property in fundamental ways. Economically speaking, copyrights and patents are not rivalrous in consumption; whereas all the world can sing the same beautiful song, for instance, only one person can swallow a cool gulp of iced tea. Legally speaking, copyrights and patents exist only thanks to the express terms of the U.S. Constitution and various statutory enactments. In contrast, we enjoy tangible property thanks to common law, customary practices, and nature itself. Even birds recognize property rights in nests. They do not, however, copyright their songs.

Those represent but some of the reasons I have argued that we should call copyright an intellectual privilege, reserving property for things that deserve the label. Another, related reason: Calling copyright property risks eroding that valuable service mark.

Property as a service mark, like FedEx or Hooters? Yes. Thanks to long use, property has come to represent a distinct set of legal relations, including hard and fast rules relating to exclusion, use, alienation, and so forth. Copyright embodies those characteristics imperfectly, if at all. To call it intellectual property risks confusing consumers of legal services—citizens, attorneys, academics, judges, and lawmakers—about the nature of copyright. Worse yet, it confuses them about the nature of property. The property service mark suffers not merely dilution from copyright's infringing use, but tarnishment, too.

As proof of how copyright threatens to erode property, consider Ben Depooter, Fair Trespass, 111 Col. L. Rev. 1090 (2011). From the abstract:

Trespass law is commonly presented as a relatively straightforward doctrine that protects landowners against intrusions by opportunistic trespassers. . . . This Essay . . . develops a new doctrinal framework for determining the limits of a property owner’s right to exclude. Adopting the doctrine of fair use from copyright law, the Essay introduces the concept of “fair trespass” to property law doctrine. When deciding trespass disputes, courts should evaluate the following factors: (1) the nature and character of the trespass; (2) the nature of the protected property; (3) the amount and substantiality of the trespass; and (4) the impact of the trespass on the owner’s property interest. . . . [T]his novel doctrine more carefully weighs the interests of society in access against the interests of property owners in exclusion.

Although I do not agree with every aspect of Prof. Depooter’s doctrinal analysis, he correctly observes that trespass law includes some fuzzy bits. Nor do I complain about his overall form of argument. It is not a tack I would take, but it was near-inevitable that some legal scholar would eventually argue back from copyright to claim that real property, too, should fall prey to a multi-factor, fact-intensive “fair use” defense. I merely take this opportunity to remind fellow friends of liberty that they can expect more of the same—and more erosion of the property service mark—if they fail to recognize copyrights and patents as no more than intellectual privileges.

[Crossposted at Agoraphilia, Technology Liberation Front, and Intellectual Privilege.]

U.S. Supreme Court Prediction Market

2011-04-30T09:27:00.000-07:00

Recently posted to SSRN: FantasySCOTUS: Crowdsourcing a Prediction Market for the Supreme Court, a draft paper by Josh Blackman, Adam Aft, & Corey Carpenter assessing the accuracy of the Harlan Institute's U.S. Supreme Court prediction market, FantasySCOTUS.org. The paper compares and contrasts the accuracy of FantasySCOTUS, which relied on a "wisdom of the crowd" approach, with the Supreme Court Forecasting Project, which relied on a computer model of Supreme Court decision making. From the paper's abstract:

During the October 2009 Supreme Court term, the 5,000 members made over 11,000 predictions for all 81 cases decided. Based on this data, FantasySCOTUS accurately predicted a majority of the cases, and the top-ranked experts predicted over 75% of the cases correctly. With this combined knowledge, we can now have a method to determine with a degree of certainty how the Justices will decide cases before they do. . . . During the October 2002 Term, the [FantasySCOTUS] Project’s model predicted 75% of the cases correctly, which was more accurate than the [Supreme Court] Forecasting Project’s experts, who only predicted 59.1% of the cases correctly. The FantasySCOTUS experts predicted 64.7% of the cases correctly, surpassing the Forecasting Project’s Experts, though the difference was not statistically significant. The Gold, Silver, and Bronze medalists in FantasySCOTUS scored staggering accuracy rates of 80%, 75% and 72% respectively (an average of 75.7%). The FantasySCOTUS top three experts not only outperformed the Forecasting Project’s experts, but they also slightly outperformed the Project’s model - 75.7% compared with 75%.

You can download a copy of the draft paper here.

[Crossposted at Agoraphilia, Midas Oracle, and MoneyLaw.]

The Power of Property Rights

2011-04-23T09:47:00.000-07:00

Why have property rights? This brief video, which I wrote and narrated for LearnLiberty, explains. Set in my hometown of San Clemente, the video co-stars some of the most lovely scenery that SoCal can offer.

Martin Interviews Bell for Kosmos Online

2011-04-20T14:29:00.000-07:00

Chris Martin recently interviewed me for Kosmos Online, a project sponsored by the friendly folks at the Institute for Humane Studies. Our podcast covered the Socratic method, measuring class participation, and other teaching techniques used in law school and other settings. You can listen here or read a rough transcript here.

(Note that this semester, at the suggestion of my students, I decided to try an approach to grading classroom participation different from the one I described in my interview with Chris. So far, so good. The experiment has yet to finish, though, so I’m not sure what technique I’ll use next year.)

Spontaneous Orders on the Beach

2011-04-18T16:56:00.000-07:00

For LearnLiberty, a project sponsored by the the Institute for Humane Studies, I recently wrote and narrated this video explaining spontaneous orders, entitled, “Can Order Be Unplanned?”

Unions, Education, and Simpson's Paradox

2011-03-09T18:03:00.000-08:00

I know, I know, I never blog anymore. I hope to change that soon. Maybe.

But in the meantime, I had to draw attention to this post by IowaHawk. As Tyler Cowen observes, the post is marred by some unnecessary partisan vitriol. But the central point is nevertheless fascinating. Although unionized Wisconsin outperforms un-unionized Texas in educational performance when you look at overall figures, it turns out that Texas outperforms Wisconsin for every major ethnic group. Now, this might sound impossible, until you realize that Texas has a substantially higher percentage of blacks and Hispanics, who tend to get lower test scores regardless of the state.

I'm not trying to make political hay out of this; I'll leave that to others. No, the reason I find this so interesting is that, as a math nerd, I'm excited at any sighting of Simpson's Paradox in the wild. The same phenomenon can happen when, for instance, a hospital with better doctors gets a disproportionate number of the sickest patients. See here for a previous, albeit artificially constructed, appearance of Simpson's Paradox on this blog.

Condoms, Cheap Pizza, Beer, and . . . the Rule of Law

2011-02-18T14:08:00.000-08:00

Condoms, cheap pizza, beer, lotto tickets, bongs, military gear . . . what have they got to do with the rule of law? LearnLiberty, a project sponsored by the the Institute for Humane Studies, recently aired a video that I wrote and narrated on the question. Enjoy!

Hoffman Interviews Bell on Kosmos Online

2011-02-09T10:11:00.000-08:00

Jeanne Hoffman, of Kosmos Online, a project sponsored by the friendly folks at the Institute for Humane Studies, recently recorded a podcast interview with me. Our discussion covered such things as career engineering, how IHS helped me win freedom, and the current state of intellectual property scholarship. You can listen here or read a rough transcript here.

FedSoc Presentation on Libertarian—But Not Originalist!—Consitutionalism

2011-02-01T09:05:00.000-08:00

Should libertarians interpret the Constitution according to its original meaning? I argue not. Instead, they should read the Consitution according to its plain, present, public meaning. I gave a very brief presentation on the topic at the 13th Annual Federalist Society Annual Conference, held in San Francisco on Friday, January 2011:

Among other things, this “consensualist” approach to constitutional theory implies that we should:

Interpret the Constitution according to its plain, present, public meaning;
Construct the Constitution as we would a standard form agreement, thus favoring individual rights over federal powers; and
Decide cases involving Constitutional rights by Citizen Courts structured akin to the panels that help to guarantee the fairness of commercial arbitration procedures.

For an earlier but more detailed account of my views, see this post about my presentation at the 2010 Students for Liberty Southern California Regional Conference.

It the Constitution True?

2011-01-10T11:07:00.000-08:00

Just because the Founders ratified a Constitution as they understood it does not mean that we ratify one with the same meaning. We ratify our Constitution, as we understand it, or not. We cannot justly be bound by others' choices.

Consider the Constitution as might a philosopher of language, asking, "Is the preamble's claim about ordaining and establishing the Constitution true?" The easy answer is, "Yes, it was made true by the ratification of at least nine state conventions." That looks like as near a truism as history can offer. But does that same preamble hold true today? The answer depends on whether we the present people ordain and establish the Constitution.

Suppose, by way of thought experiment, that a meteorite struck the nascent U.S., wiping it out but leaving documentary evidence, such as the Constitution, abroad. An Englishman reading that Constitution after the disaster would observe, "Yes, they did ordain and establish that Constitution. But it nowhere survives, today. The Constitution died in that huge gaping crater that was once the United States. Taken in the present-tense, the Constitution lies. We can understand it only as a historical artifact." Less dramatically, the same would hold true if everybody in the U.S. suddenly decided that it just wasn't worth the trouble, and magically gave up the collective hallucination of a federal government. Unless we keep it alive with our consent, the Constitution means nothing more than an account of what once was.

The choice boils down to this: If you rely solely on original meaning, you will ordain and establish a Constitution that was. If you want to ordain and establish the Constitution for we, the living People, you have read it through living eyes.

Z-Scores in Model of 2011 USN&WR Law School Rankings

2010-12-16T11:09:00.000-08:00

As I have for each of the past several years, I this year again built a model of the most recent U.S. News and World Report ("USN&WR") law school rankings. This year's model matched the publishing rankings very nicely; comparing the model's scores with the published ones generated an r-squared of .997 (where 1 would indicate perfect correspondence). At the request of my readers, I here offer the weighted z-scores of the top-tier schools from last spring's (the "2011") USN&WR law school rankings:

Why do my fellow rankings geeks care about z-scores? In brief, these z-scores measure how well each school performed relative to its peers, thereby establishing its rank. (See here for a fuller explanation.) Because USN&WR uses z-scores to rank law schools, so too must any model of its rankings.

I weighted these z-scores simply by multiplying the z-score for each school, in each category of data, by the percentage that that category influences a school's overall score in USN&WR's rankings. That method of presenting z-scores has the virtue of highlighting which scores matter the most. You will thus generally find the largest weighted z-scores in the upper, left-hand corner of the chart, for instance, where lie both the most important categories of data and the law schools that scored the highest the rankings.

Consider, for instance, the weighted z-scores of .68 enjoyed by both Yale and Harvard under the "PeerRep" category. Numbers that large (comparatively speaking) overwhelm the effect of other measures of those schools' performances—the schools' BarRep scores, at .39 each, come in a distant second—and have twice the impact of the peer reputation scores of schools ranked as close as 20th from the top.

Using weighted z-scores also has the virtue of showing how very little influence many of the things that USN&WR measures have on its rankings. The weighted z-scores for Bar pass rates among top-tier schools, for instance, vary between only .07 and -.02.. Bar pass rates, however important to students, evidently do not matter much in USN&WR rankings.

Why did it take me so long to finish this year's model? In large part, you can blame my prepping two new classes (Property and a Law & Economics seminar) and serving on Chapman's Dean Search Committee (an effort that should soon conclude with our announcment of a fantastic new leader for our law school). Notably, though, some of the delay stems from how the ABA manages its statistical take-offs. The ABA recently abandoned its former practice of routinely sending electronic copies of its statistical take-offs at the request of any subscribing school. Allegedly, some Deans had complained that to make the data available electronically would make modeling the USN&WR rankings too easy. Nice try, Deans! Also, the ABA this year neglected to send several subscribing schools, including my own, even hardcopies of the statistical takeoffs. We got a prompt response from the ABA when we finally figured out that we we were not to blame for the missing take-offs, but the mix up still impeded my efforts. Again, though, geekery finally prevailed.

Interested in prior years' z-scores? Here are the ones from the 2010 rankings, the 2008 rankings, the 2007 rankings, the 2006 rankings, and the 2005 rankings.

[Crossposted at Agoraphilia, MoneyLaw.]

The Skin Trade

2010-11-18T19:30:00.000-08:00

So it turns out there’s a market for infant foreskins that have been removed by circumcision (link via Marginal Revolution). A single foreskin can sell for thousands of dollars. A few thoughts that went through my mind in quick succession:

1. Revealing that some part of my brain still doesn’t think like an economist, I immediately thought: “What a gyp! The hospitals are getting money that rightfully belongs to the baby’s family!”

2. But wait a minute. The foreskin’s value should be incorporated into the price. The parents’ hospital bill for the birth week might be higher if foreskins weren’t sold. Hospitals that didn’t offer the foreskin-discount would lose customers to those that did.

3. But that conclusion depends on there being effective competition among hospitals. And in the current healthcare market, there’s some competition, but not very much.

4. So how could we find out? Maybe we could look for differences in hospital bills between male and female babies, or between non-Jewish and Jewish babies (since the latter would typically be circumcised outside the hospital).

5. But all this is complicated by the fact that circumcision is a surgical procedure, and therefore has some cost. What we really need for a proper comparison is a group of patients who do get circumcised by doctors, but under circumstances in which foreskin sale is not possible. And that suggests...

6. Adult circumcisions. Adult foreskins don’t have the special properties that infant ones do, so there’s no resale value. Problem is, ceteris paribus doesn’t hold here. Anesthesia is most likely different between adult and infant circumcision, and I suppose the difficulty of the procedure might also differ.

That’s about as far as I got. Anyone have suggestions on how we could discern whether the value of foreskins is incorporated into hospital prices?

The Annual Rite of Overdue Dumping: The Evidence

2010-11-05T14:40:00.000-07:00

Back in 2005 and 2007, I wrote a couple of posts about the "Annual Rite of Overdue Dumping." I claimed this event occurs early in the year, especially right after Valentine's Day. I hypothesized that the dump-fest results from a backlog of potential break-ups that were postponed to get through the holiday season. I also suggested some game-theoretic reasons to think the cycle becomes exaggerated (higher highs and lower lows) when people take others' behavior into account in their mating choices.

In the comments, some readers wondered whether the Annual Rite of Overdue Dumping was a real phenomenon. I was forced to admit that I had no hard data, only my perceptions about when people break up.

Well, now the data are in. Check out this graph, based on Facebook break-up announcements collected by David McCandless and Lee Byron:

As you can see, a rising number of break-ups do indeed happen in January and February, peaking in March shortly after Valentine's Day.

There is also a peak in break-ups in early December, presumably in anticipation of Christmas. This surprised me a little, since I thought that peak would happen pre-Thanksgiving. But it's still consistent with my story of holiday-delayed break-ups. Those who miss their window in early December tend to wait until February or March. (I doubt many of the people breaking up in March are the same people who broke up in early December, although I suppose some people might have holidays-only relationships.) Perhaps we should call this earlier peak the "Annual Rite of Premature Dumping."

In any case, I consider myself vindicated.

Three Kinds of Diversity

2010-10-27T13:47:00.000-07:00

Diversity comes in many flavors. I here compare three types—diversity of skin color and sex, cultural diversity, and ideological diversity—and offer some observations about the distinctive costs and benefits of each. I conclude that, holding all else equal, a group of people having diverse colors and sexes will enjoy modest institutional gains at low cost, while a group touting ideological diversity runs the risk of high transaction costs but wins a shot at great intellectual gains. Groups with high cultural diversity fall in between those two extremes.

Diversity of skin color and sex appears on the face of a group, thus offering ready proof that its selection, such as through hiring and promotion, was not tainted with invidious discrimination. Holding all else equal—assuming, specifically, that the racially and sexually diverse group does not possess above-average cultural and ideological diversity—the costs of intra-group transactions remain low. Thus, for instance, might a facially diverse group of culturally and ideologically similar people get along very smoothly. Think, here, of an elite law school where every professor has absorbed Ivy League norms and all lean moderately left. They might bicker, of course; law professors specialize in that. But such a culturally and ideologically uniform group is not likely to host nasty public fights about ballot initiatives or the like.

Are there downsides to pursuing diversity of skin color and sex in hiring and promotion? Not if you can find enough well-qualified candidates, and not if you avoid discriminating against candidates for blameless having an uninteresting color or sex. Happily, it is not too hard to satisfy both conditions, these days.

Cultural diversity proves harder to document, and runs some risk of increasing intra-group transaction costs. Someone brought up solely within the confines of respectable East Coast institutions will have to work a bit to understand a peer raised Mormon, in Utah's backcountry. So, too, might differences of sexual orientation (which like cultural differences generally do not appear on a person's face) sometimes lead to innocent misunderstandings. Holding equal for other sorts of diversity, however, cultural differences offer many charms and few serious costs. Most of us, and especially those of us in academia, enjoy meeting friendly people with exotic backgrounds. When we share ideologies, moreover, meeting fellow travelers who differ from us suggests that our most heartfelt values transcend race, sex, and culture—a comforting, if somewhat smug, idea.

Ideological diversity, standing alone, proves at least as hard to document as cultural diversity—it does not appear on a person's face nor even, typically, in a person's dress or hairstyle—and much more likely to raise intra-group transaction costs. Religious differences prove largely intractable, though in polite society we tend to keep them private. Political differences, at least in American institutions, threaten to burst out into loud and public disagreements, however. Such frank exchanges can help each side to hone its arguments, of course, and thus offers the prospect of considerable gains both to the disputants and the group that harbors them both. But if local norms do not temper the tone and proper boundaries of ideological debate, transactions costs can easily soar, making it hard for a group to manage even run-of-the-mill functions efficiently.

In sum: diversity of skin color and sex offers few costs and modest benefits; cultural diversity creates slightly higher transaction costs but compensates with intriguing charms; and ideological diversity presents a high risk/high return strategy for institutions devoted to generating new and useful ideas.

[Crossposted at Agoraphilia, and MoneyLaw.]

Libertarian—But Not Originalist!—Constitutionalism

2010-10-25T20:44:00.000-07:00

This past weekend, I spoke at the 2010 Students for Liberty Southern California Regional Conference, held on the campus of Pepperdine University, in Malibu, California. I enjoyed meeting a lot of very impressive young people, and sharing with them my thoughts on, Libertarian—But Not Originalist!—Constitutionalism. In brief, I argued for:

Interpreting the Constitution according to its plain, present, public meaning (rather than its original one);
Constructing the Constitution as we would a standard form agreement, thus favoring individual rights over federal powers;
Deciding cases involving Constitutional rights by Citizen Courts structured akin to the panels that help to guarantee the fairness of commercial arbitration procedures; and
understanding the Second Amendment to protect subjects from militias (rather than preparing them to serve on militias).

For a simple picture of the sort of non-originalist constitutional theory I promoted—a "consensualist" theory—consider the following, modeled on the Nolan Chart:

I swallowed hard and conceded that a consensualist reading of the Constitution might support an argument in favor of a general federal dole. I see that as a fair price for showing that I didn't choose my theory just to support my favorite policies, however, and think that liberty still comes out ahead. A consensualist reading of the constitution puts very strict limits on the federal government's power to tax and regulate, after all.

I welcome your comments on either the PowerPoint presentation or the brief written document that I prepared to accompany the talk.

Sex at Dawn

2010-09-23T19:00:00.000-07:00

I ordered Christopher Ryan and Cacilda Jethá’s Sex at Dawn from Amazon shortly after Dan Savage pimped it on his weekly podcast. I was intrigued by the idea of an evolutionary account of human sexuality that differs from the typical account offered by evolutionary psychology. Sadly, I was underwhelmed. Here’s what I wrote in the comments of a Dan Savage blog post on the subject about three weeks ago:

Dan, I love you, your column, and your podcast. But I'm reading Sex at Dawn -- because you suggested it -- and speaking as an academic, I'm not impressed. I'm having a hard time even finishing it, because on every single page there's an unsupported assertion, straw-man argument, or cherry-picked example that makes me want to throw it at the wall.

If you're looking for scientific support for your anti-monogamy position, you can find it in the *traditional* account in evolutionary psychology -- the one that Sex at Dawn tries so hard to debunk. The traditional account does not say that monogamy is easy. On the contrary, the traditional account says that cheating (in the sense of straying from monogamous relationships) is to be expected for evolutionary reasons. It is, as you say so often on your show, perfectly natural for people to want to have sex with people other than their primary partner.

Of course, it's also perfectly natural for people to get jealous. There are good evolutionary reasons for that, as well. It may seem hypocritical to be a jealous cheater, but natural selection does not breed for consistency -- it breeds for reproductive advantage. When the authors of "Sex at Dawn" say their story is more parsimonious, what they mean is that it paints a simple picture of human psychology that requires no hypocrisy. But we are hypocritical, so their explanation doesn't fit with the messy psychological reality. And that's an insight that will actually help your advice-giving career. People make a lot more sense when you understand their built-in contradictions.

When you're giving people advice on sex and relationships, you have a very critical eye. You should cast that same critical eye on the books you're pimping.

I’ve finished the book now, and my opinion hasn’t changed.

What most disappointed me was the authors’ deliberate conflation of Victorian values with modern evolutionary psychology, as though they were exactly the same position. By so doing, they make it sound as though any refutation of the former were also a refutation of the latter. They spend precious little time exploring the very significant differences between the faith-based position of the Victorians and the science-based position of the evolutionary psychologists. Every time they cite Victorian-types taking an absurd position on the subject of sex, they invite us to conclude that evolutionary psychologists share in the absurdity. By the end, they come close to saying evol psych is responsible for male and female genital mutilation.

The authors also spend a great deal of time glorifying the lives of primitive peoples, leading us to believe our distant ancestors led long happy lives filled with nutritious food and plenty of sex. Yet they also try to distance themselves from the “noble savage” position, saying (for instance) that “[t]hese pre-agricultural societies were no nobler than you are when you pay your taxes or insurance premiums” (p. 9). But that’s just a dodge. Ultimately, they really do glorify primitive living conditions. Consider, for instance, their approving quote from Kurt Vonnegut (p. 149): “Human beings will be happier – not when they cure cancer or get to Mars or eliminate racial prejudice or flush Lake Erie but when they find ways to inhabit primitive communities again. That’s my utopia.” Ryan and Jethá apparently agree.

Their overarching argument has numerous weak spots, but the weakest is their analysis of jealousy. Jealousy matters because it’s a key point on which their “promiscuous primitives” hypothesis differs from the standard account, which says that (a) males will be jealous of other males because they reduce paternity certainty, and (b) females will be jealous of other females because they threaten their children’s share of male-provided resources. But if primitive people really did mate in a polyamorous fashion in a context of abundant resources, as the authors of Sex at Dawn claim, then they need a compelling story on the origin of jealousy. Yet their argument boils down to the claim that jealousy can be controlled with appropriate social norms. Which is true; so can most human emotions. But that does nothing to explain why jealousy is there in the first place, nor why such strong social norms are needed to keep it in check.

The authors refute the claim that women have lower sex drive than men by noting, more than once, that strong social norms have been instituted to keep it down. “Why the electrified high-security razor-wire fence to contain a kitty-cat?” they ask (p. 39). On this point, I think they have a reasonable claim, and female libido may indeed be naturally higher than is typically recognized. But the same line of argument can be directed at their own position on jealousy. If jealousy is not a natural impulse, then why are such strong social norms required to control it?

The overarching flaw in Ryan and Jethá’s approach is the either/or mentality they apply to a wide range of questions. Humans are either more like chimps, or more like bonobos. (Why can’t we have characteristics of both, as well as some characteristics unique to us?) We are either naturally warlike or naturally peaceful. (Why not a tendency to keep the peace locally while making war with strangers?) We evolved in a context of either abundance or constant scarcity. (Why not stretches of both?) We are either relentlessly selfish or fully altruistic. (Why not guardedly altruistic with a tendency to exploit opportunities for selfish gain?) We are either faithfully monogamous or highly promiscuous. (Why not generally monogamous with opportunistic exceptions?) On all of these questions, Ryan and Jethá take the latter position – and then support it by showing exceptions to the former. Ultimately, the whole book reads like an extended lesson in how to commit the fallacy of the excluded middle.

