Answer: It depends on the question we’re trying to answer. In a post about Covid-19 deaths, Tyler Cowen writes: By the way, deaths as a percentage of population isn’t the right metric here.  Losing 320,000 lives (including excess deaths) has about the same moral import, whether or not there are a billion Morlocks living under the earth’s surface, though that fact would change the loss greatly as measured in percentage terms and of course make it look much smaller. Let’s start with a question that absolute deaths is the relevant metric for. A murderer in Andorra kills 10 people. A murderer in China kills 10 people. In each case the victims are innocent. Question: Is the murderer in Andorra, who has killed a much higher percent of Andorra’s population, more evil than the murderer in China who has killed a much lower percent of China’s population? Answer: No. So here’s where Tyler Cowen’s point is correct. And of course, to his credit, he makes clear that he’s talking about the moral point. But let’s ask a different question: Which country do you want to live in if you know that there’s a murderer at large who plans to murder 10 people in that country? (Assume everything else about these countries is the same so that we can isolate the effect of the 10 murders.)  Would you want to live in Andorra or in China?     (2 COMMENTS)

The first time I visited Mexico I was 16 years old. I was rather surprised to discover that many Mexicans believed in conspiracy theories, ideas that I’d never heard before. Some involved the CIA as a puppeteer behind much of what went on in the world. My wife just visited China and found that many people there also believe in conspiracy theories, such as the claim that Covid-19 was created in a US lab. Based on what I’ve read in various news sources, it seems that conspiracy theories are pretty common in most developing countries. Over the last few decades of the 20th century, I paid little attention to conspiracy theories.  One would occasionally hear a conspiracy theory about the Kennedy assassination or UFO cover-ups, but they never seemed to be a major part of our culture. In the 21st century, conspiracy theories have become a much bigger part of America life. There are major conspiracy theories that suggest all four presidents elected during this century are illegitimate, with one election basically being stolen by the Supreme Court, another won by a candidate born overseas, another influenced by a Russian disinformation campaign, and another tainted by vote fraud. The idea of an illegitimate president has gone mainstream. And it’s not just elections, something as innocuous as a vaccine trial announcement is now entangled in various conspiracy theories. So why have conspiracy theories exploded in 21st century America? First we must ask why people believe conspiracy theories. Penn Jillette argues that there’s a sort of preference for conspiracy theories. Imagine if people want to believe X, but the officials at the top of society (government, media, science, etc.) say that X is false. Also assume that those officials are in a position where they would know the truth.  If you want to continue believing X, then you are forced to develop a conspiracy theory as to why the officials would deny that X is true. A relatively small share of the world’s population does not engage in “motivated reasoning”, rather they form beliefs based on evidence, apart from what they wish to believe.  Of course these are just tendencies, I suspect that everyone engages in motivated reasoning to at least some extent (including myself), but some do it more than others.  Polls show that the views of Democrats and Republicans on the state of the economy immediately flipped after the 2016 election, before there was even time for the actual economy to change very much. Psychologist describe a certain type of relatively unbiased person as “WEIRD”, which doesn’t mean strange, it means people from areas that are Western, Educated, Industrialized, Rich and Democratic.”  But even in those countries, only a modest share of people are actually WEIRD.  This category more often applies to moral values, for instance those people who think nepotism is wrong, that it’s wrong to be biased in favor of those you know and like.  But WEIRD also overlaps with a non-biased epistemic style that is often called “rational”. There are certain ideas that are highly seductive, so much so that even “WEIRDOS” occasionally dabble in conspiracy theories.  So why weren’t conspiracy theories a bigger part of life in the late 20th century?  I believe this is because the media was almost completely controlled by WEIRD people.  The news desks at ABC/NBC/CBS stuck to the mainstream version of events, unless they had clear evidence that the official were lying (say after the Ellsberg Papers came out.)  So there was no major institution to form and disseminate conspiracy theories.  These theories did exist back then, but never gained enough traction to have a big impact on society. The internet changed everything.  More specifically, it democratized information sharing all over the world.  There are no more “gatekeepers”.  Because less that 10% of the world’s population is truly WEIRD, the internet has made conspiracy theories the dominant epistemic style of the 21st century.  Just as the 21st century will be a low interest rate/high asset price century (as I predicted years ago), it will also be a century of widespread conspiracy theories.  I doubt whether I’ll live along enough to see another president who is generally accepted as legitimate. PS.  Think about the bizarre coincidence that there’s almost a 100% correlation between people who believe an election was stolen and those who support the losing candidate.  If you think that correlation is weird, then you are probably WEIRD.  If you think that correlation is not in the least surprising, then you are probably not WEIRD. PPS.  There’s another (much less interesting) question to consider.  Are these conspiracy theories actually true?  Some of them?  All of them?  None of them?  I suspect that a unit within the federal government has looked into this question—perhaps the NSA.  And I imagine that by now they’ve been able to ascertain the answer to this question. But they aren’t telling us. PPPS.  There’s some speculation that President Trump will release information on UFOs as he leaves office.  If so, will he be exposing a government conspiracy?  Or would it be a Trump conspiracy to make our intelligence services look devious? PPPPS.  People who don’t like my ideas want to believe that I don’t actually believe what I write.  These are almost always people who disagree with me.  Scratch that; they are always people who disagree with me.  Hence my comment sections (especially at MoneyIllusion) are full of claims that I am part of a conspiracy to disseminate ideas favored by powerful people. PPPPPS.  It’s likely that some people will view this post as part of a conspiracy.  Whose interests are served in trying to analyze the psychology of conspiracy theories at this exact moment in history? Think about it. (1 COMMENTS)

