Anyone Want a Talk in Singapore in June? China? Australia?

I may be attending a libertarian event in Bali this June. Given the distance, I would want to visit other places in that part of the world. The most convenient stop would be Singapore, a city I last visited about fifty years ago. I have been in China and Australia more recently, but might enjoy visiting them again.

My talks cover a considerable range. Prices vary, depending on circumstances, from round trip air fare from the U.S. down to the cost of a hotel room for the night.

Intuiting Large Numbers: A Facebook Exchange

I recently had an interesting exchange with a FaceBook friend, a reasonable person with political views very different from mine. He posted something to the effect that he didn't think a free market society could produce a middle class, and supported it with the claim that at the beginning of the 20th century one or two dozen families held most of the wealth. Pretty clearly, judging by past exchanges, his view was that it was the rise of labor unions that changed that situation. I do not know if he had actual data on the distribution of wealth; if he did, I suspect that "wealth" was limited to forms of wealth, such as stocks and bonds, held mainly by wealthy people. 

What is more relevant is the distribution of income, so I asked if he had data on that. I also suggested that he was being misled by the inability of humans to intuit large numbers. If a hundred people have incomes of a million dollars a year and a hundred million have incomes of a thousand dollars a year, it looks as though the hundred have most of the income. Simple arithmetic demonstrates that they actually have just under a thousandth of it.

He responded with a graph showing the share of income going to the top one percent, .1 percent, and .01 percent of the population. It did not go back quite to 1900, but extrapolating it the share of the top .01 percent then looked to be about 5%. 

The top .01 percent would be about 10,000 people, say 2,000 households. So even after expanding his one or two dozen families by two orders of magnitude, their share of income was still only about one twentieth of the total, making it difficult to see how their existence could have prevented a middle class from coming into existence.

To put the point a little differently ...  . From 1900 to 1905, real GDP per capita increased by about ten percent. So if all of the income of the top 10,000 people in 1900 had been transferred to the rest of the population, their gain would have been equivalent to two or three years of economic growth. If the existence of the rich made the rest of the population too poor to have a middle class in 1900, the problem should have been solved by 1903.

Which I think supports my original point about intuiting large numbers.

Virtual Status

It is natural to think of status as a zero sum game, to assume that anything that raises your status relative to me must lower my status relative to you. What first suggested to me that it wasn't true was my experience as an undergraduate at Harvard. Different people care about status relative to different things, with the result that one can have, in the limit, a society where everyone is at the top of his own ladder. If Eugene is a chess master and Charles a billionaire, the victory that raises Eugene's status does not lower Charles', because Eugene does and Charles does not care about status in the chess world. Similarly, mutatis mutandis, across a wide variety of different reference groups. 

I made this point in another post about eight years ago. What brought my attention back to it was playing the beginning of the new part of World of Warcraft. It consists of walking the player character through a sequence of events, all easy, in which he is interacting almost entirely with computer generated characters—who tell him, over and over, what a wonderful hero he is. The same pattern shows up in earlier parts of the game, but this was a particularly striking version. Everybody can be above average. Everybody, indeed, can be in the top one percent. Provided that the other ninety-nine percent are NPC's, non-player characters. 

Which raises, for those interested in predicting the future or writing science fiction, the possibility of a world where most people spend most of their time in virtual reality, interacting mainly with virtual characters—precisely because those characters, unlike real people, are designed to make them feel superior. To some degree the phenomenon exists already with fraternal organizations where practically everyone is a grand high something or other. But the future may produce an enormously more powerful, hence more corrupting, version.

My son Bill informs me that a particular game, one I have never played, is  very good  in part because it successfully subverts the "you are the world's greatest hero" trope. He also told me that naming the game without a spoiler warning would be a Very Bad Thing to do, and I have edited this post accordingly.

Spoiler Warning

Jade Empire

A Revealing Cartoon

The cartoon shown below gets posted to FaceBook by people arguing for policies to reduce global warming. The implicit assumption is that all of the things they want to do for that purpose are good things that they would be in favor of even if warming was not a problem. It apparently does not occur to the people who post the cartoon that one implication of their posting it is that they have a reason to believe in, and preach, the threat of catastrophic global warming—whether or not it's true.

I expect that most of the people who post the cartoon, or approve of it, would see the point in a commercial context. They realize that the fact that someone is trying to sell you a car is a good reason to be skeptical of his account of its condition. Most would also recognize it in the political context, providing it was not their politics in question—many of them, after all, believe that criticism of CAGW is largely fueled by the self-interest of oil companies. 

