Further thoughts on my post below about the proliferation of choice. To be fair to the article’s author, he did not actually advocate public policies designed to reign in choice (though I suppose he might in his book). But I wouldn’t be surprised to find out that others have advocated such policies or will in the future. If so, then we have a nice example of the “damned if they do, damned if they don’t” trap that statists set for free markets. If markets don’t produce a wide array of choices, they are condemned for imposing the values of some consumers (those with the greatest influence on producers’ choices about product characteristics) on the population at large. We hear this kind of argument from the high-brow critics of pop culture (“Britney’s driving out Mozart!”), despite the wide variety of non-pop cultural products also available. On the other hand, if markets do produce a wide array of choices (as is, in general, the case), then we get the criticisms discussed in the previous post: that people are paralyzed by choice, that they spend too much time making decisions, that they are less content, etc. One way or another, the market takes the blame.
Similarly, no matter what happens to food prices, markets come under attack. If the price of food is high, markets get blamed for starvation and hunger. If the price is low, markets get blamed for making people fat.
As I discuss elsewhere, alcohol regulations are justified via a similar Catch-22. Franchise termination laws (which restrict the ability of alcohol suppliers to find new distributors) are sometimes justified by the alleged need to restrain the monopolistic power of large suppliers. The claim is that termination laws are required to protect competition, thereby (presumably) holding down prices. But if turns out that the laws actually drive prices up by shielding the large distributors from new entrants and the encroachment of small distributors, as I think is more likely the case, then the regulators fall back on a different argument: that higher prices are good because they cause people to consume less of the devil drink – like a back-door sin tax. Either way, regulations are justified.
Readers are invited to email me more examples (or put them in the comments box).
Saturday, January 10, 2004
Free Markets, Damned If They Do...
Thursday, January 08, 2004
Bet You Won't Hear This in the State of the Union Address
Remember the weapons inspectors who were looking for evidence of weapons of mass destruction after the war in Iraq? The Bush administration is withdrawing them from the country. A different team whose job is to dispose of biological and chemical weapons will remain in Iraq, but it is "still waiting for something to dispose of."
Delegating Authority, Dodging Responsibility
Amy, who writes one of the most prolific one-person blogs I know, calls down the Washington Post for inconsistency. The Post is concerned that the Patriot Act was written in vague language that allowed its actual content to be filled in primarily by the executive branch – which sounds an awful lot like a violation of the constitutional division of powers. But, Amy notes, the Patriot Act hardly breaks new ground in this respect, as virtually every federal regulatory agency works on the same template. To be consistent, the Post should also take issue with the enabling statutes that created the EPA, OSHA, FDA, etc.
One reason that Congress delegates legislative authority to the executive is, as Amy suggests, to allow for a greater expansion of state power. If Congress actually had to specify all the content of regulations, they just wouldn’t have the time to do as much regulating as they’d like. But I would argue that a more explanation of why Congress delegates its power is to finesse disagreements among its own members. Making trade-offs among disparate policy goals is hard work. Members of Congress would rather not make the trade-offs, especially since they will get blamed for any actual decisions they make – possibly losing votes and campaign money. So instead, they pass vague laws that claim to make satisfy everyone. Take, for example, the mandate created under the Emergency Petroleum Allocation Act (which I’ve taken from Gary C. Bryner’s book Bureaucratic Discretion):
[Issue regulations that] protected the public health, maintained public services and agricultural operations, preserved a sound and competitive petroleum industry, allocated crude oil to refiners to permit them to operate at full capacity, resulted in an equitable distribution of supplies to all parts of the country, promoted economic efficiency, and minimized economic distortion.In short, deftly palm the coin. Why should Congress make any hard decisions, when they can tell someone else to do it for them? And then, if anyone complains, just blame the administrative agency in charge.
Wednesday, January 07, 2004
Inefficiency Across the Curriculum
I’ve observed a disturbing trend (it’s gone on far too long for a fad) in education toward “across-the-board” curriculum elements. The most recent example, which affects me rather directly, is the requirement that group-work be included in every MBA class here at CSUN. (Actually, it may not be a requirement, but one of the items on every MBA class evaluation form is “Did this class help you to develop your teamwork skills?” or something to that effect.) The idea, of course, is that teamwork is so important that students should practice their teamwork in every class. Similarly, many high schools and colleges have implemented “writing across the curriculum” requirements, under which every class of every subject -- including math classes -- should have the students do a substantial writing assignment of some kind.