Tax Cuts Relative to Tax Payments

2010-08-12T12:37:00.000-07:00

So this graph from Ezra Klein is making the rounds. In a nutshell, it shows that the proposed GOP tax cut (really an extension of the Bush tax cut) gives lots of money back to the very rich, whereas the Democratic tax cut (really a partial repeal of the Bush tax cut, meaning a tax increase) is not so generous with the rich.

The graph speaks for itself. Or does it? What the graph doesn’t show is how much each income group pays in taxes to begin with. The real question is how much each group is getting back relative to how much they put in.

Think of a tax cut as a kind of rebate: the government took some of your money, and now it’s giving some back. So how big is the rebate per dollar of tax paid? Using IRS data and the numbers in Klein’s graph, I’ve broken it down:

The chart shows that under both plans, the highest-income groups get a much smaller rebate per dollar, while the lowest-income groups get a much larger rebate per dollar. The difference is that the Democratic plan gives the rich almost no rebate at all -- about 1 cent per dollar -- whereas the GOP plan does give the rich a rebate of about 13 cents per dollar. Meanwhile, everyone earning less than $200K gets a rebate of at least 22 cents per dollar, with some groups getting much larger rebates (reaching as high as 73 cents per dollar for households earning $10-$20K).

The fact is that the rich pay a whole lot more in taxes than everyone else. It should be no surprise that their tax cuts are larger as well; the only way to avoid this is to give a disproportionate tax cut to people with lower incomes. For more, see this post from a few years ago.

How Is This a Problem?

2010-07-26T23:35:00.000-07:00

Business Insider’s Chart of the Day purports to show the “dismal” state of America’s household net worth. The authors describe the chart as showing the ratio of household net worth to disposable personal income “falling back to levels last seen in the late 1980s and early 1990s.”

Now, the main thing that makes our current position look bad is those two big spikes on the far right. As the authors note, those correspond to the dot-com bubble and housing bubble, respectively. And since those were, y’know, bubbles, they don’t really represent the value of fundamentals. Those years should arguably be ignored. But once you ignore those years, a quick eyeball reveals that the profile is pretty much flat. The ratio has hovered around 500% for over half a century, with the exception of a dip during the 1970s and early 1980s. And 500% is where we are now. How is this a problem?

Maybe the authors think the figure should be rising over time, and the flatness of the graph (once the bubble are removed) reflects stagnation. But that’s a non sequitur. Since the figure is a ratio, it’s perfectly consistent with both rising net worth and rising disposable income. For the ratio to trend upward, net worth would need to rise more quickly than disposable income. But as far as I know, there’s no reason to expect that. Am I missing something?

When Nudging Isn't Enough

2010-07-15T22:39:00.000-07:00

In a New York Times op-ed, George Loewenstein and Peter Ubel argue that policymakers are relying too heavily on behavioral economics, when traditional -- that is, rational choice -- economics would often serve them better.

On cursory reading, you might think this op-ed repudiates the facile use of behavioral economics to guide policy. But in fact, the authors encourage us to go further down that road. They do so by questioning the efficacy of behavioral policies while implicitly accepting behavioral welfare analysis.

Consider, for instance, their position on the “obesity epidemic.” They begin by diminishing the impact of New York’s nudge-like mandate on restaurants to post calories in restaurants, while nevertheless supporting it:

Calorie labeling is a good thing; dieters should know more about the foods they are eating. But studies of New York City’s attempt at calorie posting have found that it has had little impact on dieters’ choices.

Obesity isn’t a result of a lack of information; instead, economists argue that rising levels of obesity can be traced to falling food prices, especially for unhealthy processed foods.

Aha! So it’s just the law of demand, a prediction of traditional rational-choice models. Do Loewenstein and Ubel conclude that consumers are rationally choosing greater girth in the face of lower prices (and, I might add, superior healthcare), and therefore recommend leaving them alone? Let’s see:

To combat the epidemic effectively, then, we need to change the relative price of healthful and unhealthful food —- for example, we need to stop subsidizing corn, thereby raising the price of high fructose corn syrup used in sodas, and we also need to consider taxes on unhealthful foods.

In other words, Loewenstein and Ubel remain convinced that consumers are making poor choices that require government correction. If nudges don’t work, then shoves may be warranted.

(Removing corn-syrup subsidies could indeed make consumers better off, according to the traditional model, because doing so would eliminate the inefficiency resulting from a distorted price ratio. But for the very same reason, a tax on unhealthful foods would make consumers worse off. Notice that Loewenstein and Ubel see no important difference between removing a subsidy and imposing a tax.)

The pattern repeats through the rest of the op-ed. If gallons-per-mile laws don’t induce people to choose different vehicles, then we need higher gas taxes. If telling people how much electricity their neighbors use doesn’t cause them to turn out the lights, then we need a carbon tax. To be fair, these cases may involve genuine externalities -- which are recognized as a problem in traditional economics -- rather than the “internalities” of behavioral economics. But Loewenstein and Ubel don’t mention that distinction. The behavioral goals of policy are taken as given; only the means get scrutiny.

In our first paper on paternalist slopes, Mario Rizzo and I warned about precisely this kind of process. When a policy is enacted to achieve a specific goal and then fails to achieve it, further policies are justified on grounds of achieving the goal that “we” have already agreed upon. In Loewenstein and Ubel’s op-ed, I believe our prediction is vindicated.

[Cross-posted at ThinkMarkets.]

Barbie, Political Philosopher

2010-06-28T12:58:00.000-07:00

Toy Story 3 offers many pleasures and not a little wisdom. I absorbed them with a shocking output of tears, both the laughing kind and otherwise. At one point, too, I raised my fist in solidarity, moved by the political philosophy voiced by Barbie (brilliantly played by Barbie). I liked Barbie's quote so much that I put it on a t-shirt:

Nice, huh? Click on the picture to customize the shirt for your build and style.

Fellow Bluebook geeks will notice that, despite its graphic fripperies, the shirt sports a proper legal citation. Scholars might take comfort in the fact that I crosschecked the quote against the junior novel version of Toy Story 3. Lawyers for Disney/Pixar must admit that my usage falls within the traditional bounds of the fair use defense to copyright infringement, and Hasbro cannot justly complain that the shirt's use of "Barbie" violates that trademark.

Tyrants might not like the shirt, granted. But Barbie showed us what happens to tyrants. I won't say more about that, here; just go see the movie!

UPDATE: Notwithstanding law and logic, Zazzle.com pulled the shirt almost immediately after I posted it for sale. I'm currently trying to correct the matter. Sorry for the inconvenience.

[Crossposted at Agoraphilia and The Technology Liberation Front.]

You Might Do Not Have to Use Files

2010-06-14T15:06:00.000-07:00

The grandly-named Public Domain Archive, evidently a production of Osaka-based Digirock, Inc., offers a few MP3s of classical music and historical speeches. Thanks to a suggestion from Tyler Cowen, I'm enjoying a 1942 recording of Beethoven's 9th even as I type. Am I breaking the law in so doing? The copyright notice posted on the Public Domain Archive, while quite charming, hardly reassures:

To the People
In japan, All files open to the public on this site are certainly lawful.
But, if you do not live in Japan, You might do not have to use files.
You should check the law of your country.

As proves too often true for works, like this 1942 recording, that fall under the aegis of the 1909 Copyright Act, it is not easy to figure out if the underylying work enjoys any claim to protection under U.S. law. Perhaps, after all, it was not published with the proper formalities, here, and thus fell into the public domain.

In this case, though, it looks like we can dodge those complications. U.S. copyright law affords exclusive rights only to copying, creation of derivative works, public distribution, public performance, and public display. See 17 USC § 106. So long as I listen to a MP3 solely via streaming, without saving a copy, it is hard to see how I've violated any of those rights. Perhaps Digirock, Inc. has violated U.S. law by offering me the MP3, but that is no concern of mine (and probably not much of a concern to Digirock, Inc.).

That legal scenario suggests an interesting conclusion: an offshore copyright-free zone—one set up by intellectual pirates or in a stubbornly independent country—might give U.S. residents ample, free, and legal access to all sorts of copyrighted works—even ones protected under U.S. law.

[Crossposted at Agoraphilia and The Technology Liberation Front.]

A T-Shirt to Save Miranda

2010-06-02T20:29:00.000-07:00

Professor Crim Pro I ain't, but it seems to me that anybody who has used a computer can pretty easily grasp the holding of Berghuis v. Thompkins, 560 U.S. __, No. 08-1470 (June 1, 2010) [PDF]. In that opinion, handed down just yesterday, the U.S. Supreme Court toggled the default on the Miranda warning. A five-justice majority held that silence will not suffice for citizens who want to invoke Miranda's protections against self-incrimination; we now must ask for our Constitutional rights. Think of it like a computer program that annoyingly assumes you want unsolicited advice from a chirpy paper clip--except this paper clip throws you in cuffs and tazes you if you talk back.

The Berghuis decision inspires me to offer a new piece of legal armor—this time in the form of a t-shirt:

Click on the picture to buy a shirt, or borrow the text (I've uncopyrighted it) to make your own version from scratch. Combine that notice of your Miranda rights with the bumper sticker and magnetic sign I offered earlier, in defense of your rights to record and report what public officials do to you, and you might just dodge some serious legal hurt. Or—who knows?—you might inspire some interesting and important litigation.

I leave detailed analysis of how Berghuis jibes with Miranda and other precedents to other, more knowledgeable commentators (see supra, "ain't Prof. Crim Pro" disclaimer). I dare say, though, that Justice Sotomayor's dissent hit a nice note:

Today’s decision turns Miranda upside down. Criminal suspects must now unambiguously invoke their right to remain silent—which, counterintuitively, requires them to speak. At the same time, suspects will be legally presumed to have waived their rights even if they have given no clear expression of their intent to do so. Those results, in my view, find no basis in Miranda or our subsequent cases and are inconsistent with the fair-trial principles on which those precedents are grounded.

Slip. op. at 23 (Sotomayor, J. dissenting).

I guess that you could say the Berghuis majority took a cue from the (so-called) libertarian paternalists and engaged in some legal nudging. In this case, however, the Court nudged our defaults away from individual liberty and toward prosecutorial power. Call it statist paternalism.

Thanks, Supremes, for giving us worse than nothing. Ah, well. As I read Berghuis, even the justices in the majority would not deny us the opportunity to answer their new default with a firm "No!" Thus might we recover our Constitutional rights with a t-shirt.

[Crossposted at Agoraphilia and The Technology Liberation Front.]

Police May be Monitored for Quality Control Purposes

2010-05-30T11:55:00.000-07:00

While police and prosecutors have encouraged the growth of a surveillance state, they don't seem so enthusiastic about the growth of a surveillance citizenry. Maryland and other states have recently seen privacy laws invoked to squelch the unauthorized recording of public officers performing public duties in public areas. Until courts put an end to those bogus claims, we should make sure that police officers know that we may monitor traffic stops to protect our rights; I below offer a bumper sticker and magnetic door sign that ought to help on that front.

Radley Balko recently reported on the latest attempt to use privacy laws to punish citizens for recording police misconduct. In this case, Anthony Graber was arrested for posting on YouTube a video he'd captured on an un-uniformed Maryland state trooper, driving an unmarked car, pulling over and rushing at Graber with a drawn handgun. Soon after Graber posted the video, he was charged for violating the Maryland Wiretapping and Electronic Surveillance Act, Md. Code Ann., Cts. & Jud. Proc. § 10-401 et seq. (2010), which basically outlaws secretly recording a private conversation.

Maryland's police must be feeling a bit testy, these days, about getting recorded on-the-job by uppity citizens. Earlier this spring, an inconvenient video of the beating of Jack McKenna put the lie to the claims of Maryland police that McKenna had provoked the incident by attacking the officers and their horses. State and federal officials have since launched "excessive force" inquiries.

Did that video violate the privacy of the three officers, clad in riot gear and swinging batons, who surrounded and beat the unarmed McKenna? No. Neither did the video that Graber shot of the Maryland trooper strutting towards him with a drawn handgun. Courts have already explained that wrongs under the Maryland Wiretapping and Electronic Surveillance Act require a showing that someone's reasonable expectation of privacy has suffered violation (see Fearnow v. C & P Tel. Co., 104 Md. App. 1, 655 A.2d 1 (1995), rev'd on other grounds, 342 Md. 363, 676 A.2d 65 (1996)), and no officer can have a reasonable expectation of privacy while on a public street, performing public duties.

The Maryland ACLU has stepped forward to help defend Graber, and with any luck will soon educate local prosecutors about the proper scope of the Maryland Wiretapping and Electronic Surveillance Act. In the meantime, and in other jurisdictions where police threaten to deploy privacy laws against whistle-blowers, we citizens would do well to remind public servants that we can and will record their on-the-job performance. I've worked up a couple of notices to help.

This bumper sticker should help to put police on notice that you may record them during traffic stops, thus negating any claim to a reasonable expectation of privacy:

Make sure that you place it where video taken from the officer's vehicle will record it! That proof might end up helping your case if, like Graber, you want to publicize police abuse.

To make doubly sure that you give adequate notice to an officer who subjects you to a traffic stop, you might also want to carry this handy magnetic sign:

Once you have been pulled over, just roll down your window and slap the sign outside your door, where a police officer cannot fail to see it.

Click on either image to buy a copy for yourself or a friend. All proceeds will go to aid the defense of Anthony Graber. Perhaps his case would have turned out differently if he had had that bumper sticker on his helmet, or that magnetic sign on his gas tank. (I thank Prof. Orin Kerr for inspiring the wording of these notices, though he of course bears no blame for my legal hijinks.)

In the long run, as Prof. Glenn Reynolds has observed, we in the surveillance citizenry have an edge over those trying to create a surveillance state. We have more eyes, more cameras, and a more sympathetic message. There remain, however, several legal wrinkles to iron out before we can safely say we've turned the tables. I'll try to say more about those, and offer an all-purpose notice designed to cover a wide variety of citizen surveillance practices, in a subsequent post.

[Crossposted at Agoraphilia and The Technology Liberation Front.]

"Robot Weds Couple in Japan"

2010-05-22T13:28:00.001-07:00

Want to know my reaction to the headline above? Just read this old post (starting with the second paragraph).

The Fundamental Transformation in Breaking Dawn

2010-05-20T17:51:00.000-07:00

If you’re on Team Edward, you might think the fundamental transformation in Twilight: Breaking Dawn is a person getting turned into a vampire. Or if you’re on Team Jacob, you might think it’s a boy morphing into a wolf. But if you’re an economist, it’s the conversion of undifferentiated assets into relationship-specific assets.

That came out more boring than I planned. But it’s true! On Deadline Hollywood, Nikke Finke reports that several supporting actors played hardball during negotiations for the final installments of the Twilight series:

Really, my eyes glazed over at the recent ruckus that those secondary actors were demanding as much as $4 million each to do the 4th and 5th installments of the Twilight Saga. ... I’m all for higher pay for thesps, and Summit has tons of cash to spread around. But in this case Summit gave these actors their big break, and offered them 10 times what they’d made in the first movie, and could have replaced every one of them with hungry unknowns had it not been for the execs’ fears of offending fans.

We’ve seen this happen before, of course, most notably when the six leads on Friends wangled $1 million each per episode in their final season. In economics jargon, stories like these illustrate what Oliver Williamson dubbed the fundamental transformation (see p. 176).

When an organization (such as a firm) acquires new assets (such as employees), those assets are typically undifferentiated at the outset. The firm has many other equally suitable options, and thus the potential employees have limited bargaining power. But after they join the organization, they undergo a transformation. They gain value to the organization that they lack outside of it, and thus they’re no longer undifferentiated from all the other options. Now there’s more room for bargaining, and the parties may try to claim a larger share of the gains from continuing the relationship. That’s just what the Twilight supporting actors have done.

What’s less obvious is the symmetry of the situation. The owner of the relationship-specific asset can threaten to hold-up the process, but so can the buyer. Say having the specific actor from previous installments of a series is worth $5 million to the studio. Meanwhile, the actor’s best alternative movie offer is $1 million. Then there’s a $4 million pie to be cut, and an offer of $3 million would exactly split the gains from trade. But the studio may hold-up the process by refusing to pay a dime over $2 million, while the actor may threaten to walk for anything less than $4 million. Both parties stand to lose if they walk away, which is why they usually end up settling somewhere in the middle (often with the final number undisclosed to the public). But every now and then, the deal falls through -- especially when the parties disagree about how valuable that relationship-specific asset really is.

Human assets aren’t the only assets subject to the fundamental transformation. To take another example from the movie business, the selection and creation of sets transforms undifferentiated assets (apartments, furniture, lumber, etc.) into relationship-specific assets. And in some cases -- for instance, a private home rented as a location -- the same problems can arise. But for physical assets, there’s often a simple solution: buy the asset outright. That solution is not available for human assets... although some would argue the old studio system came close.

(For another application of the fundamental transformation, see here. Cross-posted at ThinkMarkets.)

U.S. News: Less Transparency = More Fairness

2010-05-20T14:51:00.001-07:00

Robert Morse today announced that, in response to evidence that law schools had been gaming its rankings, U.S. News would change the way it estimates the "Employment at 9 Months" measure for schools that decline to report that figure. Paul Caron offers some background here. Said Morse: "U.S. News is planning to significantly change its estimate for the at-graduation rate employment for nonresponding schools in order to create an incentive for more law schools to report their actual at-graduation employment rate data. This new estimating procedure will not be released publicly before we publish the rankings."

I understand that U.S. News generated the formula it formerly used to estimate the Emp9 figure for non-reporting schools by running a regression comparing the Emp0 and Emp9 data from reporting schools. It used to puzzle me that U.S. News did not evidently re-run the regression each year, but rather stuck with the original estimate. In retrospect, though, I see that sticking to the same formula might have partially helped U.S. News offset the gaming it so dislikes. After all, as more and more schools with low numbers refused to report Emp9 data, opting to rely instead on the publicized formula, the correlation between Emp0 and Emp9 scores would change so as to favor non-reporting schools. Better to stick with the old formula, dated though it might be, than to increase the incentive to opt out of reporting.

U.S. News thus avoided a vicious cycle, but only at the cost of signaling to schools exactly when hiding Emp9 data would help their rankings. Will its new reticence work? Schools can now only guess at how U.S. News will turn Emp0 numbers into Emp9 estimates, and will rightly worry that they might misjudge the new cutoff. Even if big-E ethics does not counsel reporting Emp9 numbers, therefore, small-c conservatism will. Granted, a school might reason, "U.S. News will still try to find a reasonably accurate way to turn Emp0 data into Emp9 estimates, and it has always helped us to not report in the past, so it remains a gamble worth taking." But such schools should also rightly worry that U.S. News might throw a punitive little kick into its new formula, to encourage schools to worry more about accuracy than about rankings.

[Crossposted at Agoraphilia and MoneyLaw.]

Sex For Me But Not For Thee?

2010-05-09T15:52:00.000-07:00

Robin Hanson links to an interesting article about which activities young adults count as “having sex.” The article purports to reveal a double-standard: people are less likely to call a given act sex when they did it, and more likely to call it sex when their long-term partner did it. Here’s the abstract:

The purpose of this study was to determine if undergraduates (N=839) apply the same standard to themselves when labeling a behavior ‘‘having sex’’ as they apply to their significant others if those persons engage in the same behaviors outside the relationship. Using a between-participants design, one form asked participants if each of 11 behaviors constituted having sex if they engaged in the activity; the other form asked participants if each of the same behaviors constituted having sex if their significant other engaged in the activity outside their relationship. Participants answering for themselves were less likely to indicate a behavior was having sex for all behaviors except penile–anal and penile–vaginal intercourse. Men were also more likely than women to indicate most behaviors were having sex. The authors discuss what they define as a definitional discontinuity in undergraduate emerging adults’ definitions of having sex. Fundamental attribution error (FAE) and emerging adulthood literature are used to explain the findings. Health and relationship implications are identified. [emphasis added]

These are fascinating results, but I don’t think they really demonstrate what the authors say they do.

Let’s take an example: does oral sex count as sex? It turns out that men are less likely to say “yes” when they’re the ones who did it, and more likely to say “yes” when it’s their girlfriends who did it. And the same is true for women; they’re more likely to call it sex when their boyfriends did it than when they did it themselves.

The authors interpret this as evidence of a self-favoring bias known as the Fundamental Attribution Error. People wish to see themselves in a favorable light and so they cut themselves some slack, but they are less forgiving when it comes to other people.

But let’s look at how the survey questions were actually phrased. On Form A, respondents were asked to classify an activity involving themselves, such as:

A person had oral contact with your genitals.

On Form B, respondents were asked to classify an activity involving their S.O. (defined as an actual or hypothetical boyfriend/girlfriend or spouse), such as:

Another person had oral contact with your S.O.’s genitals.

Note that the phrasing of the latter activity instantly implies cheating. It mentions an S.O., which by definition means there exists a committed relationship. (The past tense phrasing leaves open the possibility of the event having occurred before the relationship, but the “S.O.” phrasing nevertheless brings the possibility of cheating to mind.) The phrasing of the former activity, on the other hand, does not imply cheating; no S.O. is ever mentioned.

So here’s an alternative hypothesis: the differential results may represent a framing effect rather than a self-serving bias. People tend to define “having sex” in a broader way when faithfulness is an issue, but in a narrower way when the issue is perceived as simply definitional. Thus, a person might consider oral sex to be not-quite-sex as a matter of definition, but count it as sex for purposes of policing loyalty. And that could be true even if the potential cheater is oneself.

This is not to say that there’s no FAE here, just that something else could easily be going on. To distinguish FAE from the framing effect, you’d want to phrase the activities in a more symmetrical fashion, something like this:

A person, not your current S.O., has oral contact with your genitals.

versus

Another person, not you, has oral contact with your S.O.’s genitals.

A difference in answers here would isolate the FAE, since in both cases cheating is clearly involved. On the other hand, if you wanted to isolate the framing effect, you could phrase the activities like this:

A person has oral contact with your genitals.

versus

A person who is not your current S.O. has oral contact with your genitals

This pairing focuses entirely on one person (the respondent) while differing on whether the possibility of cheating is invoked.

The larger point is that the existing question-pairs differ on two dimensions (the person involved and whether an S.O. is mentioned). But to isolate a particular kind of difference, they need to differ on just one dimension.

A Separate Peace in the Drug War: It Has Begun

2010-05-07T18:59:00.000-07:00

Three years ago, I blogged about a "longstanding policy pipe dream" of mine: that the state of California would declare a separate peace in the drug war.

“Yes,” the argument would go, “California does not have the power to repeal federal laws. But it does have to the power to dispose of its own budget and use its own state and city employees as it sees fit. From this point forward, if the federal government wishes to enforce federal drug laws in California, it will have to do so with federal tax dollars and employees. No state tax dollars or state employees will participate in fighting the drug war.”

And now it looks like it might actually happen, at least with respect to marijuana. In a sense I'm late to this party -- news of the California ballot measure broke over a month ago -- but given the blog post quoted above, I prefer to say I'm three years early.

So why am I blogging about it today? Mainly because of the video of a SWAT team raiding a house and shooting two family dogs, all over an apparently tiny quantity of weed. The video has gone viral now, with most (though sadly not all) viewers voicing anger and outrage. So now is as good a time as any to recommend that if you want to help stop events like this, which happen with sickening frequency, you should contribute to the cause. I just did.

