Wednesday, April 22, 2009

Read then Listen or Listen then Read

Currently I am teaching a course in law and economics. Most of the reading for the course consists of a book I wrote—based on my lecture notes from previous iterations of the course. As in most courses, students are supposed to read each chapter before the first of the classes that discusses it.

I reach the point in the discussion at which I pose a puzzle and want to see if the students can work out the solution—and it occurs to me that any student who has done the required reading already knows the answer, because it is in the book. I make a particularly telling point, summarize an argument with a punch line that I least believe to be witty—and if a student reacts, that is evidence that he hasn't read the assigned chapter, since it contains the same punch line. Large parts of the dramatic effect of the class only work for students who haven't done the reading I assigned for them.

One solution would be to use someone else's book. But if there were another book on the subject I was happy with, I wouldn't have had had to write mine. Another would be to try to forget everything in the book, start over with a blank page, and create an entirely new explanation of the ideas for class. I doubt I could do it, and if I could I wouldn't—I would rather spend my time understanding and explaining some new set of ideas.

An alternative that recently occurred to me is to reverse the order, assign each chapter to be read after the relevant class instead of before. That way the class can introduce the ideas, the reading can fill in details, reinforce what was discussed in class, give the student a second chance to make sense of something he did not understand the first time through.

And I can deliver my punch lines to students who don't already know them.

An intermediate possibility was suggested yesterday by a student; he said that he usually read the chapter after the first class in which the material was discussed but before the second. That way the material was fresh when he first heard it in class and he could use the second class to raise any questions that the reading had left him with.

Has anyone out there tried one or another versions of this approach, either as student or teacher? If so, how did it work?

A Coincidental Truth

Yesterday I opened an envelope from Young America's Foundation, the successor organization to Young Americans for Freedom, a conservative student organization whose magazine I used, many years ago, to write a regular column for. It was a fund raising letter, obviously a mass mailing, and started "Dear friend."

It was signed by Dana Rohrabacher, currently a congressman from southern California. Forty some years ago he was a libertarian activist and a folk singer.

And a friend of mine.

Friday, April 17, 2009

If you want war, work for justice

I think it is a more plausible slogan than the usual version. If you and I disagree because I want an outcome more favorable to me and you want an outcome more favorable to you, there is room for compromise—as we see whenever people bargain over the price of a house. But if we disagree because I see what I want as just and the alternative as unjust and you see it the other way around, compromise looks to both of us like moral treason.

Consider the issue, currently a live one in Europe, of whether people should be fined for saying or writing things critical of Islam. For those who support the traditional liberal view, agreeing to a fine of five hundred dollars instead of a thousand dollars isn't a solution—any punishment at all is an intolerable violation of free speech. For some orthodox Muslims, on the other hand, permitting people to slander the Prophet is clearly unacceptable; if the government will not impose a fine large enough to stop such an outrage, it is up to the believers to stop it themselves.

That, I think, is part of the nature of beliefs about justice—they are absolute, bright edged, in a way in which preferences are not. The point is summed up in the Latin phrase Fiat justicia, ruat coelum—let justice be done though the sky falls.

Those whose bumper stickers read "If you want peace, work for justice" simply take it for granted that there is no question what is just; if you want to find out, just ask them. The problem with the world as they see it is merely that other people are insufficiently virtuous to act accordingly.

Wednesday, April 15, 2009

How To Get Smaller Government

Move election day to April 15th.

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Tuesday, April 14, 2009

Auto Accidents, AIDS, Contraception and the Pope

Suppose you make cars safer by requiring seat belts, collapsible stearing columns, and other changes that make it less likely that an auto accident will kill the car's occupants. The obvious conclusion, and the one many people reach, is that the highway death rate will go down.

Sam Peltzman, in a classic article, pointed out that there was no good theoretical reason to expect that to happen. Auto accidents do not simply happen; they are the result of decisions made by drivers, such as how fast to drive, how much attention to pay to driving and how much to conversations with your passengers or listening to the radio, whether to drive home or take a cab after drinking a little too much. Making cars safer lowers the cost of dangerous driving; on the margin, drivers are more willing to risk accidents the less likely accidents are to kill them. So making cars safer results in fewer deaths per accident but more accidents. There is no theoretical basis to predict whether the net effect will be fewer deaths or more. Peltzman offered statistical evidence that, in the particular case he he was looking at—a collection of safety requirements imposed in the 1960's—the two effects roughly cancelled. Death rates per accident went down, the accident rate went up, and the annual death rate was about what it would have been without the changes.