Two things irk me about “across-the-board” requirements. The first is their apparent lack of regard for the value of specialization. I was trained in economics, and that’s where my comparative advantage lies. Fortunately, I have reasonably good writing and editing skills, so I’m not worthless to my students in those areas. But the same cannot be said for all economists, or mathematicians or physicists. Moreover, I don’t have time in an economics class to spend on grammar and writing lessons, because I barely have enough time to cover all the economics material I want to cover. As a result, the writing assignments in my classes probably don’t actually improve anyone’s writing skills. The good writers get good grades, the bad writers get bad grades, and that’s all there is to it. To make people better writers, you have to assign them multiple papers and provide extensive feedback on each one, and you need to make them revise each paper to correct the problems. But doing all of that would seriously detract from my ability to teach my students economics.
My second problem with “across-the-board” requirements is their susceptibility to political bias (for lack of a better term). Why are writing and teamwork skills required across the board, while quantitative skills are not? In my experience, I’ve found students’ quantitative skills to be just as bad as, probably worse than, their writing and teamwork skills. A writing-across-the-curriculum requirement imposes no additional burden on an English teacher, because writing is already the crux of the course, but it imposes a substantial burden on me. Why isn’t the English teacher required to test his students’ quantitative skills, just as I’m expected to test my students’ writing skills? My best guess (readers are invited to suggest others) is that the people who impose such requirements don’t emphasize math because they, too, are deficient in their quantitative skills, and they feel awkward about requiring of students what they lack themselves. But if this hypothesis is true, it’s evidence of a greater need for quantitative skills.
Not that I would advocate a “math across the curriculum” rule, because I wouldn’t trust most teachers in other subjects to do it correctly. I would settle instead for the weakening of the current across-the-board requirements that place a disproportionate burden on one subset of the faculty.
Monday, January 05, 2004
Chained by Choice
An article by Barry Schwartz in yesterday’s Parade magazine says that people can actually be made worse off by having more options (the full text is apparently not available online). According to the conventional wisdom of economics, Schwartz’s claim verges on nonsense: In most microeconomic models of choice, it’s logically impossible to decrease a person’s well-being by increasing the size of his choice set. But the article argues otherwise. Here’s a sampler of the article’s claims:
• “But if the number of choices keeps growing, negative effects start to appear. As choices grow further, the negatives can escalate until we become overloaded. At this point, choice no longer paralyzes us; it might even be said to tyrannize.”
• “At any large drugstore, you’ll find 80 types of painkillers, 40 kinds of toothpaste. … A choice that once took only 5 minutes now could take most of the day.”
• “The American ‘happiness quotient’ has been going gently but consistently downhill for more than a generation. In the last 30 years – a time of great prosperity – the proportion of the population describing itself as ‘very happy’ has declined. The decline was about 5%. This might not seem like much, but 5% translates into about 14 million Americans.”
• “Here we are, living at the pinnacle of human possibility, awash in material abundance. We get what we say we want, only to discover that it doesn’t satisfy us. The success of 21st-century life turns out to be bittersweet. And I believe that a significant contributing factor is the overabundance of choice.”
The notion that more options can make us worse off is not a logical impossibility, but I’m highly skeptical of its importance. In defense of the standard economic view, consider the following:
• If the burden of choice is too great, you can nearly always discard some portion of the choice set. Pick the first outfit you pull out of the closet. Buy the first can of coffee you see on the shelf. Go with the waiter’s recommendation at the restaurant.
• The process of searching for something – the best pair of jeans, a better job – often generates net benefits, at least in expected value. Otherwise, we could just terminate the search earlier. The fact that a choice that would have taken you 5 minutes now takes longer does not, in itself, indicate that you’re worse off, because you will only incur the added search time if the increase in value you expect to get exceeds the cost of search.
• Sometimes the search itself is enjoyable. If someone spends a whole day looking for a pair of jeans, I’m betting that person actually enjoys shopping.
The most plausible argument in support of Schwartz’s position is not that your own larger choice set makes you worse off, but that others’ larger choice sets do. The reason is that you might measure your happiness in relative terms, so that if everyone gets better off (say, wealthier) by an equal amount in absolute terms, nobody’s actually any happier. This approach transforms a positive-sum game (everyone can improve their condition) to a zero-sum game (one person’s gain is another person’s loss). But even if that’s part of the story, it’s nowhere near the whole story. I enjoy my DVD player immensely, not because I have one and others don’t (almost everyone I know has one now), but because I enjoy the superior picture and sound quality, the ability to turn captions on and off, etc.
Surveys like the one mentioned above, showing that fewer people are “very happy” than 30 years ago, don’t really show that people are worse off or that people only measure happiness in relative terms. On the contrary, it might be that people engage in benchmarking: they look toward the success of others to gauge how well they are doing relative to their potential. If lots of other people around me are managing to achieve more with similar initial resources, that’s a valuable signal that I could possibly be happier than I am. Knowing this, I might be reluctant to classify myself as “very happy” when I know I have the potential to be happier. Thus, we may rely on a relative definition of happiness to answer survey questions, but declining scores might merely indicate that people now have more unexploited opportunities to improve their absolute happiness than they did before. It does not follow that their absolute happiness level has fallen.
