Fishy Figures

Chatterbox at Slate is fascinated by this New York Times article, which claims to show that -- once all forms of taxation are taken into account -- all income groups in this country pay approximately the same average tax rate. I won't take issue with that claim, because it might well be true; after all, Social Security and other payroll taxes are well known to be regressive, as are excise taxes aimed at products disproportionately consumed by the poor (such as liquor and tobacco).

What's been bothering me, though, is this chart attached to the article, which purports to show the average tax rates for all income quintiles. Notice that the very highest percentage is still only 19%, implying that nobody in this country -- neither the rich nor the poor nor the middle class -- pays more than a fifth of their income in taxes of any form to any government. Now, that sounds awful fishy to me, because the usual estimates run at least into the low thirties. According to the Tax Foundation, Tax Freedom Day in 2002 fell on April 27 last year, because Americans paid 32.1% of their income to federal, state, or local government. (April 27 is just about 32% of the way through the year, you see.)

What could explain the discrepancy? I must confess that I've failed to nail down the answer. I figure it has something to do with different sources of data; the NYT graph draws on the BLS's Consumer Expenditure Survey, while the Tax Foundation's figures come from the BEA's National Income and Product Accounts. Also, they are probably using different notions of what constitutes "income." The Tax Foundation uses Net National Product to calculate Tax Freedom Day. I have no idea what the NYT article used, but for it to have produced lower average tax rates, it would have to have employed a broader definition of income. But NNP is already pretty broad (broader than, for instance, Net Income or Personal Income, two other figures provided by the NIPA). GNP and GDP are larger, but not, I think, enough larger to justify the substantial difference in implied tax rates.

The discrepancy might have something to do with exclusion/inclusion of taxes on business. But in order for the NYT's figures to result in lower average tax rates, they would have to rely on a *narrower* definition of taxes -- and that doesn't make sense, because the whole point of the article was to discuss the burden of taxes from the most inclusive standpoint possible, taking into account all forms of double taxation. The chart's subtitle starts with, "Taking all types of government taxes into consideration…," implying an inclusive approach. Including sales taxes, property taxes, sin taxes, etc., while leaving out business taxes would be disingenuous at best.

So I'm still stumped on finding an explanation for the discrepancy. I will say this: something is mighty strange about the Consumer Expenditure Survey's results. For instance, this table indicates that the average survey respondent had pre-tax income of $47,507 and after-tax income of $44,587, implying a tax rate of only 6.2%. Even in the richest quintile, the table implies only an 8.7% tax rate. As that short dude in "The Princess Bride" would have said, "Inconceivable!" (Of course, he eventually found that word didn't mean quite what he thought it meant.)

Like most disputes of this nature, I imagine this all comes down to a matter of definition. Most likely, it has something to do with the exclusion/inclusion of certain types of tax, plus some bizarre definition(s) of income, plus the unavoidable weirdness that comes from any survey-based data. But damned if I can pin it down. As I've wasted far more time thinking about this than I can afford, I'm posting it here in the hope that someone else will figure it out.

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Roundup

To make up for my lack of bloggic inspiration over the last few days, I thought I’d post links to the best of recent posts on other people’s blogs.

Julian gives another characteristically dense (as in thick with insight, not thick-headed) defense of key libertarian ideas; specifically, the distinction between “the good” and “the right,” and the virtue of simplicity in moral and legal rules.

Amy’s really been on the job lately, making a series of great posts over the last couple of weeks. Here are two longish-but-worth-it samples: a discussion of how the loss of personal responsibility leads to regulation of personal lifestyles by way of moral hazard, and a compilation of evidence of feminism hijacked by feminists. I also liked her snarky letter of recommendation for a creationist.

Juan Non-Volokh of the Volokh Conspiracy explains why reducing the number of SUV’s on the road would probably not reduce our reliance on oil from the Middle East -- indeed, it would probably increase it. The short version: the first oil wells to shut down are the highest cost oil wells. Guess what: the highest cost oil wells are located in the United States, North Sea, etc., not the Middle East.

Finally, here is a great list of insults and brickbats from One Girl’s Life. My favorite: "How about never? Is never good for you?" Thanks to Mark Kleiman for the pointer.

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You Know You Live in an Autocracy When...

...the current president's birthday is a cause for nationwide celebrations.

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What I Don’t Get About the Lott Controversy

Here’s what’s been nagging me about the John Lott controversy (if you need the summary, click here). There’s no doubt that Lott’s reputation, academic and otherwise, will suffer from recent events. At a minimum, we can say (a) that he shouldn’t have relied on results from a survey that he knew he couldn’t substantiate, and (b) that the sample size for the survey, if it was indeed conducted, was too small to justify the result he stated with any degree of confidence. In addition, it’s pretty creepy to pretend to be a fictional former student who defends your integrity while writing glowing reviews of your book.

But here’s what bothers me. Some of Lott’s critics are using these recent events to discredit or dismiss Lott’s famous result – publicized in _More Guns, Less Crime_ – showing that concealed-carry laws reduce the crime rate in states that enact them. Mark Kleiman, for instance, says we should regard Lott’s celebrated conclusion as “probably false” because Lott can no longer be trusted. Keep in mind that the concealed-carry study was quite distinct from the alleged survey (which concerned with the frequency of defensive gun uses in which shots were never fired). Still, if we had to blindly trust Lott in order to accept his concealed-carry study, as would be true if the results could not be independently verified, then the critics would have a point.

However, it is my understanding (and I’m sure someone will correct me if I’m wrong) that Lott provided all of his data and primary sources to anyone who asked for them. Analysts who used these data with Lott’s econometric specifications reached the same conclusions. Analysts who used these data with different econometric specifications (for example, this paper by Rubin and Dezhbakhsh, later published in AER, which used the 1992 portion of Lott’s data) sometimes reached different conclusions. Now, there’s a legitimate debate to be had on the appropriate specifications and statistical methods, but it’s a debate that was already going on prior to the survey controversy, and it’s not the kind of debate in which academic reputations are on the line. The point is that if Lott provided his data and sources to others, there’s no issue of fabrication here. If people want to refute Lott’s claims about concealed-carry laws, they’ll have to continue attacking his work on the merits. The survey fracas is not, or at least should not be, a silver bullet.

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Osama All Fears

Al Jazeera has just released an audiotape that (allegedly) has the voice of Osama bin Laden encouraging Iraqi Muslims to fight against the United States and to conduct suicide attacks against Americans. “We are following with great concern the preparations of the crusaders to launch war on the former capital of Muslims [Baghdad] and to install a puppet government,” the speaker says, adding, “Fight these despots. I remind you that victory comes only from God.”

The advocates of war with Iraq have already taken the bait. Colin Powell, once a hold-out for peace in the Bush administration but now a team player, informed a Senate panel about a tape (presumably this one) in which bin Laden “speaks to the people of Iraq and talks about their struggle and how he is in partnership with Iraq.”

Now, does anyone actually think that Osama bin Laden, orchestator and coordinator of the devastating 9/11 terrorist attacks, is stupid? Is it plausible that bin Laden thought he could release this tape without Americans hearing it? Of course not. Bin Laden was not speaking for Iraqi ears only, or even primarily. He knew America would hear the tape, and anything he says on it must be interpreted in that light.

And what could bin Laden hope to accomplish with the statements therein? The man’s explicit objective, made clear in all his words and deeds, is to bring about a holy war that will topple secular governments and replace them with Islamic theocracies. Bin Laden has no love for Saddam Hussein, because Hussein’s secular dictatorship is exactly the kind of Middle Eastern government that bin Laden opposes. And he hates the United States even more. A war between the U.S. and Iraq would be the best outcome bin Laden could possibly imagine, as it would bring down Hussein’s government while arousing even greater anti-American sentiment among Muslims.

Osama bin Laden is one wily bastard. The message on his tape goads Muslims to fight against the U.S., while simultaneously adding weight to the single argument most likely to generate American support for a war: the suspicion that Hussein is in league with terrorists like bin Laden himself. And judging from Powell’s reaction, the administration is falling for it, hook, line, and sinker. But if Hussein were really supporting Al Qaeda, then bin Laden would want to avoid war between Iraq and the U.S. in order to preserve his supply line, and making incendiary statements like those on the tape would constitute the worst of strategies. Does anyone really believe that Osama bin Laden is that poor a strategist?

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On the Virtue of Old Musty Tomes and Their Authors

Brad DeLong pleased me greatly by posting this fascinating list of quotations from Adam Smith a few days back. But when challenged by a reader to explain why one should ruminate on the thoughts of dead economists and philosophers, when their thought has been incorporated in and corrected by the work of subsequent thinkers, he gave this disappointing reply. The gist of DeLong’s response is that dead thinkers are like an extended circle of entertaining friends.

Well, if that’s the best reason to ponder the works of old dead dudes, then I’ll pass. I can do without the stilted language and dated examples, and my real live friends are more entertaining. But I can think of at least three better reasons to read the old economists and philosophers.