I was reminded of this by a more recent controversy involving a different issue but the same logic. The Pope has, not surprisingly, come out against the distribution of condoms as a way of dealing with the AIDS epidemice in Africa—and, not surprisingly, been ferociously attacked for doing so.

Just as with auto safety and auto accidents, making sex safer has two effects working in opposite directions. It makes the chance that a given act of sex will result in AIDS transmission lower. But, by lowering that risk, it reduces the incentive to avoid sex entirely, to avoid sexual acts such as anal intercourse that are particularly likely to transmit AIDS, to avoid sex with people likely to give you AIDS, such as prostitutes. On theoretical grounds we have no way of knowing whether the net effect will be more AIDS or less.

It turns out that there is evidence that, just as in the auto case, the two effects roughly cancel. That, at least, was the widely reported conclusion of a Harvard AIDS researcher who had actually looked at the data. “We have found no consistent associations between condom use and lower HIV-infection rates, which, 25 years into the pandemic, we should be seeing if this intervention was working.”

All of which reminds me of another point, relevant to the Catholic church and contraception, which occurred to me quite a long time ago but which I don't think I have ever seen discussed. The church, for doctrinal reasons that are unclear to me, permits contraception via the rhythm method but condemns essentially all alternative methods. Critics of this policy frequently support their criticism with images of poor women who bear ten or twelve children, with terrible effects for themselves and, it is argued, the world.

The problem with that argument is that the particular problem they are concerned with is one—arguably almost the only one—that unreliable forms of contraception such as the rhythm method can solve. If your objective is to have four children instead of eight, a form of contraception that only occasionally fails will do a pretty good job of achieving it. That, presumably, is one reason why, prior to the invention of modern methods of contraception, birth rates responded to factors such as income that affected the desirability of having children, instead of being almost always near the biological maximum—although my guess is that the low tech methods being used were more likely to be coitus interruptus or oral sex than rhythm.

Unreliable forms of contraception can work pretty well for holding down marital birth rates. On the other hand, if your objective is to permit women to have sex with men they aren't married to without a significant risk of pregnancy—to permit, in other words, what has become the normal pattern of sexual behavior in developed societies—there is much to be said for more reliable forms of contraception.

Which leads me to suspect that neither side of that controversy is being entirely honest about its objectives. The Catholic church defends its position on doctrinal grounds, but it can be interpreted, perhaps more plausibly, as social engineering. Limiting contraception to unreliable methods—rhythm, which the church approves of, and interruptus, which it has no way of preventing—makes casual sex considerably riskier without imposing large burdens on marital sex and thus makes the former less attractive as a substitute for the latter. Critics of the church's position claim that their concern is with overpopulation and poverty, but support contraceptive technologies that enable—arguably have created—the modern pattern of sex largely outside of long term relationships.

On general principles, of course, I think contraception should be legal. On the question of whether improved contraception has had, on net, good or bad effects I am agnostic; I can see legitimate arguments in both directions. My point in this post, however, is not to support either side of that question but only to point out reasons to suspect that neither side of the controversy over contraception is being entirely honest about its motives.

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Wednesday, April 08, 2009

Ways of Changing the World

My son Patri has an interesting essay up on Cato Unbound, dealing with the question of how to change the world in a libertarian direction. He views most of the standard approaches, such as persuasion and policy studies, as tactics that worked for changing policy in the hunter-gatherer bands where humans spent most of their evolutionary history, since the numbers were small enough for one individual to affect outcomes, but that are ineffective in modern, large population societies. He concludes that we have to somehow change the dynamics of the system, the incentives that generate political outcomes, if we want different and better results. He discusses a variety of approaches, in particular his own project to develop a technology of floating housing—seasteading—in order to create something closer to a competitive market in governments. It's an interesting and persuasive essay and to a considerable extent correct, but I think he is missing one important alternative.

I see democracy as equipped, like a microscope, with a coarse control and a fine control. The fine control is special interest lobbying, the coarse control is majority voting. It is coarse because of rational ignorance. Voters know their vote has a negligible effect on outcomes and so have no incentive to acquire the information they would need in order to do a good job of making sure that governments do good things instead of bad things. The result is that how they vote and the outcome of their voting are largely driven by free information—what everyone knows, whether or not it is true.

Consider a few examples. At the moment, "everyone knows" that recent financial troubles threaten economic catastrophe on the scale of the Great Depression. It probably isn't true—my guess is that the current cure is considerably more likely to create economic catastrophe than the disease it is supposed to be curing—but, true or false, a lot of people believe it. The result is that it has been politically possible for Obama and the Democratic majority in Congress, with some help from the Republican minority, to engage in a program of vastly expanded government spending financed mostly by an enormous increase in the national debt—a program that would not have been politically viable five or ten years ago.