And I'm not just talking to Californians. If marijuana gets legalized in one state without ending the world, that could set the precedent for change nationwide. So help us get it right here. In return, I promise to contribute to the next serious campaign in another state to do the same thing.

(As an aside, I'm irritated by the fact that the name of the campaign is "Control & Tax Cannabis." That's kind of burying the lead. But make no mistake, this is really about legalization.)

New Paternalism: Odds & Ends

2010-05-05T14:28:00.000-07:00

The Cato Unbound discussion on new paternalism has come to a close, but I want to address a few loose ends that came up during the exchange.

The Demand for Evidence

Richard Thaler has demanded empirical evidence that the new paternalism has led to slippery slopes. Given that the new paternalism is a relatively new phenomenon, I certainly don’t claim that the slope has already occurred.

I do claim that slippery slopes are real, that slopes are most likely when certain features are present, and the new paternalism has many of those dangerous features.

Historically, there can be little doubt as to the existence of slippery slopes. Examples that came up during the Cato Unbound forum included the run-up to Prohibition, the escalation of the drug war, and the gradual encroachment of smoking restrictions. I believe an honest examination of other, non-paternalist domains yields similar conclusions. For instance, after passage of the 16th Amendment, the vast majority of people paid no income tax at all, and the top marginal tax rate was only 7%. We all know how that turned out. A much more complex story could be told about early interventions in healthcare that laid the groundwork for more extensive intervention later.

For examples more closely related to the new paternalism, consider two stories David D. Friedman relates on his blog. Both involve a college whose supposedly optional contributions to certain causes (a fund for environmental projects and one of Ralph Nader’s PIRGs) became, in the process of implementation, de facto mandates. I don’t know whether the college in question is private, but since there is competition among colleges both public and private, I’m not overly concerned about things getting far out of hand. Nevertheless, the process Friedman describes is illustrative:

But the people constructing the choice architecture know what result they want to get, they believe they are doing good and so not constrained by what they themselves would consider proper principles of morality and honesty in a commercial context, so it is very easy to make the ‘wrong’ choice more and more difficult and obscure until what is optional in theory becomes mandatory in practice.

Put that process in a political context, and there’s good reason to be worried after all.

Other Goals

New paternalist techniques can be used for purposes other than helping people “by their own standards.” Thaler offers the example of organ donation: by defaulting people into donor registration, or at least forcing them to choose explicitly one way or the other, it may be possible to increase organ donations. Other examples, such as inducing lower energy usage, appear frequently in Nudge.

During the Cato Unbound discussion, I largely ignored these examples because I considered them off-topic. Paternalism is about changing your behavior for your own good, not the good of others, right? But now I see the connection. The process starts with the (possibly correct) assumption that some people already want to help some good cause, and all they need is a little nudge to do it. Ostensibly, then, the goal is still making people better off by their own standards. From there, the slide is quick and almost unnoticeable. Is the new policy’s goal to help people better satisfy their own preferences, which might happen to include supporting a good cause? Or is the goal simply to advance that cause?

In the comments to a previous post on Agoraphilia, Gil Milbauer reports that his Washington state driver’s license renewal includes “a $5 ‘donation’ to state parks that I have to deduct from the total in order to avoid paying.” I have to agree with Gil’s assessment: “This opt out gimmick was not a reasonable attempt to help people satisfy their actual preferences. It's a way to scam them out of money, and that’s how I expect most uses of these techniques to be used.”

The concern, then, is that new paternalism will provide justificatory cover for a panoply of interventions that eventually take on a life of their own, fully unmoored from the “by their own standards” goal.

A Silver Lining for Liberty?

In the wider blogosphere, some libertarians ask whether the new paternalism has the potential to improve liberty in some domains by rolling back harder paternalism. (Julian Sanchez expresses this hope more positively, Bryan Caplan more negatively.)

In Nudge, Thaler and Sunstein do, in fact, support a handful of liberty-improving proposals, and for this they should be lauded. Nevertheless, if you consider the new paternalist literature as a whole, you’ll find the balance is heavily on the side of greater intervention. Most new paternalist authors simply don’t acknowledge liberty-improving possibilities at all. Even in Nudge, Sunstein & Thaler don’t go as far as (say) pushing to repeal the prohibition of drugs or prostitution and replace it with knowing-and-voluntary waivers. Their liberty-improving proposals are more modest: privatizing marriage, allowing school choice, and (maybe) privatizing Social Security.

I think the reasons for the imbalance in libertarian paternalism are clear enough. When it comes to liberty-improving policy changes, it’s the “libertarian” that does most of the work. When it comes to liberty-diminishing policy changes, it’s the “paternalism” that does the work.

To put it another way, what self-described libertarian ever needed paternalism (or behavioral economics) to think of liberty-improving proposals? Libertarians have supported school choice and Social Security privatization for literally decades. David Boaz called for privatizing marriage at least 13 years ago (and I remember discussing the idea with him years earlier). Libertarians have long sought ways to weaken the drug war short of full-blown legalization, such as ending mandatory minimum sentences and legalizing marijuana for medical use.

The motivation behind such proposals has, in general, been to assuage the fears of those who think a sudden leap to laissez-faire would result in a hard, painful landing. People unaccustomed to a certain kind of liberty may lack the personal and social tools to cope with it (a result of the “unlearning” effect that is one argument against paternalist laws), so some hand-holding may be required. Now behavioral economists are offering us a new set of tools that may help us better craft these intermediate policies.

That’s great. But unfortunately, their liberty-improving suggestions have been offered up as a package deal. That package includes an awful lot of unnecessary, and I think damaging, baggage. When the rubber of new paternalism hits the road of real politics -- where numerous processes support expanding intervention while few support rollback -- I predict the balance liberty-diminishing to liberty-improving policies will become increasingly lopsided.

(Cross-posted at ThinkMarkets.)

The Hand Rule

2010-04-27T08:53:00.000-07:00

Judge Learned Hand famously opined that if the burdens of preventing an accident outweigh its cost multiplied by its probability, it does not constitute carelessness to avoid those burdens. Doesn't that little gem make you want to break out in song? I've got just the thing: The Hand Rule, a little ditty I recently composed and played for some students at Chapman Law School.

Though I've yet to record The Hand Rule, I can offer you a .pdf of the lyrics and chords as well as a PowerPoint, complete with pictures of Learned Hand, to accompany the performance (both uncopyrighted). Here's a sample of a verse and the refrain:

In the case of Carrol Towing Co., Learned Hand set forth to show
The meaning of "reasonability."

Defendant failed to leave in charge, a man to watch its unmoored barge.
And plaintiff's cargo met calamity.

"Negligence!" plaintiff complained and on appeal, Judge Hand explained,
The proper scope of liability.

Learned, learned, Learned. Learned in the law was he.
Learned Judge Hand, Learned, he judged so learnedly!
So learn what the Hand Rule teaches: "There's no liability,
If the burden of the cost exceeds the loss times the probability."

Silly? Yes, but it gets students to pay attention and remember what they learn. So goes the modus operandi of the Law and Fun school.

[Crossposted at Agoraphilia and MoneyLaw.]

Rejoinders at Cato Unbound

2010-04-14T12:42:00.000-07:00

At Cato Unbound, I've replied to Richard Thaler here, and to Jonathan Klick here. My reply to Shane Frederick should go up tomorrow.

UPDATE: My reply to Frederick is here.

Klick and Frederick Responses

2010-04-12T07:24:00.000-07:00

Jonathan Klick and Shane Frederick have now posted their responses. I am now at liberty to respond to all three responses, which I plan to do by today or early tomorrow.

Thaler's Response

2010-04-07T16:37:00.001-07:00

New paternalist Richard Thaler has posted his response to my essay on Cato Unbound. I won't be posting a reply until after all three respondents have had their say.

UPDATE, 4/8/10: Argh. Waiting is so hard.

Rational Bias in Forensic Science

2010-04-06T19:16:00.000-07:00

Somehow I neglected to mention this when it happened. My article on “Rational Bias in Forensic Science,” coauthored with Roger Koppl (pretty much the only economist out there studying the economics of forensic organization), was published in the journal Law, Probability & Risk. Unfortunately, the full text is gated, but your college or university may have access.

I’m proud of this article because I think it’s one of the most important I’ve done, at least in terms of significance to real people. In the course of writing the paper, I became increasingly appalled by the unscientific and haphazard nature of forensic science. Even DNA profiling, the gold standard of forensic techniques, is not as ironclad as you might think. Many other techniques verge on alchemy. But judges and juries in our Law & Order/CSI/Bones-immersed culture tend not to question the reliability of forensic conclusions and the trustworthiness of forensic analysts. The bottom line? A lot of innocent people are probably getting their lives ruined by the legal system.

The focus of the paper is narrower; it identifies one specific source of forensic bias. Here’s the abstract:

The current organization of forensic science induces biases in the conduct of forensic science even if forensic scientists are perfectly rational. Assuming forensic examiners are flawless Bayesian statisticians helps us to identify structural sources of error that we might otherwise have undervalued or missed altogether. Specifically, forensic examiners’ conclusions are affected not just by objective test results but also by two subjective factors: their prior beliefs about a suspect's likely guilt or innocence and the relative importance they attach to convicting the guilty rather than the innocent. The authorities—police and prosecutors—implicitly convey information to forensic examiners by their very decision to submit samples for testing. This information induces the examiners to update their prior beliefs in a manner that results in a greater tendency to provide testimony that incriminates the defendant. Forensic results are in a sense ‘contaminated’ by the prosecution and thus do not provide jurors with an independent source of information. Structural reforms to address such problems of rational bias include independence from law enforcement, blind proficiency testing and separation of test from interpretation.

I think that’s pretty self-explanatory, but here’s an even simpler explanation. Say you’re a forensic examiner. For the most part, your test samples are provided by the authorities (police or prosecutors). And the authorities generally don’t bother giving you a sample unless they already suspect there’s reason to expect a match. So if you’re a rational forensic examiner, you may infer a somewhat higher probability of guilt by the mere fact that you’re doing a test at all. And that fact will affect your testing process, because there is no such thing as a purely objective test; your subjective beliefs about the likelihood of guilt necessarily affect your interpretation of the evidence.

A Question of Timing

2010-04-05T15:19:00.000-07:00

Shortly after the healthcare bill’s passage, I made some comments about the weirdness of the timing. Specifically, I noted (following Bryan Caplan and David Henderson) that guaranteed issue appears to kick in three years before the individual mandate – which, if true, would set in motion a rather severe adverse selection problem.

But now I’m not sure that’s the timing after all. If you check out the official timeline, the first thing that’s supposed to happen, in 2010, is:

Immediate Access to Insurance for Uninsured Individuals with a Pre-Existing Condition. Provides eligible individuals access to coverage that does not impose any coverage exclusions for pre-existing health conditions.

I took that to mean that guaranteed-issue would take effect immediately. But a couple of items below, the timeline includes a separate item, also in 2010, for “Eliminating Pre-Existing Condition Exclusions for Children.” And only in 2014 do we finally see something that sounds like guaranteed-issue for adults: “strong health insurance reforms that prohibit insurance companies from engaging in discriminatory practices that enable them to refuse to sell or renew policies due to an individual’s health status.”

So it appears that guaranteed-issue and the individual mandate might be coordinated after all. But if so, then does anyone know what the quoted passage above is referring to? One of the subsidies? A high-risk insurance pool? Anyone know?

Incidentally, I think some form of adverse selection will happen anyway, because I doubt that the individual mandate will be that effective in assuring compliance. But if the timing is right, the adverse selection won't be as severe.

Self-Promotion: Me in Cato Unbound

2010-04-05T09:24:00.001-07:00

I wrote the lead essay in this month's Cato Unbound. The subject is "Slippery Slopes and the New Paternalism." A familiar topic to readers of this blog -- but this time I was forced to stay under a word limit, so maybe it will be more accessible. Response essays from Richard Thaler, Jonathan Klick, and Shane Frederick will arrive later this week, so stay tuned.

It's a Joke, But I'm Not Foolin'

2010-04-01T12:27:00.000-07:00

From our bulletin board at home:

This cartoon takes its inspiration from a conversation—a real gut-buster!—that I had with my kids. April would have foolishness enough, given that dread date smack in its middle, without April Fool's Day. You can thus take this joke seriously.

[Crossposted at Agoraphilia, TechLiberation Front.]

Landsburg Defends Economics vs. DeLong

2010-03-26T11:40:00.001-07:00

Steven Landsburg steps to Mario's defense:

You’d never know it from DeLong’s selective summary, but Rizzo’s post is dense with interesting (if elementary) economics. ... Personally, I don’t mind tipping but I found a lot to chew on in Professor Rizzo’s post. DeLong, true to form, ignored the content and jeered like a third grade bully. Most sadly, whenever he indulges this habit, DeLong sacrifices a chance to teach a little economics. Fortunately, the web is a big place and there are plenty of alternatives for readers who care about ideas.

Yes.

The Knowledge Problem of New Paternalism

2010-03-25T15:40:00.001-07:00

Mario Rizzo and I have recently published another article on the new paternalism, titled "The Knowledge Problem of New Paternalism," in BYU Law Review. The article lacks an abstract, but here's a lightly edited portion of the introduction:

The “new paternalism” spawned by behavioral economics faces a severe knowledge problem akin to the knowledge problem that Friedrich Hayek argued afflicts centrally-planned economies. If well-meaning policymakers possess all the relevant information about individuals’ true preferences, their cognitive biases, and the choice contexts in which they manifest themselves, then policymakers could potentially implement paternalist policies that improve the welfare of individuals by their own standards. But lacking such information, we cannot conclude that actual paternalism will make their decisions better; under a wide range of circumstances, it will even make them worse. New paternalists have not taken the knowledge problems that are evident from the underlying behavioral and economic research seriously enough.

This article should be taken as a companion to our previous article, "Little Brother Is Watching You: New Paternalism on the Slippery Slopes" -- which I've promoted with a series of excerpts on this website. The two papers draw on many of the same aspects (and flaws) of the new paternalist literature, but with different critiques. "Little Brother" emphasizes the vulnerability of new paternalist laws to expansion, while "Knowledge Problem" emphasizes the high level of knowledge required for such laws to achieve their ostensible goals.

There is another important link between the two articles: the knowledge problem can exacerbate the slippery slope problem. Recall that the goal of new paternalism is to make targeted people better off by their own standards or according to their own preferences. But when government planners go about crafting policy, they will lack the necessary knowledge of targeted people's preferences. As a result, they will tend to rely instead on their own preferences, or those of other interested parties, instead. That is the beginning of a slippery slope toward implementing their own preferences in other ways as well.

Cross-posted at ThinkMarkets.

Self-Promotion and Other Thoughts on Healthcare

2010-03-24T16:08:00.000-07:00

First, I’ll be speaking in a forum about the individual mandate (and probably other aspects of the newly passed bill) this evening in Pasadena, California (6:30 pm PDT). So if you’re in the area, please come. The forum will also be recorded and aired on KPCC sometime tomorrow. [UPDATE: The host, Larry Mantle, said the recorded version will air at 11:00 a.m. PDT on Thursday, on KPCC 89.3.] [UPDATE: You can listen to the recorded version here.]

Second, a couple of thoughts about the new legislation.

1. Obviously, I’m not pleased about its passage. But there may be a silver lining. For years, critics have tarred the “free market” for all the problems with American healthcare, despite the existence of government intervention at every level of the system. Now that the interventionists have gotten what they want, maybe it will be just a little harder for them to blame the market a few years down the road when the system is still having problems.

Okay, I’m stretching here. They’ll blame the market as long as the system is anything short of single-payer. Especially given this…

2. I think Bryan Caplan and David Henderson are exactly right: the timeline for implementation virtually guarantees a severe adverse selection problem. Remember, the justification for an individual mandate -- such as it is -- is that it’s needed to make the guaranteed-issue regulation work. Otherwise, people will just wait to get sick and then buy insurance. But in the timeline, the individual mandate doesn’t kick in until three years after guaranteed issue.

So for three years, we’ll have low-cost people dropping off the insurance rolls and high-cost people jumping on, resulting in ever-higher premiums. Given the arguments made by the left-wing proponents of the bill, I can’t imagine they don’t know this – so I have to wonder, along with Henderson, if this might have been intentional. By the time the individual mandate’s about to kick in, it will seem absolutely necessary.

But what happens after that? Will the adverse selection problem disappear as the low-cost folks are forced back into the pool? I don’t think so. The penalties for not buying insurance are very low relative to even the present price of insurance -- to say nothing of its price once the adverse selection has set in. So a lot of people will choose to pay the penalty instead.

Now, it’s true that if you buy insurance instead of coughing up the penalty, you’ll at least have health coverage... but so what? Guaranteed issue will still be in effect, and so there’s not much advantage to getting the coverage immediately. Just pay the penalties until you get sick, then sign up for insurance. The worst that can happen is you have to pay for the treatments that might happen in the interim between getting the bad news and getting your new policy. And this strategy will make sense as long as the penalty is less than the yearly price of insurance coverage.

To patch that hole, the government will have to increase the penalty until it's effective -- that is, until it’s relatively close to the annual insurance premium. I predict a slippery slope to higher penalties.

I am, however, leaving out the effect of subsidies. The real comparison will be (annual price – annual subsidy) versus (annual penalty). With large enough subsidies, people will choose to buy insurance. So I should modify my prediction above: we should expect some combination of rising penalties and rising subsidies.

The Whole Conversation

2010-03-24T13:02:00.000-07:00

A couple of weeks ago, Mario Rizzo made a curmudgeonly but interesting post on the subject of taxi tipping. Today, Brad DeLong responds by calling him a “psychopath”. In Mario’s defense, I made two comments on Brad’s post -- both of which Brad expurgated. So for those interested in the full story, here’s what I said in my first comment:

Wow, Brad. You're supposed to be an economist. Economists can and should question the wisdom of social norms that affect economic activity, and that's just what Mario was doing. You could have taken the opportunity to discuss the peculiar economic activity of tipping. Instead, you selectively cut-and-pasted precisely those passages of Mario’s post that you think make him sound like a psychopath.

Shame.

The wording above is approximate, since Brad deleted the last two sentences and I had to reconstruct them. So I made sure I kept a copy of my next comment:

And so you've clipped out the rest of my comment, where I noted that Mario made actual economic arguments about the effects of changing the norm? And the part where I shamed you for selectively quoting Mario while dodging the chance to talk about the fascinating issue of tipping norms?

Shame again.

Your comments section is yours to do with as you please, and if you wanted, you could have just clipped out my entire comment. Instead, you selectively kept only that part which was convenient to you. Just as you did with Mario's post. Classy.

If you read Mario's post carefully, instead of being deliberately uncharitable, you'll note that he *does* tip. He just doesn't like it, so his tips are small. And his purpose in doing so is to help shift the norm.

And now we'll see if you delete or selectively clip this comment as well.

Which he did. He clipped everything after the first two sentences.

What sticks in my craw about this exchange is the selective editing, of both Mario’s original post and my comments. For what it’s worth, I delete comments on this blog when they are wildly inappropriate (or spam). But I have never selectively edited a comment. They either stay or go in their entirety. This matters, because it’s easy to make someone sound worse, or better, by choosing what stays and what goes.

Incidentally, although I respect Mario’s position, I don’t 100% agree with it. I think social norms are very difficult to shift, and trying to do so can have unfortunate side effects on innocent parties -- see my comments on Mario’s post for more. I also think tipping does help to motivate better service. But for tipping to serve that purpose, it cannot be obligatory; we have to preserve the option of withholding the tip when service is poor.

Peer Production and Transaction Costs

2010-03-12T10:36:00.000-08:00

The concept of peer production is hardly new to me. Wikipedia and Linux, the most visible examples of peer production, long ago convinced me that intellectual products can be produced by means of a distributed network of individuals working largely without supervision or central control.

But until a couple of weeks ago, when I finally listened to Clay Shirky’s interview on EconTalk (recorded over a year ago), I had a difficult time fitting peer production into my mental models. It’s not that I didn’t understand peer production; it’s that I couldn’t quite integrate it with what I already knew about typical modes of production. Shirky, by invoking the work of Ronald Coase, finally let me put it together.

(Disclaimer: The following doesn’t necessarily represent Shirky’s view; it’s just my take on what he said. Also, I have not read Yochai Benkler's work on this subject. Finally, my conclusions will probably be obvious to some readers -- but to compensate, I promise an example drawn from my work on Fringe!)

The first step is to uncover an assumption hidden in most models of labor supply. The “typical” labor supply curve looks something like Figure 1. This curve represents an individual’s willingness to supply labor. As the figure shows, the individual won’t supply any labor until offered a wage that exceeds some minimum, denoted w_o and dubbed the “reservation wage.” This reflects the notion that exerting effort is inherently unpleasant.

But what if labor is not inherently unpleasant? Then the labor supply could look something like Figure 2. Here, we see that even at a wage of zero, the individual willingly supplies some amount of labor. This is obviously true for a variety of activities; I blog for free, for instance. Denote this minimum L_o and dub it the “free labor supply.”

But that’s not the end of the story. Most worthwhile projects will require more labor than any one individual will provide for free. To complete these projects without paying wages, you need to assemble the free supply of many, many individuals. Prior to the modern information age, this certainly happened; think barn-raisings and charity projects. To do it, however, you usually had to get people together in the same place, requiring both transportation and physical space. Information technology has dramatically reduced these transaction costs -- specifically, the costs of coordinating team production. It’s now possible to assemble the free labor supply of thousands of people at much lower cost than before.

Thinking of peer production in this way helps to understand its limits. What kind of projects can be done by this method, and which can’t? First, we need to have the kind of project for which people have labor supply curves like Figure 2 -- that is, for which people willingly supply free labor.

Second, the project’s other transaction costs must be sufficiently low. Coordination costs include not just drawing laborers together (physically or virtually), but also making sure their separate efforts mesh properly. The pieces have to fit, so to speak. And this puts a premium on modularity -- the capacity of a task to be broken up into pieces that can function, at least to some degree, on their own. Wikipedia is a nice example: an error or conflict within a single entry (say, Walmart) does not inhibit ongoing work on another entry (say, Target or quantum field theory). I don’t know enough about software programming to give examples there, but my understanding is that it has similarly modular features.

Not every project is of this nature. To take an example from my current livelihood: it’s awfully difficult to write a script in a distributed fashion. Anyone who’s read the results of a tandem writing assignment knows this. Every now and then, time constraints in the Fringe writing office will require us to “gang-bang” a script (yes, that’s actually what we call it): acts and scenes must be divvied up among all the writers to get the script written faster. But this only works because a detailed overall outline has already been written, either by an individual or by a group working in concert.

Moreover, once the individual pieces have been stitched together, the combined script is typically a hairy mess. The tone is inconsistent; some bits of necessary information have been duplicated across scenes; other necessary components have fallen through the cracks. To make the script coherent, a single writer or pair of writers (usually the writer(s) of record on the episode) must go through the script revising, reworking, and rewriting substantially. As Warren Buffett wryly notes, you can’t make a baby in one month by getting nine women pregnant; the same is true of a script. In some cases, I’ve seen a gang-banged script take longer to write than a regular script.

To summarize, peer production works because information technology has reduced the transaction costs that previously had prevented the coordination of large amounts of free labor provided by many individuals. Thus, low transaction costs are the key to peer production. But some kinds of transaction costs remain high, especially for projects that cannot easily be made modular; for those projects, peer production is still not a viable option.

New Paternalism on the Slippery Slopes, Part 11: Avoiding Paternalist Slopes

2010-02-26T21:04:00.000-08:00

This will be the final installment in my series of excerpts from Mario’s and my article on the slippery-slope potential of new paternalism. The comments on the posts have been minimal, so I’m uncertain how helpful this series has been. Since I’m considering doing the same with a closely related article Mario and I have just published, please let us know what you think.