First, the notion that “all that was good in the ancients is included in the moderns” is pure hubris. It would be comforting to think that the intellectual marketplace works with perfect efficiency, that every academic debate settled is settled correctly. Comforting, but unlikely. The theories of social science are accepted and rejected as often on the basis of politics as on the basis of objective truth (even supposing there’s an objective truth to be had). The macroeconomic theory of Keynes, for instance, was accepted in large part because people were looking for escape routes from the Depression, and Keynesian theory promised one. Keynesian economics eventually died, with much credit due to the stagflation of the 1970s, and was replaced by rational expectations and real business cycle macro theories. Later, Keynes was resurrected by economists who cast his arguments (or at least his conclusions) in the form of rational-expectations-with-sticky-prices. At the risk of invoking Hegel and Marx (two old dead dudes I can pretty much do without), I would suggest social scientific thought is a dialectic, not a monotonic approach to the truth. This is not to say I don’t think there is such a thing as truth -- only that finding it is more problematic than the efficient-marketplace-of-ideas hypothesis implies.

Second, even if our new theories are more correct than the old, that doesn’t mean they’re comprehensive. Not all topics that interested the ancients have been fully explored by the moderns, as the choice of what topics to examine often follows the issues of the day. To take just one example, a coauthor and I recently wrote a largish paper on the subject of slippery slopes in law and ethics, and we found that some of the best comments and examples on the topic came from Herbert Spencer, who keenly observed the ways in which political choices made in the past can ease the way for related choices in the future. I doubt that my coauthor and I could have duplicated all of Spencer’s insights without reading him.

Third, analysts are often guided in their thinking by the methods most popular among their peers. For at least the last 40 years, the economics profession has been dominated by mathematical modeling. Now, I wouldn’t claim (as do some people I know) that mathematical modeling is undesirable -- it is quite appropriate for many tasks, the most important of which is aiding logical consistency and, as an added benefit, keeping the post-modernists at bay. The problem is that, as the old saying goes, when all you have is a hammer, everything looks like a nail. Economists are drawn to those topics that are most tractable in mathematical terms, which sometimes leads them to ignore topics (such as radical uncertainty, radical ignorance, and systemic complexity) that mathematical models cannot (at present) explore fully without oversimplification. The old philosophers, being neither gifted nor burdened with the high-powered mathematical tools we have today, had no qualms about attacking issues with pure logic and reason. They also had little respect for the artificial lines between disciplines, and ranged freely over a variety of areas, drawing connections that might never be drawn by modern thinkers trapped in their pigeonholes. As a result, their work can be a treasure trove for modern analysts trying to break new ground and cross disciplinary borders.

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More on Grade Inflation

Reader Lucas Wyman notes a specific example of how grade inflation has helped to drain resources from science and math:

Last fall, I found a course description book being thrown away in a stack of books by a retiring faculty member. The catalogue was from 1983 (the year I was born), and it contained a great many interesting surprises. The mathematics department offered a second course in logic which covered model-theoretic results and set theory, a course in point set topology, a course in algebraic topology, one in complex analysis, measure theory at the undergraduate level (now considered graduate), several courses in theoretical computer science, and what is now two classes in abstract algebra was only one class. I asked my faculty advisor why there had been such a change (he started in 1986), and this was his explanation (paraphrased from memory and condensed substantially from several conversations):

"At the time we had almost 400 majors in the department with nearly 150 of them in pure math, but now we have about 300 majors with 50 in pure math. Changes in the [state] teacher requirements (for high school) forced us to restructure the algebra class since a decent course would be too hard for most HS teachers. The reason that we lost students is both that a lot of bright people went into computer science, and our program was considered too hard, so that people started going to easier majors. As we were forced to stop running courses, people began to come back because the program requirements became easier, and it's been sort of a spiral down since."

Seems to jibe pretty well with your experience and intuition...

Yep. The really difficult part, from the perspective of a professor who'd like to reverse the trend, is that you cannot make the change unilaterally. If you started grading your classes harder than others, you would just be punishing those students who took your course instead of someone else's -- and probably reducing your future class sizes. In addition, you'd probably be lowering your evaluations relative to other instructors. I think this situation has many features of the classic prisoners' dilemma.

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The Invisible Foot Strikes Again

Mark Kleiman provides a comprehensive breakdown of the issues raised by the OMB's threat to give the DEA only a small budget increase because of its gross inefficacy. But I prefer Amy’s quick-and-dirty bottom line:

So remember folks, if you're a totally ineffective government agency doing a job that shouldn't be done in the first place, you might only get a small amount of extra money, like say a few million dollars.

And that, of course, is what happens when government works *well*. The usual rule for bureaucracies is the worse you do, the more funding you get.

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Not Making the Grade

This article about grade inflation struck a chord with me, since I have to deal with grade inflation on a daily basis. The following observation rang especially true:

Unfortunately, grade inflation is not costless. One consequence is that students are discouraged from taking science courses, where the nature of the subject matter has held down grade inflation, in favor of those in the humanities, where it is rampant. Over time, this has caused universities to drain resources from science programs.

Now, I don't know if it's actually true that resources have been drained from science programs (has there been a study?), but it definitely fits with my intuition and personal observation. Some disciplines, including my own, have a greater inherent resistance to grade inflation than others. It's easier to mark someone down for a clear error in math or graphing than to mark someone down for awkwardness (though not actual grammar errors) in writing. When there are some answers that are clearly right or wrong, not just a matter of opinion, grading standards are not as difficult to maintain.

Not surprisingly, the average grades are lower in economics and physics than any other department at my university (or so I've been told). And the students undoubtedly react by avoiding courses in subjects where the grading is known to be harder. If universities respond at all to the ebb and flow of student demand - and I think they do, though not with the speed and efficiency of for-profit organizations - then it's inevitable that resources will flow from the harder to the easier departments, other things equal. Of course, the other-things-equal assumption is important; if firms recognize the value of a good education in science and math, they will offer higher wages for students so educated, and that should increase the demand for the appropriate majors. Unfortunately, not all students are so far-sighted, and in any case, the grade differential still biases the selection of majors. Some students on the margin, who would have picked a math or science major if the grading were comparable, will choose the touchy-feely majors instead. So much the worse for them - and the rest of us.

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Return of the Muse

One of my favorite websites, Free-Market.Net, has risen from the ashes. After the demise of its parent company, the Henry Hazlitt Foundation, I wasn't sure Free-Market.Net would find a home - but fortunately, the International Society for Individual Society has rescued it. And as though to mark the occasion, they've resumed the Free-Market.Net Personal Update service, which until December 2002 had emailed me a daily list of web links on issues I specified. That service was my source for many blog topics, and I've been hurting for inspiration since then. I'm so pleased it's back!

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People Who Live in Glass Vaticans…

Good news -- the Vatican has given the thumbs-up to Harry Potter. The best part is the following quotation from Vatican spokesman Peter Fleetwood:

I don't think that any of us grew up without the *imaginary* world of fairies, magicians, *angels* and witches.

The emphasis is mine, of course.

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On a Lighter Note

Gene Healy provides a knee-slappingly funny deconstruction of smoking bans, as well as a pants-wettingly clever rejoinder to his critics. The short version: Smoking is cool. Dweebs and sissies who can’t handle the smoky atmosphere and stinky clothes lobby for laws that make it easier for them to hang out with cool people.

I, like Gene, am one of those non-smokers who has tried and failed to pick up the habit -- but who still recognizes the coolness of smoking. Its self-destructiveness, its “air of futility and tragedy” as Gene puts it, does not make smoking uncool -- on the contrary, the danger is precisely the allure. The people who would redefine smoking as “uncool” remind me of the elementary school teachers who tried to convince us that “Reading Is Cool!” and “Math Is Cool!” What a crock. Reading and math are useful, indispensable in fact, and (for some) interesting. But reading is not cool unless it’s Ken Kesey or J. D. Salinger; math is not cool unless you’re taking book. Point being, “cool” is not a universal word for anything good or desirable. It’s a specific attribute of things that, fairly often, are fun laced with some degree of danger. Trying to convince people otherwise is a good way to identify yourself as, not merely a dweeb or sissy, but someone who doesn’t even quite understand modern American slang.

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Federal Department of Lying to Your Kids

According to the Drug Czar… okay, hold on for a minute, I can't finish that sentence without inserting a quick rant. Doesn't the Constitution of the United States forbid the granting of titles of nobility? And is not "Czar" a title of nobility? Yeah, I know, "Czar" isn't the man's real title. It's really "Director of the Office of National Drug Control Policy." But nobody calls him that. And the fact that a government official in the American democracy is regularly referred to as a Russian monarch should give us pause, don't you think?

Back to the top. According to the Drug Czar, it's a good idea to lie to your kids about drugs -- specifically, about your own past use of drugs. I think Amy's take on this is exactly right, so I won't belabor it. I will, however, point out a couple of misleading claims in Czar John Walters's comments.

First, he says that parents who smoked marijuana "should warn their children that the dope being peddled today is much more potent than what the older generation smoked." While that's true, it erroneously implies that people who smoke now are getting more high than before, whereas in fact the evidence indicates that marijuana smokers seem to aim for a "target" level of intoxication, and now it just takes less weed to get there than it did before. (I found that out from Mark Kleiman's blog a few weeks or months ago, though his archives don't seem to be operative at the moment.)