But it apparently does not occur to them that, for someone not persuaded of their policies, the same argument applies to them, that, from the standpoint of the people they want to convince, the cartoon is a reason to be more skeptical of their views, not less.

Implications of Academic Dishonesty

There has been a recent flap over the appearance online of a video of Jonathan Gruber telling the truth about the Obamacare bill:

This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If [Congressional Budget Office] scored the mandate as taxes, the bill dies. Okay, so it’s written to do that. In terms of risk-rated subsidies, if you had a law which said that healthy people are going to pay in -– you made explicit that healthy people pay in and sick people get money — it would not have passed… Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter, or whatever, but basically that was really, really critical for the thing to pass. And it’s the second-best argument. Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.

What he is saying, pretty clearly, is that he wishes one could both be honest and get good legislation passed but approves of dishonesty if necessary to get the job done. 

My guess is that his view is shared not only by most politicians but by most academics involved in the political system, although I expect many would be unwilling to say so, especially on camera. Part of the reason I believe that is an experience that happened almost fifty years ago. I was spending a summer in Washington as a congressional intern. My congressman lent me for four days a week to the Joint Economic Committee. They lent me to the Project on State and Local Finance of George Washington University, aka the Project on State and Local Finance of the JEC, aka the Project on State and Local Finance of the Governors' Conference. The Project was producing a fact book, a volume to provide the ordinary voter with information on state and local finance. 

I discovered a fact. It was a demographic fact about people already born. It was a fact about future financial requirements for the largest expenditure in state and local budgets. The people running the project refused to include the fact in their factbook, not because they thought it was not true or not important but because it pointed in the wrong direction. Knowing it would make voters less willing to support increases in state and local revenues, which was the opposite of the result they wanted.

The fact itself is one you can easily check. The date was about 1967. For the previous fifteen or so years, as the baby boom came into the school system, the ratio of students to taxpayers had been going up, which meant that taxes for schools had to increase in order to keep per pupil spending from falling. For the next decade or two, as the baby boom came out of the schools and into the labor force, the ratio of students to taxpayers would be going down. That meant that per pupil spending could be kept at its current level while taxes for schools went down. Schooling was and is the largest expenditure of state and local governments.

I had assumed that professional academics, people I liked and respected, were committed to honesty in their professional work. I think of the discovery that they were not as my loss of innocence.

My gut reaction is to disapprove both of what the people I worked with then did—pretending to inform people while deliberately misinforming them—and what Gruber describes and approves of, but I cannot prove that my reaction is justified. Gruber's position is that he is willing to sacrifice one value for another that he thinks more important, and I cannot show that he is wrong. I can, however, point out a danger in the approach. Once academics accept the principle that dishonesty is justified if done for the greater good, their work cannot be trusted on any subject with regard to which they have an incentive to misrepresent it. I offered an example in one of my previous posts.

Consider the relevance for the current climate controversy. No single academic knows enough to base his conclusion solely on his own work and expertise. Each of them is relying on information produced by many others. The economists estimating the net effect of AGW rely on the work of climate scientists predicting the effects on temperature of increased CO2, the work of other climate scientists predicting the effect of increased temperature on rainfall, hurricanes, and other relevant variables, the work of agronomists estimating the effect of changes in CO2 concentration, length of growing season, temperature on agricultural production, the work of statisticians confirming the models of the climate scientists on the basis of their analysis of paleoclimate data, and many others.

What happens if each of those experts feels entitled, even obligated, to lie just a little, to shade his conclusions to strengthen the support they provide for what he believes is the right conclusion? Each of them then interprets the work of all the others as providing more support for that conclusion than it really does. The result might be that they end up biasing their results in support of the wrong conclusion—which each of them believes is right on the basis of the lies of all the others.

That is one of the reasons I am not greatly impressed by the supposed scientific consensus in favor of Catastrophic Anthropogenic Global Warming.

There is a quote usually attributed to Bismarck but apparently due to Saxe:

Laws, like sausages, cease to inspire respect in proportion as we know how they are made.

Science too. At least when it intersects politics.

A Debunker Debunked

The late Stephen Jay Gould was both an evolutionary biologist and a popular essayist. In the book The Mismeasure of Man he argued that scientists unconsciously manipulate their data to fit their preexisting prejudices. As evidence he cited the work of Samuel George Morton, a 19th century physical anthropologist who assembled a large collection of skulls from many parts of the world and measured their cranial capacity in an attempt to answer questions about racial differences. According to Gould, Morton skewed his data in various ways to fit his racial beliefs.