In the final section of the paper, we offer a few suggestions about how to resist the slippery-slope tendencies of new paternalism (p. 737-739):

How, then, might we protect ourselves against paternalist slopes? We have three recommendations, addressed both to the new paternalists themselves and to those who might be persuaded by them. These recommendations are intended to lower the probability of adopting new paternalist policies to begin with, but also to help resist more intrusive policies after initial policies have been adopted.

1. Have Reasonable Expectations of Decisionmakers

One lesson of behavioral economics is that we cannot reasonably expect decisionmakers to carefully consider the full ramifications of their choices in light of the best available evidence. Instead, they economize on information by using choice heuristics, and they sometimes myopically focus on present and concrete problems while ignoring more distant and abstract ones. This is no less true of public decisionmakers (including voters, politicians, judges, bureaucrats, experts, and rent-seekers) than it is of private citizens. Indeed, the problem is likely worse for public decisionmakers, because they lack the incentives to discover and control their own cognitive limitations. Private decisionmakers at least face the costs and benefits of their own mistakes, and thus have an incentive to correct them.

It is therefore insufficient to ask policymakers to carefully weigh the costs and benefits of each new paternalist proposal. The “careful, cautious, and disciplined approach” advocated by Camerer and coauthors is rather unlikely to guide real-world policy. We should not expect policymakers to weigh all the economic, scientific, and psychological evidence objectively, to stand on nuanced distinctions, and to adopt policies that carefully target just those people who need help most. We should expect policies to be blunt instruments.

2. Reject the Paternalism-generating Framework

The new paternalists say that the framing of problems can affect decisions by emphasizing certain aspects of a situation and downplaying others. As we have argued earlier (see especially Section V.C), the new paternalists themselves have framed the public-policy debate in a manner that emphasizes opportunities for intervention while downplaying or ignoring private alternatives. Adopting that framework increases our vulnerability to slippery slopes.

In contrast to this paternalism-generating framework, we recommend a slope-resisting framework—one that emphasizes the limitations of public policy and the potential for private solutions. In this alternative framework, both private and public decisionmakers are understood as having essentially the same cognitive defects; they also have various tools for self-correction. For private decisionmakers, the tools include resolutions and commitments, conscious construction of their environment, and voluntary submission to social controls from third parties. For public decisionmakers, the tools include procedural, substantive, and attitudinal limitations on the scope and extent of government action.

3. Maintain Important Distinctions

Slippery slopes, including paternalist ones, can sometimes be resisted by standing on easily enforceable bright-line rules. One such bright-line rule is the distinction between public and private decision-making. Another is the distinction between coercive and non-coercive intervention. John Stuart Mill enunciated these distinctions in terms of the Harm Principle, which says that restriction of individual choice is justified only on grounds of harm to others. He argued:
[The individual] cannot rightfully be compelled to do or forbear . . . because, in the opinions of others, to do so would be wise, or even right. These are good reasons for remonstrating with him, or reasoning with him, or persuading him, or entreating him, but not for compelling him, or visiting him with any evil in case he do otherwise.
Of course, Mill understood, and we agree, that if a person harms himself and in so doing violates his legal responsibilities to others, he ought to face the relevant legal penalties. But the State has no legitimate interest that can be advanced through coercion strictly in the prevention of harm to oneself. To the extent that policy adheres to this principle, the paternalist slope will obviously never get started.

We do not contend that a single violation of Mill’s Harm Principle will send us hurtling toward heavy-handed paternalism in all areas of life; if that were true, we would already be doomed. We do contend that increasing numbers of such interventions, passed under the guise of helping people do better by their own preferences, and without any recognition of the lines being crossed, will tend to create momentum toward further interventions. Keeping the Harm Principle clearly in mind—and recognizing any given restriction on autonomy (however small) for what it is—will, we hope, retard movement down the slope.

To some extent—especially in Sunstein and Thaler’s book Nudge and Daniel Ariely’s book Predictably Irrational—the new paternalists have presented their position as self-help advice. That is, they offer behavioral economic insights into achieving better self-control and personal management. Under the Harm Principle, such efforts are perfectly unobjectionable. They fall in Mill’s category of remonstration, reasoning, persuasion, and entreaty.

The problem, as we have argued, is that the new paternalists do not clearly distinguish private, voluntary efforts from public, mandatory ones. Instead, they deliberately construct a continuum from soft to hard paternalism (see, especially, Section III.B). They define freedom of choice in terms of the cost of exercising a given option, without regard to whether the costs are imposed coercively or by the voluntary choice of resource owners. In this way, they effectively erase a reasonably bright-line rule—the distinction between private action and state coercion—and purposely replace it with a gradient. They also regularly present public and private, and coercive and non-coercive, paternalistic activities alongside each other, without recognizing any important distinction between them, and often simply ignoring the coercive aspects of their policies (e.g., the way in which allegedly pro-employee policies limit the freedom of the employer).

We suspect the new paternalists resist bright-line rules and encourage gradients because of an unavoidable feature of rules: they nearly always err by both over- and under-inclusion. A rule that allows private paternalism but not public paternalism would admit some varieties of paternalism that new paternalists might oppose, such as Walmart’s restrictions on what sort of movies it will stock; and it would disallow some varieties of paternalism they favor, such as mandatory terms in employment contracts. That is, however, the price of having rules. The compensating advantage of rules (or at least one advantage) is providing a bulwark against the problems of vagueness, including the threat of slippery slopes.

Bernard Williams’s distinction between logical and effective distinctions is frustrating, because it means we cannot always rely on the normative distinctions that make most sense to us. But it is also enabling, because it reveals that some distinctions may be useful—that is, effective—without being strictly logical. Thus, even if the new paternalists do not think the public–private and coercive–non-coercive distinctions track their ideal notions of right and wrong, such distinctions might nevertheless be practical as guides for law and policy.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

New Paternalism on the Slippery Slopes, Part 10: Rejoinder to Objections

2010-02-26T20:47:00.000-08:00

Some new paternalists have recognized the slippery-slope objections to their approach, and they have made some effort to respond. But we find the responses insufficient (p. 735-737):

In their book Nudge, Sunstein and Thaler recognize the slippery-slope objections to their policies, and offer three responses. We reply to their responses here.

Sunstein and Thaler’s first response is that the slippery-slope argument “ducks the question of whether our proposals have merit in and of themselves.” They say if the initial interventions are worthwhile, then we should “make progress on those, and do whatever it takes to pour sand on the slope.”

Our claim is not that slippery slopes are the only objection to the new paternalism. Various other objections have also been made (and referenced in the introduction to this Article). The slippery slope is an additional argument against the new paternalism.

The idea that we should “make progress” on the initial interventions, and then do what we can to “pour sand” on the slope, is a variant of the usual (and, we think, hackneyed) response to all slippery-slope arguments: that we can simply “do the right thing now, and resist doing the wrong thing later.” But if the slope argument is correct, there is a causal (albeit probabilistic) connection between initial interventions and later ones. Saying we should move forward on those initial interventions is akin to saying we should do something because it promises present benefits, while ignoring the potential costs in the future. Ironically, it is just this sort of error in private decision-making that most new paternalists think cries out for correction. The slope risk must be counted among the costs of the initial intervention.

Furthermore, how should we “pour sand” on the slope? Aside from invoking the term “libertarian,” Sunstein and Thaler offer no suggestions. We do, in the remainder of this Article. Our suggestions involve, among other things, rejecting their paternalism-generating framework.

Sunstein and Thaler’s second response is that their “libertarian condition” limits the steepness of the slope. They say their proposals are “emphatically designed to retain freedom of choice.” In short, they are relying on the “libertarian” part of libertarian paternalism to do the work of resisting paternalist slopes. But as we have seen (see especially Section III.B), their redefinition of “libertarian” actually encourages the slope. They recognize no sharp line between libertarian and non-libertarian policies, just a smooth gradient. And also as we have seen, their proposals do not, in fact, preserve freedom of choice in all cases. They have proposed or supported numerous policies (such as mandatory time-and-a-half overtime pay and cooling-off periods) that rule out certain options altogether, all under the rubric of libertarian paternalism.

It is also simply implausible to think the mere word “libertarian” will create a bulwark against further interventions. Even if Sunstein and Thaler themselves genuinely care about freedom of choice, they cannot control the application and transformation of their own ideas. They will not be in charge of all future legislation. As we have emphasized throughout this Article (see especially Sections II and IV), the creation of policy is a social process that involves multiple decisionmakers, who may not share their alleged concern with freedom of choice.

Sunstein and Thaler’s third response is to insist that in many situations, “some kind of nudge is inevitable,” because there will always be default rules and contexts that frame choices in certain ways.

It is one thing to have defaults, quite another to choose them with paternalist goals in mind. Traditional contract law chooses defaults in line with the customary expectations of the parties in question. Thus the new paternalists advocate overruling customary expectations so as to privilege what they (the experts) believe are better decisions. They would purposely shift transaction costs to those who wish to deviate from the experts’ preferred outcomes.

If new paternalism were truly inevitable, it would hardly be necessary to argue for it. Clearly, Sunstein and Thaler believe they are offering something beyond the inevitable. Moreover, they present their position in a manner designed to ease the transition from the inevitable to the more intrusive. They explicitly reject any sharp line between changing defaults and raising costs in other ways. Again, their very own next step, in discussing default rules, is to suggest raising the cost of exercising exit options, and then to endorse eliminating some options altogether.

To these points, I would add that even if you agree that paternalist selection of default rules is needed, the new paternalist approach advocates much, much more. The new paternalists must defend their whole position, not just the most defensible part.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

New Paternalism on the Slippery Slopes, Part 9: Framing in Public Policy

2010-02-26T20:31:00.000-08:00

And after another long interruption, I’m finally going to finish my series of excerpts from Mario Rizzo’s and my article, “Little Brother Is Watching You: New Paternalism on the Slippery Slopes.” There are three more posts, including this one.

As discussed in an earlier post, the new paternalists use the notion of framing -- that is, the idea that people’s choices respond to seemingly irrelevant differences in how the choice situation is presented -- to justify a variety of policy interventions. But what happens when we apply the notion of framing to the choices of the policymakers themselves? There is a natural human tendency to frame decisions narrowly “because immediate and concrete effects are more psychologically accessible than remote and abstract ones” (p. 726), and this tendency has worrisome implications for public policy. Specifically, paternalist policy-makers will tend to ignore the indirect and longer-term and implications of their policy choices (p. 726-727):

Narrow framing leads decisionmakers to consider choice-options simply as they arise, framed by present circumstances, the crisis of the moment, and perhaps the activities of rent-seekers. Their actions will often be ad hoc solutions to particular problems, and the narrow framing produces a tendency not to see important interrelationships. In Kahneman’s words again, “[t]he decision of whether or not to accept a gamble is normally considered as a response to a single opportunity, not as an occasion to apply a general policy.” For example, the interaction of biases may be ignored. This means the problem is not simply one of discounting long-term effects, but also of discounting effects that occur through longer and more complex chains of causality.

Narrow framing will enhance every variety of slope we have discussed so far, because all slopes occur in part from a failure to take a global perspective on policy. Altered incentives slopes, for instance, occur because policymakers tend to focus on one issue at a time—in this case, a single cognitive or behavioral bias, or a single means of correcting a bias. Simplification and distortion slopes occur because policymakers enact policies to address a specific problem, while failing to see how the new policy could empower experts and rent-seekers to advance less desirable policies in the future. To the extent that narrow framing inhibits policymakers’ awareness of such possibilities, it exacerbates the slippery-slope risk.

Furthermore, we argue that the new paternalist framework itself frames policy choices in a manner that encourages ever greater intervention (p. 727-728):

As presented in the behavioral literature, framing does not result from the deliberate choices of the decisionmaker; instead, it is an aspect of decision-making that is passively accepted. It is the result of unconscious processes whereby the conscious mind sees options or events with particular features accentuated; framing alters “the relative salience of different aspects of the problem.” Here we suggest that the particular way in which the new paternalists (most notably Camerer and coauthors and Sunstein and Thaler) have framed the issue of paternalism gives rise to an inherently expansionist dynamic. If irrational or boundedly rational policymakers accept the new paternalists’ approach, they will have accepted a paternalism-generating framework. Thus future policymakers, or the same policymakers in future situations, will tend to see more opportunities for paternalistic intervention than they otherwise would.

The decisions of targets are not intrinsically different from those of the policymakers. Framing is thus important in the policy context as well. The public-policy framework produced by the new paternalists directs policymakers’ attention to intrapersonal preference conflicts, that is, conflicts between operative preferences (choosing the sugary dessert) and deeper or more important preferences (maintaining good health). The framework then labels as paternalism any plan that alters the decision problem with the intent of improving welfare.

Therefore, if there is to be any solution to the target’s problem, paternalism is inevitable. Thus, the decision problem is framed not as “whether or not paternalism is desirable,” but as “what form of paternalism shall we have?” Sunstein and Thaler, for example, urge us to “abandon the less interesting question of whether to be paternalistic or not, and turn to the more constructive question of how to choose among the possible choice-influencing options.”

To summarize (p. 729):

Therefore, the Sunstein and Thaler approach is expansive not only in the sense that adoption of specific policies today will make the adoption of further, even more interventionist, policies more likely in the future, but also because their basic framework of analysis frames the overall issue as one in which some form of paternalism is “inevitable.” Sunstein and Thaler adopt a paternalism-generating public-policy framework. If policymakers accept this framework, they will be led by the framing to produce more and more paternalistic policies.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

Uncompensated Care for the Uninsured

2010-02-24T17:14:00.000-08:00

As David Henderson observes, it's nice to see that the Economic Report of the President actually includes facts and sources. Of course, that opens the analysis up to criticism it wouldn't otherwise face.

The Report notes four sources of inefficiency in health insurance markets: adverse selection, moral hazard, the Samaritan's dilemma, and incomplete insurance contracts. But as Henderson points out, the Report itself draws attention to the market solutions for the first two of these -- and oddly condemns them. (Risk-rating is the market response to adverse selection, and high deductibles and co-insurance are the market response to moral hazard.) It's worth adding that government policies like community rating and mandated benefits exacerbate adverse selection, and government-provided care and insurance exacerbate moral hazard.

We should also cast a skeptical eye on the Samaritan's Dilemma -- that is, the willingness of the citizenry to provide care for people who can't or won't provide for themselves, which encourages free-riding. While this is a real issue (as are the other three cited inefficiencies), what is its magnitude? The Report says uncompensated care for the uninsured was $56 billion in 2008. That sounds like a lot. But the Report also says (elsewhere) total expenditures on healthcare in 2009 were $2.5 trillion. Assuming the 2008 and 2009 numbers are relatively close, we can do the math and conclude that uncompensated care for the uninsured is less than 3% of all health expenditures.

For what it's worth, I think the Report's fourth source of inefficiency, incomplete contracts, is probably the most serious challenge for private insurance markets. That is, aside from the various government policies that hobble them now.

Self-Promotion: Pro and Con on the Individual Healthcare Mandate

2010-02-17T00:17:00.001-08:00

I was featured in Monday's L.A. Times "pro and con" article on the individual healthcare mandate. Here's a key bit:

The point of the individual mandate is to balance the risk pool, but that's not really what insurance is supposed to do. With car insurance, the idea is not that you want good drivers to pay for accidents caused by bad drivers. Instead, you want there to be pools of people with similar risk: bad drivers and good drivers who pay different premiums.

I notice that a couple of commenters have taken issue with this argument, essentially saying "OF COURSE insurance is supposed to balance risk!" They're mistaken. But this is a point worth dwelling on, because it's easy to get confused.

Everyone knows that insurance does "balance risk" in a certain sense. It transfers wealth from those who have been fortunate (e.g., didn't get in a car accident, didn't have a house fire) to those less fortunate (e.g., did get in a car accident, did have a house fire). The premiums paid by everyone get paid out to a small group ex post. But ex ante, every policyholder could have experienced either outcome. To make this worthwhile for all buyers, they have to be pooled with other buyers who have similar risk. Otherwise, some buyers will find that it's just not worth it: their risk is too low to justify the high premiums.

This is very different from trying to "balance risk" in the sense of balancing low-risk policyholders with high-risk policyholders and charging them similar premiums. This approach creates a cross-subsidy from some policyholders to others ex ante. That is, even before we know which people will experience an unfortunate outcome, some policyholders are getting a much better deal than others. That's why some buyers drop out of the insurance pool -- because they're getting a lousy deal. Hence the demand for the individual mandate: it's needed to rope in the people who would rather opt out.

As a matter of terminology, the former should be called "risk pooling" and the latter "risk balancing"; using the same term for both just creates confusion. And as a matter of historical and economic fact, the insurance business arose primarily to do risk pooling. The idea that insurance should engage in risk-balancing is almost exclusive to healthcare, and it's assuredly the result of decades of government efforts to force insurance to accomplish policy goals that were no part of its origin.

New Paternalism on the Slippery Slopes, Part 8: Hyperbolic Discounting in Public Policy

2010-01-14T22:45:00.000-08:00

As discussed in a previous post in this series, the new paternalists often use the concept of hyperbolic discounting (roughly, excessive impatience) to show that people make systematic errors that could, in principle, be corrected by government intervention. But what if policymakers, too, are prone to hyperbolic discounting? That is the question raised in the next section of the paper (p. 724-725):

Policymakers can have short time horizons for various reasons. They might no longer hold office when future costs and benefits of their policies occur. Insofar as voters have imperfect memories, they might fail to fault policymakers for the ill effects (or credit them with the good effects) of policies they supported. Both of these effects give fully rational policymakers an incentive to discount future consequences.

If policymakers are hyperbolic discounters, there is yet another reason they will tend to discount the future: because they apply especially high rates of discount when some costs or benefits are in the present (or near future).

If so, then just as regular people may succumb to temptations like desserts and cigarettes that promise short-term pleasures, we should expect policymakers to succumb to “policy temptations” that generate short-term political gains. For instance, they might be tempted in election years to adopt policies, such as fiscal stimulus bills and trade restrictions, that will improve their electoral chances while pushing costs into the future.

How does this worsen slippery-slope risks? Slippery-slope events are necessarily sequences that play out over time: policy A’s adoption now leads to policy B’s adoption later, leading to policy C’s adoption yet further in the future. Hyperbolic discounting implies that when policymakers are faced with a policy proposal that is appealing in the present, but which creates a danger of bad policies being adopted further down the line, they will be inclined to focus on the former at the expense of the latter. In short, they will be less cognizant of slippery-slope risks.

For instance, policymakers might be tempted to create a small fat tax on grounds that it will induce marginally “better” eating decisions. Opponents might argue that adopting a small fat tax will create a danger of a larger fat tax in the future, as future policymakers—having already incurred the costs of creating a tax collection mechanism—see the opportunity to increase their tax revenues and fund special-interest constituencies. If they are hyperbolic discounters, the policymakers will not take this risk seriously enough, even if they recognize it as real.

Like hyperbolic discounters in the private sector, policymakers should be expected to exhibit time inconsistency: the tendency to make commitments and promises and then break them when the moment of choice arrives. They might, for instance, repeatedly express a willingness to take measures to fight budget deficits in the future, while nevertheless passing bloated budgets and incurring large debts in the present. Note that critics of slippery-slope arguments will sometimes claim to be able to resist the urge to adopt bad policies in the future. The idea is that we can do the right thing today and resist doing the wrong thing tomorrow. They might, for instance, promise to keep fat taxes relatively low (and linked to scientific evidence about the extent of present-bias). The existence of time inconsistency bears directly on the plausibility of promises to do the right thing in the future even in the face of temptation.

So how can the ill effects of hyperbolic discounting in government be resisted? (p. 725-726):

We have also argued that people afflicted by excessive impatience have various self-debiasing mechanisms at their disposal, such as imposing internal rewards and punishments, structuring their external environment, and enlisting the help of third parties (like families and support groups). Policymakers may have access to similar devices. We suggest that the analogous devices in the policy arena usually take the form of institutional constraints, such as judicial review and constitutional limitations on what areas can be regulated by government. The greater need for external restraints follows from the fact that bad self-governance by a single person primarily affects that person, whereas bad governance by policymakers affects all of those governed. Thus, the individual has a rational incentive to rein in his own irrational impulses, whereas a policymaker’s incentive to do so is attenuated. In other words, policymakers are more likely to exhibit “rational irrationality” about matters of personal choice than are the private citizens who make those choices.

In short, if the new paternalists take the problem of hyperbolic discounting seriously, we ought to hear them arguing for stronger limits on the power of government. Thus far, I haven’t heard them doing so.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

My Favorite Motions

2010-01-05T21:15:00.000-08:00

Faculty meetings may have their charms, but efficiency does not rank among them. Many a time I have looked around a room full of my colleagues, long minutes into a winding discussion of what was supposed to take only a few moments to resolve, considered the full agenda still stretching before us, and bemoaned the deadweight social costs of law school governance. Allow me, then, to share a couple of partial cures—one an old favorite and the other a new find—from Robert's Rules of Order.

I've long been a fan of "calling the question," as we casually style the motion at my school. Full-on Robert's geeks know it as the "Previous Question" motion. Call it what you like, you have to love its effect: It takes precedence over every debatable question and, if the motion carries, forces a vote on the issue under debate.

Suppose, for instance, that a handful of faculty members have been arguing back and forth about some relatively inconsequential motion for 20 minutes or so, as everyone else's attention wanders and more important business goes untended. You get the Chair to recognize you and simply say, "I move to call the question." Once the motion carries—and often with sighs of relief—you and your colleagues can vote on the trifling motion and move on to other topics. (Section 20 of the Rules offers caveats and details, but most law school faculties seem to manage, surprisingly enough, with less than the full panoply of formalities.) Try calling a question the next time a faculty meeting starts spinning its wheels. You—and most your colleagues—will enjoy the ride.

Calling the question does not cure all the inefficiencies that afflict faculty meetings, however. Because we law profs so love to hear ourselves speak, for instance, we sometimes run on (and on and on) a bit. Polite coughs, finger drumming, and the like usually suffices to keep our monopolizing tendencies in control, happily. In fact, it was only very recently that I found myself wondering what a fellow could do when those informal measures failed. Here, too, Robert's Rules offers a remedy: a Question of Order pertaining to decorum.

Roberts Rule's provides, in § 34, that "no member shall speak more than twice to the same question . . . nor longer than ten minutes at one time, without leave of the assembly, and the question upon granting the leave shall be decided by a two-thirds vote [§ 39] without debate." Upon encountering an infraction of that rule, you have the right to interrupt the speaker. As section 14 says, one who so objects "shall rise from his seat, and say, 'Mr. Chairman, I rise to a point of order.'" The Chair must then decide the issue immediately, without debate. If the Chair finds the challenged speaker out of order, and if anyone objects to the speaker continuing, he or she must cede the floor unless the assembly votes to grant leave.

That sounds like strong medicine, granted, and would doubtless ruffle some feathers. But faculty meetings pose a classic tragedy of the commons, one where just a few overly-talkative people risk consuming far more than their fair share of everyone else's time and attention. Raising a Question of Order can help you save you—and thus your school—from the perils of a grossly inefficient faculty meeting.

[Crossposted at Agoraphilia, MoneyLaw.]

Linguo-Economic Blogging

2010-01-01T17:34:00.000-08:00

Two recent posts at my brother Neal’s blog “Literal-Minded” caught my attention because of their connection to economics.