Second, Walters says that "of the 6 million Americans undergoing drug treatment today, about 60 percent are marijuana-dependent." Notice the clever wording. He does *not* say that 60 percent of people undergoing drug treatment are undergoing treatment for marijuana. What the statistic really shows is that, for every ten people undergoing treatment for *some* drug, six of them also use marijuana. This is not surprising -- someone who uses crack might very well like weed, too. But the crack, not the weed, is most likely the reason they're in treatment.

I disagree with the Czar's notion that lying to and misleading your children is a good policy. But I'll give him this much credit: at least he's leading by example.

UPDATE: Mark kindly sent me the link to his comments on marijuana potency. Aside from the point above (that pot smokers seem to aim for a target high), it also turns out that Walters's factual claim about the potency per ounce is also bogus, for reasons Mark explains.

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Insert Monkey Pun Here: More on Evolution and Recommendations

Mark refers to the Texas Tech biology professor Michael Dini as a “fool” for his no-recommendations-for-creationists policy. That’s harsh. Mark himself admits that this policy might be appropriate if applied only to biology majors: “After all, you probably wouldn't recommend someone for graduate work in physics who insisted that Newtonian mechanics was ‘just a theory’ and held out for the Aristotelian theory of motion.” His complaint, then, must be based on the judgment – a factual judgment, I submit – about whether evolution is relevant in the practice of medicine. I tend to agree with Mark that it probably is not. But then again, Paul Orwin (quoted here by Eugene) points out some plausible connections between evolution and medicine – or at least between evolution and medical research. Even if one doesn’t agree with Orwin’s or Dini’s arguments, they hardly strike me as “foolish.” Honest, intelligent people can disagree here.

Mark puts the issue in terms of compelling recommendation-seekers to say something they don’t believe: “Handicapping someone in applying to medical school because he won't say something he thinks is false is mean and stupid, just as kicking a kid out of Scouting because he won't pretend to a belief in a Higher Power is mean and stupid.” Perhaps this is a reason for Prof. Dini not to make his policy public, lest students just give him the answer they know he wants to hear. But the honesty concern cuts both ways: if the professor truly believes – for whatever reason – that a student is not qualified, it is disingenuous for him to write a letter indicating otherwise.

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"I Cannot Recommend Her More Highly..."

Eugene discusses the fascinating case of a biology professor at Texas Tech who refuses to write recommendations for students who reject the theory of evolution. The case raises questions relating both to law and to academic ethics, and Eugene presents excellent arguments on both sides of both issues. Nonetheless, my strong inclination is to defend the professor’s discretion. Let’s set aside the issue of evolution versus creation, and just look at what it means to write a recommendation.

As a professor, I have to write recommendations fairly often, and it’s not a simple process. When you do it, you’re putting your name and reputation behind someone, saying to others that you think this person is honest, credible, and possessed of the necessary skills or talents for the position he seeks. (Unless, of course, it’s a *bad* recommendation – more on that below.) Writing a recommendation involves, to some degree or another, putting one’s own credibility on the line, and it necessarily involves the exercise of judgment.

Thus, writing a recommendation is not just another requirement of the job, like grading papers or having office hours. It’s making a statement about one’s own beliefs and judgment. Although it would be unacceptable for a professor to say (as one of my sister’s unfortunately said) that he will never write any recommendations at all, there has to be a very wide margin of discretion. To require someone to recommend someone whom they do not deem worthy is to remove all meaning from the word “recommendation.”

I think there is also a relevant practical consideration: there is no way to require that a recommendation be “fair.” As anyone who’s ever written or read a recommendation can attest, it is easy enough to damn a candidate with faint praise. For that matter, the letter writer could just use heavy and uninspiring language, so that the letter is less likely to have a positive impact. It’s rather like trying to compel an actor to perform the role of Hamlet – if he really isn’t inspired by the role, there’s no way to assure a good performance. Requiring professors to write recommendations seems likely to encourage them to write less-than-glowing letters for students who are better off asking someone else.

These considerations hold true even if the particular professor’s judgment is compromised in some way. In the present case, I think the professor is probably correct to doubt the scientific-mindedness of biology students willing to ignore the incredible array of evidence supporting evolution. On the other hand, he is likely mistaken that one’s perspective on evolution has much to do with one’s effectiveness in the medical profession. Yet that is his judgment, and judgment cannot truly be compelled. A policy that requires professors to write recommendations even when their convictions tell them otherwise will either (a) result in weak recommendations not worth having, or (b) result in strong-but-insincere recommendations that diminish the persuasive power of sincere recommendations.

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What Would Jesus Smoke?

Once again, the Office of National Drug Control Policy spent millions of dollars of your money to spread drug war propaganda during the Superbowl.

In one ad, “Ghost Train,” a man on a subway is haunted by ghosts of people killed in the crossfire of the drug war. Why are they harassing this well-dressed commuter? Because he bought drugs (the ghosts explain) and the drug dealers were fighting over drug money. In another ad, “Ghost Office,” a little girl killed in a bomb blast gives a guilt trip to a businesswoman who bought drugs – because the money ended up in the hands of terrorists. Both ads end with the message, “Drug Money Supports Terrible Things.”

This is something like punching holes in your neighbor’s gas line, and then blaming the explosion on your neighbor’s filthy cigarette habit.

There should be a parody of these ads that puts the blame where it really belongs. In the new version of the ads, when the commuter and businesswoman ask why the ghosts are blaming them, the ghosts should respond: “Because you’re a member of Congress, and you voted for the war on drugs. Your laws created huge black-market profits that lead to violence and death.” The ads should end with the message, “The War on Drugs is a War on People.”

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Linguistic Cosmos and Taxis

Eugene takes on the language police, and for the most part I agree with him. Language is, as Eugene argues, a “grown order” that evolves over time. New usages emerge and old ones die, in response to the real needs of real language users. Trying to freeze the language in place -- or worse yet, turn back the clock to some earlier version of the language -- is a pointless and (to the rest of us) annoying endeavor.

But I do have a nit to pick, as I think Eugene’s criticism goes too far. He says:

Linguistic prescriptivism (dictionarymakers recording what they think should be the usage, not what is the usage), is a "made order" -- a judgment of a small group of people selected for the purpose of rendering their judgment. Made orders are sometimes useful, for instance in the setting of technical standards. But as to language, I think the grown order approach is far more likely to yield a language that is genuinely responsive to users' needs than the made order approach.

Yes, grown orders (also known as spontaneous orders) are generally more responsive than made orders. But does any form of linguistic prescriptivism necessarily fall in the latter category? Unless the prescriptivists actually attempt to enforce their standards on the rest of us in the manner of the French Academy, the power of the prescriptivists to influence the language is dependent on the willingness of other speakers to follow their lead. In other words, the prescriptivists' admonitions have their place within the grown order of language. If you want a real example of a made order in language, try Esperanto.

Consider the analogy with the free market, another type of spontaneous order. The defining characteristic of this order is *not* the absence of hierarchy or deliberate organization; otherwise, we’d have to conclude that the existence of firms violates the principles of the market. The defining characteristic of the market order is the absence of an overarching authority with the ability to command specific outcomes. Within this decentralized framework, influential people and organizations may work to achieve specific outcomes on a voluntary basis. The linguistic prescriptivists are analogous to the managers of a firm who, upon observing a new competitor that claims to make a better mousetrap, stubbornly insist that the old-fashioned mousetrap is superior. And maybe they’re right; the real test is in the mousetrap-buying choices of consumers. Likewise, in language, the test of the prescriptivists’ prescriptions is their staying power.

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My Small Place in the Blogosphere

I find this amusing. I've created a couple of charts showing the number of hits on this website for each day and week since it creation. See if you can guess when I got linked by Instapundit.

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Milton's Paradise Folded, Spindled, and Mutilated

Radley posted this quotation from Milton Friedman almost a week ago, but it's evergreen. And here's the graphic version.

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And Who Says Accidental Gun Deaths Are All Bad?

I heard on the radio this afternoon that a man in Virginia (I think) accidentally shot and killed himself while trying to beat his dog to death with the butt of his shotgun.

UPDATE: And here's the link, courtesy of Eugene.

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Squeals on Wheels?

Today's (23 October) Dear Abby column is more interesting than usual. Read the letter for the full details; here's the adumbrated version. The letter writer has a friend with muscular dystrophy. He is mostly paralyzed and could die any time. Yet, like most men, he still has sexual needs. The letter writer arranged for his friend to have a date with a female "escort" -- yes, that kind of escort -- and the encounter apparently went quite well. But the man's parents (who care for him) were appalled, and they have banned the writer from seeing his friend. Now, this is interesting to me for a couple of reasons. First, like all libertarians, I think prostitution should be legalized. But I don't think prostitution is a "good thing." In general, I think it's a poor personal choice. I support legalization because (a) I think prohibition creates even greater harms, and (b) I am unwilling to substitute my personal moral judgment for that of another competent adult. Here, however, we have one of the rare cases in which I think prostitution is not just tolerable, but actually desirable. Abby gets it exactly right in her response:

It is wrong for a person in control to project his or her own moral values on another adult who is dependent. For parents to confine an adult child, to prevent that person from having relationships, and to discourage that person from living life as fully as possible is to me both cruel and ignorant. I would only hope that someone in your community who understands this could intercede and explain to Kent's parents that there is room for nontraditional relationships in cases like this one.