I have just read an article by a group of modern anthropologists who went over Morton's data and remeasured many of the skulls that Morton measured—something Gould did not do. The authors concluded that most of Gould's criticisms were poorly supported or falsified. The errors that Gould reported in Morton's analysis resulted from errors by Gould, not by Morton. Morton did make some mistakes in his work, but they were in the opposite direction from his biases. Thus, for example:

Morton’s three most over-measured skulls are an Egyptian Copt that Morton considered "Negro" (+12%), a Seminole (+8%) and a "Native African Negro" (+7%).

The obvious conclusion, not stated by the authors of the article, is that Gould's central claim was correct. Scientists sometimes bias their work to fit their preconceptions. As Gould demonstrated by doing so.

The article fit a conclusion that I long ago reached about Gould on other evidence—that he misrepresented the work of people he disagreed with, taking advantage of the fact that since he was a widely read popular essayist and they were not, most of his readers would never read either the work he was attacking or any response that the authors might make. In this case he took further advantage of the fact that the man he was slandering was no longer alive to reply. 

For evidence in another case, here is a response to Gould by Tooby and Cosmides. And here is a perceptive comment on Gould by someone with whom, on other subjects, I often disagree.

How Much Does Control of the Senate Matter?

In the weeks leading up to the election, the key question everyone focused on was whether or not the Republicans would get control of the Senate. It was never clear to me why that was supposed to be so important. As long as the Republicans control the House, the Democrats cannot pass any bills that the Republicans are solidly against. As long as the Democrats control the White House, Republicans cannot pass any bills that the Democrats are solidly against unless they have large enough majorities in both houses to override a presidential veto, which they were not going to get.

I do not want to overstate my case. A Republican majority in the Senate means that Obama cannot appoint judges, in particular Supreme Court judges, that the Republicans are solidly opposed to. It means that the Republicans can pass popular legislation that the Democrats oppose and force Obama to either sign it or veto it. It might make it possible to override a veto of popular legislation with the help of a few Democratic legislators. But the bottom line for legislation is still what it was. Nothing can get passed if either party is solidly opposed to it.

Which brings me back to my theory of why people vote. It isn't to change the political outcome, since any reasonable person knows that, in a large population polity, his vote has virtually no chance of doing that. It's for the same reason people go to football games—to cheer for their side.

In order to have a game you need some definition of winning and losing. In order for it to be interesting, the definition has to leave the outcome in doubt. If winning the midterm elections was defined by whether or not the Republicans retained their majority in the House or by whether they gained enough seats in both houses to override a presidential veto, it would have been a very boring contest, since the answer to both questions was known long in advance.

Viewing it as a contest over who ended up in control of the Senate, on the other hand, made it a game worth watching.

Memories of Gordon Tullock

Gordon died yesterday. We were colleagues at the Public Choice Center at VPI and I have affectionate memories of him. Some bits and pieces ...  .

Gordon gave the impression that he read every book that was published. As best I could tell, he was bluffing about half the time.

Like George Stigler, he was sharp tongued but not, so far as I could tell, in the least malicious. The best advice he gave me was that the one part of the submission cycle you can control is the time your article spends on your desk. 

My wife remembers meeting him when she was my girlfriend. He started the conversation by asking why she was wearing a backpack. Her interpretation was that the only form of conversation he knew was argument, he only knew two things about her—that she was my girlfriend and that she was wearing a backpack—so he flipped a mental coin and chose the backpack. He never made the common mistake of thinking that an argument was a quarrel.

One chapter of the recent third edition of my first book is based on something I published when I saw an opportunity to argue, in print, that something Gordon had written was both obvious and wrong. Anyone who knew him will understand that it was a temptation I could not resist.

The last time I saw him was an event at George Mason a good many years ago. I told him that I had heard he was publishing a book of his rejected articles. He smiled and nodded. So I asked when the first volume was coming out.

I will miss him.

A Modern Orwell

In a recent post I commented on a piece by a blogger who posts under the name of Scott Alexander. I have now read quite a lot of his posts and find both them and him fascinating. He is someone who identifies more nearly with the left than with the right but can be ferociously (and intelligently and entertainingly) critical of aspects of left wing culture. He is sufficiently open to ideas he does not agree with to offer a brilliant, even persuasive, summary of reactionary arguments. He is interested in a very wide range of subjects and says intelligent things about all of them

Start with the page of top posts. It includes a grim and persuasive description of why the worst place in the world to die is a hospital—he is a doctor. It includes evidence of how hard it is to do scientific research right and how frequently we do it wrong. Also a description and defense of Polyamory. And a great many other things.