First, Neal links an article on whether “no problem” is an acceptable substitute for “you’re welcome.” Personally, I have no problem with “no problem.” In fact, I think it’s often preferable to the somewhat stuffy “you’re welcome.” But it’s notable that the no-problem opponents’ chief complaint relates to the use of “no problem” in commercial contexts:

Many especially dislike hearing “no problem” in commercial transactions and from folks in customer service jobs, since, as the customer is always right, nothing a customer could ask for could ever be “a problem.” “I assume my business is not a problem,” huffed one complainer on the message boards at the Visual Thesaurus. Others on the Internet have taken the same tack: “Why would it be a problem? It’s her job, isn’t it?” and “It better damn well NOT be a problem, because I just gave you my money.”

When a commercial transaction has just concluded, I have to agree that “no problem” is inappropriate -- but not for the reasons stated. “You’re welcome” would sound just as bad to me as “no problem” because, as I’ve observed before, the appropriate response to “thank you” in this context is “thank you.” Trade is a mutually beneficial transaction, in which both parties do something that benefits the other. In the context of a straight-up favor, on the other hand, the benefits travel in one direction only.

Second, Neal has a column at Visual Thesaurus on a subtle shift in the usage of “choice” by educators. Apparently it has become common practice to use the language of choice when describing behavior -- usually bad behavior -- by students. “Doug chose not to do his homework today,” for instance. Neal describes a movement from “free-choice choose” to “take-responsibility-for-your-own-behavior choose”:

Schoolchildren are told not to behave, but to make good choices, take responsibility for the choices they make, and accept the consequences that come with them. It's not that I didn't hear similar messages when I was in school: My senior English teacher had a poster that read, "There are neither rewards nor punishments; only consequences." But the way I hear that message in schools now, it's usually phrased with choose or choice. On a high school teacher's desk recently, I saw a sign reading, "Let the choices you make today be the choices you can live with tomorrow."

Like Neal, I find this use of "choice" irksome, but I've been struggling to put a finger on why. After all, they're right: kids do make choices, and choices have consequences. Some choices lead to better consequences than others. What's wrong with saying that?

And I don't think it matters that some choices are clearly better than others. When people say, "I had no choice," that's often hyperbole. What they really mean is that some of their options sucked, so they went with the obviously best option. Nothing in the concept of choice requires all options to have similar value.

I think what bothers me about the new usage of "choice" is this: They're using the idea of choice to obscure the difference between natural consequences and deliberately imposed consequences. When you choose not to exercise, a natural consequence is that you'll get fat and have less energy. A deliberately imposed consequence is that your parent will dock your allowance, or your teacher will make you sit in the corner. Neal gets at this distinction when he says, “Only a few students are so cynical as to suggest that a choice between one alternative with a punishment attached and another without one is not really a choice.” I don’t agree that it’s not really a choice -- you really do have the option of taking the unpleasant alternative -- but I agree that an important distinction is being glossed over.

The failure to recognize the natural-vs-imposed distinction is potentially dangerous. It allows, for instance, a drug warrior to claim that the drug war respects freedom of choice. "You choose to take drugs, and you pay the price: going to jail." But just because you still have a choice doesn't mean your freedom of choice has been respected.

New Paternalism on the Slippery Slopes, Part 7: The Inevitable Misinterpretation of New Paternalist Arguments

2010-01-01T16:38:00.000-08:00

Happy new year! After a holiday-induced hiatus, I’m now resuming the series of excerpts from Mario Rizzo’s and my recently published article, “Little Brother Is Watching You: New Paternalism on the Slippery Slopes.”

A number of our claims in the paper rely on the new paternalists’ arguments (which are largely based in behavioral economics) being misconstrued or misrepresented by other parties such as politicians, bureaucrats, and rent-seekers. We claim such people will often employ simplified, unsophisticated versions of the new paternalists’ arguments when crafting policy. Is this a fair line of criticism? We believe it is (p. 723):

Experts, and more broadly intellectuals like the readers of scientific and law journals, naturally respond to sophisticated argumentation. The complex interaction of multiple justifications is their favored milieu, the drawing of distinctions their stock in trade. Some of the claims of this Part might, therefore, seem anti-intellectual or unfair, because we are discussing the misinterpretation of the new paternalists’ arguments, rather than the new paternalists’ actual arguments. Why can’t the experts simply reject the simplification, distortion, and expansion of their justifications for policy?

The answer is twofold. First, intellectuals cannot always control the development of their own ideas. Many regular people, whose job is not the careful parsing of sophisticated arguments, nevertheless affect the policy process. These regular people include voters, of course, but in varying degrees other public decisionmakers, such as politicians, bureaucrats, and some judges. The point is not that such people are stupid, but that they are rationally ignorant. They act based on simplified versions of arguments because they do not have the time, energy, or motivation to explore the sophisticated versions. In short, simple is easy; complex is hard.

Second, decision-making takes place in a social context. The fact that some people will recognize certain distinctions as relevant does not mean that others will. The decisionmakers who create a policy are not necessarily the people who enforce it, or who interpret it, or who consider extensions of it. We therefore need to keep in mind Bernard Williams’s distinction between “reasonable distinctions” and “effective distinctions.” The former are distinctions for which a reasoned argument can be made, whereas the latter are distinctions that can be defended “as a matter of social or psychological fact.” The social and psychological facts, in a world of rational ignorance, often point toward simplification and even distortion of both theory and fact.

The core of the new paternalists’ position is, put simply, that people make mistakes. If they are right (and surely they are), then they cannot deny or ignore the mistakes that will inevitably be made in the process of translating their policy prescriptions into political reality.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

New Paternalism on the Slippery Slopes, Part 6: Rent Seekers

2009-11-25T15:15:00.000-08:00

As discussed in the previous post, the “experts” in charge of implementing new paternalist policies will have a tendency to simplify their own theories to make them useful for crafting policy. That alone creates slippery-slope potential. But that potential is magnified by the existence of rent-seekers – that is, interest groups whose agenda is to change policy for their own interests. Such interests can be ideological, monetary, or simply personal. In the paper, we illustrate the power of rent-seekers to distort the facts and confuse the debate with two issues: environmental tobacco-smoke (ETS) and obesity. With respect to ETS, however, we have to run off a potential objection: that ETS is not really a paternalist cause at all, because smoke harms non-smokers (p. 714):

We should note that although policies addressing exposure to secondhand smoke (“environmental tobacco smoke” or ETS) are not strictly paternalistic, inasmuch as secondhand smoke can potentially harm bystanders, paternalist arguments have played an important supporting role. Most importantly, many actual and proposed anti-smoking regulations limit the ability of individuals who may not be bothered by smoke to expose themselves voluntarily to secondhand smoke as customers or employees of restaurants and bars. Furthermore, by creating a hostile environment for smokers, the ETS argument easily slides into the paternalistic. Thus, even some ETS arguments must be regarded as partially paternalistic either in intention or merely in effect.

After considering the ways in which ETS claims have been exaggerated, we draw some more general conclusions (p. 715):

The rent-seekers’ motivation for simplifying and distorting is not hard to see. The exaggeration of risks has the direct effect of creating greater public support for the policies they regard as best. It also has the indirect effect of making the cultural environment less hospitable to opposing groups, such as those who wish to smoke. This puts further pressure on individuals to stop smoking because they will find themselves uncomfortable in more and more public spaces. Thus the paternalist net can widen by increasing the number of those who, for self-interested or moralistic reasons, will support more inclusive bans.

And after presenting the similar case of obesity, where the distortion of facts by special interests is also apparent, we observe that rent-seekers can have a variety of motivations (p. 716-717):

As the secondhand smoke and obesity examples [just presented] suggest, rent-seekers with an interest in distorting and simplifying information come in at least two varieties. The first variety is old-style paternalists who believe they know best and do not necessarily care about the underlying preferences of the targets. Traditional temperance and health advocates fall within this category. They sacrifice the preferences of the targets to their own moralistic goals. The second variety is people who stand to benefit economically from the promotion or cessation of some activity. Examples include mutual fund companies that provide savings instruments, weight-loss clinics and programs, and manufacturers of smoking-cessation drugs. Public officials and agencies with an interest in preserving and expanding their domains also fall within this category, as do some individuals in their role as consumers and workers (e.g., non-smoking bar customers who would prefer to have more establishments cater to their tastes).

The larger point is that new paternalists cannot constrain the use of their own arguments in the public-policy debate. Once new paternalists premises are admitted, there is every reason to believe they’ll be used and abused by rent-seekers for purposes the new paternalists themselves would not approve of.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

New Paternalism on the Slippery Slopes, Part 5: Deference to Authority

2009-11-21T13:05:00.000-08:00

Another problem with the new paternalism is that it necessarily involves greater deference to the authority of experts. Here is the basic logic (p. 710):

Substantial deference to authority is inherent in the application of new paternalist ideas to public policy. This is because the complexities, vagueness, and indeterminism of their analysis (previously discussed) raise the costs of decision-making on the part of voters, politicians, and bureaucrats. The locus of effective decision-making will then quite reasonably shift to experts (“authorities”) or to simplifiers of technical ideas who may have agendas of their own. As Eugene Volokh puts it, “The more complicated a question seems, the more likely it is that voters will assume that they can’t figure it out themselves and should therefore defer to the expert judgment of authoritative institutions . . . .” There will thus be a tendency for policy to slide away from the values of the targeted agents themselves toward those of outsiders regarded as authorities. This happens in at least two ways. First, experts simplify their own theories to make them applicable in a policy context. Second, people seeking to advance their own interests will further simplify the theory and distort the facts to suit their purposes.

Of course, some people think deference to experts is only right and proper. But there are specific reasons to resist that conclusion when it comes to paternalist policymaking (p. 711):

Although it may seem as if the shift of effective decision-making to experts is the right thing to do in difficult cases, this is not always true. It is especially unlikely to be true in the case of new paternalist policies. This is because, as we have argued earlier, the underlying standards and information needed to apply those standards and implement policy are fundamentally vague and indeterminate. The experts themselves have, at best, only a tenuous grip on the values of the targeted agents, which limits the direct applicability of their paternalistic theories to policy. Thus, there will be a tendency for the experts to reify their own values, and to simplify their own theories, in order to make more definite policy recommendations.

How have the new paternalists simplified their own theories? Here is one example (p. 712):

The new paternalists claim to have found policy interventions that will make targeted agents better off according to the target agents’ own preferences. What they have in fact found is evidence of internal conflict in the target agents’ preferences, and then they have resolved the conflict in favor of the experts’ preferences. The error in reasoning is subtle enough that the experts themselves have simplified the argument substantially—either because they do not fully understand the argument themselves, or because they do understand the argument but have simplified it for mass consumption.

For examples of how they have done this, see the posts on hyperbolic discounting and context dependence. Continuing:

What creates the slippery-slope potential here is the veneer of scientific objectivity. It is the simplified argument, not the original and more sophisticated one, that becomes reified in policy. Yet, the simplified form of the argument can justify far more than the initial intervention, especially if the experts are appointed to agencies and commissions tasked with implementing it. If simple observations—that people weigh more than they used to, that they don’t save as much as we think they should—are taken as ipso facto evidence of suboptimal choices, then further intervention will surely follow.

The paper offers evidence, from the obesity debate, to show that the new paternalists do in fact take simple facts as evidence of suboptimal choices – even though their own theory indicates that more evidence is required.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

New Paternalism on the Slippery Slopes, Part 4: Context Dependence

2009-11-14T13:10:00.000-08:00

New paternalists have also relied on the notion of context dependence to justify their policies. But as with hyperbolic discounting, they unjustifiably assume the existence of an inconsistency of preferences gives the policymaker license to choose among the inconsistent preferences. That assumption is the paper’s next target (pp. 703-704):

For a variety of decisions, people are subject to what behavioral economists call context-dependence. This means that how they choose among two or more options depends on seemingly irrelevant aspects of how the situation is described. For example, medical patients are more likely to assent to a treatment with a 90% survival rate than one with a 10% death rate, even though these are the same. In this case, people seem to favor “positive” over “negative” framing. People also seem to prefer options framed as the existing or a baseline position; this may be called status-quo bias. Another example of the power of framing is the persistent difference between willingness-to-pay (WTP) and willingness-to-accept (WTA), meaning that people will demand more money to part with an item than they will pay to acquire it, even when the item’s value is a trivial portion of their wealth or income.

The phenomenon of context-dependence underlies various new paternalist proposals. All of Sunstein and Thaler’s proposals for new contractual defaults, for example, rely on the difference between WTP and WTA. Although such defaults leave all contractual options open (at least for the most modest proposals), employees may be less willing to part with a given term (such as guaranteed paid vacation) than to bargain for its inclusion. If there were no difference between WTP and WTA, and if transaction costs were zero, then the realized terms of contract would be the same regardless of the default.

The problem with context-dependence is similar to that of hyperbolic discounting: the new paternalist argument relies on an internal inconsistency to justify intervention. There is no theoretical basis for choosing which behavior represents the individual’s “true” best interest as he sees it. Which better represents a person’s real preferences: what he is willing to pay for something or what he is willing to accept to part with it? There is no theoretically correct answer to this question, as Sunstein and Thaler admit: “If the arrangement of the alternatives has a significant effect on the selections the customers make, then their true ‘preferences’ do not formally exist.”

In the absence of a true underlying preference as the correct standard, what standard should be used? Sunstein and Thaler decline to answer that question: “We are not attempting to say anything controversial about welfare, or to take sides in reasonable disputes about how to understand that term.”

In short, there is no standard provided by behavioral economic theory. The answer to the “what standard” question will depend on policymakers’ own particular notions of welfare and well-being, as well as the weight they attach to autonomy. Notably, behavioral economics does not necessarily place any weight on autonomy, despite Sunstein and Thaler’s obeisance to the value of individual choice. Policymakers who adopt the new paternalists’ approach need not share their belief in choice. The new paternalist paradigm places them on a gradient from policies that only mildly restrict choice to policies that restrict or abolish it.

Additionally, we should realize that the supposedly beneficial default rules that S&T favor, such as a presumption of paid vacation, are not necessarily costless. Wages will adjust to account for the value of additional benefits. Thus, a new default rule does not simply give workers something they lacked before; it gives them something in exchange for losing something else.

(As usual, full citations are available in the full paper. Cross-posted at ThinkMarkets.)

New Paternalism on the Slippery Slopes, Part 3: Hyperbolic Discounting

2009-11-09T20:44:00.000-08:00

New paternalists often rely on the phenomenon of “hyperbolic discounting” to justify their policies. Hyperbolic discounting is difficult to define in a non-mathematical way. It is sometimes summarized as excessive impatience, but that’s an over-simplification. A person with a high-but-consistent rate of time discounting would not be a hyperbolic discounter. What hyperbolic discounting really means is having inconsistent rates of time-discounting. One consequence is that a hyperbolic discounter may exhibit “time inconsistency,” a tendency to make choices and then reverse them. After explaining hyperbolic discounting (in more technical terms that I have here), Mario and I explain how paternalists have made unjustified leaps in their use of the concept (pp. 699-700):

In short, hyperbolic discounting means that people at first make long-term plans for saving or dieting but then, when the time comes to implement these plans, they succumb to the desire for short-term gratification. For the new paternalists, this type of behavior suggests an opening for paternalist intervention or correction. Examples include the previously mentioned proposal to automatically enroll people in savings plans, and to impose a sin tax (on unhealthy foods, cigarettes, and so forth) to provide additional incentive for impatient people to resist their temptations.

New paternalists claim that they are evaluating the observed behavior of the individual in terms of his own normative standard. This appears attractive until we realize that the individual has no unambiguous standard for the appropriate level of time discounting. The analytical “opening” for paternalist policy is created by the existence of an internal inconsistency of choice. But although an inconsistency does create a quandary for traditional rational-choice theory—which assumes that people have internally consistent preferences—it does not provide any grounds for choosing between the inconsistent preferences. The inconsistency of a hyperbolic discounter could be “fixed” by making him uniformly more patient ..., but it could also be “fixed” by making him uniformly less patient...

To craft new paternalist policies, it is necessary to decide the appropriate normative rate of time discounting. This matters because policies must specify the amount of money an individual is automatically signed up to save, the magnitude of a fat tax, etc. Which rate of discount is the correct one? Theory provides no answer, but the new paternalists have not hesitated to side with the more patient one. O’Donoghue and Rabin define “optimal behavior” as “that [which] maximizes long-run well-being,” where long-run well-being is associated with the more patient rate of discount. Gruber and Köszegi “take the agent’s long-run preferences as those relevant for social welfare maximization.”

To put the point slightly differently: the existence of an inconsistency does not give the new paternalists license to resolve that inconsistency however they please.

Hyperbolic discounting is difficult to work with mathematically. For that reason, behavioral economists have often used quasi-hyperbolic discounting instead. While hyperbolic discounting means a person has many (perhaps infinitely many) different rates of time discounting, quasi-hyperbolic discounting means a person has only two: one that applies when comparing any two periods in the future, and one that applies when comparing a present and future period. Once we recognize that real people tend to have a range of time discount rates, the slippery-slope potential becomes clear (p. 702):

Quasi-hyperbolic discounting makes it deceptively simple to choose the “correct” rate of discount, since there appear to be only two options. If real people actually engage in hyperbolic discounting, this implies a gradient or continuum of discount rates over time. If we assume, notwithstanding our earlier objections, that the immediate discount rate is impulsive or ill-considered, which of the longer-term rates is normatively preferable? There is nothing in the logic of new paternalism or behavioral economics that can provide an answer. We are faced with a continuum of normative possibilities. These arguments impel us to the conclusion that among the discount rates revealed in choice or planning behavior, none has a clear claim to normative superiority. Thus, the new paternalist is in a conceptual fog because his underlying standard of evaluation is unspecified. The notion of “excessive impatience” is both theoretically and empirically vague, and that means we have a gradient of possibilities. There is no clear line to resist the gradual creep of higher savings requirements, higher fat taxes, and the like.

Note the connection here to our earlier point, that gradients increase the slippery-slope risk. (As usual, full citations are available in the paper.)

Cross-posted at ThinkMarkets.

New Paternalism on the Slippery Slopes, Part 2: How New Paternalism Creates Gradients

2009-11-07T14:04:00.000-08:00

A key conclusion of the literature on slippery slopes is that they are especially likely in the presence of gradients -- meaning situations in which there is a relatively smooth continuum from one policy to another, and in which it is difficult to draw sharp distinctions. Gradients don’t guarantee slippery slope events, but they increase their probability in the presence of other slope processes.

In “Little Brother,” Mario and I review the literature on gradients and slippery slopes, and then we consider how the new paternalists deliberately frame policy choice in terms of gradients (pp. 693-694):

The new paternalist paradigm, as presented by its leading advocates, relies on discarding sharp distinctions in favor of gradients. Specifically, they reject standard distinctions between choice and coercion and between public and private action. Cass Sunstein and Richard Thaler minimize the importance of the distinction between paternalism in the private and in the public sectors. In explaining their concept of “libertarian paternalism,” they say that the distinction between libertarian and non-libertarian paternalism “is not simple and rigid.” Moreover, they explicitly state that libertarian and non-libertarian paternalism lie on a continuum: “The libertarian paternalist insists on preserving choice, whereas the non-libertarian paternalist is willing to foreclose choice. But in all cases, a real question is the cost of exercising choice, and here there is a continuum rather than a sharp dichotomy . . . .”

Sunstein and Thaler thus present us with a gradient on which choice is characterized by low costs of escaping the prescribed course of action, while coercion corresponds to higher costs of escape. Who imposes the costs of escape and how these costs are imposed are regarded as unimportant questions.

In the pages that follow, we summarize the many and sundry policies that S & T regard as falling on the libertarian paternalist spectrum. Many of these are policies they never mention in their public defenses of libertarian paternalism. But they do appear in their academic work, and reading the list makes it apparent just how un-libertarian libertarian paternalism can be. We conclude (pp. 697-698):

At the far end of the continuum lies an outright ban on certain activities. Sunstein and Thaler embrace this conclusion: “Almost all of the time, even the non-libertarian paternalist will allow choosers, at some cost, to reject the proposed course of action. Those who are required to wear motorcycle helmets can decide to risk the relevant penalty, and to pay it if need be.”

Notice that the same argument would place outright prohibition of alcohol, drugs, or anything else on the same spectrum. You are free to use any drug you want, says the argument, if you are willing to incur the cost of potential imprisonment. At this end of the continuum, we find, lies genuine hard paternalism. In Sunstein and Thaler’s words:
A libertarian paternalist who is especially enthusiastic about free choice would be inclined to make it relatively costless for people to obtain their preferred outcomes. (Call this a libertarian paternalist.) By contrast, a libertarian paternalist who is especially confident of his welfare judgments would be willing to impose real costs on workers and consumers who seek to do what, in the paternalist’s view, would not be in their best interests. (Call this a libertarian paternalist.)
Movement along a paternalist continuum should come as no surprise when the two ends of the continuum depend on which word is italicized, as well as on the subjective confidence of the policymaker in his welfare judgments.

It bears emphasis that the sequence of steps we have outlined—from nudging (changing the order of cafeteria items) to pushing (imposing costs on those who deviate from the state’s preferred terms of contract) to shoving (ruling out some terms entirely) to controlling (banning some activities altogether)—is not our creation. Sunstein and Thaler present the same proposals in approximately the same order, to demonstrate the existence of a continuum.

A bit later (pp. 698-699) we respond to a natural objection: that the new paternalism is not to blame for the existence of a gradient that already exists.

Some may object that the existence of a gradient from soft to hard paternalism is just a fact, and that the new paternalists cannot be faulted for pointing it out. But the gradient in fact results from the conceptual framework that the new paternalists have adopted and urge the rest of us to adopt. The main problem with the framework, in our view, is that it defines freedom of choice (and libertarianism) in terms of costs of exit, without any attention to who imposes the costs and how. An alternative framework, one that is more consistent with the typical usage of words like coercion and choice, would focus on whether rights of person and property are abridged by a given policy. On this approach, a restaurateur’s decision about dessert placement and a government’s decision about whether to allow helmetless motorcycle riding simply would not be on the same continuum. The former is private and non-coercive, the latter public and coercive. This is the sort of framework that the new paternalists encourage us to reject in favor of theirs.

To put it another way, the new paternalists often say that people are subject to “framing effects” that alter their choices. Indeed, they say that such framing effects are evidence of irrationality. Yet they are exploiting a framing effect in their advocacy of new paternalism. They encourage us to adopt a conceptual frame that relies on gradients, rather than a conceptual frame that highlights important distinctions. We will revisit this point later. (As usual, footnotes have been omitted, but are available in the full paper.)

New Paternalism on the Slippery Slopes, Part 1

2009-11-05T00:07:00.000-08:00

Mario Rizzo and I have just published a new article, "Little Brother Is Watching You: New Paternalism on the Slippery Slopes," in Arizona Law Review. You can find the full text here.

Regular readers (if I still have any) will know I've written a great deal about the new paternalism. Just click on the subject tag "paternalism" on this post for a sampling. Mario and I also published a prior article about how new paternalist policies are vulnerable to slippery slopes; the present article is a more comprehensive treatment of the issue.

The article is quite long. As a result, I expect few people will read the whole thing. I've therefore decided to excerpt the article in a series of blog posts. I won't be covering all of our arguments in the paper, but I'll be pulling out some passages I particularly like -- and that might otherwise be missed.

Since Mario has already posted the abstract on his blog, I'll start by posting parts of the longer summary in the introduction. Here are the opening paragraphs, which explain the idea of the "new paternalism" (pp. 687-688).

Paternalist arguments advocate forcing or manipulating individuals to change their behavior for their own good, as distinct from the good of others. Paternalism has been with us for millennia. Recently, however, a seemingly new form has arisen that we call “the new paternalism.” Unlike the old paternalism, which sought to make individuals behave consistently with the (often moralistic or religious) preferences of policymakers, the new paternalism seeks to help individuals maximize their own welfare as they see it themselves. ...