Saturday, January 03, 2004
Legislative AIDS, part 2
(For context, see part 1 below.) I’m skeptical of government funding of any medical research, but I can think of at least two reasons (besides Eugene’s) why it makes sense to give greater funding to HIV/AIDS than breast cancer or heart disease, if funding is measured on a per-victim basis.
First, HIV/AIDS tends to strike people down in the prime of life, whereas breast cancer and heart disease strike down older people. That means that lives saved by means of HIV/AIDS correspond to a greater number of life-years saved. If the government were interested in saving the most number of life-years instead of the most number of lives, it would be justified in spending a greater amount per HIV/AIDS-victim than per victim of diseases that strike later in life. (I don’t have specific figures, so I can’t say whether the difference in average age at death is large enough to justify the actual disparity in funding. If anyone can find specific figures, please email them to me.)
Second, any treatment that prevents, cures, or inhibits the transmission of HIV/AIDS create positive externalities; this is a result of the communicable nature of HIV/AIDS. For example, if someone is vaccinated against a disease, other people who have not been vaccinated also benefit, because their chance of being exposed to the disease is lower when fewer members of the population have it. The same cannot be said of non-communicable conditions like heart disease or cancer; the fact that you’ve been treated for cancer doesn’t make me any less likely to get cancer. Since there is a stronger case for subsidizing activities with positive externalities, it makes sense that HIV/AIDS would get greater funding than non-communicable conditions. (The fact that a conscientious person can generally avoid exposure to HIV/AIDS, by practicing abstinence or monogamy, using condoms, etc., weakens but doesn’t eliminate the argument. First, even for those who practice safe sex, some residual chance of exposure still remains, especially in the case of healthcare workers. Second, all these practices are burdens for at least some members of the population, and lower likelihood of exposure would reduce the need to use them.)
I don’t mean to imply that either of these arguments is a definitive argument in favor of funding research on HIV/AIDS or any other form of medical research. There are good public choice reasons to resist any involvement of government in setting scientific priorities. But for the time being, government funding isn’t going anywhere, so we might as well ask whether the priorities chosen are justified. With regard to the seemingly disproportionate funding of HIV/AIDS over other illnesses, prima facie considerations indicate the answer may well be yes.
Friday, January 02, 2004
Legislative AIDS
Eugene Volokh and Clayton Cramer are having a set-to on the subject of NIH funding for HIV/AIDS. Cramer observes that the federal government spends 10 times as much money on HIV/AIDS than it does on heart disease and cancer, when measured on a per-victim basis. Cramer takes this as evidence that the government “cares more about homosexuals and IV drug users than it does about everyone else.”
Eugene defends disproportionate funding for HIV/AIDS because it’s a communicable disease with the potential to spread and affect much larger numbers of people in the future. (I think an even stronger defense can be made on different grounds – but I’ll save that for a separate post.) Eugene also takes on Cramer’s claim that the government “cares more about” homosexuals and IV drug users, noting that those two groups “are only a tiny share of all voters … lots of voters dislike IV drug addicts, and quite a few still dislike homosexuals.” Cramer responds by arguing that small, well-organized groups – also known as special interests – regularly get greater government assistance than larger, less well-organized groups.
Cramer is presumably correct that the level of HIV/AIDS funding is attributable to the logic of concentrated benefits and dispersed costs that rules our political system. Yet Eugene wins the overall debate, for two reasons. First, as Eugene notes in an update to his original post, the power of a special interest to get legislative favors hardly shows that the government “cares more” about that interest. I would add that the phrase “cares more” shouldn’t even be applied to a collective entity like Congress, because groups don’t have preferences as individuals do. Institutional incentives, such as the need to win elections and collect campaign funds, drive the body’s choices in directions that may have little to do with personal preferences. It may well be true that each member of Congress cares less about homosexuals and drug users than other people, yet legislators are led to favor these groups through legislation because of their strength in the lobbying process.
Second, while legislative choices do reflect the power of special interests, that’s just as true of funding for heart disease and breast cancer as it is of funding for HIV/AIDS (and steel tariffs, and agricultural subsidies, ad infinitum). The more interesting question is whether the results, whose seedy origins are no surprise, can be rationalized. And that’s where Eugene’s argument about the communicability of HIV/AIDS, which Cramer never refutes, enters the picture. Even if it’s true that HIV/AIDS gets disproportionate funding because of the lobbying power of homosexuals, it might still make sense to fund it more.