All of them, so far, worth reading.

---

P.S. Reading more of Alexander's posts, I came across a paragraph in one of them that struck me as a nice example of his writing style:

Tables 10 and 11 turn out to be a gold mine – I worried the records of exactly who took the tests would be lost, but as you might expect of someone who basically invented statistics single-handedly and then beat Darwin in a debate about evolution as an encore, Galton was very good at keeping careful data.

Good News for Libertarians

I have long argued that the real function of libertarian involvement in politics, including the Libertarian Party, is not to get libertarians elected. It is to get libertarian policies to the point where the major parties will find it in their interest to adopt them—the strategy followed with striking success by the U.S. Socialist party over the first half of the 20th century.

Which is why I was delighted to see a recent piece on Reason's blog in which a Democratic politician argued that libertarians ought to vote for Democrats because they were more nearly in favor of libertarian policies than Republicans. Another piece on the Reason blog, two days earlier, reported Rand Paul  arguing that libertarians should vote for Republicans because they are more ...  . 

A competition I can appreciate.

Climate: The Implication of Uncertainty

Anyone who looks seriously at climate issues should recognize that the consequences of climate change are very uncertain. My own view is that they are sufficiently uncertain to raise serious doubts about the sign as well as the size of the effect, that warming due to human production of greenhouse gases might well make us better off rather than worse off. Even if I am wrong and the effect is almost certainly negative, how negative it will be is very uncertain. CO2 emissions might fall sharply due to increases in the cost of fossil fuels or decreases in the cost of alternatives. For a given value of emissions, varying estimates of climate sensitivity imply at least a factor of two range for the resulting temperature. For a given increase in temperature, the effect on humans depends on what humans will be doing for the next century. Diking against a meter of sea level change could be a serious problem for Bangladesh if it happened tomorrow. If Bangladesh follows the pattern of China, where GDP per capita has increased twenty fold since Mao's death, by the time it happens they can pay the cost out of small change.

A possible response to this point is to argue that uncertainty is no argument against action. One simply replaces the uncertain range of outcomes with the best estimate one can provide of its expected value, the average of costs weighted by their probability, and acts as if that were the known consequence of warming. If the estimate of expected cost is ten trillion dollars, then any precaution to prevent it that costs less than ten trillion is worth taking.

It is a possible response and a popular one, but it is wrong for a reason that ought to be obvious to (at least) economists. The question we are answering is not "what should we do?" but "what should we do now?" Waiting may raise the cost of dealing with the problem but it will also provide additional information. The more information we have, the better our ability to decide what precautions are worth taking. Or not worth taking. Uncertainty that will be reduced over time is an argument against immediate action.

The usual rhetorical response is to claim that we barely have time to act at all, that if we wait more than a very short time it will be too late. This claim becomes less persuasive the more times it is made, and it has  been made, by various people, quite a large number of times over the past twenty years or so. It largely depends on picking some arbitrary temperature change, most commonly two degrees C, and treating it as if it were the end of the world. As salesmen commonly put it, "Buy Now—This Is Your Very Last Chance To Take Advantage of Our Special Offer."

For a more realistic opinion, consider an estimate of the cost of waiting by William Nordhaus, an economist who has specialized in climate issues. In the course of a piece arguing for immediate action against climate change, he reported his estimate of how much greater the cost of climate change would be if we waited fifty years to deal with it instead of taking the optimal action at once.  The number was $4.1 trillion. He took that as an argument for action, writing that "Wars have been started over smaller sums." 

As I pointed out in a post here responding to Nordhaus, the cost is spread over the entire world and a long period of time. Annualized, it comes to something under .1% of world GNP.

"Thought before action, if there is time."
(quote from a character in a Dick Francis novel)

And there usually is.

A Case of Posthumous Conscription

A recent Forbes article is headlined "What Would Milton Friedman Do About Climate Change? Tax Carbon." It reports on a forum at the University of Chicago at which several economists, including Michael Greenstone, described as the "Milton Friedman Professor of Economics at the University of Chicago," argued that Friedman would have supported a carbon tax. The evidence for that claim was a 1979 clip from the Phil Donahue show where Milton Friedman argued that if the government is going to do something about emissions, they should use an effluent tax rather than direct regulation. He does not actually say that government should do something about emissions, only that there is a case for doing so and, if it is done, the best way to do it is by a tax on emissions.