Second, there is a twist in the story that I left out above: when the writer contacted the escort service and explained the situation, the manager offered the escort's services for *free*. Does that mean this wasn't prostitution after all, because the price charged was zero? From a legal standpoint, I suspect this encounter was totally legit, unless the escort herself was still paid and the money came out of the business's general revenues. However, my understanding is that escort services usually handle only the "date" portion of an escort's business; the prostitution, if any, is left as a transaction strictly between the escort and her customer (so that the escort service is shielded legally). I think this case highlights the arbitrariness of a law that bans certain acts of sex simply because money is involved. What if, hypothetically, the escort service had not offered the service for free, but had instead offered a discount? Would it matter how big the discount was? In this case, it's hard for me to find a relevant moral distinction between sex for free and sex for a nominal payment. But perhaps I'm being misled by the fact that I think prostitution is desirable in this situation anyway. I'd like to hear someone who is opposed to prostitution make the case for a meaningful distinction.

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Glengarry Glen Ross

Eugene is excited about this list of name frequencies collected by the Census. I think it’s pretty cool, too. But in looking at it closely, I noticed something slightly misleading about it: alternate spellings of the same name are listed separately. Naturally, I noticed this because I looked up my own name in the list. “Glen” is the 188th most common male name in the U.S., at 0.094% of the male population. But “Glenn” is the 117th most common male name, at 0.167% of the male population. Adding these together, they constitute 0.261% of the male population, making Glen/Glenn the 68th most common male name (between Bruce and Brandon). Of course, that’s assuming that all the other names are distinct. But if we combine Shawn (92nd) and Sean (94th), we find that Shawn/Sean comes in 42nd.

And then there’s the problem of nicknames or related names. William comes in 5th, Billy comes in 73rd, and Bill 159th. Combining them, they jump past Michael (4th). But that’s not accounting for all the Mikes out there.

Since this is Census data, I assume that seeming nicknames might be the actual names on birth certificates. So arguably, these are not people with the same name after all. But on the other hand, many of the people categorized under the standard names may go by the nicknames. Given the subjectivity of deciding what constitutes the “same” name, I can’t fault the Census for taking the objective spelling-only approach.

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A Request for Bad Statistics

For an MBA course I’m teaching this semester, I will be giving a lecture on the use and abuse of numbers and statistics, and also a lecture on the use and abuse of tables and figures. I plan to structure both lectures in “greatest misses” format – using examples of people employing numbers and figures in bogus or misleading ways. If you’ve read Darrell Huff’s book _How to Lie With Statistics_, you know the kind of thing I’m talking about; unfortunately, Huff’s examples are rather dated, and I’m looking for more recent ones. I have lots of old examples in my head, but I really prefer documented cases – “I saw an article one time that said…” isn’t good enough.

So, I’m hoping to solicit my readers’ assistance. If you know of any good examples of numbers/stats/tables/figures being used badly, please send me an email. I need full references or webpage locations if at all possible. I’m looking for examples in various categories, including:

• Confusion of mean and median (or mean and mode, or mode and median). For example, it’s often observed that the average (i.e., mean) time it takes a woman to conceive a child is several months, but most women (i.e., the mode) conceive much more quickly – within a couple of months. The average is higher because of a small number of women who take a really long time to conceive.
• Confusion of absolute numbers with changes in numbers, or confusion of changes in numbers with percent changes in numbers. For example, during the 2000 election season I recall hearing that Houston’s air quality had actually gotten worse than L.A.’s – but it turned out that while Houston’s had gotten worse over time (compared to Houston before) and L.A.’s had gotten better (compared to L.A. before), L.A.’s air quality was still worse than Houston’s.
• Providing figures that are meaningless without a figure for comparison. For example, saying that some very high percentage (say, X%) of all traffic fatalities involve people not wearing seatbelts, without telling us what percentage of *all* drivers wear seatbelts. (If that figure were also X%, we might conclude that seatbelts have no effect!)
• Creating a pie chart that leaves out the “other” category. For example, showing a pie chart with market shares for only the top four firms in an industry, even though together they constitute only a fraction of the market.
• Creating a line graph that does not show a trend over time, but instead connects unlike things. (“What’s this big jump in the line show? Oh, it shows the jump in GDP you get when you go from Mexico to Japan.”)

This is not a comprehensive list, of course. I’d appreciate any ideas or contributions you have.

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My Chickens Come Home to Roost

So when I moved to a new apartment back in July, I was excited by the prospect of a new telephone number that might actually spell something. The Pacific Bell customer service representative gave me three choices of phone number, and some back-of-the-envelope scribblings revealed that one of them was 761-AUTO. I thought that was reasonably cool, so I picked it.

I'd had the number for about two days before I left town for a week-long seminar. I came home to an answering machine with about 30 messages -- all people wanting to advertise their cars in Auto Trader Magazine, which apparently had the number before I did. Some of the callers were pretty steamed about my failure to get back to them. "What the FUCK, man," said one of them, "why don't you people pick up your FUCKing phone???" As message after message rolled out of my machine, Olivia laughed her ass off at my expense -- since I had, of course, brought this on myself. Shortly thereafter, I called Pac Bell and got my phone number changed. End of story… or so I thought.

Last week I received a form letter from Pacific Bell -- now SBC Pacific Bell, and soon to be just SBC -- informing me that, due to my poor payment history, certain restrictions were being placed on my account: I must pay all bills within 15 (not 30) days, and I can't run up more than $200 in charges without special permission. How strange, I thought. I knew I'd occasionally paid a bill a day or two late, but hardly often enough to justify a deadbeat classification. So I went looking through my old bills and online banking records. It took a while to figure out, but I finally realized that Pacific Bell hadn't received one of my online payments, even though my bank said it had cleared. I'd continued to pay the additional monthly charges, but the amount due on my September bill continued to hang around for three months, seemingly unpaid, and presumably lousing up my credit. And what, you ask, happened to that errant payment? Turns out that after getting the 761-AUTO number changed, I'd never altered the account number in my online banking settings. Somehow the phone company still managed to register my subsequent payments, but that first payment under my new (post-AUTO) number got lost in the vortex.

I tried to sort all this out on the phone, but I still have to get documentation from my bank to prove the payment was actually made. Once I straighten things out with the phone company, I suppose I'll have to contact the credit agencies, too. And to top it all off, my current phone number doesn't spell a damned thing -- too many 1's and 0's, I'm afraid.

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Mutatis Mutandis

Mark Kleiman makes a plea to libertarians and libertarian-leaning folk to flee the Republicans and join forces with the Democrats: "And when Glenn Reynolds … figures out that, while most Democrats take anti-libertarian positions with some discomfort, and largely out of perceived political necessity, the current Republican crew is deeply and abidingly anti-libertarian in the personal sphere and not really opposed to corporatism in the economic sphere, I'll be happy to welcome him as well."

Aye, but here's the rub: the current Democratic crew is deeply and abidingly anti-libertarian in the economic sphere and not really opposed to paternalism in the personal sphere. Much as I like Mark, he himself provides a nice example of the latter point - consider, for example, his opposition to the notion that "the blamelessness of the tempter follows from the responsibility of the tempted." Summary version: I persuade you to eat one more jelly doughnut, and you do so, to the detriment of your waistline. According to Mark's theory, I may be partially to blame for your eventual heart attack, especially if I'm a big bad corporation. Mark is not a politician, of course, but we all know how this kind of position gets translated into policy when the Democrats have their way.

Not that the Republicans are any great shakes. Fact is, neither party is abidingly libertarian, and neither can be relied upon to defend liberty even in the areas where we expect them to. Republicans are supposed to be for free enterprise, and then Bush supports the steel tariff. Democrats are supposed to be for freedom of expression, and then Bill Clinton signs the Communications Decency Act. Mr. Hobson, what horses do you have for rent today?

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Dead Horses, Alive and Kickin’

As a New Year’s resolution, D-squared has posted a list of propositions (scroll down a bit) that are so “bleedin’ obvious” that he refuses to get drawn into another pointless debate about any of them. Now, on the one hand, I’m highly sympathetic to the notion that some arguments just aren’t worth having. It irks the hell out of me when someone suggests that I’m narrow-minded because I’m no longer willing to consider the possibility that communism might really be superior to capitalism. I considered it once… and rejected it. I considered it again... and rejected it. I considered it umpteen more times… and rejected it. How many times must I perform this exercise before I can be considered open-minded? My brain-time is better spent considering the dozens of other propositions on which I’m as yet undecided.

Nonetheless, I can’t help but be shocked by some of the things D-squared considers “obvious.” Not probably true, or even very likely true, or true if you give it lots of careful thought, but “obvious.” Let me pick just three of D’s proposition and see if I can clear the very low hurdle of non-obviousness.