Similarly, we all know that national defense spending is driven, at least in part, by the lobbying efforts of defense contractors. Nonetheless, national defense is a public good, and therefore federal funding for national defense is more justifiable than funding for most other things (which can be provided more easily by the private market). In other words, it’s reasonable to enquire into the justifiability of the results, even while recognizing their origin in a flawed legislative process.
Saturday, December 27, 2003
Optimal Crime and Punishment
Chris Bertram discusses the extent to which human beings raised under different circumstances can or should be assumed to have the same rational and moral faculties. In the comments box, one commenter argues:
That some people grow up under averse conditions, that incline them to act in violent ways, does not necessarily mean that they should be held less accountable for their actions.I haven’t read the Blank Slate, so I can’t say whether this accurately reflects Pinker’s position. But I can say that the argument is flawed, despite being highly intuitive. To see why, imagine we’re not talking about different classes of potential criminal, but different ways in which to invest your money. If two lines of investment were equally risky, but profits were particularly hard to make in one of them – that is, if the return per dollar invested were low – you would not want to throw more money at that line of investment in order to get a high enough gross return. On the contrary, you’d shift your funds from the lower return investment to the higher return investment. (You might still keep a mix of the two investments because you wished to diversify your portfolio, or because there were diminishing returns in each investment; but the lower return per dollar would bias the mix away from the lower return investment.)
Steven Pinker gave this example, in the Blank Slate. We are all agreed that rape is evil and completely wrong. Say it is proved that 1% of the population is more inclined to rape for genetic reasons. That does not mean that they should not be punished for rape. Instead it means that the punishment for rape for them should be much more severe, in the hope of providing a stronger offsetting force to deter them from raping (this of course ignores a lot of argument about what can deter crime in fact).
Similarly, you wouldn’t want to throw away crime-enforcement dollars (and resources) on criminals who are resistant to deterrence, when the same dollars could deter a larger number of more responsive criminals. If you want to maximize your net gains from law enforcement, it actually makes sense to spend less on catching and punishing the most resistant, and more on catching and punishing the least resistant, criminals. That’s why, for instance, it makes sense to have lower punishments for children and the mentally insane: they are likely to commit their crimes regardless of our deterrence efforts (unless we spend prohibitively large sums on preemptive efforts), and therefore our efforts are better spent elsewhere.
It’s true, of course, that worse crimes should be punished more harshly, but that’s not the same issue. Bertram’s commenter indicates that we’re talking about different criminals committing pretty much the same crime, rape in her example. If we consider all rapes equally bad, then we should spend our rape-prevention resources on those potential rapists most likely to be deterred. (Even if rapes are not all equally bad, to justify different punishments for different rapists we would have to believe that the least deterrable rapists systematically tend to commit the most heinous rapes.)
If you want an argument for why it makes sense to hold everyone responsible for their actions regardless of their resistance level, here’s one: that we cannot easily distinguish between those people who are more and less deterrable. Children and the mentally insane provide nice categories that we can separate from the general pool, but even these categories do not have well-defined borders. Some legal minors are as rationally capable as adults. Some most-likely-sane criminals attempt to slide through the insanity loophole. Thus, even these seemingly obvious exceptions create some poor incentives for those who shouldn’t, but might, be able to take advantage of them. Other categories, such as poverty, are related to the possession of rational and moral faculties tangentially at best. (The rejoinder that the poor empirically commit more crimes proves nothing, because that is perfectly consistent with rational choice: criminal opportunities are naturally more attractive to people with fewer legal opportunities.) Given the fuzzy boundaries between different classes of criminal, we have little choice but to treat them for the most part as a single class.
Wednesday, December 24, 2003
Merry Christmas!
Merry Christmas to all! I have nothing new to say about this holiday, but here's something old (from this blog a year ago).
How to Get Lucky
This fascinating article, with the studies supporting it, confirms what I’ve long thought to be true about luck: that it’s not really luck at all. Lucky people display specific behaviors and attitudes that make them more likely to spot opportunities and find ways to turn bad outcomes into good ones. Unlucky people’s greater anxiety causes them to miss such opportunities, and their low expectations become self-fulfilling prophecies. Moreover, as one of the author’s experiments shows, there are things that unlucky people can do to make themselves lucky. (Thanks to Tyler for the pointer.)