The new paternalism is supported by a growing body of research in behavioral economics showing that individuals are not fully “rational,” as economists understand that term, but instead are subject to a variety of cognitive errors and biases. The list of such deviations from strict rationality includes—but is not limited to—status quo bias, optimism bias, susceptibility to framing effects, and lack of willpower or self-control. Thus individuals are viewed as “pawns in a game whose forces [they] largely fail to comprehend.” To the extent that these cognitive problems cause individuals to make systematic and predictable choices that are inconsistent with their own well-considered preferences, there is potential for paternalistic interventions that will help them do better. In fact, these interventions have been described as “free lunches . . . that would help people achieve more of what they truly want.”

And then our central claim in the article (pp. 687-688):

New paternalists distinguish their views from hard paternalism by emphasizing the moderate character of their proposals. Christine Jolls and Cass Sunstein frequently refer to their proposals for debiasing behavior through law as a “middle ground” between laissez-faire and more heavy-handed paternalism, one that is a “less intrusive, more direct, and more democratic response to the problem of bounded rationality.” Colin Camerer, et al., present their model of “asymmetric paternalism” as “a careful, cautious, and disciplined approach” to evaluating paternalistic policies. Cass Sunstein and Richard Thaler characterize their “libertarian paternalist” approach as a “relatively weak and nonintrusive type of paternalism” that in its “most cautious forms . . . imposes trivial costs on those who seek to depart from the planner’s preferred option.” In short, the new paternalists claim we can attain significant improvements in individual welfare with relatively small interventions that do not substantially restrict liberty or autonomy.

Our thesis is that the new paternalism’s claim to moderation is not sustainable. A recent body of literature, to which we have contributed, has rehabilitated slippery-slope reasoning by examining the specific processes by which slippery slopes occur, as well as the circumstances under which slippage is most likely. The insights of the slippery-slope literature suggest that new paternalist policies are particularly subject to expansion. We argue that this is true even if policymakers are rational. But perhaps more importantly, we argue that the slippery-slope threat is especially great if policymakers are not fully rational, but instead share the behavioral and cognitive biases attributed to the people their policies are supposed to help. Consequently, accepting new paternalist policies creates a risk of accepting, in the long run, greater restrictions on individual autonomy than have heretofore been acknowledged. Inasmuch as new paternalists claim to be interested in preserving autonomy, this surely must be taken into account as an unrecognized or unacknowledged cost to be balanced against any possible gains from their policies.

I've omitted citations, but they can be found in the full article. Next up: how the new paternalism blurs important distinctions.

Halloween Doppelgangers

2009-10-31T17:38:00.000-07:00

If you've walked into a Halloween store recently, you've probably been treated to a soundtrack of what seem to be classic haunting favorites, like "Thriller" and "Ghostbusters" and "Weird Science." But if you listen closely, you will realize the original songs have been spirited away, their places taken by substandard doppelgangers -- lousy covers performed by unknown studio musicians.

But why not just play the originals? After all, Michael Jackson's "Thriller" is probably playing on scores of radio stations nationwide this very minute, as I compose this blog post. So why not play it in the stores, too?

You'll know the answer if you've read my post from two years ago on the strange phenomenon of crappy karaoke covers. Rather than using modern technology to strip out the vocals from originals, karaoke track producers recreate the whole songs from scratch. Halloween stores are doing the same thing for the same reason. To use the original recording for any commercial purpose, you must get the permission of the copyright holder and negotiate a price; but to use the melody and lyrics, you don't need permission and you pay only a low price fixed by statute.

The result, of course, is economic waste. Were it not for this legal structure, both Halloween shoppers and karaoke singers could use the originals, and economic resources wouldn't get spent on the creation of lousy knock-offs. The goal of the law, of course, is to assure that the artists get compensated for their effort. But the reality is that the artists get only nominal compensation (from the music/lyrics payment), while music listeners get treated to second-rate performances.

How Top-Ranked Law Schools Got That Way, Pt. 3

2009-08-30T23:23:00.000-07:00

Part one and part two of this series focused on the top law schools in U.S. News and World Report's 2010 rankings, offering graphs and analysis to explain why those schools did so well. This part rounds out the series by way of contrast. Here, we focus on the law schools that ranked 41-51 in the most recent USN&WR rankings, those that ranked 94-100, and the eight schools that filled out the bottom of the rankings.

The above chart shows the weighted and itemized z-scores of law schools about 1/3rd of the way from the top of the 2010 USN&WR rankings. Note the sharp downward jog at Over$/Stu—a residual effect, perhaps, of the stupendously large Over$/Stu numbers we earlier saw among the very top schools. Note, too, that three schools here—GMU, BYU, and American U.—buck the prevailing trend by earning lower scores under PeerRep than under BarRep (GMU's line hides behind BYU's). As you work down from the top of the rankings, GMU offers the first instance of that sort of inversion; all of the more highly ranked schools have larger itemized z-scores for PeerRep than for BarRep. It raises an interesting question; Why did lawyers and judges rank those schools so much more highly than fellow academics did?

The above chart shows the weighted, itemized z-scores of the law schools ranked 94-100 in the 2010 USN&WR rankings—about the middle of all of the 182 schools in the rankings. As we might have expected, the lines bounce around more wildly on the left, where they trace the impact of the more heavily weighted z-scores, than on the right, where z-scores matter relatively little, pro or con. Beyond that, however, no one pattern characterizes schools in this range.

The above chart shows the weighted and itemized z-scores of law schools that probably did the worst in the 2010 USN&WR rankings. I say, "probably," because USN&WR does not reveal the scores of schools in the bottom two tiers of its rankings; these eight schools did the worst in my model of the rankings. Given that uncertainty, as well as for reasons explained elsewhere, I decline to name these schools.

Here, as with the schools at the very top of the rankings, we see a relatively uniform set of lines. All of the lines trend upward, of course. These schools did badly in the rankings exactly because they earned strongly negative z-scores in the most heavily weighted categories, displayed to the left. Several of these schools did very badly on the Emp9 measure, and one had a materially poor BarPass score. Another of them did surprisingly well on Over$/Stu, perhaps demonstrating that, while the very top schools boasted very high Over$/Stu scores, no amount of expenditures-per-student can salvage otherwise dismal z-scores.

[Crossposted at Agoraphilia, MoneyLaw.]

How Top-Ranked Law Schools Got That Way, Pt. 2

2009-08-23T11:52:00.000-07:00

In the first post in this series, I discussed the mysterious distribution of maximum z-scores in the top two tiers of law schools in U.S. News & World Report's 2010 rankings, and focused on the top-12 schools to solve that mystery. In brief, among the very top schools, employment nine months after graduation" ("Emp9") varies too little to make much of a difference in the schools' overall scores, whereas overhead expenditures/student ("Over$/Stu") varies so greatly as to almost swamp the impact of the other factors that USN&WR uses in its rankings. Here, in part two, I focus on the top 22 law schools in USN&WR's 2010 rankings. In addition to the Emp9 and Over$/Stu effects observed earlier, this wider study uncovers some other interesting patterns.

The above graph, "Weighted & Itemized Z-Scores, 2010 Model, Top-22 Schools," offers a snapshot comparison of how a wide swath of the top schools performed in the most recent USN&WR rankings. It reveals that the same effects we observed earlier, among just the top-12 schools, reach at least another ten schools down in the rankings. With the exception of Emory and Georgetown, Emp9 scores (indicated by the dark blue band) barely change from one top-22 school to another. Over$/Stu scores, in contrast (indicated by the middle green hue), vary widely; compare Yale's extraordinary performance on that measure with, for instance, Boston University's.

This graph also reveals some other interesting effects. Like the Emp9 measure, the Emp0 measure (for "Employment at Graduation," indicated in yellow-green) varies little from school to school. Indeed, it varies even less than the Emp9 measure does. Why so? Because all of these top schools reported such high employment rates. All but Minnesota reported Emp0 rates above 90%, and all but Georgetown, USC, and Washington U. reported rates above 95%.

These top 22 schools also reported very similar LSATs. Their weighted z-scores for that measure, indicated here in light blue, range from only.20 to .15. The weighed z-scores for GPA, in contrast, marked in dark green, range from .24 to .06.

As the graph indicates, the measures worth 3% or less of a school's overall score—student/faculty ratio, acceptance rate, Bar exam pass rate, financial aid expenditures/student, and library volumes and equivalents—in general make very little difference in the ranking of these schools. One exception to that rule pops up in the BarPass scores (in dark orange) of the California schools, which benefit from a quirk in the way that USN&WR measures Bar Pass rates. Another interesting exception appears in Harvard's Lib score (in white)—only thanks to its vastly larger law library does Harvard edge out Stanford in this ranking.

To best understand how a few law schools made it to the top of USN&WR's rankings, we should contrast their performances with those of the many schools that did not do as well. I'll thus sample the statistics of the law schools that ranked 41-51 in the most recent USN&WR rankings, those that ranked 94-100, and the eight schools that filled out the bottom of the rankings. Please look for that in the next post.

[Crossposted at Agoraphilia, MoneyLaw.]

How Top-Ranked Law Schools Got That Way, Pt. 1

2009-08-20T11:20:00.000-07:00

How do law schools make it to the top of the U.S. News & World Report rankings? USN&WR ranks law schools based on 12 factors, each of which counts for a certain percentage of a school's total score. Peer Reputation counts for 25% of each law school's overall score, for instance, whereas Bar Passage Rate counts for only 2%. More precisely, USN&WR calculates z-scores (dimensionless statistical measures of relative performance) for each of the 12 factors for each school, multiplies those z-scores by various percentages, and sums each school's weighted, itemized z-scores to generate an overall score the school. USN&WR then rescales the scores to run from 100 to zero and ranks law schools accordingly.

In earlier posts I described my model of the most recent U.S. News & World Report law school rankings (the "2010 Rankings"), quantified its accuracy, and published itemized z-scores for the top two tiers of schools. (Separately, I also suggested some reforms that might improve the rankings.) Studying those z-scores reveals a great deal about how the top-ranked law schools got that way. The lessons hardly jump out from the table of numbers, though, so allow me to here offer some illustrative graphs.

The above graph, "Weighted & Itemized Z-Scores of Top 100 Law Schools in Model of 2010 USN&WR Rankings," reveals an interesting phenomenon. The items on the left of the graph count for more of each school's overall score, whereas the items on right count for less. We would thus expect the line tracing the maximum weighted z-scores for each item to drop from a high, at PeerRep (a measure of a school's reputation, worth 25% of its overall score), to a low, at Lib (a measure of library volumes and equivalents, worth only .75%). Instead, however, the maximum line droops at Emp9 (employment nine months after graduation) and soars at Over$/Stu (overhead expenditures per student). The next graph helps to explain that mystery.

The above graph, "Weighted & Itemized Z-Scores, 2010 Model, Top-12 Schools," reveals two notable phenomena. First, the Emp9 z-scores, despite potentially counting for 14% of each school's overall score, lie so close together that they do little to distinguish one school from another. In practice, then, the Emp9 factor does not really affect 14% of these law schools' overall scores in the USN&WR rankings. (Much the same holds true of top schools outside of these 12, too.)

Second, the Over$/Stu z-scores range quite widely, with Yale having more than double the score of all but two schools, Harvard and Stanford, which themselves manage less than two-thirds Yale's Over$/Stu score. That wide spread gives the Over$/Stu score an especially powerful influence on Yale's overall score, making it almost as important as Yale's PeerRep score and much more important than any of the school's remaining 10 z-scores. In effect, Yale's extraordinary expenditures per student buy it a tenured slot at number one. (I observed a similar effect in last year's rankings.)

Other interesting patterns appear in "Weighted & Itemized Z-Scores, 2010 Model, Top-12 Schools." Note, for instance, that Virginia manages to remain in the top-12 despite an unusually low Over$/Stu score. The school's strong performance in other areas makes up the difference. Though it is not easy to discern from the graph, Virginia's reputation and GPA scores fall in the middle of these top-12 schools' scores. Northwestern offers something of a mirror image on that count, as it remains close to the bottom of the top-12 despite a disproportionately strong Over$/Stu score. The school's comparatively low PeerRep and BarRep scores (the lowest of those in the top-12) and GPA (nearly tied for the lowest) score pull it down; Northwestern's Over$/Stu score saves it.

[Since I find I'm running on a bit, I'll offer some other graphs and commentary in a later post or posts.]

[Crossposted at Agoraphilia, MoneyLaw.]

Free Willie?

2009-08-10T17:13:00.000-07:00

Thanks to comments on my earlier post, Copyright Duration and the Mickey Mouse Curve, I've been encouraged to reflect on what would happen if, in fact, Steamboat Willie had fallen into the public domain. Could we then reuse Mickey Mouse, the star of that show, without facing any liability to the Walt Disney Company? I drafted this answer for my book, Intellectual Privilege (here edited for blogging):

Scholars have made surprisingly strong arguments that Steamboat Willie, a cartoon that the Walt Disney Company cites as establishing its copyright rights in Mickey Mouse, has fallen into the public domain. As a thought experiment, let us assume the truth of that claim. What would happen if Walt Disney Company—if, indeed, nobody—held a copyright in Steamboat Willie? Certainly, each of use would by default enjoy complete freedom to copy, distribute, display, or perform the cartoon, because the expiration of the work's copyright would also end the exclusive rights of the Walt Disney Company and its assigns the exercise those statutory privileges. So, too, would we escape copyright's limitations on making derivative versions of Steamboat Willie—versions that might show Mickey standing at a lectern rather than at a pilot's wheel, for instance, or have him expounding on copyright law.

The Walt Disney Company would retain its copyrights in later, plumper versions of the Mickey Mouse, of course. Contemporary artists wanting to reinterpret the character free from the company's veto would thus have to draw inspiration primarily from the earlier, skinnier, version. Given that the characters would share a common ancestor, however, even mice derived solely from Steamboat Willie would often strongly resemble the modern-day Mickey Mouse.

Would Walt Disney Company object to those unauthorized reuses of Steamboat Willie? It might, indeed. Some such uses might substitute for sales of the company's wares, after all, or cast its most prominent spokes-mouse in an unsavory light. But copyright law would, per the assumption behind our thought experiment, offer the company no solace. The Walt Disney Company could not plausibly claim that patent or trade secret law gives it the power to limit free use of Steamboat Willie, either. Nor could it invoke the right of publicity, which though sometimes shockingly effective in limiting speech about celebrities, has thus far not stretched to cover cartoon characters.

Trademark and unfair competition law would probably offer the Walt Disney Company its most potent weapon against any movement to emancipate Steamboat Willie. Generally speaking, that area of law allows the holder of a name, symbol, or other mark to prevent latecomers from using in commerce marks likely to confuse consumers about the source or affiliation of a particular good or service. Thus, for instance, can Nike bar someone from putting its famous "swoop" on non-Nike clothes. The Walt Disney Company uses Mickey Mouse as a mark designating its goods and services. If a consumer did not know (ex hypothesis) that the image and voice of Mickey Mouse, qua the character Willie, had fallen into the public domain, and that consumer saw a cartoon of a substantially similar Mickey Mouse in a new context, the consumer might naturally, yet wrongly, assume that the newer Mickey Mouse had issued from the same source as so many other cartoons featuring the character: The Walt Disney Company. On that argument, consumer ignorance would give the company cause to censor derivative versions of the copyright-free Mickey Mouse.

Perhaps the addition of disclaimers, such as noting, "Not a Walt Disney Company production!" in a cartoon's margin, would suffice to dispel consumer confusion. That would ward off only a "passing off" claim—one where a mark's holder accuses another of selling bogus wares under that mark—however. The same disclaimer would set the defendant up for a "reverse passing off" claim—one where Disney would charge that cartoonist wrongly sold Disney's product (intellectual creations about Mickey Mouse) under another's name. Disney could thereby damn those who use Steamboat Willie both if they do use disclaimers and if they do not. Happily for anyone who wants to free Willie, however, the Supreme Court has cut through that Gordian knot of liability.

The Supreme Court held in Dastar Corp. v. Twentieth Century Fox Film Corporation that, once a work has fallen into the public domain, its former copyright holder cannot use federal unfair competition law to demand credit from those who reuse the work. Still more broadly, the Court flatly excluded copyrighted works from the scope of section § 43(a)(1)(A) of the Lanham Act, the federal law barring passing off, whether direct or reverse. The Court explained the policy reasons for thus limiting unfair competition law:

Assuming for the sake of argument that [defendant] Dastar's representation of itself as the "Producer" of its videos amounted to a representation that it originated the creative work conveyed by the videos, allowing a cause of action under § 43(a) for that representation would create a species of mutant copyright law that limits the public's "federal right to 'copy and to use,'" expired copyrights.

Dastar voiced broad concerns, and lower courts have read it accordingly. They have extended it to bar state law claims of unfair competition, a result the U.S. Constitution's Supremacy Clause would apparently mandate. Lower courts have also extended Dastar to bar unfair competition claims arising out of the use of uncopyrighted and uncopyrightable works. Plainly, the case has done a great deal to ensure that copyright's privileges go no farther than copyright itself.

The exact scope of Dastar's preemptive effect remains as yet uncertain, granted. Even if it suffered the uncopyrighting of Steamboat Willie we've hypothecated here, for instance, the Walt Disney Company would perhaps still have the right to bring suit under § 43(a)(1)(B) of the Lanham Act against those using liberated versions of Mickey Mouse to deceptively market their wares, such as by falsely advertising a new Spaceship Willie as a Disney original. The Dastar Court left that question open. Lower courts have, however, read the case to bar § 43(a)(1)(B) claims alleging no more than false marketing about whether permission was granted for an uncopyrighted work. Under that reasoning, the Walt Disney Company could not even stop the authors of Spaceship Willie from selling it as, "A wholly original take on Mickey Mouse," or, conversely, as "Mickey Mouse in the finest tradition of Walt Disney." Thus might Dastar and its progeny help Mickey Mouse, when and if he escapes copyright, from achieving the status of a great cultural icon, akin to Santa Claus or Uncle Sam.

[Crossposted at Agoraphilia, TechLiberation Front.]

Copyright Duration and the Mickey Mouse Curve

2009-08-05T21:03:00.000-07:00

Herewith another recent addition to my draft book, Intellectual Privilege: A Libertarian View of Copyright, (inspired, in part, by Berin Szoka's recent claim, "I just don’t know what the right balance [for copyright] is! I’m glad there are others patient enough to try to figure it out. This is why we have economists and… yes, even lawyers!"):

As an illustration of the public choice pressures that drive copyright policy, consider the fate of the copyright in Steamboat Willie, a 1928 cartoon that the Walt Disney Company cites as establishing its copyright claim in Mickey Mouse. Scholars have made a surprisingly strong case that, because the requisite formalities of the 1909 Copyright Act were not satisfied, Steamboat Willie has fallen into the public domain. The Walt Disney Company has responded to such claims by threatening to bring suit for "slander of title," demonstrating how seriously it takes its copyright in Steamboat Willie. Let us take that copyright seriously, too, then, so that we might better understand the public choice effects of the Walt Disney Company's interests.

The above figure illustrates how the duration of the copyright that the company claims in Steamboat Willie—marked by the solid grey line—has twice approached expiration—a limit marked by the dashed grey line. In both instances, federal lawmakers amended the Copyright Act to extend copyright's duration, both for copyrighted works generally and works, such as Steamboat Willie, that predated the amendments. The line marking the copyright term in Steamboat Willie jogs upward both on the effective date of the 1976 Act (January 1, 1978) and again on the effective date of the Sonny Bono Copyright Term Extension Act (October 27, 1998). (Steamboat Willie did not receive the maximum possible copyright duration under either extension due to complications arising from the work's status as a work in its second term under the 1909 Copyright Act.) No one can, of course, say with certainty whether or to what degree lobbying by the Walt Disney Company drove those copyright term extensions, which fortuitously or not saved the (supposed) copyright in Steamboat Willie from falling into the public domain. It does not take a great deal of skepticism, however, to predict that federal lawmakers will extend copyrights again before 2023, at which time Steamboat Willie will once more risk sailing beyond the limits of copyright's duration.

Given the rough-and-tumble of real world lawmaking, does the rhetoric of "delicate balancing" merit any place in copyright jurisprudence? The Copyright Act does reflect compromises struck between the various parties that lobby congress and the administration for changes to federal law. A truce among special interests does not and cannot delicately balance all the interests affected by copyright law, however. Not even poetry can license the metaphor, which aggravates copyright's public choice affliction by endowing the legislative process with more legitimacy than it deserves. To claim that copyright policy strikes a "delicate balance" commits not only legal fiction; it aids and abets a statutory tragedy.

[Crossposted at Agoraphilia, TechLiberation Front.]

Reforms Suggested by Modeling the Law School Rankings

2009-08-04T16:27:00.000-07:00

As I recently observed, the close fit between law schools' scores in U.S. News & World Report's rankings and the scores of those same schools in my model of the ranking "suggests that law schools did not try game the rankings by telling USN&WR one thing and the ABA . . . another." Since both Robert Morse, Director of Data Research for USN&WR, and the ABA Journal saw fit to comment on that observation, perhaps I should clarify a few points.

First, I have no way of knowing whether or not law schools misstated the facts, by accident or otherwise, to both the ABA and USN&WR. The fit between USN&WR's scores and my model's scores indicates only that law schools reported, or misreported, the same facts to each party.

Second, this sort of consistency test speaks only to those measures USN&WR uses in its rankings, that it does not publish with its rankings, and that the ABA collects from law schools: median LSAT, median GPA, overhead expenditures/student, financial aid/student, and library size. Measures that USN&WR uses and publishes—reputation among peers and at the Bar, employment nine months after graduation, employment at graduation, student/faculty ratio, acceptance rate, and Bar exam performance—go straight into my model, so I do not have occasion to test their consistency against ABA data. In some cases—the reputation scores and the employment at graduation measure, the ABA does not collect the data at all. This proves especially troubling with regard to the latter. We have little assurance that USN&WR double-checks what schools report under the heading of "Employment at Graduation," and no easy way to double-check that data ourselves.

Third, and consequently, USN&WR could improve the reliability of its rankings by implementing some simple reforms. I suggested three such reforms some time ago. USN&WR has largely implemented two of them by making its questionnaire more closely mirror the ABA's and by publishing corrections and explanations when it discovers errors in its rankings. (I claim no credit for that development, however; I assume that USN&WR acted of its own volition and in its own interest.)

Another of my suggested reforms remains as yet unrealized, however, so allow me to repeat it, here: USN&WR should publish all of the data that it uses in ranking law schools. It could easily make that data available on its website, if not in the print edition of its rankings. Doing so would both provide law students with useful information and allow others to help USN&WR double-check its figures.

To that, I now add this proposed reform: USN&WR should either convince the ABA to collect data on law school graduates' employment rates at graduation or discontinue using that data in its law school rankings. That data largely duplicates the more trustworthy (but still notoriously suspect) "Employment at Nine Months" data collected by the ABA and used by USN&WR in its rankings. And, unlike that data, law schools do not report "Employment at Graduation" numbers under the threat of ABA sanctions. We cannot trust the employment at graduation figures and USN&WR does not need them.

Among the reforms I suggested some two years ago I also included one directed at the ABA, calling on it to publish online, in an easily accessible format, all of the data that it collects from law schools and that USN&WR uses in its rankings. I fear that, in contrast to USN&WR, the ABA moved retrograde on that front. I leave that cause for another day, however; here I wanted to focus on what my model can tell us about USN&WR's rankings.

[Crossposted at Agoraphilia, MoneyLaw.]

