Libertarians stoutly defend the right, sometimes even the virtue, of non-voting. Some pride themselves on their non-voting; others take pleasure in tweaking the conventional wisdom (“It’s your civic duty!” “You have no right to complain if you don’t vote!”). I’ve done this many times myself. I usually invoke the public-choice analysis of voting: the marginal benefit of voting is essentially nil, since a single vote almost never decides any election, while the marginal cost includes the opportunity cost of your time, the cost of travel, the risk of getting hit by a truck on the way to the polls, etc.
But perhaps I have a mote in my eye. When I explain rational non-voting to my students, invariably someone objects that a large group of people can indeed affect the outcome of an election. True, I reply, but I don’t control a large group of people’s votes; I only control my own, and the power of that one vote is negligible – popular mythology notwithstanding. Mathematically, that’s a fact. But politically, the result of libertarians taking that fact seriously, while adherents of other ideologies embrace the myth, is the under-representation of libertarian votes in the vote total. Libertarianism becomes further marginalized by its lack of electoral clout, thereby attracting less attention and fewer future adherents. Arguably, then, holding the objectively correct belief may constitute an evolutionarily weak strategy.
Still, that’s just the way it goes, right? We cannot, like Pascal, simply adopt a false belief because of its potentially good consequences. But how about an alternative belief?
The rational non-voter’s cost-benefit calculus rests essentially on private costs and benefits, not social ones. If all libertarians incurred the personal costs of voting, all libertarians would be better off. What we have here is a collective action problem brought on by the divergence of private and social benefits – in short, a public good. And how do other public good problems get solved by private means? One route is the inculcation of moral norms enforced by social approbation and public shaming. We frown at housemates who don’t do their share of the household chores, or fellow parishioners who fail to put money in the collection plate. (I use the word “we” figuratively, since I live alone and belong to no church.) We administer guilt trips to free riders who don’t contribute to worthy causes we know they agree with. Some go so far as to send critical postcards to people with unkempt yards.
The libertarian individualist bristles at such intrusions. But remember: these are not the commands of the state – they are the alternative. And in the context of voting, they could provide libertarians with a path to political relevance. What if libertarians stopped applauding non-voting, and instead began prodding each other to go out and vote? What if we had “voting parties,” consisting of groups of people who vote together and go out for dinner afterward (at a location disclosed only to those who joined in voting)? What if every libertarian called two or three libertarian friends on election day to make sure they did their duty? Yeah, duty. You got a problem with that?
What would happen? Would we win elections? No way. Would we swing elections to one major party or the other? Possibly, if we coordinated our votes. Would we attract more attention with higher numbers? Very likely, I think.
Oops, I think I may have just convinced myself.
Thursday, August 05, 2004
A Libertarian Case Against Non-Voting
Surfing Property Rights
Most people, when they think of surfing, picture fearless athletes charging down moving mountains of water. Non-surfers who know the sport only through movies and videos have little else to go on. But even surfers dwell on those sorts of money shots, fantasizing about the last great ride or the next big swell. I admit to the same daydreams. Surfing has hardly washed the law geek out of me, though. When I think of surfing, I also picture property rights in action.
What has surfing got to do with property rights? A lot. Although few of them admit or even realize it, surfers obsess about defining, getting, defending, and enjoying—especially enjoying!--property rights in waves. Specifically, surfers deal in rights to the area on a wave face capable of providing an enjoyable ride.
Rideable wave space, like property generally, proves all-too-rare. The raw inputs for surfable waves—a fair sized swell arriving at a surf break under relatively smooth conditions—don’t always obtain. And when nature finally does supply those resources, a crowd of surfers usually shows up to demand them. Since one wave face can generally support only one ride at a time, scarcity arises.
Bloody fights would probably arise, too, if surf ethics didn’t embody a profound respect for property rights. With rideable waves as with valuable goods generally, property rights help to coordinate social behavior, preventing conflict and waste. When a sweet set rolls in, everybody in the line-up gets a fair shot at catching a wave and, if successful, enjoys a solo trip to surf nirvana. For a summary, see this brief description of customary surfing rules.
How do the rules of surfing embody a respect for property rights? First and most importantly, they uphold the right to homestead wave faces. Sets roll in unowned. As this helpfully illustrated guide explains, the first surfer to take off closest to the breaking face of a wave enjoys the sole right to ride that wave face. Luck plays a role in finding that magic take-off point, but the ethics of surfing primarily award waves on the basis of wave knowledge, line-up strategy, and gutsy paddling.