Tuesday, December 23, 2003
And the Creep Goes On
Kelly Jane Torrance got booted from a meeting of the American Public Health Association, for having the temerity to record what the public health professionals were saying. Read the whole scary thing; here’s a taster:
Speaker after speaker scorned the notion that individual Americans are responsible for their own choices. Margo Wootan of the Center for Science in the Public Interest (CSPI—the Ralph Nader spinoff that has already ruined movie popcorn for millions of us), made no effort to hide her agenda. "We have got to move beyond personal responsibility," she pleaded with her audience. In a session titled "The Politics of Food," Skip Spitzer of the radical Pesticide Action Network added that "the idea of 'personal responsibility'" is merely "a cultural construct," ready to be superseded for our own good.Thanks to Will (guest-blogging at the Agitator) for the pointer, and for reminding me of a warning I’ve been meaning to give my readers. The strategy of suing Big Food for the eating choices of individuals is, as Radley and Julian have noted, the leading example of reductio creep: the transformation of a seemingly absurd extension of an opponent’s argument into a serious policy proposal. So what is the next step in the creep? What will be the target of the anti-responsibility lobby’s next campaign?
Amy has the answer. Obesity is caused by two things: consuming too many calories and burning too few. It makes as much sense to attack the latter as the former. So how long will it be before General Electric and other manufacturers of labor-saving appliances (such as washing machines, dishwashers, and escalators) get sued for making people fat? Amy’s faux proposal (warning labels on appliances) could be only the beginning. Amy might have been joking, but I’m dead serious. In principle, you cannot distinguish the case against Big Food from the the case against Big Appliances. If the legal and political systems abandon personal responsibility in the former case, why should they uphold it in the latter? Worse, the argument can be extended to any product or activity that tends to reduce calorie usage, such as movies, television programs, even white-collar jobs (how long before someone sues for workers’ comp because they got fat from sitting at a desk?).
The creep is like undertoe: before you know it, you’re a mile down the beach, scratching your head and wondering where you left your towel and cooler.
Monday, December 22, 2003
The Least Samurai versus Return of the Rings
I’ve seen two movies in the theater recently – “The Last Samurai” and “The Lord of the Rings: Return of the King.” Both kept me entertained while in the auditorium, but only the latter would I actually recommend to others. “Samurai” had some exciting fight scenes but was otherwise forgettable. Worse, like many movies of the “Western man goes to live in another culture” genre, its socioeconomic message is atavistic and misleading. The message of such films is nearly always something like, “The old traditional culture was more honorable than modern Western culture, and we should lament its passing.”
What’s wrong with that message? The fact that old traditional cultures were often politically brutal and economically backward. The samurai culture was no exception. The samurai were the warrior class of feudal Japan, a system that, like feudal systems elsewhere (notably Western Europe in prior centuries), privileged the nobility, tied the common people to their land, restricted trade, stunted economic growth, and forcibly kept the mass of people in poverty. “The Last Samurai” focuses almost exclusively on the seemingly honorable traits of the samurai themselves – loyalty, discipline, respect, etc. – while downplaying (if not outright ignoring) the cause those characteristics served, a cause utterly without merit: preservation of the god-monarch status of the Japanese Emperor and the feudal system over which he reigned. (To be fair, I’m eliding some distinctions here myself. At the time the movie was set, the 1870s, the Japanese Emperor’s power was weak, the monarch being little more than a figurehead. But the system he symbolized was still feudal, with all that implies.)
At times, the film’s conflict appears to be between traditional Japanese culture and the militaristic greed of the West. Undoubtedly, the Western powers often acted less than admirably during the historical period in question. The U.S. government terrorized the American Indians at home, while attempting to extend its military power abroad (though not nearly to the extent it did in the next century). The European powers were even worse, governing and exploiting vast colonial empires. Japan was justified in wishing to resist Western control.
But in no way does the West’s poor behavior legitimize the samurai culture. What made the Western nations’ foreign policies undesirable was their deviation from the Western liberal principles of freedom, democracy, property, and contract – principles that were the source of the West’s astounding prosperity and the dramatic improvement in their quality of life over the preceding four centuries. By rejecting those principles, Japan’s feudal political-economic system guaranteed its continued stagnation relative to the West. (Eventually, Japan was able to achieve independence from the West by adopting a quasi-capitalist system. Unfortunately, that system melded with the worst aspects of the militaristic samurai mindset, leading to the Japanese imperialism that culminated in World War II.)
I feel somewhat silly spending time criticizing “The Last Samurai,” because in truth, the film is a thematic lightweight. “Return of the King” is a much better film, far more worthy of discussion. Yet interestingly, the LOTR trilogy draws on some of the same primitive impulses: glorification of military prowess, disdain for technological progress, approval of traditional undemocratic forms of government. Why does LOTR deserve a pass on these matters while “Samurai” does not? The simplest is answer is that the LOTR films are immeasurably better in pretty much every other respect, from the writing to the acting to the cinematography. But more importantly, LOTR is obviously a fantasy, whereas “Samurai” claims the mantle of history. The samurai were real; the Rohirrim were not. We know little of the economic system of Gondor and Rohan, so we can imagine that their rulers are benevolent dictators who protected the economic and personal freedoms of their people. In Middle Earth, good and evil are tangible things that result from your species and your soul (human vs. troll, elf vs. orc); in the real world, good and evil are behaviors whose incidence is mostly a function of institutional incentives.