To get from there to the conclusion that he would have favored a carbon tax requires at least one further step, a reason to think that he would have believed that global warming due to CO2 emissions produced net negative externalities large enough to justify doing something about them. The problem with that claim is that warming can be expected to produce both negative externalities such as sea level rise and hotter summers and positive ones such as longer growing seasons and milder winters. The effects will be spread out over a long and uncertain future, making their size difficult to estimate. My own conclusion, defended in past posts here (one example), is that the uncertainties are large enough so that one cannot sign the sum, cannot say whether the net effect will be positive or negative.

I do not know if my father would have agreed but I have at least a little evidence on the subject, more than offered in the Forbes article. The same issue arose in the earlier controversy over population. Just as it is now routinely assumed that warming is bad, it was then routinely assumed that population increase was bad. Forty years ago I wrote a piece on the subject for the Population Council in which I attempted to estimate the  externalities associated with population. I concluded that they were too uncertain for me to tell whether the net effect was good or bad. My father read the piece and commented on it. If he had disagreed he would have said so, and he did not. It is possible that he would have felt differently in the case of climate change, but I can see no reason to expect it.

The article quotes professor Greenstone on the uncertainty:

Estimating the cost is tricky, Greenstone said, but scientists and economists have models for projecting the cost of each added ton of carbon on agricultural losses, mortality, sea-level rise, storm surge, and other climate effects.

It’s a complicated task but I think the best evidence suggests that it’s probably around $40 a ton,” he said. The U.S. government has projected the cost of carbon emissions at $37 per ton.

Current estimates of climate sensitivity, the effect on temperature of an increase in CO2, vary by more than a factor of two. One would expect the size of the externality due to an additional ton of CO2 to increase with the temperature increase. A further uncertainty, reflected in the various scenarios of the IPCC report, is the amount of CO2 that will be emitted over the next century. Lockheed Martin has recently claimed that it will have a working fusion reactor in the near future. I have my doubts that it is true, but if it is, the result should be to reduce CO2 emissions over the course of the next few decades to between half and a quarter of what they would otherwise be. That would sharply reduce warming and thus the cost of additional CO2.

One would expect similar effects from any substantial reduction in the cost of other alternatives to fossil fuels, such as nuclear or solar power, or from a substantial increase in the cost of fossil fuels due to the exhaustion of the more readily accessible sources. Additional uncertainties are associated with the relevant climate science. The IPCC, for example, claimed in its fourth report that warming increased drought, retracted that claim in the fifth report.

Whether or not my view that we cannot sign the externality is correct, I would be very surprised if Professor Greenstone could justify his confidence in the specific number he offered—which happens to be close to the official government estimate. I would be equally surprised if he could offer evidence that Milton Friedman would have taken seriously a government estimate of an uncertain number offered in support of a policy the current administration favored.

Before they died, my parents created a foundation to promote the idea of school choice. One of the terms on which they created it was that the foundation was to end a fixed number of years after the last of the founders died. The reason for that was my father's concern, possibly based on the examples of the Ford and Rockefeller Foundations, that once the founders were no longer around their names would be used in support of policies they themselves would not have supported.

Of all my father's accomplishments, I believe the one he was proudest of was his role in ending military conscription. I do not think he would be happy to be conscripted, posthumously, for someone else's cause.

----

P.S. Robert Murphy points at evidence against the claim that my father would have supported a carbon tax. In a 1999 comment to a recently published book, he wrote:

This encyclopedic and even-handed survey of the evidence of global warming is a welcome corrective to the raging hysteria about the alleged dangers of global warming. Moore demonstrates conclusively that global warming is more likely to benefit than to harm the general public.

It is possible that between then and now he would have reversed his view, but I can see no reason to expect it.

Is There Political Correctness on the Right?

I can think of at least three occasions in recent years when someone prominent made a statement inconsistent with left wing orthodoxy, was fiercely attacked for it, and forced in one sense or another to back down. In each case the statement was, as best I can tell, a defensible one. One involved a Nobel Prize winning scientist, one the president of a top university, the most recent a best selling author.

Are there any similar cases involving right wing political correctness? The question isn't whether there are any beliefs that are orthodoxy on the right—surely there are. It is whether there are cases of someone prominent making a defensible statement that violates such an orthodoxy and being attacked for it so fiercely that he was forced to publicly retract it, resign from a prominent position, or both. I'm not counting cases of conservative politicians backing down from statements that offended their supporters, since that's a different pattern and one that occurs across the political spectrum.