How do surfers enforce their wave rights? For the most part, they rely on the gentle arts of social suasion. Surfers bobbing in the line-up make up a community of sorts, one often strengthened by the presence of locals who know and look out for each other. Getting the stink-eye for dropping in on somebody else’s wave stings badly enough. Sanctions against repeat offenders may escalate to sharp words or, in extraordinary cases, to physical violence. When someone dropped in on me recently, for instance, I first forebore the offense, then took alarm at his unsafe proximity and verbally warned him to back-off. Finally, when that proved unavailing, I put my hand on the punk’s chest, shoved him off his board, and finished out my ride.
Like any property holder, a surfer can transfer, jointly own, or extinguish his rights to a wave. Someone who favors large, outside waves might ride one only partially in-shore before pulling out over the lip and paddling back out, allowing a surfer who favors inside breaks to then take possession. Longboarders on softly sloping waves often share the face, especially with their friends. Surfers at some breaks honor a convention whereby the party in rightful possession of a wave can offer to share it with all comers by calling out, “Party wave!” or “All aboard!” One bright and warm day last summer, at Old Man’s, I joined some five other surfers on such a wave. We flew in formation for a while, like surfing Blue Angels, and then one by one peeled over the outer lip of the breaking wave.
Surfers can, of course, waste the waves they homestead. I doubt anyone does so intentionally; what surfer would? Every surfer wipes out from time-to-time, however, often in circumstances where no surfer can reclaim the wave thus abandoned. Though other surfers may groan and shake their heads at the lost opportunity, they generally respect others’ rights to do with waves what they want. Someone who repeatedly wastes waves, however, may soon draw blame for (in effect) violating the second Lockean proviso that no one take more property from the commons than they can use without letting it go to waste. (See the Second Treatise, section 31.)
I should caution the reader that these observations rely on my own, sadly limited, fieldwork. The topic deserves a great deal more research. To that end, I eager solicit funding so that I can expand my study to include cross-cultural comparisons of the role that property rights play in surfing by, for instance, extensive experimental work in Hawaii, Costa Rica, Fiji, and Australia.
Wednesday, August 04, 2004
Death of a Pioneer
I’m almost a week late, but since no blogs that I read have mentioned it yet, I suppose it’s up to me. I’m greatly saddened by the death of Francis Crick. If we had our hero-worship priorities straight, his funeral would have garnered at least as much attention as Reagan’s.
Landscaping Man!
Some mysterious and opinionated person has launched a local crusade to beautify my San Clemente, California neighborhood. His (let’s suppose it’s a man) target: unsightly landscaping. His modus operandi: anonymous postcards. His prose: bizarrely condescending.
I learned of this fellow’s campaign from a neighbor some few doors away. After receiving several of his postcards, she began to worry that she was being targeted by some sort of home improvement stalker. When she worriedly asked our postal worker about the cards, however, he told her that she was hardly alone. Several people in our neighborhood had received similar missives.
My neighbor loaned me one of the postcards she’s received. It came to her addressed, “Good Neighbors?” and bears a postmark from a nearby town. (Other cards have born postmarks from all over the country, leading some recipients to surmise that the sender works as an pilot.) The front of the card bears unremarkable picture of the Stanyan Park Hotel in San Francisco. The back of the card bears this text in what looks to be a man’s handwriting:
The tree. The D-Disturbingly, after my neighbor cut down the “D-E-A-D tree” (which she had planned to do even prior to receiving the postcard), she got a card congratulating her on her progress (and suggesting another chore). The author apparently keeps tabs on his targets. Although the card I’ve quoted strikes a somewhat casual tone—“What do you think?”—other neighbors say theirs have sounded quite angry.
E-A-D Tree is AN
eyesore on your prop
erty. Would take A
bout AN hour to cut it
up and put it in
the proper waste bin. What do you
think? Then after that there’s more work.
No matter how nasty the author’s tone, so long as he stops short of threatening harm to sloppy groundskeepers I doubt that his weird hobby crosses the line into illegality. On a charitable view, he even acts heroically. Private landscaping visible from city streets constitutes a public good, after all, one that homeowners don’t always see fit to maintain. Insofar as he shames slackers into improving their streetside yards and gardens, then, our mysterious benefactor helps the whole community. You might picture Landscaping Man as he no doubt pictures himself: Dashing down our quiet streets in a bright green mask and cape, a golden trowel in his raised fist, calling for, “Beauty! Industry! And Resale Value!”