One completely unrelated comment on “Return of the King.” From those I’ve talked to about it, the most common criticism is that the ending was far too long. And it’s true that the movie includes a half hour or more of denouement, which is really too much for one movie. But in Peter Jackson’s defense, neither of the previous installments in the trilogy had any denouement at all. ROTK’s ending could charitably be considered three denouements in one. Is one half hour of ending really too much for nine hours of movie?
Friday, December 19, 2003
Beware of Bipartisanship
The campaign finance law that the Supreme Court just (mostly) upheld is a disaster, but at least give it credit for truth in labeling. Its official name is the “Bipartisan Campaign Reform Act” (BCRA). The term “bipartisan” betrays what is probably the worst aspect of that law: that it further entrenches the Democrat-Republican duopoly that dominates our political system.
Democrats and Republicans have no trouble reaching the public and getting their message out. Everyone knows the two major parties. Most everyone knows who their candidates are in any major election. The viewpoints of the major party candidates will be broadcast to the public even if they barely spend a dime, because they will benefit from scads of free media. All the news networks and papers report the campaign activities, press releases, and public appearances of the Democrats and Republicans. And the candidates can parlay their free media into paid media, because more exposure means more potential supporters becoming aware of their candidacy and subsequently contributing funds.
Pity the little-known independent and third-party candidates. Rarely do they get free media, and as a result, they typically remain unknown. And being unknown, they find it difficult to grab the kind of initial attention that generates large numbers of individual donations. For little-known candidates, the best option may be to rely on one or a few “sugar daddies” who are willing to make large initial donations for the sake of publicity. Ross Perot was able to do it with his own money – but he couldn’t have used his money to fund a candidate other than himself without running afoul of the campaign finance laws. The BCRA aggravates the problem by further limiting donations and “issue ads” that could draw attention to lesser known candidates and their causes.
Let us not forget that campaign funding, like most forms of investment, eventually falls victim to diminishing returns. The initial infusions of money have a much higher return than the later ones. The new campaign finance law might succeed in reducing the total amount of money received by the major parties, but it will also reduce the money received by their smaller competitors, and the marginal impact of the reduction will be much larger for them because they are still fighting to get start-up funds. The reduction in funding to both major parties will not change their positions relative to each other, but it will improve both their positions relative to independents and other outsiders.
The two major political parties got together and agreed to place limits on political activity. And then they sold the agreement as being in the public interest. Now, if the two dominant producers of a single product got together and agreed to limit their sales, or if they successfully lobbied to place regulations on their own industry, would anyone with a brain believe for more than half a minute that their actions were motivated by a desire to serve the public interest? I think not. So why should we give the D’s and R’s any more credit? Bipartisanship is not something we should applaud; it is something we should fear.
Thursday, December 11, 2003
Money Can't Buy Me Speech
Suppose that I think George W. Bush’s presidency has been a miserable failure. Actually, you don’t have to suppose, because I actually think that. And suppose I find a couple of dozen other people who agree with me. All of us want to convince other people of the same thing (that George W. Bush’s presidency has been a miserable failure), but none of us alone has enough money to buy a radio or TV ad. So we pool our funds and come up with enough money to buy an ad blasting the current administration for the miserable failure that it is, in the hope that other citizens will come to support our position.
The activity I’ve just described would seem to be the essence of free speech, no? And yet the Supreme Court has just upheld a ban on precisely that kind of activity.
Yesterday’s Supreme Court decision upheld campaign finance regulations of two distinct varieties. First, it upheld restrictions on donation of “soft money” to political parties. While I think such restrictions are terribly unwise, one can make at least a plausible argument for their constitutionality. A donation directly to a candidate or his party is not exactly the same as an independent expenditure, as Eugene Volokh argues persuasively here. (His argument, in short and probably inadequate form, is that a restriction on campaign contributions is effectively content-neutral and doesn’t even specifically target speech, since campaign funds can be used for a variety of non-speech activities.) But second, the Court also upheld a ban on “issue ads” run by interest groups, whether or not those interest groups have any direct connection with the candidate or his party. Inasmuch as an “interest group” could be any group of people associated by a common interest (such as, for instance, our interest in not having a miserable failure for a president, or not having a campaign finance law that prevents our saying so), the prohibition is not evenly targeted at the real special interests that were the alleged impetus for the law’s passage. The problem, of course, is that one person’s “special interest” is another person’s “good cause,” and the law cannot easily distinguish between them in any principled way. Nor should it try, because even true special interests have a constitutional right to speak their minds. Or did until yesterday.