Or consider the longstanding issue of free trade vs protectionism. All economists know that tariffs, as a general rule with perhaps some exceptions, injure the country that imposes them as well as its trading partners. Everyone who isn't an economist "knows" that tariffs help the country that imposes them by protecting its industries from the threat of foreign competition and are bad only because other countries are likely to retaliate with tariffs of their own.

Part of the reason people believe that may be the same hard-wired hunter/gatherer mindset that Patri discusses in a different context, this time taking the form of a view of almost all issues as us against them. But another and perhaps more important part is that the wrong analysis of foreign trade is easy to understand, the right analysis is hard to understand, which is why the right analysis was not discovered until the early 19th century when David Ricardo worked out the theory of comparative advantage. One result of the mistaken popular understanding is to lower the political cost of passing tariffs and so to lower the cost to industries of buying such legislation.

Since political outcomes are in part driven by the free information that affects the political cost of alternative policies, one way of influencing outcomes is by influencing that free information. Patri's grandfather provides a striking example. His writing, speaking, and television programs had a substantial effect on what very large numbers of people believed, and so affected political outcomes. Other examples, working in the opposite direction, would be George Bernard Shaw and John Kenneth Galbraith. A still more important example, two centuries earlier, is Adam Smith.

Coming back to the case of tariffs, I suspect that one of the most important things I ever accomplished for public policy was to come up with a simple, intuitive explanation of the principle of comparative advantage—and thus of why tariffs hurt us. To find it and see some evidence of how widely it gets quoted, google on "growing Hondas."

As a contribution to economic theory what I did was worthless, since it added nothing to what Ricardo worked out almost two hundred years earlier. But putting the argument in an easily understood, easily repeated, quotable form changes the content of the free information available to voters. It means that more of them will see support for an auto tariff as a reason to vote against a politician, fewer as a reason to vote for him. Which will make it (a little) harder for the auto industry and their allies to get auto tariffs passed.

My conclusion is that while something like seasteading or crypto anarchy may indeed be the most hopeful path to a freer future, those are not the only sorts of approach worth attempting. An alternative, for academics, authors, newspaper columnists, anyone able to produce ideas and information and put them into circulation, is to try to alter the mix of free information that drives the coarse control mechanism of democracy.

Friday, April 03, 2009

Is World of Warcraft Evidence for Socialism?

There are lots of different versions of socialism and lots of different arguments against them. In this post, I am concerned with one particular question—whether, in order to get things produced, it is necessary to pay people to produce them. Some variants of socialism, typically decentralist and perhaps utopian, argue that it is not. In a well functioning society as they see it, workers will work for the pleasure of working, possibly reinforced by nonpecuiary motives such as status, feelings of social obligation, and the like—a craftsman model of the economy.

One might argue that World of Warcraft provides evidence in favor of their position. After all, players spend many hours "working" at producing things of no material value. A high level blacksmith or jewelcrafter or engineer has made the effort to learn and practice his craft, within the framework of the game, largely for the fun of it—possibly reinforced by various nonpecuniary motives. If it works in virtual reality, why not in realspace?

It does work in real space—within limits. Quite a lot of effort goes into a wide variety of unpaid voluntary activities. It may not result in as much effort or output as can be produced by material incentives; I do not think I know anyone who puts forty hours a week into online crafting. But we are, historically speaking, a very rich society, and may well grow richer still in the future. Reducing output to, say, half its current level might be a reasonable price to pay for a society where nobody find that he has to do work he doesn't want to do in order to pay the bills.

A more serious problem has to do with what work gets done, what goods get produced. In a market society, one of the things determining what people do is what they like doing; it is easier to hire people to do work they enjoy than work they don't enjoy. But the other thing determining what people do is what other people want done, since that affects how much you can get paid to do things. In the sort of society I am describing, the second element comes in only through mechanisms much clumsier than the price system. If nobody likes plumbing or ditch digging, someone may decide that it's his social duty to take it up or that other people will award him status for doing so. Or he may simply hope someone else does it, while he gets on with writing the Great American Novel.

One of the attractive features of World of Warcraft and its competitors is that the virtual world has been constructed, in some cases with considerable care and ingenuity, to be a place that it is fun to do things in. The real world has not. Some of the things that need doing there are things that people enjoy enough to do them even when not paid to, and some things get done that way. My guess, for instance, is that the vast majority of all novels written end up unpublished and that at least some people keep writing novels even after they realize that the chance of getting paid for them is very low. But I am dubious that all, or even most, of the world's work can get done that way. An economy in which resources are allocated almost entirely on the basis of what people want to do rather than what other people want done is likely to end up with quite a lot missing.