Contrariwise, and back in the real world, Landscaping Man needs to get a life. A given homeowner largely internalizes the benefits of his or her landscaping, thank you very much, because it directly impacts the value of his or her home. And even a “D-E-A-D Tree” does not excuse freaking out your neighbors with cowardly and nasty notes.
Who would do such a thing? Personally, I suspect one of the realtors who specializes our neighborhood. Such a person would both have occasion to prowl our streets and a financial motive to drive up housing values. I might add that a realtor would also possess the requisite personality for craven nagging, but that would not be fair. I’ve run into—and into conflict with—some realtors of that type, but I’ve met some very pleasant and honest ones, too.
One more element of mystery closes out this story: How the heck has my house escaped criticism by the home improvement stalker? Granted, the front isn’t too bad (though I just lost two lavender bushes and the ornamental cherry tree again needs pruning). But I’ve fairly well let that loathsome iceplant take over the side yard. I’ll bet that Landscaping Man has held only because he cannot decide whether I or my neighbor deserves the blame for that offense.
I wait in trepidation, fingering my shears.
How I Learned to Stop Worrying and Love the Spam
Tom is right, of course. It’s an endless game of predator-and-prey. As fast as we evolve new strategies to foil the spammers, the spammers evolve strategies to overcome them. As you can see from the modified right-side bar, I’ve decided to concede the race. Send us your penis enlargers, your Nigerian financial scams, your farm-girl fetish sites yearning to breathe free!
UPDATE: Yes, that was supposed to be a joke. I've restored the so.and.so-AT-yadayada.com format in the right-side bar. I'm not quite ready to concede the race just yet. But Tom is assuredly correct that smart spammers are wise to the -AT- convention, and it's only a matter of time before all the spambots scan for it.
Tuesday, August 03, 2004
The Stampede-of-Elephants Effect
This weekend I watched “The Butterfly Effect” on DVD, and I must admit thinking it was underrated. I might feel differently if I had paid to see it in the theater, but as a rental it was definitely worth the price. It was one of the better takes on time-travel-induced alternate realities I’ve seen. I had only one serious complaint with the movie: its title. WARNING: Spoilers ahead.
Chaos theorists use the term “butterfly effect” as shorthand for the phenomenon of sensitive dependence on initial conditions. The notion is that small, seemingly insignificant events – something as tiny as the flapping of a butterfly’s wings – can result in cumulative changes culminating in drastically different outcomes, such as the creation of typhoons.
I would expect a movie titled “The Butterfly Effect” to draw on that insight, perhaps by having the time-traveling character step on a roach and thereby alter the outcome of presidential elections. But every history-changing event in this movie is undoubtedly of major significance, at least to the lives of the main characters: saving a little girl from molestation by her pedophile father, preventing a mother and her baby from getting killed in an explosion, and so on. These historical alterations change the present, not always for the better, but certainly in ways that follow straightforwardly enough from the historical events in question. Meanwhile, lots of insignificant details about the present remain essentially the same; for instance, Ashton Kutcher’s character always attends the same college, and even winds up in the same dorm room in at least three alternate realities. And at one point, Kutcher's character makes what could be a relatively major change in his life's history, with no apparent impact on the present except the sudden appearance of scars on his hands. Some changes, it seems, don't matter that much.
None of this makes the movie less worthwhile – it just makes the title inappropriate, and all the scientific commentary included in the DVD’s extras pointless and pretentious. If you’re looking for a better fictional treatment of the butterfly effect, watch Run Lola Run or The Simpsons: Treehouse of Horror V.
Glen Quixote?
Thanks, Glen, for inviting me to blog with you for a while! I don’t suppose the world really needs yet another pro-market, technophile, law professor blogger. But neither does it really need, say, Two-Buck Chuck. I’m lucky that people enjoy a great many things that fall short of needs or, as seems more fitting in my case, that they at least forebear them.