  I lift my lamp beside the golden door.   It all boils down to this: In all the talk about freedom to leave or to enter, are we really interested in freedom, justice, and humanity, or are we only interested in scoring Brownie points in the Cold War game? If the former, we should not merely be content to condemn Russia or Cuba for not letting their people go; we should hail any occasion when some of their people do go, and we should welcome all of them to our shores with good fellowship and open arms. If we truly wish to be the land of the free, we must return to the traditional American policy before World War I of welcoming immigrants, of lifting our lamp by the golden door. America was built by immigrants, and we lost a good deal of our soul when the lamp nearly went out after World War I and immigration was sharply restricted by a combination of racism and labor union restrictionism. Let us return to our own noble heritage and be the beacon-light of freedom once more. This is from Murray Rothbard, “From Cuban to American Socialism,” Reason, December 1980. It was highlighted today on the Reason web site here. (1 COMMENTS)

Fantastic questions from the noble Chris Freiman (author of Why It’s OK to Ignore Politics), reprinted with this permission. A recent survey indicates that about 80% of Americans have no or “just a few” friends across the political aisle. So, should Democrats stop being friends with Republicans, and vice versa? Let’s ask an analogous question: should consequentialists stop being friends with deontologists, and vice versa? I assume most people would say “no.” So is political disagreement different? Maybe the stakes of your friend having mistaken political beliefs are higher. But this probably isn’t true. After all, their vote is extremely unlikely to make any difference to the outcome of the election. Furthermore, consequentialists and deontologists often disagree about questions that *are* impactful on an individual level, such as those concerning eating meat or donating to charity. Maybe having the wrong political beliefs is evidence of someone’s terrible moral character. But why wouldn’t having the wrong moral beliefs also be evidence of someone’s terrible moral character? Furthermore, both Democrats and Republicans tend to arrive at their conclusions via politically motivated reasoning, so it’s hard for one side to claim an advantage here. Lastly, both moral and political questions are complicated and so people can have good faith disagreements about both. (Note that this isn’t to claim that *all* political positions are tolerable but rather that mere disagreement doesn’t imply a corrupt character.) Also, we know that most people aren’t particularly committed to their policy preferences in the first place. So we probably shouldn’t draw conclusions about their moral character from their views about an issue that may well be different the next time an election rolls around. Lastly, refusing to interact with outparty members is part of the reason we are seeing so much affective polarization and partisan hostility right now. Evidence suggests that positive, nonpolitical contact across the aisle can lessen this hostility. So rather than freeze out the neighbor who votes differently than you do, maybe see if they want to watch the game on Sunday. (0 COMMENTS)