“That people making employment decisions are for the most part (probably unconsciously) racist in the way in which they make those decisions.” Wow. It’s one thing to say that racism still exists, that there exist some people whose decisions are motivated mostly by racism, or that most everyone harbors some amount of residual racism. But this is supposed to be a general proposition about “people making employment decisions,” and the claim is that they are *for the most part* racist. That’s an incredibly damning statement about an incredibly large and diverse group of people.

“That college admissions have never in the history of the world reflected ‘ability’ in the abstract, even if such a metaphysically dubious quality were to exist and that nor [sic] will they ever in the future, whatever happens to government policy.” Hmm. Okay, college admissions are indeed based on a variety of merit-irrelevant matters, such as race, geography, celebrity, alumni parentage, and so on. But in addition to these criteria, standardized test scores and GPAs are also used. And while these are far from perfect measures of ability, they do bear some correlation to ability, no? And if that’s the case, then college admissions almost assuredly “reflect” ability to some degree. Do a regression of college admissions for any selective university, with race, gender, parentage, etc., plus GPA and SAT scores as the explanatory variables; I’ll bet that the coefficient on GPA or SAT or both is positive and statistically significant.

“That the transatlantic slave trade was the moral responsibility of those who profited the most from it, and that it was the proximate cause of the American Civil War.” Okay, I’ll buy the first half, but as for the second… well, let me put it this way: the transatlantic slave trade ended (at least for the U.S.) in 1808. After that, most new slaves were the children of old slaves. The Civil War began in 1861. Are we using the same definition of the word “proximate”?

Enough. Suffice it to say that there’s a barrel of non-obviousness in virtually every one of D’s propositions -- even on the handful I agree with (in whole or in part).

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The Anal Film Critic

I thought I had the whole Disney Dalmatian movie nomenclature straight. The original 1961 animated movie was called “One Hundred and One Dalmatians.” The 1996 live-action version with Glenn Close was called “101 Dalmatians.” And, just to confirm the alphabetic v. numeric distinction, they made a live-action sequel called “102 Dalmatians.” I figured if they ever made an animated sequel, it would be called “One Hundred and Two Dalmatians.” But now Disney’s just released a straight-to-video animated flick called “101 Dalmatians II.” And after doing a little poking around, I discovered that they’ve given the original 1961 animated version an alternative title, “101 Dalmatians,” which is indistinguishable from the 1996 live-action title. (I haven’t figured out when this renaming took place.)

Am I the only one who’s bothered by this kind of inconsistency and confusion? Is anyone else still bothered by the fact there’s a movie called “Rambo III” when there was never a movie called “Rambo” or “Rambo II”? And am I myself being inconsistent when I grouse about Stephen Spielberg’s having renamed “Raiders of the Lost Ark” as “Indiana Jones and the Raiders of the Lost Ark” to achieve retroactive consistency with the subsequent Indiana Jones movies?

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More on Statistical Injustice

A reader responds to my post below about false positives: “That's why you test each positive at least one more time - the odds for a double-false positive are extreme. … Of course universal testing generates false positives. The idea that one test alone is sufficient for punishment is ludicrous.”

Absolutely correct, though I’m often amazed at how often ludicrous laws get passed by legislatures and school boards. (I’m thinking specifically of the southern state that passed a law setting the value of pi at 3.14.) I wouldn’t be at all surprised to hear that school districts with across-the-board drug testing suspended athletes immediately upon their getting a positive test result. Does anyone out there know the standard practice?

Also, testing a second time shrinks the problem substantially, but does not eliminate it. By my calculations (and using Brad DeLong’s hypothetical numbers again), someone who gets two positive test results in a row still has an 8% chance of not having the disease. That’s about one person in every twelve. Also, my calculations are based on the assumption that the two tests’ results are independent events, which may not be the case – it might be that the false positive is triggered by the presence of a particular protein in your blood, for instance. (I’m not a doctor or a biologist, so I don’t want to make too strong a claim here, but it seems reasonable to think that false negatives and false positives are caused by something, and that something may be related to your physiology.) Fortunately, there may exist alternative tests for the same condition, as my reader observes elsewhere in his email, and such alternatives may be both more accurate and more likely to constitute an independent event.

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Uh ... Did I Just Score?

Last week I celebrated this blog's 2000th post. Earlier today, the counter was somewhere in the 2100s or 2200s, I think. But as of a few minutes ago, the counter stood at 3270! (That's an exclamation point, not a factorial sign.) What's going on? I'm thinking this must be a glitch in the counter.

UPDATE: Apparently I did score. A couple of readers let me know that my post on Raelians was linked by Instapundit. I'm thinking I probably owe thanks to Julian, who linked the same post on his much-higher-traffic blog. (Higher traffic than my blog, that is, not higher than Instapundit!)

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Statistical Injustice

Brad DeLong has an ongoing series of One Hundred Interesting Mathematical Computations on his website. Two of the most recent jumped out at me.

First, in OHIMC #10, he describes the letter-switching paradox that I mentioned in a previous post. And unlike the website I cited that time for explanation (because I was too lazy to describe the whole problem and its solution), he gets the moral of the story right.

Second, in OHIMC #9, he describes the false-positive problem that arises in the context of tests for disease. The bottom line is that even if you test positive for a disease, there is actually a surprisingly high chance that you don't have it. The reason, in a nutshell, is that for most diseases - even ones considered epidemics - the vast majority of the population does not have it. As a result, even a small false-positive rate will result in a very large absolute number of people testing positive even though they are disease-free. Even if the test correctly identifies all people who have the disease, they are likely to be a small group compared to those who were false positives. (If this doesn't make sense, go to DeLong's site and follow the math.)

What DeLong doesn't mention is that the false-positive problem is most acute when someone takes a test for a disease without having any particular reason to think he might have it. If there is some a priori reason for thinking you have the disease (e.g., the test is for HIV, and you've been having lots of promiscuous unprotected sex and sharing needles), then the problem is not as severe, though it still exists. I think this is especially relevant in the context of proposals to, for instance, test all school athletes for steroids or drug use. Quite aside from the legal and ethical problems related to invasion of privacy, policies like these will almost assuredly punish far more innocent students than guilty ones. Taking DeLong's sample numbers, but replacing "disease" with "drug use," testing 10,000 athletes would lead to the punishment of 49 drug-users and 199 non-drug users. Of course, DeLong's numbers are only hypothetical; if a larger percentage of the whole athlete population used drugs than in the example, the disparity would not be as severe. But the qualitative result will be the same: lots of innocents getting punished.

Thus, the notion of "probable cause" has statistical as well as legal value. Restricting drug and steroid tests to those students who have evinced other signs of use would at least reduce, though not eliminate, the disparity in punishments meted out. Across-the-board testing is not just a procedural injustice; it also leads to greater substantive injustice.

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Those Wacky Raelians

So the Raelians -- you know, the religious cult that claims to have created the first human clone -- believe that scientifically advanced extra-terrestrials manipulated DNA in order to create all life in Earth. Wow, that's really crazy. Don't they realize that life, along with everything else in heaven and earth, was actually created in just seven days by an omniscient, omnipotent being, who later had a mortal son, who died, was buried, rose from the dead, and ascended to heaven?

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Putting Prostitution Back On the Street Where It Belongs

According to a news story I heard on the radio (I couldn't find any articles about it online), the Royal Viking Hotel in Los Angeles is in trouble for allegedly "facilitating" prostitution and other criminal activities. The city council has decided it's time to crack down on the hotel, so they are forcing it - by means of a court to injunction - to stop selling condoms, stop renting rooms for fewer than 12 hours at a time, and stop renting rooms for less than $25 a day.

Wow. Just for the fun of it, let's even suppose you think that outlawing sex between consenting adults when money is involved is a good idea. Let's count how many different ways this injunction gets it wrong.

1. The injunction against condoms punishes only those prostitutes and clients who want to have *safe* sex. This might deter some prostitutes and clients from having sex, but only by encouraging the rest to have sex more dangerously. At best, this part of the injunction will have no effect because prostitutes will just bring their condoms with them. Meanwhile, the regular customers who just want to have sex (with no money involved) will also be deprived of the convenience of buying condoms at the hotel.

2. The prohibition on renting rooms for fewer than 12 hours at a time punishes plenty of people who aren't prostitutes or their clients, such as truck drivers who just need a few hours sleep, or young couples who'd rather not have sex in their parents' homes. Similarly, the prohibition on renting rooms for less than $25 per day is just a price floor, which hurts anyone looking for a cheap place to spend the night.

3. The last two restrictions combined raise the cost of doing business in private - but not the cost of doing so in back alleys, parking lots, and other public places. One of the main arguments that people have against legal prostitution is the potential exposure of children and other sensitive persons to seedy sexual transactions in public places. In that case, does it make sense to discourage prostitutes from taking their business indoors?

I can't think of a more foolhardy approach to fighting prostitution. It encourages exactly those aspects of the business that people finds most objectionable - specifically, spreading disease and conducting private affairs in public spaces. And it does this while punishing law-abiding citizens who want a cheap place to sleep or (why not?) have sex.

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"Ha Ha, Made You Look" Advertising

When TV networks started putting a nearly transparent network logo in the lower righthand corner during programs, I was actually in favor of it. When I'm channel surfing, I like to know what channel I've surfed onto. And if I'm catching the end of a previous show before the show I intend to watch, it's nice to know I'm in the right place.