You Agoraphile readers who know Glen only through his writings may not realize what prodigious charms he wields in person. Having taught with him at several Institute for Humane Studies seminars, I know better. Those IHS seminars include evening socials, where I’ve spent untold hours downing beers and swapping groansome jokes with Glen and the students who invariably surround him. Oh, the stories I could tell, even though I won’t, assuming I could remember them, which for the most part I don’t!
Instead, I’d like to discuss another aspect of Glen’s character, one only recently revealed to me: His willingness to carry on a worthwhile fight against all odds. I speak here not of his libertarian leanings or deep appreciation of Buffy the Vampire Slayer, but rather of his struggle against spam.
When Glen gave me the details about joining his blog, he noted that he planned to publish my email address as “tbell-AT-chapman.edu,” to fool spambots. I expressed doubt about his strategy, reasoning that the malfeasants who program spambots have undoubtedly noted and accommodated that widespread convention. I invited Glen to follow through as he planned, anyhow, saying that I’m resigned to getting spam. In a testament to Glen’s tenacity, he did just that.
I don’t see much harm in using the “user-AT-domain.suffix”convention, though I doubt it does much good. As this web design firm notes of such techniques, “Any decent spambot can decode them and get your actual email address.” On my own contact page I use a GIF image of my email address, a strategy that certainly costs more to implement but that probably foils spambots a bit more effectively.
Still, I have few pretenses that Glen’s, my, or anybody’s strategy to limit the supply of email addresses will substantially curb spam. Only David Friedman’s plan—forcing spammers to pay email postage to their intended recipients—seems to me both appealing and workable. To put it in Quixotic terms, while most of us tilt at windmills, Friedman has targeted a smartbomb on the real dragons.
Tom W. Bell, Guest-Blogging Here
I’m happy to announce that Tom W. Bell will be guest-blogging on Agoraphilia for the next two weeks. Tom is a professor at Chapman University Law School, where he teaches and does research on intellectual property, Internet, entertainment, and commercial law. He’s also a veritable polymath, with interests in technology, music, and surfing, among many other things. I’ve had the pleasure of Tom’s company as a co-faculty member at IHS seminars for three years. This year, I successfully persuaded him to give blogging a shot. I look forward to reading his posts.
Monday, August 02, 2004
The Still Alarm
Upon hearing about the latest terror alert, which unlike most previous alerts actually names specific targets threatened by Al Qaeda, I reacted skeptically. “If I were a terrorist,” I thought, “and if I knew that counter-terrorist organizations were actively trying to thwart my plans, what would I do? Ah, yes: I would make it look like I’m targeting some location I don’t actually plan to attack, so the authorities would be distracted while I put my real plot into action.”
Then I had second thoughts. They have lots of smart people working at the intelligence agencies. Well, maybe not so smart, given recent failures; but surely smart enough to have thought of the point above. So they should be thinking, “If there is clear evidence that terrorists are casing targets A, B, and C, that’s really evidence that they are trying to distract us, and they plan to attack some other targets D, E, and F instead.”
But wait a minute. Those terrorists are pretty wily. They could presumably duplicate both lines of reasoning above, and then think to themselves, “If we make it look like we’re planning to attack sites A, B, and C, the intelligence agencies will think we’re trying to distract them, so they’ll focus their attention on sites like D, E, and F. Then we can attack A, B, and C after all!” And then the counter-terrorists would think, “The terrorists, in making it look they’re taking A, B, and C, are trying to mislead us into thinking they’re actually targeting D, E, and F, but in fact they are indeed targeting A, B, and C…”
This is a classic game of double-think. We could spiral through endless layers of “I know that you know that I know that you know…” without ever reaching a decisive conclusion. The structure of this game is identical to that of Matching Pennies, the Holmes-Moriarty game, and the Sneetches game. The only equilibrium of this sort of game is a mixed-strategy equilibrium, wherein both players (in this case, terrorists and counter-terrorists) randomize over their possible actions. I conclude that the current terror alert, which represents the counter-terrorists’ random response to the terrorists’ random evidence-creation, provides us with no information whatsoever.
Sunday, August 01, 2004
Sex Differences
In another outstanding post on the internal contradictions of (much) religious conservatism, Roderick Long gives the Vatican's letter "On the Collaboration of Men and Women in the Church and in the World" the rogering it richly deserves. Rod's main point: that the Catholic Church, allegedly a defender of the spiritual over the biological and material, nonetheless resorts to blind biology-worship in defining the role of women.