Tuesday, December 09, 2003
Whiny Poets
I saw the same Marilyn vos Savant column that Alex did, and I was planning on posting a riposte myself, but Alex Tabarrok beat me to the punch. (My only complaint with Alex's reply is that he uses "advise" as a noun.)
Monday, December 08, 2003
Meta-Spam and Spam Evolution
The fastest emerging category of spam in my email inbox is now meta-spam -- that is, spam advertising devices for screening out spam. Some of them even say, “Want to stop getting annoying messages like this one?”
Also on the topic of spam, has anyone else noticed how fast the “Paris Hilton” spamming strategy has evolved? The original messages all spelled her name correctly. But now, presumably to reach people who have created email filters to keep out any subject line with “Paris” or “Hilton” in it, the latest messages all refer to “Par1s Hiltun,” “Parris Hi1t0n,” and so on. I have to wonder what fraction of the people who actually took the time to create an anti-PH spam filter will nonetheless eventually succumb to the temptation and click a link to see “Par1s Hiltun” doing amateur porn. The spammers must think the fraction is non-zero, or else they presumably wouldn’t bother with the modifications. Incidentally, I have not created any such filter yet, and yet it seems that all the messages have the young lady’s name misspelled now. There must be a selection mechanism at work here, such as the spammers noticing higher response rates on the messages with misspellings.
Friday, December 05, 2003
What We Really Need Now Is Another Pointless Waste of Money
Bush thinks we need to have another mission to the moon. Because our government has, you know, lots of cash on hand and nothing else to do with it.
Of Purses and Sows' Ears
Here’s an editorial about the massive pork content in the current appropriations bill. Pork projects account for almost $23 billion – appalling in the best of times, unconscionable given the projected budget deficit (in the hundreds of billions). However, when the author impugns the character of our elected leaders (“it's a reflection of the weak character of the individuals who occupy the country's highest offices”), I think he’s rather missing the point. I hate politicians as much as the next guy. But pork-barrel politics is a predictable and inevitable result of our democratic political system, and character has little to do with it. Even a politician with the best of intentions faces the inexorable logic of concentrated benefits and dispersed costs. You either bow down to it, or you eventually lose office.
It’s true, I suppose, that impugning the character of the politicians who take part in the pork-barrel process is one way of drawing attention to the problem and, possibly, limiting it. But we shouldn’t be misled into thinking that special-interest legislation results from bad character. Politicians are just responding rationally to incentives, and those who don’t respond to the incentives don’t stay politicians for long. Call it a character issue if you like, but the fact is that our system systematically selects for this form of bad character.
Wednesday, December 03, 2003
It’s My Baby and I’ll Sell If I Want To
I’ve been a long-time proponent of allowing a market in baby-selling -- or more accurately, the sale of parental rights -- as an alternative to the current adoption system. Under the current system, mothers are allowed to give their parental rights away for free, but they are not allowed to sell them for any price above zero. Like any price ceiling, this prohibition creates a shortage: too many willing adoptive parents and too few available babies. Letting the price rise to a market-clearing level would increase the number of babies available, by inducing more women to carry babies to term instead of aborting them, and also by inducing some “marginal” parents (i.e., parents who are just barely willing to keep a baby instead of giving it up for adoption) to opt for paid adoption instead. The result would be more satisfied adoptive parents, better cared for children, and wealthier birth mothers. For the complete case in favor of baby-selling, read this excellent article by Don Boudreaux.
However, a potential problem with the free market in adoptions recently occurred to me. It’s not a bad enough problem to overcome the arguments in favor (for reasons I’ll explain below), but it does present an interesting question about the power of markets to overcome bargaining problems. The problem arises from the fact that both birth mothers and birth fathers have a legal right to prevent an adoption. That means any potential buyer would need to buy off both parents before the sale could be complete. This situation creates a potential hold-out problem, since each of them would like as large a share of the gains from trade as possible. Fathers who under the current system have no interest in their offspring might, in a market system, suddenly take an interest for the sake of getting a share of the proceeds.
If both parents bargained hard enough, we could easily imagine some potential sales getting thwarted by the excessive demands of the mother and father. But set that difficulty aside, and assume there is some automatic division of the proceeds (arrived at through private negotiations or perhaps by fiat). Say the father automatically gets X% of the baby’s price. The problem is that the pregnant mother choosing between an abortion and carrying the baby to term would face a positive externality: she would bear the full cost of carrying the baby to term, but would only get (1-X)% of the benefits. At the margin, this would deter some pregnant women from having the baby at all, even if doing so would be efficient. If the full benefit is B, and the cost is C, this occurs whenever B > C > (1-X)B. As a result, an inefficiently small number of babies would be born and brought to market.