But then, as anyone who's watched TV in the last two years knows, the logos started growing, traded their transparency for vivid colors, acquired moving graphics, and began adding advertisements for other shows. I figure it won't be long before they develop intelligence and apply for membership in the UN.

The latest travesty: I was watching Law & Order on TNT, and the whole bottom fifth of the screen suddenly turned blue. The words "STORM WARNING!" scrolled across the screen from right to left, and I stopped what I was doing to find out if we were in for another windstorm like the one we had last week, which caused numerous homes to lose power for more than 48 hours. "Friday, Saturday, and Sunday night," it continued, "the TNT broadcast of THE PERFECT STORM, starring George Clooney and Mark Wahlberg!" What's next - using the Emergency Broadcast System to alert us about changes in the primetime line-up?

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It's Creepy and It's Kooky, Macro Economy!

With respect to the proposals in GWB's new economic "stimulus" plan, some critics have commented on the oddness of proposing long-term solutions to short-term problems. Senator Ted Kennedy's reaction (quoted in this Reuters story) is typical: "To use the need for an immediate economic stimulus as an excuse to enact costly new permanent tax breaks for the wealthy is a cynical and disheartening ploy," said Democratic Sen. Edward Kennedy of Massachusetts.

The critics are correct from the perspective of old-school Keynesian fiscal policy. The recommended fiscal policy response to a slumping economy usually involves one-time spending increases or tax deductions, not "permanent" changes in the tax code. But guess what: using fiscal policy to deal with macroeconomic cycles is a poor idea anyway. It is incredibly, almost insurmountably difficult to get the size and timing of legislative responses to correspond to the ups and downs of the economy. By the time it's apparent that a fiscal policy response would have been helpful, the window has most likely closed. Current spending increases and tax reductions will have little or no impact on current unemployment rates. Their primary impact will likely be months down the road, when the economy might already have recovered on its own.

So if you want to judge the wisdom of new tax and spending proposals, short-run economic performance is not the correct measure. The appropriate criterion is the probable effect on *long-run* economic growth. And in that regard, GWB's proposals move us in pretty much the right direction, as some Cato scholars argue here, *assuming* they are eventually accompanied by spending cuts. That's a big assumption, unfortunately. Of course, most of GWB's supporters are casting their praise of his proposals in terms of the slumping economy because that's what people are concerned about right now. (But note that all the real praise from the Cato scholars is in terms of "growth," despite the misleading headline about "stimulus.")

As an aside, it's worth noting that the word "permanent" doesn't really mean much in this context anyway. In what sense is any legislation really permanent? Unless there is some kind of supermajority requirement for changing it, as is the case with constitutional provisions, all it takes to reverse a "permanent" law passed by a majority is another law passed by another majority. Short of passing a constitutional amendment, the 2003 Congress and president are utterly incapable of placing binding constraints on any future Congress and president - even if they are the very same people. Calling a tax cut or another change in the law "permanent" has all the power of making a wish with your fingers crossed. Those of us who favor tax cuts will just have to hope that future legislators are willing to stick with them.

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Agora2K

I just noticed that my blog has now gotten over 2000 hits! Very exciting. I just wish I could celebrate by posting a monster-sized blurb on something either really important or incredibly obscure. But blast it, I just couldn't get inspired today. I kept getting distracted by, you know, work.

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Movable Type

While driving home today, I saw an SUV with two huge stickers in its back window, both in huge Gothic type. The one on the left read, "Holy Spirit Fueled," and the other read, "Powered by Jesus." I couldn't help wondering what kind of mileage they were getting, and whether they were using 87, 89, or 93 octane Jesus. And then I wondered if there might be a more spiritual interpretation, like a modern-day version of the Hanukkah story: while driving home from Vegas a few years ago, they realized they had only enough gasoline left for one more mile, and yet that gasoline miraculously allowed the car to travel the eight miles down the interstate to the nearest gas station.

Seriously, though, I'm curious as to the motivation behind these and most other bumper stickers. Are there people whose political and religious viewpoints are influenced by the messages they see plastered on strangers' vehicles? I'm reminded of an article in The Onion's _Our Dumb Century_ from 1973: "Bumper Sticker Industry Applauds Roe v. Wade Decision." The final paragraph of the article pretty much says it all: "The historic ruling means bumper-sticker creators will dictate the terms of America's abortion dialogue in the coming years. Said [Bumper-Sticker Manufacturers of America President Karl] Steinholz, 'This debate has now moved out of the courts and onto the bumpers of cars, where it belongs.'"

I suspect, as my sister suggested to me, that no one really thinks they'll change anyone's mind with a bumper sticker, and therefore most bumper stickers are just expressions of belief - commonly, the belief that "I'm better than you." Still, there are some bumper stickers I do enjoy, typically ones designed for the entertainment (as opposed to moral and political education) of other drivers. Many of these make fun of other bumper stickers, "Jeez if you love Honkus" being the classic. "Nuke the whales" was funny once, but is now tired. That's the problem, of course; the humor may be gone, but the bumper sticker lingers on.

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The Origin of Theses

In the process of researching the alcohol industry, I unexpectedly ran across the origin of the economics profession's favorite proverb, "There's no such thing as a free lunch." It began in the pre-Prohibition days, when manufacturers of alcohol could, and often did, sell their wares directly to customers. This practice is now forbidden by post-Prohibition federal and state laws that effectively mandate a three-tier alcohol industry in which distributors must stand between manufacturers and retailers. According to a 1997 story (not available online without payment) from the Orange County Register,

The purpose of these laws was to eliminate predatory turn-of-the-century marketing such as that practiced by "tied houses" - distiller-owned taverns that offered salt pork or free sandwiches to induce working men to visit and drink. The sobriety and wages lost to this "tied-house evil" spawned the phrase, "There's no such thing as a free lunch. "

An interesting story, despite the highly questionable use of the word "predatory."

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Regifting

According to this Reuters story, the Christmas shopping season may be "extended" this year because of the unexpectedly large number of people who gave gift certificates. Tell me about it. When I was in Restoration Hardware about a week before Christmas, I overheard an employee ask her manager if it was okay for a customer to use a gift certificate to buy… another gift certificate. (The answer was yes.)

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Adverb to the Wise

I asked my brother Neal (the linguist) if he knew of any nouns that have been turned into adverbs aside from shotgun and bitch, as discussed in a previous post. After pondering for a while, he observed that many nouns have become adjective-modifying adverbs in phrases like "/ice/ cold," "/bone/ dry," and "/rock/ hard." But he couldn't think of any others nouns that are verb-modifying adverbs as in the phrases "ride /shotgun/" and "ride /bitch/."

Then I posed the question to my sister Ellen, who came up with commando, as in the phrase "go /commando/" (i.e., wear pants without underwear). This definitely seemed to fall in the same class, with shotgun and bitch, of verb-modifying adverbs. But that got Neal thinking, and he said there's a good argument that *none* of these are really adverbs, because their seemingly adverbial uses are too situation-specific. There's nothing you can do bitch or shotgun except ride (or sometimes sit); there's nothing you can do commando except go; etc. Arguably, then, we don't really have verbs with adverbs here - we just have verbs that happen to have spaces in them, in a manner similar to the verb "put up with."

That sounds right to me. But then again, there seem to be other adverbs that are at least awkward when paired with anything other than a specific verb. There are few things one would do fitfully except sleep, for example. So how many different verbs must a new prospective adverb be used with before it becomes a real adverb?

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Rawls and the Precautionary Principle

Sasha Volokh, Mark Kleiman, and Kieran Healy have had an interesting exchange about the justification, if any, for the so-called precautionary principle. In a nutshell, this principle says that if there is uncertainty about the possible negative effects of a new technology (or the equivalent), society ought to resist using it until its negative effects are known. (Sasha defines it as “the principle that we should avoid new technologies unless they're proven harmless,” but that may be a little overstated – it’s not that any harm at all is unacceptable, but that unknown risks of harm are unacceptable.) I’ve always found this principle problematic, in part because I think it bears a strong resemblance to John Rawls’s maximin principle, and it shares a common error: relying on an absurdly high degree of risk aversion.

If the analogy seems strained, bear with me. Rawls’s political theory (and I should admit at this point that what I know of Rawls is largely second-hand, as I’ve only read bits and pieces of his actual writing) asks us to imagine ourselves behind a “veil ignorance,” where each person lacks knowledge about what position he will occupy in society. You don’t know, yet, whether you’ll be the best-off person, or the worst-off person, or someone in between. Behind the veil, the future members of society will negotiate to an agreement about what sort of society they will live in. Okay, so far so good; although some philosophical objections could be made to this construct, it makes enough sense for me to accept it for the sake of argument. The problem is Rawls’s conclusion: that people behind the veil of ignorance will accept the “maximin principle” (not Rawls’s term, but a commonly used name for it), which says to choose the form of society that maximizes the position of the worst off person.