I only have one small complaint with Rod's analysis. He says:
The Vatican also pays women the old false compliment of a special feminine "sense and ... respect for what is concrete," as "opposed to abstractions which are so often fatal for the existence of individuals and society." That sounds very nice; but propagating such a view of women is hardly likely to enhance their success in intellectual careers. (Admittedly some feminists have made precisely the same mistake, trumpeting hostility to abstraction as some sort of liberating "feminine voice" and "ethics of care," when in fact such stereotypes are more plausibly regarded as artefacts of women’s subjection.)I wouldn't be so quick to dismiss men's and women's differing capacity or affinity for abstraction as a matter of pure socialization. One doesn't have to engage in biology-worship to admit that there exist real biological differences between men and women, and this may be one of them. Naturally, I'm open to evidence indicating otherwise. Of course, virtually all mental and physical characteristics exist on a spectrum, so it would be wrong to make strong assumptions about the capacity of a specific man or woman to engage in high-level abstraction, even if it is indeed true that men and women as groups differ statistically.
Friday, July 30, 2004
Philosophers Who Don't Pull Punches
I love this quotation from Herbert Spencer, although I suspect it's because of statements like this one that he has (wrongly in my view) been tarred as an evil Social Darwinist.
We have no patience with the mawkish philanthropy which would ward-off the punishment of stupidity. The ultimate result of shielding men from the effects of folly, is to fill the world with fools.Well put. But why doesn't this indicate Social Darwinism on Spencer's part? Spencer focused primarily on the cultural evolution of practices, not the biological evolution of traits. The primary feedback mechanism is not the reduced representation of the fool's genes in the gene pool, but the cautionary tale from which others can learn how to be less foolish. Second, Spencer did not advocate programs for the deliberate weeding out of undesirables, because he recognized the spontaneous character of the evolutionary process. Fools weed themselves out; they don't need much help.
Public Choice Kritique
I’ve just returned from lecturing at a workshop for home-schooled debaters in Santa Clara. While there, I began thinking about a convention of debate that usually improves the quality of debate, but under some circumstances rules out some perfectly valid argumentation.
In policy debates, the affirmative team is granted the power of fiat (Latin for “let it be”), which means they can assume for purposes of the debate round that the policy they advocate will be passed into law. This prevents the negative team from making arguments such as, “You may be right, but this law would never be passed because the vast majority of people think you’re wrong,” or “This policy would never be passed because Senator So-and-So, chair of the Such-and-Such committee, would never let this bill reach the floor of Congress.” In general, fiat makes for a better debate because it forces the negative team to focus on substantive critiques – i.e., showing why this policy is a bad idea in itself, independent of whether the public or any given politician thinks it’s a bad idea.
Unfortunately, fiat also rules out public choice argumentation. To oppose government action, you needn’t believe there is no conceivable policy that would improve upon market outcomes. All you have to believe is that lawmakers lack the correct incentives and/or information to adopt and implement a good policy. Public choice theory and observable reality both amply demonstrate the poor incentives at work in the public sphere. Yet fiat bars that kind of argument.
As a result, some teams will fund their plans by “reducing waste and corruption,” or by naming some specific pork-barrel programs they would eliminate. Those are nice thoughts, but the incentives inherent in (our form of) democratic government lead inexorably to waste, corruption, and pork-barrel programs. To fiat them away is to assume away an unavoidable feature of the political process. In reality, almost any new program will be funded through more borrowing, more taxation, or more inflation.
Fortunately, fiat does (I believe) allow room for the branch of public choice economics that applies to bureaucratic choice. A negative team could argue that fiat allows the affirmative team to assume their plan’s passage by the legislature, but not its correct and influence-free implementation by an agency of the executive branch. I’m pretty sure the concept of regulatory capture would fly in a policy debate round.
A few months ago, I learned that high school and college debaters had begun using a form of argument called a “kritique,” in which the negative team challenges the language of the affirmative team’s case or its right to decide the topic of the debate. (I’m told the German spelling is attributable to Wittgenstein or some of other philosopher credited with this kind of position.) For example, a team might argue – paradoxically – that a case to legalize drugs is bad because it privileges the notion that government action (or inaction) is more important than private action in dealing with drug-related problems. Or they might argue that the affirmative’s use of the word “he” to refer to a person of indeterminate gender makes the affirmative’s position inherently sexist. That is exactly the kind of twisted, deconstructionist reasoning I think ruins the art of debate. However, given my above point about fiat and public choice, perhaps there is room in debate for “kritiques” of debate conventions when they obscure factors highly relevant to real policy decisions. I’m not sure, however, if a principled line separates this “kritique” (yes, I will continue to use the scare quotes) from the bogus ones. Maybe there are some valid arguments that just don’t belong in debate rounds.