Now, presumably there’s a Coasean solution to this problem, as with any externality problem. When the mother chooses not to carry the baby to term, the father also loses whatever share of the payment he might have received. Realizing this, the father could offer the mother some inducement, presumably a larger share of the baby’s price, to induce her to give birth after all. The size of the inducement would be a function of the difference between the costs (C) and the benefits (B); the larger the difference, the greater would be the necessary inducement. In the marginal case, when B is just barely larger than C, the father would have to offer the mother almost the entire price and accept a negligible payment for himself. The problem here, as with any Coasean solution, is that transaction costs may be too high. Reaching an agreement over the size of the necessary inducement could be a costly process, in some cases costly enough to overcome the net gains from the agreement itself. Thus, while bargaining between the mother and father could reduce the size of the problem, it could not eliminate it: the number of babies born and brought to market would still be inefficiently low.
I’m still cogitating about this issue, so there may be some market solution that I haven’t considered. In any case, even if this potential problem is real, it’s hard to imagine that the result would be worse than the status quo, where the price that a mother legally can be paid is held down to zero (or actually, to the amount needed to pay for medical expenses and the like). Even if the price paid to the mother on the free market were not as high as it would need to be to induce all desirable births, it would still be higher than the price in the current system.
Friday, November 28, 2003
Cloning versus Adoption?
Brian Weatherson of Crooked Timber links to a paper by Stephen Coleman defending reproductive cloning against its critics. One such critic, David James, argues that adoption provides a viable alternative to all reproductive technologies (including cloning, fertility drugs, and in vitro fertilization). Coleman offers the following rebuttal:
The problem unique to adoption is that these cases involve an existing child, and in most cases, existing parents. In the words of Barbara Katz Rothman “For every pair of welcoming arms, there is a pair of empty arms. For every baby taken in, there is a baby given up”. The vast majority of mothers do not relinquish children for adoption because they want to, but rather because they are forced to through poverty. They are not unwilling to care for the child, they are simply unable. This is especially the case with international adoption. Virtually all the children adopted internationally come from economically or politically oppressed areas. Probably only the orphans from these areas can really be classed as “unwanted”. Even within the USA, one study found that 69% of parents giving children up for adoption cited external pressures, including financial constraints, as the primary reason for surrender. Given these problems, adoption hardly looks the glowing alternative to reproductive technology that James suggests.Much as I’m in favor of cloning, I fail to see how the above even begins to constitute an argument against adoption. In fact, I think it strengthens James’s case. While the decision to give up a child for adoption is undoubtedly a wrenching one for biological parents, the existence of willing adoptive parents does not make the biological parents worse off in any way. It merely provides them with one more option. Suppose there’s a poor woman who has just given birth to a baby, and someone with better finances offers to adopt it. Does that offer somehow make her poorer? Of course not. She can still choose to keep the baby, with all the hardship that would entail; the potential adopter has merely provided her with another route, which she is free to accept or reject. Her position is still unenviable (who wants to be poor?), but no worse – and arguably better – than it would be if adoption were ruled out.
And the same goes for anything that increases the size or quality of the pool of potential adoptive parents, and contrariwise for anything that diminishes the pool. So despite my support for cloning, I have to admit there’s something to the adoption argument. If the possibility of cloning substantially reduces the number of willing adoptive parents, both the children who could have been adopted and their biological parents may end up worse off.
It is true that the choice between keeping a baby and giving it up for adoption can cause a great deal of anxiety for the biological mother. Foreclosing the adoption route would eliminate any anxiety associated with making the choice. Instead of facing this agonizing decision, the mother would have no option but to keep the baby. But adoption will always be an option, whether or not reproductive technologies are available, so there’s no avoiding either the choice or the anxiety. And besides, I think it’s a good thing for a biological mother to ask herself, in all seriousness, whether she is ready to raise a child. Raising a child takes time, effort, and (yes) money; if biological parents don’t have all of these things to offer, then for the sake of the children they should at least consider adoption.
However, as James and Coleman both recognize, the adoption argument is hardly unique to cloning; it applies to any other technology that improves the ability of potential parents to have non-adoptive children. I’d be curious to know whether the advent of fertility drugs and in vitro fertilization substantially reduced the number of people seeking to adopt children. I strongly suspect that the effect of cloning would be smaller, given most people’s likely preference to have children genetically similar but not identical to themselves. (I personally would prefer a genetically related child to an adopted child, but I’d prefer an adopted child to a genetically identical child.) In any case, we would have to weigh the cost of fewer adoptions against the gain from better satisfying the preferences of parents who would prefer genetically identical to adopted children. If some people are so focused on genetics that they’d prefer clones of themselves to adopted children, they are hardly the ideal adoptive parents.