It should be apparent that this is an incredibly risk-averse approach, because it focuses exclusively on the worst-case scenario. No increase in the wealth or happiness from any or all of the other positions in society can compensate for the slightest loss of wealth or happiness for the person at the bottom. If this principle were applied to investment decisions, investors would never make high-risk high-return investments, or even medium-risk medium-return investments, when low- or zero-risk investments were available. To me, it is far more plausible that people behind the veil of ignorance would be either risk neutral (assigning equal weight to all possible outcomes) or moderately risk averse (giving somewhat more weight to the worse outcomes).

My philosopher friends tell me Rawls has responded to this objection by saying that, behind the veil of ignorance, you cannot assume you have an equal likelihood of being each person in a society. In other words, if there are N people in a society, you can’t assume there’s a 1/N chance of being each one. Now, I have no idea how Rawls justifies this additional assumption, but it makes zero sense to me. I can’t imagine how he would justify any alternative probability distribution (e.g., double the weight on the worst-off, half the weight on the best-off) unless he wants the “probabilities” to represents a value-based weighting of outcomes instead of likelihood-based weighting. If so, then he’s building into the construct some of the conclusions that people behind the veil were supposed to arrive at themselves through negotiation. But my understanding is that Rawls is not positing some other distribution -- he’s rejecting the notion of people behind the veil of ignorance employing any kind of probability distribution *at all*. This, however, is impossible; as one of my grad school professors always put it, “You cannot have no beliefs.” You may have more or less justified beliefs, but lacking any beliefs at all leads to paradoxes like the letter-switching paradox.

(Note: On this page, the author gives a pretty good explanation of how to resolve the paradox, except that he gets the “moral of the story” wrong. You must have beliefs about the decision procedures of Johnny Moss’s ghost, even if you don’t know the procedure. Otherwise, the mathematical argument for always switching still works.)

So how does this all relate to the precautionary principle? In the Rawlsian scenario, the uncertainty is about “who you will be” in a future society. In the new technology scenario, the uncertainty is about which conceivable effects (positive and negative) the technology will actually have. In both scenarios, a sensible approach is to take into account all the possible outcomes with their associated probabilities, but the maximin and precautionary principles ask us instead to focus on the worst conceivable outcome.

In addition, both proponents of both principles try to justify their extreme risk aversion by saying that we lack a probability distribution. Rawls did this by simply asserting that we don’t have one behind the veil. The defenders of the precautionary principle do this by saying that so little is known about some new technologies that we don’t know what probabilities to attach to different outcomes. While it’s true that we sometimes lack good information, that doesn’t mean that we “have no beliefs” – it just means that we have less confidence in them.

My comments here are probably pretty unhelpful when it comes to the much more difficult question of how we *should* weight good and bad possible outcomes, given that most of us are somewhat (but not ridiculously) risk averse. My point is merely that the uncomfortable in-between space is where our actual decisions do, and should, take place.

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Unfinished Business

Amy sent me a few more suggestions for clever group names:

A bouquet of florists
A yard of landscapers
A sextet of prostitutes (but why would they travel only in 6’s?)

She also favors “fathom” as the group name for philosophers.

Unlike the group name game, the best-and-worst Xmas song contest only got two entries – mine and my sister’s. Consequently, every category had either a unanimous winner or a 50-50 tie. Here they are:

Best Classic: Tie – “God Rest Ye Merry Gentlemen” and “O Holy Night”
Worst Classic: Tie – “The 12 Days of Christmas” and “I’ll Be Home for Christmas”
Best Modern: “Christmas Wrapping” by the Waitresses
Worst Modern: “Last Christmas I Gave You My Heart” by Wham!

There were plenty of honorable mentions in the worst modern category, and I don’t want to leave them out: “All I Want for Christmas Is My Two Front Teeth,” Bruce Springsteen’s version of “Santa Claus Is Coming to Town,” Paul McCartney’s “Wonderful Christmas Time,” and any Christmas song done by the Chipmunks.

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Word Repurposing

I can think of many nouns that have been verbed: "I tried to /knife/ the intruder," "Jones will /chair/ the meeting," etc. I can also think of many verbs that have been nouned: "Have a /go/ at solving the puzzle," "He made one /throw/ of the dice," etc. The transformation of one part of speech into another is a pretty common phenomenon in English. But I can think of only two nouns that have been adverbed, and both concern one's position in a moving vehicle. If you "ride /shotgun/" in a car, you ride in the front passenger seat; if you "ride /bitch/," you sit between the driver and the front passenger (or, sometimes, in the middle of the back seat). Can anyone out there think of other examples of nouns being used as adverbs? (To count, it must be possible to use the word as an adverb without any suffixes like "-ly" attached to change its form.)

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Contretemp-tations

Mark Kleiman describes a very common type of situation:

Sometimes people do damage to themselves, or incur the risk of doing so, at the (often not disinterested) prompting of others. Call this pattern "temptation," and the parties the tempted and the tempter. The tempted, and their friends, often blame the tempters for the bad results, and sometimes sue them or demand that the activity of temptation be constrained by law. The tempters, and their friends, always respond that the tempted need to start taking personal responsibility for their actions, and that the tempters can't be held accountable for the foolish acts of others.

Mark considers the proposition that "the blamelessness of the tempter follows from the responsibility of the tempted" to be self-evidently fallacious. But he also observes that "many other people" (I am one of them) think this proposition true. So Mark sets out to explain why we think so, and he settles on the idea that we have fallaciously equated moral responsibility with a probability density function, thus concluding that all moral responsibilities must sum to one.

Mark is correct that moral responsibilities need not sum to one. If John shoots Bill while Eric stabs Bill, both are 100% guilty of murder, after all. But disproval of a fallacious argument in favor of a proposition does not disprove the proposition itself, as there may exist other, valid arguments for the proposition. I wish to make one of them.

In involuntary cases like murder and rape, there is little question that a harm has been done, and the main question is one of apportioning punishment. But in voluntary situations - presumably those Mark has in mind, though he declines to name them - the whole issue is whether a harm has actually been done. If I choose to smoke cigarettes, and later I develop lung cancer, this may seem to be, factually speaking, a harm; clearly I'd rather not have cancer. But we must take an all-things-considered perspective, as the risk of lung cancer might have been a cost I was willing to bear because of the perceived advantages of smoking. Likewise for other risky activities, like snow skiing and eating high-cholesterol foods. For there to have been a harm *on net*, the subjective value of costs must have exceeded the subjective value of the benefits - and the only person who is in a position to know is the person who actually experiences them. What we want is a set of legal and moral rules that encourage people to do things that affect their well-being when, and only when, the expected benefits exceed the expected costs. When an individual is held personally responsible for his own voluntary choices that affect his well-being, the costs and benefits are concentrated in one place (his mind), and he thus has an incentive to make the correct choice.

Since moral responsibilities need not sum to one, Mark might argue that we could punish the tempter as well as the tempted when bad results occur. But placing responsibility on the tempter creates a doubly bad incentive: First, if the individual whose well-being is affected is compensated by the other party (as occurs when the damage payments are awarded to the "victim"), his *perceived* costs from the activity are reduced, and as a result he will be more inclined to engage in activities whose costs exceed the benefits. This is the moral hazard problem. Second, the tempter may be deterred from providing opportunities to engage in the activity even when the activity is on net desirable. (This argument holds even if damages are not awarded to the victim.)

There is an exception to the general rule I've stated here, and that occurs when the tempter possesses but withholds information that *might* be relevant to the tempted's decision. If we want to encourage decisions that take into account all costs and benefits, then we need legal and moral rules that encourage disclosure of cost- and benefit-relevant information. This is the source of the one quasi-plausible argument against the tobacco companies in the recent lawsuits: that old enough smokers might have chosen not to smoke if the tobacco companies had been more forthcoming with information they had (and that was not available from other sources) about the health consequences of smoking. (I say "quasi-plausible" because I'm not convinced that potential smokers were really that clueless about the likely effects of smoking, nor that it would have made a difference if they had been informed. But at least the form of the argument is right.)

In short, when the very desirability of an activity is in question, simple causality (in the sense of necessary conditions) is not the relevant issue. It's true that the tempter's offer may be a necessary condition for the outcome to occur - but in order to know whether the outcome is a "harm," it is necessary to consult the preferences of the tempted. Placing moral and legal responsibility on the tempted creates the appropriate incentives to encourage value-increasing and discourage value-decreasing activities, and placing responsibility elsewhere mucks up the decision calculus unless it encourages the dissemination of relevant information.

One final caveat: I am thinking primarily in legal terms, because I'm concerned about how issues like this should be treated as a matter of policy. It's possible Mark wished to restrict his comments to the moral realm only. If so, I might concede that the tempter should "feel bad" and is thus not "blameless." But as soon as we start talking about meting out reward and punishment, whether in the legal realm or otherwise, I fall back on the arguments above.

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Teachers Fight for Lower Wages!

"Public school systems in Nebraska are prohibited from offering signing bonuses or other incentives to attract or retain qualified teachers because doing so violates collective bargaining agreements with teacher unions, the Nebraska Supreme Court ruled Friday." This is a perfect example of how the teachers unions' stranglehold on the public schools stifles attempts to improve the quality of education. It is also yet another argument for a school choice program that does not exclude private schools.