Thursday, July 22, 2004
The Libertarian Party's Public Choice Problem
Why can’t the Libertarian Party manage to nominate someone respectable for president? In 1996 and 2000, the LP nominated Harry Browne, who seemed respectable but turned out to be corrupt. This year, they nominated Michael Badnarik, who turns out to be a goofball and a tax crank.
Critics of libertarianism will naturally take such poor choices as a sign of what libertarianism’s all about. Others will blame the terminal silliness of the LP, which seems dominated by nutbars intent on making sure it remains an obscure third party (apparently they like being outside the mainstream). I’m sympathetic to the latter explanation, but it also begs the question: given the large number of smart, sensible, and honest libertarians out there, why does incompetence rise to the top at the LP?
I suggest a straightforward application of public choice theory. Public choice theory observes that voters have very little incentive to become informed about issues, because the chance of any one individual’s vote swaying the outcome of an election is approximately zero. A comparison of the costs and benefits of becoming informed indicates that most voters will remain rationally ignorant about most issues. The concept of rational ignorance is usually applied in the context of general elections, with respect to knowledge of public policy topics. But it also applies in nomination races within political parties, with respect to the background and personal characteristics of the candidates themselves.
In the major parties, one major factor mitigates the problem of rational ignorance: each candidate has a very strong personal incentive to discover and publicize his opponents’ dirty laundry. Doing so can substantially increase his own chances of winning the nomination. Members of the candidate’s staff, who stand to get future jobs, power, and benefits if their man wins, have a similarly strong incentive to look into opponents’ backgrounds. But in a small party like the LP, everyone knows the whole operation has very low stakes, because the LP’s candidate – no matter who he is – will assuredly lose the general election. Even though the small numbers mean that a single delegate’s vote could actually decide who gets the LP nomination, the significance of that nomination is essentially nil. As a result, neither the candidates nor their supporters have a strong incentive to get the goods on the other candidates.
Given the incentives, it is not terribly surprising that the LP continually nominates corrupt/incompetent/just-plain-goofy candidates. And the problem perpetuates itself, since the risibility of past candidates contributes to the low reputation of the party, further reducing the return on investing any time or effort in the party’s nomination process.
Light Blogging Ahead, and Behind
I've been attending an Institute for Humane Studies seminar for the last several days; hence the absence of new posts. Blogging will also be light next week (though I may slip in a post or two), as I'll be speaking at a home-schoolers' debate workshop in Santa Clara.
Friday, July 16, 2004
Couldn't Have Said It Better Department
Roderick Long has an excellent post on the philosophical contradictions of religious conservatives. It’s like shooting fish in a barrel, of course, but Rod’s a mighty fine shot. For instance, Rod observes that religious conservatives love to rail against the evils of moral relativism, and then points out:
[The religious conservatives] tend, for example, to accept "divine command theory," which holds that what makes something right (or wrong) is the fact that God commands (or forbids) it. The upshot of such a view, of course, is that God's commands must be viewed as completely arbitrary and random. After all, if God had reasons for commanding and prohibiting as he does, then those reasons, rather than God's will, would be the basis of the action's rightness or wrongness -- an intolerable restriction on God's "freedom." Hence such conservatives are as hostile as any relativist to the notion of a rationally intelligible moral order. They too regard morality as being a matter of groundless whim; they just think the whim is God's rather than ours.Well put. I am not a believer myself, but even if I were, I’d still have to wonder what authority other than argumentum ad baculum lies behind God’s commands. For that reason, I’m inclined to think too much emphasis is put on the question, “Is there a God?” and too little on the question, “Why does it matter?”
Wednesday, July 14, 2004
The (in)Significance of Significance
I do not intend for this post to be about the minimum wage. I don’t really have anything new to add to the subject, except to point to my VC post on it, and to voice my basic agreement with Tyler Cowen and Steve Horwitz. But the topic of this post was inspired by the blogospheric discussion of the minimum wage, especially Jacob Levy’s question about the statistical questions involved.