What I Learned at the FBI

2009-08-01T18:55:00.000-07:00

On Thursday I attended a seminar at the FBI for film and TV writers. There was lots of useful information, but what I found most interesting was the FBI agents' use of language. Specifically, I noticed that they regularly used the word 'forfeit' as a transitive verb meaning 'to acquire by asset forfeiture.' As in: "The FBI forfeited $2.6 million in this operation."

Of course, this is a perfect reversal of meaning. The standard meaning of 'forfeit' is to lose or to abandon, not to acquire.

I don't know that this says anything particular about FBI psychology, except that asset forfeiture has become so routine that they needed a shorter word -- "acquire by asset forfeiture" being rather cumbersome. I suppose that agents just naturally extracted the only verb embedded in the phrase 'asset forfeiture.' Words like 'seize' and 'confiscate' either didn't occur to them, or else seemed too narrow because they don't necessarily imply keeping the seized assets.

Still, it was jarring to hear this casual use of a word to mean something so diametrically opposite its original meaning. At first I was genuinely confused; when I heard an agent say the FBI had forfeited a bunch of money in some operation, I momentarily thought the FBI had actually returned the money to someone. But what are the odds of that?

Unconstitutional Copyrights?

2009-07-28T21:32:00.000-07:00

As part of a revise-and-resubmit process, I've been spending much of my summer upgrading my draft book, Intellectual Privilege: A Libertarian View of Copyright. That effort has led me to revisit copyright's constitutional foundations. I find them very shaky, indeed. This passage (with footnotes excerpted) explains why modern copyright law often fails "to promote the Progress of Science and the useful Arts":

What would copyright look like if we took the Constitution at its word, requiring that copyright promote the progress of both science and the useful arts? We would then have to look askance at the current practice of affording copyright protection to such purely artistic creations as songs, plays, novels, paintings, and sculptures. Even supposing that "science" reaches broadly enough to cover all of the humane sciences—a reading that Malla Pollack documents as an original meaning of the term—copyright law today focuses far more on the expressive arts than on the "useful" ones.

Taking "Science and useful Arts" seriously would thus radically narrow the proper scope of copyright. The first Copyright Act, enacted in 1790 by some of the same people who wrote and ratified the Constitution, covered only maps, charts, and books. Permitting copyrights in first two types of works plainly promoted both science and the useful arts. Lawmakers in 1790 probably regarded books, too, primarily as tools rather than diversions. Novels had yet to rise to prominence, after all; the first American one, William Hill Brown's THE POWER OF SYMPATHY, had appeared only the year before, and even it aimed at practical ends, promising "to Expose the fatal consequences of SEDUCTION." Judging from the titles in libraries and on sale, fiction made up only a small portion of the books available in late eighteenth century America. The 1790 Copyright Acts moreover excluded such purely artistic expressions as songs, plays, paintings, and sculptures—even though its drafters undoubtedly knew of and appreciated those sorts of works.

It appears, then, that "[t]o promote the Progress of Science and useful Arts" originally meant that that copyrights had to serve practical ends, rather than merely expressive ones. But originalists should not alone embrace that constitutional limitation on copyright's scope. Given that "Science" now connotes a more technical and specialized endeavor than it did in the eighteenth century, the plain, present, public meaning of the Constitution likewise counsels against extending copyright protection to purely artistic works. Whether we give the Constitution's text its original meaning or its current one, therefore, copyright should cover little more than maps, charts, non-fiction books, illustrations, documentaries, computer programs, and architecture. Most songs, plays, fictional books, paintings, sculptures, dances, movies, and other artistic works, because they fail to promote the progress of science and the useful arts, would on that reasoning not qualify for copyright protection.

However rigorously logical, that argument against the constitutionality of almost all modern copyright law will, I grant, probably generate more grins than agreement. Courts and commentators have hitherto hardly bothered to distinguish between "Science and useful Arts"; still less have they taken those words to impose real limitations on federal power. Here as elsewhere, acquiescence to long-accepted practices has dulled us to the Constitution's bracingly straightforward words. We should read them anew and reflect that the Founding generation did not evidently think that granting statutory privileges to such purely artistic creations as romantic operas or pretty pictures would promote the progress of both science and the useful arts. Furthermore, most citizens today would, if presented with the Constitution's plain language rather than the convoluted arguments of professional jurisprudes, probably say the same thing about pop songs, blockbuster movies, and the like. That is certainly not to say that purely expressive works lack value. They may very well promote such important goals as beauty, truth, and simple amusement. The Constitution requires that copyright promote something else, however—"the Progress of Science and useful Arts"—and a great many works now covered by copyright cannot plausibly claim to do both.

This argument against the constitutionality of most modern copyright relies, by the way, on a prior argument about the structure of the copyright clause; to wit, that "Science and useful Arts" modifies both "authors" and "inventors." Also, I intend to follow up the above with an analysis of how the Supreme Court in Eldred took a view almost exactly opposite to the text-based one I've embraced. (I'd call that an admission, were I not proud to disagree with the Court.)

[Crossposted at Agoraphilia, TechLiberation Front.]

Z-Scores in Model of 2010 USN&WR Law School Rankings

2009-07-23T12:13:00.000-07:00

If you want to know how U.S. News & World Report's law school rankings work, you'll want to know about z-scores. In very brief, z-scores measure how well each school performed relative to its peers, thereby establishing its rank. (See here for a fuller explanation.) My model of the rankings aims to recreate those z-scores, and thus the rankings themselves, by duplicating both the data and the methodology that USN&WR uses. Here are the results for the law schools most recently ranked in the top 100:

For cross-year comparisons, please see the similar reports I offered in 2005, 2006, 2007, and 2008. This year, in response to a reader's request, I've added various diagnostic measures, such as the mean, median, and standard deviation of each itemized category of data. As I did last year, I again provided weighted z-scores, meaning simply that I've multiplied the z-scores in each category of data by the percentage that category influences a school's overall score. That method of presenting z-scores has the virtue of highlighting which scores matter the most.

Unsurprisingly, you'll generally find the largest numbers in the upper, left-hand corner of the chart. There lie the most heavily-weighted z-scores of the law schools that scored the highest in USN&WR's rankings. Consider, for instance, the .71 weighted z-scores enjoyed by Yale and Harvard under the "PeerRep" category; those numbers nearly swamp the effect of other measures of those schools' performances, and have twice the impact of the peer reputation scores of schools ranked as close as 20th from the top.

This presentation of the data also shows how very little influence many of the things that USN&WR measures have on its rankings. The weighted z-scores for Bar pass rates, for instance, vary between only .07 and -.02, with a whole lot of zeros filling that span. Bar passage rates evidently do not matter much to any school's USN&WR score.

Rankings geeks will doubtless find close study of this table rewarding. I'm especially interested in the surprising impact of the top schools' overhead expenditures/student—a phenomenon that I discussed in some detail last year. Perhaps I'll return to that topic, and raise some new ones, in later posts. In the meantime, I welcome your own observations.

[Crossposted at Agoraphilia, MoneyLaw.]

Accuracy of the Model of the 2010 USN&WR Law School Rankings

2009-07-22T11:55:00.000-07:00

I earlier offered a snapshot comparison of the scores generated by my model of the 2010 U.S. News & World Report law school rankings and the original. After Robert Morse, director of data research for USN&WR, asked me if I could quantify the fit between the two data sets, I realized that others might share his curiosity. Here, then, are the r-squared measures (more precisely, the squares of the Pearson product moment correlation coefficients) for each of the models I've done over the past few years:

2010 rankings: 0.999
2009 rankings: 0.999
2008 rankings: 0.999
2007 rankings: 0.997
2006 rankings: 0.995

What do those numbers mean? In brief, an r-squared closer to 1 (or –1) shows a closer fit between the two data sets. It might seem a bit absurd to report these results out to three decimals, but I wanted to make clear that the model has yet to obtain results absolutely identical to those reported by USN&WR. I daresay, though, that any r-squared above .99 shows a pretty strong correlation.

[Crossposted at Agoraphilia and MoneyLaw.]

A Model of the 2010 USN&WR Law School Rankings

2009-07-16T15:50:00.000-07:00

As in every year since 2005, I this year again built a model of the law school rankings published by the U.S. News & World Report ("USN&WR"). Figuring out the rankings—the "2010" rankings, as USN&WR's calls them—proved especially trying this time around. USN&WR changed several parts of its methodology this year and the ABA, which distributes statistical data on which my model depends, fell far behind its usual publication schedule. Finally, though, the model ended up generating scores gratifyingly close to those that USN&WR assigned law schools. Here's a snap-shot comparison of the results:

For details about how and why I modeled USN&WR's law school rankings, as well as for similar snap-shots, see these posts from 2005, 2006, 2007, and 2008.

Perhaps in later posts I'll offer some reflections on what this year's model of the USN&WR rankings teaches. For now, I'll just offer this happy observation: The close fit between USN&WR's scores and the model's scores suggests that law schools did not try game the rankings by telling USN&WR one thing and the ABA (the source of much of the data used in my model) another. Even a skeptic of law school rankings can find something to like in that.

[Crossposted at Agoraphilia and MoneyLaw.]

Eat More, or Starve Yourself

2009-07-12T13:56:00.000-07:00

According to a recent L.A. Times Science article, there’s new evidence that a calorie-deprived diet, with 10% to 30% fewer calories than the usual recommended intake, leads to better health and longer life. The evidence comes from a study of rhesus monkeys, though researchers believe (based on accumulating evidence) that the effect is probably common to all primates, including humans. The conclusion? “Even those who maintain a healthy weight probably should be eating less.”

But wait! Turns out they buried the lead, waiting until page 2 to reveal this:

Are they happy? Are they hungry? Can they think as fast?

When UCLA evolutionary biologist Jay Phelan put mice on caloric restriction, he got the distinct impression that they didn't appreciate it.

"They bit people and were more agitated," he said. In contrast, the mice who ate a normal diet "would just sit around and let you pick them up."

Okay, maybe that’s not the lead, because Phelan only studied mice; the article does not report on the monkeys’ happiness.

Still, this is the important issue, is it not? If eating less increases your lifespan but decreases your happiness, then there’s a very real trade-off between quantity and quality of life. Which means the author’s conclusion that even people with a healthy weight “should probably be eating less” is simply unjustified -- unless we make some fairly heroic assumptions about what’s loaded into that key word “should.”

Setting aside the quality-quantity trade-off and assuming health and longevity are the only worthwhile goals, how much should you be eating? It’s beginning to look like the relationship between calorie intake and health is aggressively non-linear. And by “aggressively,” I mean it’s not even a simple quadratic (U-shaped) relationship.

Clearly, starvation is not optimal. Nor is morbid obesity. Between these suboptimal endpoints, the usual assumption is that you’re best off with a BMI in the middle of the recommended 18.5-24.9 range. But two factors argue against this conclusion. First, the monkey study adds to a growing body of evidence that people with a lower BMI live longer. (This isn’t immediately clear, since the article doesn’t say anything about the BMI under caloric restriction, but I assume it’s lower than what you get with regular calorie intake.) Second, there’s also good evidence that people with a BMI higher than the recommended range – between 25 and 30 – also live longer.

Putting it all together, the relationship between BMI and longevity (setting aside a variety of other factors, of course) seems to be something like this: From starvation up to a BMI somewhere on the low side of normal, there’s a positive relationship. From there into the middle of the normal range, there’s a negative relationship. Then the relationship goes positive into what is typically regarded as the overweight range. And then it goes negative again, all the way to morbid obesity. Thus, there seem to be two peaks on either side of the alleged normal range of BMI, and a local minimum in the middle of the normal range. Yet that’s the range regularly recommended to the public!

Anyway, I’m far from an expert on this. Maybe the weirdness goes away when you separate the effects of different kinds of weight, such as fat vs. muscle. BMI is a very blunt instrument for measuring health, after all. I just wish that articles about health and weight would spend more time discussing questions like these, instead of continuing to push the simplistic “Americans are too fat and need to slim down” line.

Libertarian Paternalism: Appearance vs. Reality

2009-07-10T01:01:00.000-07:00

In the comments section of Russell Roberts’s link to my previous post, “Charlie” makes some thoughtful points. I was going to respond in the comments there, but then decided a new post would be worthwhile. Charlie begins:

Libertarian paternalism seems to aim to take paternalism and give it choice.

The key word here is “seems.” The advocates of libertarian paternalism have taken great pains to present their position as one that does not foreclose choice, and indeed even adds choice. But this is entirely a matter of presentation. They always begin with non-coercive and privately adopted measures, such as the ski-slope markings in Thaler’s NY Times article. And when challenged, they resolutely stick to these innocuous examples (see this debate between Thaler and Mario Rizzo, for example). But if you read Sunstein & Thaler’s actual publications carefully, you will find that they go far beyond non-coercive and private measures. They consciously construct a spectrum of “libertarian paternalist” policies, and at one end of this spectrum lies an absolutely ban on certain activities, such as motorcycling without a helmet. I’m not making this up! See these two previous posts for details, with direct quotes and page citations. (In a forthcoming article, Mario and I examine the “libertarian paternalist” spectrum in greater detail.)

Charlie continues:

For instance, the 70s Democrat solution to this problem would be to mandate that only one type of "plain vanilla" loan can be given out by all loan offerers. Now it's just that the plain vanilla loan must be offered as a choice.

This is actually an excellent example of Sunstein & Thaler’s rhetorical approach. Yes, it’s true, this policy offers the consumer greater choice than a more restrictive policy. BUT! Notice, first, that the more restrictive policy is no longer in place, which means the actual change advocated here would constitute a greater restriction than the status quo. And notice, second, that the policy in question most certainly does restrict the freedom of the other party – the bank – by requiring it to offer a certain kind of mortgage. Now, there might be great arguments for this approach; as I’ve said, I’m not a finance guy. But can we please not pretend this is a policy that fully respects freedom of choice?

Furthermore, as Sunstein & Thaler’s published work clearly indicates, this kind of policy is the thin end of the wedge. The next step, as outlined in their articles, is to raise the cost of choosing other options. In this case, the government could impose more and more onerous requirements for opting out of the “plain vanilla” mortgage: you must fill out extra paperwork, you must get an outside accountant, you must have a lawyer present, you must endure a waiting period, etc., etc. Again, this is not my paranoid imagination at work. S&T have said explicitly that restrictions like these would count as “libertarian paternalism” by their definition.

Charlie continues:

I find it hard to fault Thaler for not using more gov't anecdotes, because not that many exist. Taxes, tax credits, and subsidies have long been recognized as better ways to achieve public goals than top down regulation. Such as carbon tax > technology regulation, tax free IRA > mandating people save, school voucher > direct school spending. All these are libertarian paternalistic policies. They aim to achieve public goals without destroying choice.

Most libertarians, myself included, are quite willing to say that some interventions are worse than others – and when our favored policies are off the table, we will choose the second best. For instance, most libertarians I know prefer mandatory savings to government-run Social Security. Most libertarians I know prefer education vouchers or tax credits to the public school monopoly. Most libertarians I know prefer medical-marijuana-by-prescription to a total ban on marijuana.

The problem is that S&T’s “libertarian paternalism” is used almost exclusively to advocate greater intervention, not less. I have never, for instance, seen S&T push for privatization of Social Security or vouchers in education. I have never seen them advocate repealing a blanket smoking ban and replacing it with a special licensing system for restaurants that want to allow their customers to smoke. If they have, I would love to see it.

In their articles, S&T pay lip service to the idea that libertarian paternalism lies between hard paternalism and laissez faire, and thus that it could in principle be used to expand choice. But look at the actual list of policies they’ve advocated on libertarian paternalist grounds, and see where their real priorities lie.

Thaler on Ski Slopes and Mortgages

2009-07-05T22:49:00.000-07:00

So what does it take to get me to blog these days? Having an opinion is no longer enough. Apparently I have to be actively irritated.

Richard Thaler is the newest contributor to the NY Times’ Economic View, where in his first column he uses behavioral economics to justify new financial regulations. In the process, he gets up to the same shenanigans that have become familiar to anyone who follows his work on “libertarian paternalism.” Specifically, he continues to disregard the distinction between public and private action.

Some critics contend that behavioral economists have neglected the obvious fact that bureaucrats make errors, too. But this misses the point. After all, wouldn’t you prefer to have a qualified, albeit human, technician inspect your aircraft’s engines rather than do it yourself?

The owners of ski resorts hire experts who have previously skied the runs, under various conditions, to decide which trails should be designated for advanced skiers. These experts know more than a newcomer to the mountain. Bureaucrats are human, too, but they can also hire experts and conduct research.

Here we see two of Thaler’s favorite stratagems deployed at once. First, he relies on a deceptively innocuous, private, and non-coercive example to illustrate his brand of paternalism. Before it was cafeteria dessert placement; now it’s ski-slope markings. Second, he subtly equates private and public decision makers without even mentioning their different incentives. In this case, he uses “bureaucrats” to refer to all managers, regardless of whether they manage private or public enterprises.

The distinction matters. The case of ski-slope markings is the market principle at work. Skiers want to know the difficulty of slopes, and so the owners of ski resorts provide it. They have a profit incentive to do so. This is not at all coercive, and it is no more “paternalist” than a restaurant identifying the vegetarian dishes.

Public bureaucrats don’t have the same incentives at all. They don’t get punished by consumers for failing to provide information, or for providing the wrong information. They don’t suffer if they listen to the wrong experts. They face no competition from alternative providers of their service. They get to set their own standards for “success,” and if they fail, they can use that to justify a larger budget.

And Thaler knows this, because these are precisely the arguments made by the “critics” to whom he is responding. His response is just a dodge, enabled by his facile use of language and his continuing indifference – dare I say hostility? – to the distinction between public and private.

Now, as for the financial aspects of all this. I’m not a finance guy, so I’m less qualified to speak here. The regulations he advocates might be desirable; behavioral justifications for paternalism might make more sense in this context than others. I’m not saying they do, but I’m open to the argument.

Still, something seems fishy about his argument here, which hinges on people being “fooled” by exotic mortgage contracts. Yes, there were some confusing mortgage deals out there, and I’m sure some people didn’t completely understand what they were getting themselves into. But did the lenders – the supposed experts – know any better? Remember that Thaler’s argument here is about letting the experts drive the decisions; that’s the whole point of the ski-slope story. Yet by all indications, the lenders were fooled, too. Both the debtors and the lenders were making the same bet: that housing prices would continue to rise, if not forever, then at least long enough to refinance. Or to put it another way, with respect to the major issue at hand, most of the debtors knew what they were doing: gambling. So while I’m sure some debtors were fooled by funky mortgage contracts, it’s hard for me to believe that was a major driver of the financial crisis.

But as I said, I’m not a finance guy, so maybe there’s more to the behavioral-paternalist angle in this context. I just wish Thaler would be straight-up when dealing with the arguments of his critics.

Recipe for a Force Field

2009-07-01T12:56:00.000-07:00

We don't yet have flying cars, much less jet packs. I like our Roomba, but domestic robots still have far to go before they can whip up an omelet, set the table, and pour the coffee. In these and many other areas, technology continues to lag behind the rosy sci-fi scenarios of my youth. Allow me, then, to give the future a little kick in the pants by describing how to build a long anticipated and long overdue technology: The force field.

Start with a phase conjugate mirror. A conventional mirror simply reflects light, bouncing it off at an angle in the same way that the bumper on a pool table redirects the motion of a ball. A phase conjugate mirror, in contrast, reflects light in exactly the reverse direction and form as the light comes in. Banking shots would be impossible on a pool table with "phase conjugate" bumpers, as balls would always bounce back in exactly the same direction whence they came.

Add to the phase conjugate mirror this additional ingredient: pumping beams that create a amplified reflection of the incoming wave front. (Read the bit under "phase conjugate mirror" at this source for more details.) To recur to the pool table example, it would be as if you gently tapped a ball at a bumper and it came speeding straight back at you.

Lastly, top off the amplified phase conjugate mirror with an illumination beam—a laser that rapidly scans the protected area, say. This illuminating beam can operate at relatively low power levels, given that it serves only to bounce a few photons off of the target. When some of those illuminating photons find their way from the target to the amplified conjugate phase mirror . . . BAM! Out flashes a blast of electromagnetic energy, automatically aimed on-target.

To better understand how the force field works, consider a ready application: Protecting spacecraft from orbiting debris. A scanning laser would rapidly sweep the area from which space junk would most likely approach the protected craft. Most of the time, of course, that beam would dissipate into empty space and the force field would remain quiet. When the scanning laser illuminated an approaching threat, however, the phase conjugate mirror would bounce a beam of electromagnetic energy right back at the debris (or, what would in practice amount to the same thing, given the speed of light, at the location the debris occupied an flash earlier). With enough amplification, the phase conjugate mirror could alter the trajectory of the approaching junk, directing it away from the spacecraft. With more amplification, the force field could simply vaporize the threat.

I could say more, but readers who have read this far can probably work out other interesting applications of the force field, as well as the problems introduced by non-reflective or highly reflective targets and the remedies afforded by using different frequencies for the scanning and amplified beams. Some readers might quibble that, regardless of its merits, I've not really described a force field, but rather only something that appears to function like one. Given that sci-fi authors don't typically explain how force fields work, though, I don't feel too bad about borrowing the label.

I don't claim this recipe for a force field as any sort of breathtaking innovation, granted. Once you get your head around phase conjugate mirrors, the rest of what I've suggested falls into place pretty quickly. I guess you could call it obvious to one reasonably skilled in the relevant arts—dynamic holography—and, thus, unpatentable. Still, though, I've yet to find any references on the 'net about this method of creating a force field.

Given that I make my living as a law prof, rather than a non-linear optical scientist, you might wonder why I dabble in these topics. It turns out that I've long had an interest in holograms. I set up a home lab to make them when I was in high school, and later developed a holographic information processing system that, in theory at least, answered a challenge that a hero of my youth, Douglas Hofstadter, put to me personally. His response left me so disillusioned that I abandoned my plans to pursue a degree in AI, but that is another, much longer story.

Exercise Breathings

2009-06-22T11:23:00.000-07:00

I've long advocated the mental benefits of working out, and recently promised to offer some details about my own, somewhat peculiar regime. Here, I address the question: "How should I breath when I run?" My answer goes a long, long way beyond simply, "In-and-out."

Basically, I treat breathing as a mental exercise that accompanies and improves the brute physical aspects of running. By default, I run in a 3:4 pattern, inhaling for three steps and exhaling for four. On steep grades, in deep sand, or when sprinting, I might switch to a 2:3 or even 1:2 cadence. At other times, like yesterday, when I ran long miles on a flat dirt road, I might shift up to a 4:5 pattern, breathing in for four steps and breathing out for five. (I've also run in a 3:6 "gear," though it poses a problem for reasons I'll relate below.)

Most people who breath in step with their running unthinkingly fall into a 2:2 pattern, breathing in for two steps and breathing out for two. In contrast, I take care to combine a relatively short inhaling period with a slightly longer exhaling one. Why? Because we tend to generate more power when we exhale. Weight lifters, for instance, almost always breath out when working hardest. It thus makes sense, when running, to spend more time exhaling than inhaling.

I also choose breathing cadences that add up to odd numbers, a practice advocated by military trainers and others. Why? Because it helps to keep my stride symmetrical, ensuring that I start exhaling first on one foot and then, in the next cycle, on the other. A 2:2 pattern, in contrast, has you always pushing off the same foot at the most powerful part of your stride.

Those observations speak only to physiological issues, however. What about the mental side of the equation? Breathing in 2:3, 3:4, or 4:5 time has the salient benefit of not echoing any typical musical rhythm. Especially when I fall into a stretch of composing music, I tend to get tunes stuck in my head. Running in non-musical tempos gives me a reprieve from what would otherwise turn into an oppressively unremitting internal concert. (I take care to not mentally compose tunes in 5/4 or other exotic tempos while I run. Hence, too, the problem with a 3:6 cadence: It tends to stir up melodies written in waltz time.)