What's especially ironic about this situation is that the teachers unions constantly complain that teachers don't get paid enough. Their solution for every failing public school is to increase budgets and pay teachers more. But when a school actually tries to pay a teacher more money, the unions oppose it unless the pay raise is across the board. Aside from putting a cap on salaries, the across-the-board policy also prevents schools from paying the wage premiums required to attract teachers - specifically, math and science teachers - who have lucrative opportunities outside the teaching profession. (The case at hand involved an industrial arts teacher, but the principle is the same.) Unless schools start offering more for teachers with a higher opportunity cost, they will continue to produce students with inadequate quantitative skills.

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Tort-uous Economic Logic

Sasha's recent post on the subject of tort liability prompted to Mark to make a thoughtful reply. I'm too lazy to summarize the whole interchange, so I'll just let you follow the links. However, I had to respond to the following passage in Mark's post:

"[Sasha] says that ideally an entrepreneur would get all the benefits and pay all the costs of his innovation, and argues that tort damages are part of 'all the costs.' But -- putting aside the external-benefit point, which Sasha makes -- the only entrepreneur who gets all the benefits of his innovation is the hypothetical price-discriminating monopolist. In the more usual case, there are consumers' surpluses. (Being forbidden to buy a vaccine at the market price would leave the consumer worse off.)
"So if we stick manufacturers with all the costs, but can't secure for them all the benefits, then the overall level of market activity will be suboptimally low."

I was about to reply by saying that Mark is looking at total costs and benefits, whereas marginal costs and benefits are the relevant parameters. A firm doesn't have to be a perfect price discriminator to face the full *marginal* benefit of his production decision, because the valuation of the marginal consumer is generally reflected in the maket price (unless this is a good whose production creates external benefits).

But Mark is one smart guy, and he seems to know something about economics, so I figured he probably wasn't making that mistake. Then I realized he might be talking about a different problem: external costs that are fixed costs, incurred as a one-time result of innovation (the word he used in his post) or business start-up. If so, then his argument goes through, albeit as a special case. The problem is not that any existing firm underproduces, but that there are not enough firms producing in the first place. The threat of liability prevents them from opening, even though the total benefits of the activity (as measured by consumer surplus) exceed the total costs.

I was going to post that instead, and then I realized Mark might be talking about yet another issue: the general theory of the second-best, which implies (among many other things) that some amount of monopoly power can be desirable in the presence of externalities, and vice versa, because the underproduction attributable to monopoly power can counteract the overproduction attributable to negative externalities. As a result, imposing liability for negative externalities can result in underproduction.

So now I'm really unsure what exact point Mark was making. I guess I'll email him, point him to this post, and ask him to let me know. For now, I will just make the general (and vague) observation that all of this analysis is conducted without any reference to the Coase Theorem, whose main lesson is that external costs are not *necessarily* ignored by decision-makers; whether they are considered adequately will depend on both transaction costs and the institutional structure.

UPDATE: Mark informs me that my interpretation #2 (external costs that are fixed) was what he meant.

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The Joy of Commerce

As anyone who has visited my apartment and seen my two Christmas trees can attest, I love this time of year. And why do I love it so much? Well, the decorations are pretty, and (some of) the music is nice, but what I really like is… the commercialism.

It probably sounds like I'm trying to be a contrarian, bucking the traditionalists who are fond of reminding us that "Jesus is the Reason for the Season" and that all this crass materialism degrades the holiday. But actually, despite my atheism, I think I'm the truer traditionalist here. As modern-day pagans and some very fundamentalist Christians love to remind us, the origins of Christmas stretch back to the ancient pagan rituals like Saturnalia and Alban Arthuan that were celebrated long before the time of Christ. But this point has been made so often that it's become hackneyed (just do a Google search on "Christmas origin pagan festival"), so let me try to say something slightly different.

The old pagan rituals were, for the most part, harvest festivals. They celebrated the abundance of the food available after the harvest. There was much feasting and gift-giving during this time of plenty. Even in years when the harvest was poor, the holiday was celebrated in the hope of a better harvest the next year -- and because, well, any harvest is better than no harvest at all. In modern times, of course, society is no longer focused on agriculture, so the "harvest" part of the story has naturally faded. But I think it can be interpreted more broadly to mean any abundance of material production. In the modern capitalist era, we celebrate the astounding harvest of goods and services that are available to us. In good years, we splurge with our Christmas bonuses. In not-so-good years, we still celebrate (if a bit more frugally) because we realize -- or at least we should realize -- that we still live in one of the most comfortable and abundant times and places in history. Throughout the ages, poverty has been the norm for the vast majority of people; in modern Western societies, poverty is the exception. That's something truly worth celebrating, even as we try to deal with the poverty that remains.

And that's why I love the commercialism of Christmas. Even when I see the bits of commercialism that irk me -- like those damnable dancing-singing Santas -- I rejoice that I live in a society that can afford such frivolities. Commercialism is the visible manifestation of commerce, the production and trade of goods and services. It is a reminder of how rich we are.

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Pro Bono by Proxy

Sasha Volokh observes that most lawyers at big law firms still perform fewer than the recommended 50 hours of pro bono legal work each year, despite recent gains. The problem, of course, is that performing pro bono work can entail a considerable opportunity cost in terms of the forgone revenues the lawyers could have generated during those hours. In order to encourage greater provision of legal services to the poor, some law schools are now encouraging their graduates to start "neighborhood law practices" whose purpose is to provide low-cost legal services, a.k.a. "low bono" work. But this approach doesn't eliminate the opportunity cost problem - it just concentrates it on a smaller number of individuals, the attorneys who practice at such firms. As Sasha says, "Trying to get many lawyers to do a few pro bono cases may be a better strategy than convincing more people to take a very substantial salary cut to provide services to the poor."

I wonder if there's a potential third way here. If big-firm lawyers wish to "do the right thing," but the opportunity cost is simply too high, then perhaps they should make contributions to lawyers or firms that specialize in pro bono work. Say I'm a corporate lawyer who contributes 40 pro bono hours per year, but the cost of contributing another 10 (to reach the recommended 50) is just too high. Then I do my corporate work instead, and then contribute part of my earnings to pay someone else to do another 10 on my behalf. This strategy could lead to just as much or more pro bono work getting done at lower cost, because the hours would be shifted from attorneys with higher opportunity cost to lawyers with lower opportunity cost.

The potential downside is that the high-octane corporate lawyers might be *better* lawyers, in which case the transfer of hours to other lawyers could lower the quality of service rendered to the poor. But I think this problem is likely to be slight, for at least three reasons. First, I suspect the biggest problem for many poor people is not having representation *at all*, and this plan would likely increase the number of service hours provided. Second, there are presumably gains from specialization in the legal profession. Some lawyers are better at corporate work, while others are more talented at providing the kind of services most often required by the poor. This proposal would tend to shift the pro bono work to those most skilled at it. Third, if corporate lawyers really are better, the main reason is the higher compensation they receive. The contribution of funds to firms that specialize in pro bono would attract higher quality attorneys to those positions, at least on the margin.

I suspect the main hurdle for this proposal would be opposition to the idea of discharging one's ethical duties with personal checks instead of effort. If so, I think our ethical standards need revising. The duty to help others does not imply a duty to help them in a more costly fashion simply because it's more "personal." Personal contact can be valuable for the practitioner in terms of moral growth and development of character, but perhaps something less than 50 hours a year is sufficient to achieve that benefit. Why not satisfy the rest of one's ethical obligations with cash?

ADDENDUM: If no one's coined it yet, I hereby lay claim to authorship of the label "proxy bono."

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Collective Consciousness

Ah, so I've finally gotten a slew of nominations for my clever group names contest. It's actually not a competition, only an exhibition -- so please, no wagering. Here are some of the best entries so far.

My sister Ellen suggests:

A batch of chefs
A population of ecologists
A litter of veterinarians
A gross of sanitation engineers
A cord of loggers
A ring of jewelers

When I mentioned sanitation engineers to Olivia, she suggested "shitload" might be more appropos.

Julian adds the following suggestions:

An E(x)E(y)(x?y) of logicians
An updraft (or a babble?) of pundits
A gush of liberals
A thump of fundamentalists
A Lott of racist senators
An indignation of activists

Radley has posted a whole list on his blog, so I'll just repost my favorites:

A rash of brothel patrons
A collective of socialists
A categorizing-by-species-is-artificial- and-degrading-to-the-uniqueness-and-authenticity- of-each-individual-and-therefore-this-entire-exercise -is-empty-and-moot of deconstructionists
A barefoot-nun-playing-a-melted- purple-trumpet of surrealists

Visit Radley's comments page for many others suggested by his readers.

Kevin Grinberg adds the following:

An array of computer scientists
A compendium of librarians

Will informs me that, much as he might like "a bewilderment of philosophers," the Philosophical Lexicon has already designated "cohen" as the collective term for philosophers. (It's allegedly a portmanteau of "cohort" and "coven," but there are also many philosophers with the last name Cohen.)

Finally, I have a few more suggestions of my own:

A sample of statisticians
A ream of accountants
A casket of morticians

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