Everyone who takes an undergrad stats class learns how to perform statistical significance tests. They learn to choose a significance level of 95%, corresponding to an alpha of 0.05. Sometimes, they learn that you can select a higher or lower level of significance, like 99% (alpha = 0.01) or 90% (alpha = 0.1). But what I’ve gradually realized, from speaking to (and testing) many undergrads, is that they typically have no clue why – and more importantly, when – that’s the right level of significance to choose. And I’m increasingly of the opinion that lots of professionals don’t, either. (Maybe I’m one of the ignorant professionals – I’ll judge that from the reactions to this post. Also, nothing I say here is meant as criticism of Jacob, who addresses a related but different question.)
The fact is that alpha = 0.05 is essentially arbitrary. Technically, alpha is the probability that your testing method will lead you to incorrectly reject some “null” hypothesis. The null is the complement (logical opposite) of the “alternative” hypothesis, which is the claim you’re interested in supporting. To take the minimum wage example, the null hypothesis is that there’s no relationship between the minimum wage and employment. With alpha = 0.05, there’s a 5% chance you’ll incorrectly reject that hypothesis and conclude there is such a relationship (when in fact there is not).
But why should alpha be so small? Why put such high value on not incorrectly accepting our alternative hypothesis? The idea is that, as scientists, we ought not put our faith in a conclusion unless we have very strong proof. And, again as scientists, we must be satisfied to remain agnostic if we fail to get statistical significance for a proposition. And this is the key point: The absence of statistical significance should not lead us to accept the null hypothesis. It should lead us to be agnostic about both the null and the alternative hypothesis. To take the minimum wage example again, if studies fail to show the minimum wage causes unemployment, the appropriate conclusion is not that there isn’t a relationship, but that we just can’t say so with much confidence.
Think about it this way. Above, I supposed we were interested in showing that there is a relationship between the minimum wage and unemployment. In order not to make the task too easy on ourselves, we set a rather high bar: 95% confidence. But what if we were interested in showing there’s not a relationship? In that case, we are interested in supporting the null, not the alternative, hypothesis. If we set alpha = 0.05, and if we accept the null whenever we fail to accept the alternative, then what is the chance of incorrectly affirming that there’s no relationship? It is not 5%, but in fact something much larger – what statisticians call the beta value, corresponding to a Type II error (the error of incorrectly failing to reject the null hypothesis). The smaller is the alpha, the larger is the beta. And that means using an alpha of 0.05 makes it way, way too easy to claim to have proven the no-relationship hypothesis.
Using a small alpha makes a lot of sense if you’re choosing between belief and agnosticism, and you wish to give agnosticism the benefit of a doubt. Scientists don’t want to express support for something unless they’re pretty darn sure of it. But what if the choice is not between belief and agnosticism, but between one belief and another belief? In practical decision-making, that is usually the case. The owner of a movie theater has to decide whether students’ ticket-buying behavior differs from the rest of the public’s, and if he makes the wrong decision he will not make as much money as he could have. He has no choice but to pick a belief – either he thinks students are probably different and he charges different prices, or he thinks they are probably the same and he charges the same prices. Similarly, a government can either impose a minimum wage or fail to do so. It can’t remain purely agnostic like the scientist can.
In cases like these, the arbitrary setting of a very small alpha doesn’t make sense, because both the alpha and the beta are important. Small alpha implies large beta. In the case of the minimum wage, a large beta means a high chance of assuming there’s no relationship between the minimum wage and employment even though there is.
Again, let me emphasize that I’m not trying to make a point about the minimum wage per se. The point I’m making here applies to business, public policy, and numerous other cases of practical decision-making in which one must choose between alternate strategies based on alternate beliefs about the world. The decision rules of pure science should not be confused with the decision rules of life.
Tuesday, July 13, 2004
Self-Promotion
I have an op-ed in the East Bay Business Times (free registration required), discussing state bans on direct shipping of wine to consumers. I'm not sure if it's okay for me to post it here as well, so you'll have to follow the link.
I see that some mild editing has been done, but nothing too serious. I do have one concern about my own claims: I used the phrase "Sonoma Valley chardonnay" without actually checking to make sure they make chardonnay in Sonoma Valley. For all I know, they only make cabernets there. But hey, I'm an economist, not a sommelier.