Lastly, and perhaps most importantly, breathing in time with my steps calms my restless mind. After years and years of practicing this sort of heart-racing meditation, I of course no longer need to count every breath. Rather, I simply choose a cadence and trust in habit to keep me on-track. Freed from the need to think about my breathing, and soothed by the now-familiar rhythms of lungs, legs, and heart working in concert, I enjoy miles and miles of peaceful reverie.

How Union Bullies Fund their Critics

2009-05-24T10:04:00.000-07:00

The L.A. Times' blog recently reported that the Los Angeles police officers' union tried to bully the San Diego Union-Tribune into firing editorial writers who argue that "lawmakers should cut back on salaries and benefits for public employees in order to help close gaping budget deficits." Gail Heriot calls the incident "chilling," and with good reason. I see a bright side to it, however.

Platinum Equity, a private firm, relies on a $30-million investment from the union's pension fund, along with large sums from the pension funds of other groups of California government employees, to help it buy companies. Platinum recently acquired the San Diego Union-Tribune. The L.A. police officers' union thus regards itself as a part owner of the paper—one that has purchased the right fire unwanted employees.

Exactly how much clout the union actually has over the paper remains to be seen. The San Diego Union-Tribune has publicly rebuffed the union's demands. As Heriot observes, however, "threats like these can cause a newspaper to soft-pedal its views even when the threats aren't carried out."

So what is the bright side? Many newspapers face financial difficulties, and would welcome capital infusions. This imbroglio will suggest to alert publications a ready way to attract investments from government-employees' unions: repeatedly and loudly demand that lawmakers reduce those employees' salaries and benefits. In effect, unions have signaled their willingness to subsidize their critics. State action would never have that effect; there is no profit to be had in suffering censorship. Score another point for the relative efficacy of market mechanisms—even when used by ignorant bullies—in encouraging freedom of expression.

Surfing Dolphin Property Rights

2009-04-04T10:05:00.000-07:00

Do the usual surfing rules apply when a human shares a wave with a dolphin? If so, I might have pissed off one of Flipper's kin, yesterday. But I think that because dolphins use waves differently from humans, both species can ride the same wave without conflict. So, at least, my story of cross-species surfing suggests.

Here's how it went down: I was surfing Churches with my former Marine (not "ex-Marine!") bud, Tracy, who uses his base pass to get us parking right on the beach. We had been surfing for a while when I heard him and some of the other guys yelling and whistling. I looked up to see a pod of dolphins surfing down the face of a big set wave that was rolling towards us. The dolphins glided just under the surface of the water and then—Pow! Pow! Pow!—started leaping into the air and back into the wave. That alone made it a Super Special Rainbow Unicorn Day (with sparklies). The fun, though, had only just begun.

I guess the other guys were too busy laughing and clapping to notice that the wave was shaping up pretty nicely, or maybe they were too deep where it began breaking, but for whatever reason the face came to me with nobody on it. The dolphins seemed to have disappeared, too. So I whipped my board around, took a couple of strokes, and nailed it. As I came out of my bottom turn and hit the lip, I looked down to see a dolphin still in the wave, some 10 feet ahead of me, speeding along under the surface. I laughed and yelled, "Yeah, bro! Let's go!" The dolphin and I rode along a bit, together, and then it peeled off and rejoined its pod. I finished out the wave, getting a nice long ride and a nice big smile.

On the paddle back out, though, my conscience pricked me. The dolphin had caught the wave and worked out to its shoulder when I dropped in at the sweet spot, blocking the dolphin from a making a cutback to the face. Under the usual, human rules of surfing etiquette, I almost certainly would have been in the wrong. I'd get some slack, perhaps, because I couldn't see the dolphin gliding along under water. Then, too, the dolphin was so far out on the shoulder that, even if I had seen it, I might have safely whipped some turns inside, remaining ready to pull out if the dolphin began to cut back. And, of course, it would have been a perfectly fine maneuver between friends—but I didn't even know the dolphin's name.

Ultimately, though, I decided that I had not triggered a cross-species diplomatic incident. As I've explained elsewhere, surfing's rules of etiquette create transitory property rights in wave faces, a custom that helps us humans maximize the a very valuable and scarce resource: surfable wave faces. Dolphins don't surf the same way that humans do, though. They have so much power, speed, and efficiency that they can ride waves far out from the steep, breaking portions that we humans require. Like mega longboarders, dolphins pick up waves long before they begin to pitch, tend to ride far out on the shoulder, and eschew sharp turns for long, graceful lines.

I conclude that dolphins and surfers—especially shortboarders—can happily share the same waves without conflict. So, at least, my experience suggests. So, too, does this video of humans and dolphins peacefully enjoying the same waves.

Longboard Helicopter! Shortboard Air?

2009-04-02T20:51:00.000-07:00

Today I finally managed a surf move that I've been on working for over a year: a fin-forward take-off with a regular-footed pop-up, followed by a 180-degree spin and a goofy-footed ride, wrapped up with a switch-step back to regular. If you're not a surfer, that might not mean much to you, granted. Suffice it to so say that it rates as reasonably difficult longboard trick.

I can't say I exactly nailed the move, but neither did I just slop through it. It helped, I think, that I grabbed the rail during the turn and made sure to work up some momentum before trying to switch my stance. Perhaps on a longer board, with practice, I could pull off a graceful cross-step. As it was, on my 9'0", I had to sort of shuffle through the transition.

Next on my surfing "to do" list: Getting air. For that, I'll rely on my shortest and favorite board, the 6'10" hybrid fish that I added to my quiver about three years ago. These days, I surf it almost exclusively. I still remember fondly the first time I really figured out how to work a wave on that little pony: August 17, 2006. After a long, ripping ride on a waist-high right at Churches, I flopped down, grinned, and thought, "Ahhh! So that is why people shortboard!"

Since then, I've gotten ton of great rides on that board. I've figured out how to pump it down the line, stomp the tail, and even throw a little spray. But although I've had some pretty good drives off the lip, I don't think I've gotten it fully airborne; the fins have yet to disengage. Perhaps I need a shorter board or bigger waves. More likely, though, I just need more practice. That, I will find it a pleasure to try!

The Transcendental Value of Consent

2009-03-27T13:55:00.000-07:00

Consent plays a prominent role in moral reasoning. I here offer a new, transcendental argument for the moral value of consent: Because an attempted justification aims, by definition, to obtain its audience's consent, justifications presume the moral significance of consent.

Students of philosophy tend to associate transcendentalism with Immanuel Kant, who argued against metaphysical skepticism on grounds that reason necessarily presumes both time and substance. Kant had no monopoly on "transcendental," however, which simply describes a particular form of argument. A transcendental argument begins with an uncontroversial fact, adds a proposition that necessarily follows from that fact, and concludes in support of the proposition. Following that form, the transcendental argument for consent's moral relevance runs as follows:

1. A justification aims to win the consent of its intended audience.
2. If a justification aims to win the consent of its intended audience, then the argument's efficacy covaries with the consent of that audience.
3. Therefore, justification presumes the value of consent.

This argument for consent's moral relevance begins with a (supposed) truism about the nature of justification. Readers who regard step one as an obvious truth can skip to step two without delay. Some might doubt its truth, however; in particular, a skeptic might counter that justifications sometimes aim to mislead their intended audiences, as when political leaders conspire to mislead gullible citizens about the causes of social unrest, blaming foreign provocateurs rather than native disaffection. In such a case, however, we cannot properly say that the justification aims to win the consent of the governed; it aims, rather, to win their ignorant acquiescence.

The claim made in step two of the transcendental argument for consent's role in justification might, like the claim made in step one, strike many readers as obvious. As long ago as Aristotle, philosophers have regarded the end, or teleos, of a thing as a fair gauge of its proper function. On that reasoning, if a justification (or, more properly, the person offering the justification) aims to win the consent of a particular audience, we can judge whether or not the argument succeeds by measuring the consent that the argument rouses.

The third step of the argument for the moral relevance of consent follows as a matter of logic from the first two steps. Even hardcore skeptics do not trouble themselves challenging modus ponens, so perhaps we could stop here. As a safeguard against sophistry, however, let us double-check whether the argument's conclusion—that justification presumes the value of consent—conforms with common sense.

Note, first, that an argument nobody accepts cannot work as a justification. We thus laugh off the arguments, no matter how internally consistent or ardently pressed, a madman makes when he claims the right to rule the Earth. Because his argument wins nobody's consent, nobody regards it as sufficient justification for his coronation. Note, next, that we commonly regard informed consent as adequate justification for imposing far-ranging conditions on those who accept them; we hesitate to second-guess another's pursuit of happiness. Lastly, note that we tend to recognize exceptions to that rule only in defense of consent itself, as when we refuse to enforce an agreement to submit to slavery, when we deny the power of fraud to justify a transaction, or when, far from praising a mugger for successfully inducing his victim to give up her purse in exchange for not losing her life, we condemn his acts as coercive and unjustified. Logic and experience alike thus suggest that we judge an attempted justification in terms of whether or not it wins the consent of its intended audience. Unsurprisingly, the plain meaning of "justify" conforms to that understanding.

[NB: The foregoing comes, after various edits, from Part I.B. of Graduated Consent Theory, Explained and Applied, Chapman University School of Law, Legal Studies Research Paper Series, Paper No. 09-13 (March 2009) [PDF].]

A Call for Citizen Courts

2009-03-18T15:31:00.000-07:00

It stands as a fundamental principle of justice that we cannot entrust one party to unilaterally judge its disputes with other parties. This poses a problem for the resolution of disputes between a State and those subjected to its legal jurisdiction. How impartially can agents of the State, acting as the judges of its courts, decide such disputes? "Not well enough," citizens and residents might worry. It thus looks at least unwise, and arguably unjust, to give federal authorities exclusive jurisdiction over disputes that call for applying the U.S. Constitution.

If we view the U.S. Constitution as a contact—a standard form agreement offered on a take-it-or-leave-it basis by an awesomely powerful government to a comparatively powerless individual—we cannot help but note the glaring inequity of letting only federal authorities decide questions of federal power. No just court would enforce a standard form agreement between grossly unequal parties, imposed by one on the other under conditions that raise serious doubts about the offeree's consent, that lets the all-powerful offeror alone decide disputes arising under the agreement. A clause reading, "I have the sole power to interpret this agreement," reeks too much of substantive unconscionability to win a court's approval. Indeed, the patent unfairness of such a clause cannot help but raise procedural doubts about whether the parties bargained for an exchange at all, undermining the enforceability of the entire agreement.

Happily, we can easily read the U.S. Constitution to avoid the vice of self-judgment. Its plain text by no means mandates that only federally employed judges can decide the scope of federal power. . . . We thus remain at complete liberty to adopt this remedy for self-judgment: Decide disputes between the federal government and other parties under the same arbitration procedures that private parties customarily use in deciding their contractual disputes. In other words, we should establish Citizen Courts.

A Citizen Court would arise at the option of any party to a legal dispute with the federal government being heard by a federal court. Each party—including the federal one—would choose one judge. Those two judges would then agree on a third. Together, the panel of three judges would decide the parties' dispute. Rather than leaving questions about the power of the federal government solely in the hands of federal agents, therefore, a Citizen Court would rely on judges to which the disputants have consented. A Citizen Court would help to remedy the partiality of federal courts and, thus, would offer more justifiable judgments.

[NB: The foregoing comes, after various edits, from Part III.B.3.c. of Graduated Consent Theory, Explained and Applied, Chapman University School of Law, Legal Studies Research Paper Series, Paper No. 09-13 (March 2009) [PDF].]

Original Reasons for Non-Originalism

2009-03-15T11:43:00.000-07:00

Although some of my closest friends might respond with expressions of fury and disappointment, I am coming out of the closet on originalism. I am not convinced that we should interpret the Constitution's text to mean what those who ratified it thought it meant, over 200 years ago. Instead, I think we should favor the plain, present, public meaning of the Constitution's text, resolving any ambiguities in favor of individual liberty.

Given the popularity of originalism among self-proclaimed libertarians and conservatives, my view risks raising some hackles among the very people with whom I so often agree in questions about the constitutional limits on government action. So be it. Originalism's foundations have always seemed pretty shaky, to me, even though I usually like the theory's results. It has taken me some years to formulate a different, and I think much more solid, foundation for resolving questions of constitutional meaning. I describe that new approach in a working paper, Graduated Consent Theory, Explained and Applied, Chapman University School of Law, Legal Studies Research Paper Series, Paper No. 09-13 (March 2009) [PDF]. For a snapshot view of the theory, consider this figure from the paper:

That may look familiar, given that I earlier blogged about The Scale of Consent, a working paper that, in revised form, constitutes one part of this larger paper. Rest assured, though, that this later work has a different, and more ambitious goal. Here is the abstract:

We often speak of consent in binary terms, boiling it down to "yes" or "no." In practice, however, consent varies by degrees. We tend to afford expressly consensual transactions more respect than transactions backed by only implied consent, for instance, which we in turn regard as more meaningful than transactions justified by merely hypothetical consent. A mirror of that ordinal ranking appears in our judgments about unconsensual transactions. This article reviews how a wide range of authorities regard consent, discovering that they treat consent as a matter of degree and a measure of justification. By abstracting from that evidence, we can outline a theory of graduated consent. This article concludes by testing a graduated consent theory against such problems as enforcing standardized agreements, justifying political coercion, and reading a constitution. In those and other applications, a theory of graduated consent can help to advance legal, moral, and economic reasoning.

If I don't sidelined by other, more pressing obligations, I'll post here some excerpts from Graduated Consent Theory. It offers a number of original (but not originalist!) arguments, which I'd like to air for commentary. I plan to publish the paper in a law review and want to make sure the best possible version makes it into print.

The Problem with Rational Expectations in Macro

2009-03-11T17:37:00.000-07:00

I'm not much of a macroeconomist, which is why I haven't had much to say about the current financial crisis and recession. But I did have to take the standard macro courses in grad school, and I remember having one major methodological objection to the rational-expectations models we were learning at the time. Arnold Kling nails it:

Economist X has one model of the economy. Economist Y has another model of the economy. In X's model, people believe in X's theory. In Y's model, people believe in Y's theory. It is logically impossible for economist X and economist Y to inhabit the same universe! Yet they do. This tells me that the axiom of rational expectations is too strong.

Exactly. But notice that this is not a criticism of the rationality assumption. Nor is it a criticism of incorporating expectations into an economic model. Neither component of the label "rational expectations" was the problem. The real problem was the additional assumption, rarely stated explicitly but applied repeatedly when solving the models mathematically, that all economic actors shared the economist's model of the world. And that's manifestly false if even economists don't all share the same model.

I sometimes wonder (idly, with no intention of doing the research to find out) if any macroeconomist has constructed a model in which the modeled agents make rational decisions based on assumptions that differ from those of the model.

The Singles Map

2009-03-02T17:50:00.001-08:00

Richard Florida has posted a nice map (originally from National Geographic) showing which cities have the greatest numerical disparity between single men and single women. It appears that I'm in a pickle, being a single guy in L.A., which has the largest excess of men over women.

But wait a minute... the spots on the map are based on absolute differences, not scaled for population. It looks like Las Vegas has about 20,000 more single men than women, a difference that constitutes about 1% of the Las Vegas region's population. The L.A. region has a larger difference of 40,000, but that constitutes only 0.3% of the region's population. (It would be even better to take the ratio of men to women in each region, but I don't have that data.)

Also, shouldn't we take demographics into account? I'll bet a lot of those single women are aging widows. Notice that the retirement mecca of Miami has a rather large female-over-male disparity. (I'm reminded of this old post about where to find single women.)

Adverse Selection in BDSM Clubs

2009-02-14T18:15:00.000-08:00

In last week’s Savage Love Podcast, Dan Savage responds to a 22-year-old female caller who digs BDSM. Her problem is that when she goes to BDSM clubs, she can’t find any young, attractive men. Instead, she mostly finds creepy, gross, dirty old men. In answering, Dan says:

[T]here’s a lot of attractive people into S&M, they’re just not necessarily at the BDSM clubs. … A lot of attractive people will dip in for a minute and say, “Wow, y’know, everybody here is way out of my league -- way, y’know, under my league.” And they don’t tend to come back, which makes the problem worse when the next objectively hot hottie comes along.

To which my reaction was, of course, “Adverse selection! Dan’s talking about an adverse selection problem!”

But this isn’t your run-of-the-mill adverse selection, which usually happens in a context of asymmetric information. For instance, adverse selection can happen in used car markets because sellers know more about the quality of their cars than do buyers. As a result, sellers have to assess used cars by their average (not individual) quality. But in the BDSM club, one can quickly assess the age and hotness of specific people (or so Dan’s caller leads us to believe). So why can’t the hots simply pair up with other hots, and the nots with other nots?

The problem arises because people choose where to go based on their expectations about the quality distribution. If hot people into BDSM think there’s a reasonable likelihood of finding other hot people at the BDSM club, they will go there. If not, they will go elsewhere. And by not attending, they reduce the likelihood of hot people being there, thereby inducing other hot people not to attend either. The resultant unraveling leads to a club filled almost entirely with icky (or at least unimpressive) people.

So why doesn’t this problem happen at all clubs, not just the BDSM clubs? Well, to an extent it does. In some bars, you won’t find many attractive people. But there are other clubs filled with attractive people. You might expect the same kind of sorting to happen with BDSM clubs. The problem, I suspect, is caused by thin markets -- that is, markets in which the number of players is too small to generate the usual efficiency gains. People into BDSM are, I assume, a relatively small fraction of the general public; nevertheless, there are enough to create a demand for BDSM clubs, at least in large cities. But multiply the fraction of people into BDSM by the fraction of people who are attractive (by some standard of hotness), and you get a fraction small enough that it’s hard to get a thick market going. As a result, potential club-goers must consider the possibility that there might not be any attractive targets on any given night, and that leads to adverse selection.

I have not seen adverse selection explicitly connected to thin markets in any textbook I can recall, though a quick Google search for both terms pulls up a number of papers that appear to bring them together.

Did Prop 8 Divorce Anybody?

2009-02-08T15:03:00.000-08:00

Whew. It’s been a long time since I posted anything here, but this video (h/t to Julian) has been on my mind:

"Fidelity": Don't Divorce... from Courage Campaign on Vimeo.

My reaction, like Julian’s, was to get just a bit teary-eyed. If you can look at these photos and still oppose gay marriage, I think your moral intuition is broken.

But at the same time... I really wish that no one, gay or straight, invested state-sanctioned marriage with so much emotional significance. Did Prop 8 actually divorce anybody in the emotionally or spiritually relevant sense? No. I figure that most of the loving couples shown in the video are still together (or at least, they’re as likely to be still together as heterosexual married couples). There is no law preventing gay people from having marriage ceremonies, celebrating anniversaries, presenting themselves as spouses, and so forth. Churches that permit gay marriage can continue to marry same-sex couples. (And churches that oppose gay marriage could refuse to marry them even before Prop 8.) The only question is whether the state ought to formally recognize them.

State-sanctioned marriage does matter, for reasons relating to tax treatment, legal power-of-attorney, parental rights, and so forth. As a matter of civil rights and equal treatment, I favor state-sanctioned gay marriage -- at least until the state backs out of the marriage-sanctioning business entirely. But somehow “don’t take away our preferred tax treatment and legal power of attorney” doesn’t ring the same emotional bell as “don’t divorce us.” If we all viewed state marriage as nothing more than a standard form of contract with a few attendant privileges, maybe the anti-gay-marriage contingent would be less agitated over the whole thing to be begin with.

Physical (Re)Education 101

2009-01-18T08:26:00.000-08:00

My co-blogger and host, Glen, might object, but I'd argue that "agoraphilia" covers not just "love of markers," but also "love of the great outdoors." Surely, the meaning of "agora" reaches at least that far. Allow me, then, to update you on my adventures under the open sky; here, specifically: surfing.

I've continued the training program that I began during my sabbatical, about year ago, and have gotten fairly competent on my 6'10" hybrid fish. I've also put a lot of time into figuring out my newest board, a 7'2" Channel Island M13, and had some great rides. These days, I surf those two boards almost exclusively. My wave count has improved a lot and I'm starting to get a handle on pumping for acceleration, cut-backs, and sometimes even throwing a little spray. I've yet to get any air, though.

I'm a little worried that if I go back to longboarding I might suffer a relapse, and put my hard-won shortboarding skills at risk. The last few times I've taken out my longboard—a performance-shaped 9-footer—I've thus limited myself to fin-forward paddling and takeoffs. I'm getting OK at spinning it, but I still haven't figured out how to cross-step back to regular footing. Instead, I just finish out my (usually short) rides goofy-footed.

Today, though, I just might let myself indulge in some good old fashioned, straight-up longboarding. I'm heading to Church's with my Marine buddy (who can use his pass to park us right on the beach) and we're expecting a mackin' swell. He always longboards, and it'll be nice to hang with him outside, picking off the bigger sets. Besides, I think I've earned a gravy session; yesterday, for the first time ever, I surfed Lowers! The swell had not started showing, so it wasn't crowded, and I got some good rides on the small but well-shaped waves. It took me over ten years of preparation, but I finally can say I've shortboarded one of the world's premier breaks!

I might say more about that preparation—which has included special trail running and gym exercises of my own devising—in a later post. And as long as I'm covering physical training, I should probably throw in an update on my semi-prone bike, which I recently took out of storage, upgraded, and put through some test rides. Right now, though, I've got to saddle up for the first big winter swell of the season!

Anarchist Chess

2009-01-07T01:54:00.000-08:00

My boy, Kai, joined his school's chess club this fall and has ardently plunged into learning the game. He enjoys setting up the board next to his mom's favorite reading chair and playing both sides of lively matches, complete with violent captures and Star Wars sound effects.

At only five years old, Kai has a long way to go before he masters chess. Yet I think he has already figured out something that a lot of adults don't understand. Running from his chess board to my side, the other day, Kai announced with glee, "I was playing myself and I captured my king but I just kept playing without him!"

The Scale of Consent

2009-01-01T11:07:00.000-08:00

I recently posted to SSRN a working paper, The Scale of Consent, a copy of which you can download here. Here's the abstract:

We often speak of consent in binary terms, boiling it down to "yes" or "no." In practice, however, consent varies by degrees. We tend to afford expressly consensual transactions more respect than transactions backed by only implied consent, for instance, which we in turn regard as more meaningful than transactions justified by merely hypothetical consent. A mirror of that ordinal ranking appears in our judgments about unconsensual transactions. This working paper reviews how legal and other authorities regard consent, revealing that they treat consent as a matter of degree and a measure of justification. The scale described here plays a vital role in a larger project, one that will also explain consent's importance and apply graduated consent theory to such longstanding puzzles as the enforceability of standard form agreements, the justifiability of political coercion, and the meaning of a constitution. As a preliminary to that project, this working paper explains how consent and justification vary by degree and covary in value.

The working paper includes a number of illustrations that quickly sum up the core ideas; here's one:

As the abstract suggests, The Scale of Consent offers but one part of a larger writing project, tentatively titled, Consent by Degrees, A Theory, Explained and Applied. I spun off this working paper because Consent by Degrees was growing unwieldy and I wanted to get some feedback before committing it to print. I hope you will see fit to comment on it.

I'm excited about this foray into consent theory, which I think friends of liberty will find useful. I should note, however, that the theory of graduated consent I'm working up does not clearly support originalism, a theory of constitutional interpretation dear to many libertarians. We can debate that later, though. The Scale of Consent aims simply to build the theory's engine, leaving the chassis, the wheels, and the wild road trip for later.