UPDATE: The piece has been picked up by the Tri-Valley Herald and the Argus. Cool! Also, Jason kindly informs me (in the comments) that I'm safe on the Sonoma Valley chardonnay issue.
Monday, July 12, 2004
Unfriendly Amendments
A friend just forwarded me an email alert, which began with the following:
In less than 48 hours, Congress will vote on an amendment to the U.S. Constitution that would permanently deny marriage equality to same-sex couples. This is unprecedented -- never before has our Constitution been amended to take away anyone's rights. We've got to fight back.The proposed amendment is a bad idea, of course. But it’s false to say the Constitution has never been amended to take away anyone’s rights. What about the 18th Amendment, which instituted the prohibition of alcohol? That definitely took away people’s rights. We might also include the 16th Amendment, which allowed Congress to institute an income tax.
Does Divorce Encourage or Discourage Marriage?
The gay marriage debate has gotten me thinking about the effect of divorce on marriage. That divorce has a deleterious effect on marriage as an institution is a notion shared by both the advocates of gay marriage (“What’s really undermining marriage is divorce, not homosexuality”) and opponents (“Gay marriage, like divorce, will further the degradation of traditional marriage”). But is it really true that divorce is bad for marriage?
From an economic perspective, the answer is ambiguous. Marriage is a kind of contract. Divorce is a means of ending the contractual relationship. What happens when you make it easier to get out of a contract? On the one hand, people will be less inclined to enter a contract if the other party can bail out, potentially leaving you in a difficult situation (say, stranding your relationship-specific investments). On the other hand, people will be more inclined to enter a contract if they know they can end the relationship when it’s no longer beneficial for themselves. For example, if I like an apartment but I’m unsure I’ll enjoy living there, I’m more inclined to rent on a short-term lease. Likewise, if the landlord think I like a good tenant but can’t be certain, they’re more inclined to rent to me on a short-term lease. There’s a reason that business contracts often contain escape clauses: without such an option, some parties won’t contract in the first place.
The application to marriage is straightforward: easier divorce could increase or decrease the number of marriages performed. The participants in some potential marriages are made better off by divorce, others worse off. Now, the conservative defenders of marriage might argue that the total number of marriages, or the satisfaction of the participants, is not the issue – the real issue is having stable marriages, and easy divorce decreases stability through both the routes described above. People become less willing to make investments in a relationship that might end, and they become more willing to enter such relationships lightly because they have an escape hatch.
But why do we want marriages to be stable? The main argument is “the good of the children.” Realize that many couples who might consider marriage already have kids (or kids on the way). Being unsure about the lastingness of their relationship, they might be unwilling to marry if marriage is hard to quit, but willing to give it a try if it’s easy to quit. If they get married with an easy divorce option, the kids could end up better off because their parents are more inclined to stay together than if they hadn’t tied the knot. And even if the parents wind up getting divorced, arguably the kids are no worse off than if the parents had never married in the first place and eventually went their separate ways.
I’m not claiming the effect just described is significant enough to make easy divorce, on net, a good thing. But it is something to keep in mind, because it means that divorce’s effects are ambiguous in theory, even if we focus solely on its effects on children. In principle, it would make most sense to allow couples to choose the terms of their own marriage contracts. That would allow couples who feel the need for an escape clause to include one, without obligating other couples who want a stronger commitment to follow suit.
Friday, July 09, 2004
Suckers Wanted Here
I’ve received the following email a couple of times:
[Citibank logo here]I’m embarrassed to admit that I fell for it long enough to click the link. The logo was the main thing that fooled me, and I didn’t read closely enough to catch the weirdness of the language. But fortunately, I’m not enough of a sucker to fall for the next step. The form-window that popped up asked me to provide:
Dear client of Citi,
As the Technical Service of the Citibank have been currently updating the software, We kindly ask you to follow the reference given below to confirm your data, otherwise your access to the system may be blocked.
[hyperlink omitted]
We are grateful for your cooperation.
Full nameWhew. If anyone is willing to give away that much information, I think they just may deserve to get their identity stolen. Interestingly, the link was set up so that it simultaneously opened the form-window just described and the actual Citibank website. Clever.
ATM card number
Bank account number
PIN number
User name for online access
Social Security Number
Mother’s maiden name
Date of birth
Credit card number
Credit card expiration date
CVV2 number for credit card