Sunday November 15 will mark the 188th anniversary of the death of Jean-Baptiste Say (1767-1832), author of the Traité d’économie politique, whose first edition appeared in 1803. The 4th edition (1819) was translated in English and published as A Treatise on Political Economy (1821). I recently directed a Liberty Fund conference of this great economist, mainly known as the discoverer of Say’s Law (supply creates its own demand), against which John Maynard Keynes more or less conceived his 1936 General Theory of Employment, Interest and Money. Among his many ideas that preceded today’s economics by one or two centuries, Say explained that the middlemen between the producer and the final consumer play an efficient role by moving goods to where the consumer can purchase them. The middlemen create value too. Say also developed an idea that many of our contemporaries—think of the defenders of “price-gouging” laws—still do not grasp. He explained how the speculators and hoarders benefit the consumer: There is a further branch of commerce, called the trade of speculation, which consists in the purchase of goods at one time, to be re-sold in the same place and condition at another time, when they are expected to be dearer. Even this trade is productive; its utility consists in the employment of capital, warehouses, care in the preservation, in short, human industry in the withdrawing from circulation a commodity depressed in value by temporary superabundance, and thereby reduced in price below the charges of production, so as to discourage its production, with the design and purpose of restoring it to circulation when it shall become more scarce, and when its price shall be raised above the natural price, the charges of production, so as to throw a loss upon the consumers. The evident operation of this kind of trade is to transport commodities in respect of time, instead of locality. The last sentence is the crux of the matter. Let me also quote these lines in their original French, as they appeared in the 6th edition of the Treatise, the last one in Say’s lifetime. The text is much clearer than the previous translation: Il y a un commerce qu’on appelle de spéculation, et qui consiste à acheter des marchandises dans un temps pour les revendre au même lieu et intactes, à une époque où l’on suppose qu’elles se vendront plus cher. Ce commerce lui-même est productif ; son utilité consiste à employer des capitaux, des magasins, des soins de conservation, une industrie enfin, pour retirer de la circulation une marchandise lorsque sa surabondance l’avilirait, en ferait tomber le prix au-dessous de ses frais de production, et découragerait par conséquent sa production, pour la revendre lorsqu’elle deviendra trop rare, et que, son prix étant porté au-dessus de son taux naturel des frais de production, elle causerait de la perte à ses consommateurs. Ce commerce tend, comme on voit à transporter, pour ainsi dire, la marchandise d’un temps à un autre, au lieu de la transporter, d’un endroit dans un autre. The formulation could perhaps have been more general—for the same speculation happens when, say, facemasks are not produced under their cost of production but the speculator foresees that their demand will jump over the current quantity supplied. But remember that Say wrote in the early 19th century, just a quarter of a century after Adam Smith’s The Wealth of Nations, at a time when the first conceptualization of this sort of economic problems was attempted. In fact, such issues are so difficult to understand that many among our intelligent contemporaries still don’t. On Sunday, raise your glass to Say. Yet, a historical mystery remains. Why was classical liberalism, which was then on its rise, so rapidly restrained by reactionary opinions? Is the classical-liberal or libertarian ideal a mirage? Jean-Baptiste Say foresaw an explanation: To speak the truth, it is because the first principles of political economy are as yet but little known; because ingenious systems and reasonings have been built upon hollow foundations, and taken advantage of, on the one hand, by interested rulers, who employ prohibition as a weapon of offence or as an instrument of revenue; and, on the other, by the personal avarice of merchants and manufacturers, who have a private interest in exclusive measures, and take but little pains to inquire, whether their profits arise from actual production, or from a simultaneous loss thrown upon other classes of the community. A good explanation, no doubt, and which was much improved by the public-choice school of economics that developed a century or more after the Treatise. But is it sufficient? (0 COMMENTS)

President Trump is such an unusual politician that people (myself included) have trouble seeing him clearly. For instance, Trump is often seen as an opponent of lockdowns. But while he did often speak out against lockdowns during the waning days of the campaign, he actually supported them during the period they were most restrictive.  Here’s a NYT headline from April 22: Trump Criticizes Georgia Governor for Decision to Reopen State “I think it’s too soon,” said the president, who joined several mayors in questioning Gov. Brian Kemp, a Republican, who had said some businesses could resume on Friday. And here’s a tweet from April 30: And it’s not just lockdowns.  I could easily dredge up Trump quotes for and against masks, for and against testing, or for and against any of a number of other policies. Trump needed substantial votes from two groups that had very different views on Covid-19.  One group, mostly made up of his “base”, included small businesses worried about the economic effects of lockdowns, libertarians opposed to mask mandates, and Hispanic workers who lost jobs due to lockdowns.  Another group included moderate Republicans in the suburbs with professional jobs, who were economically insulated from the crisis but worried about the effects on their health. It seems to me that early on he sensed that there was a risk of going too far “right” on the issue, losing those swing suburban voters.  Later in the year, it became clear that the problem wasn’t going away and indeed was picking up again.  At that time, he decided to go down the final stretch by appealing to his base with an anti-lockdown message. I’m not sure that Trump had any good options politically (once the epidemic was out of control), although it’s intriguing to speculate as to what would have happened if he had followed me in questioning the experts (skeptical) view on masks back in early March.  The actual issue in which Trump questioned the experts (chloroquine) didn’t seem to pan out for him in the end, but by late April, experts throughout the world had basically decided that masks were indeed the way to go.  It might have been a big political win for Trump if he’d been ahead of the experts.  In addition, masks are a more attractive solution for small businesses than lockdowns.  In conservative Mission Viejo, almost everyone wears mask when in stores.  In contrast, very few people in North Dakota wore masks, and now they are paying the price. When politicians encourage people to voluntarily wear masks, they are actually promoting liberty.  That’s because the more people that wear masks, the less political pressure there will be for lockdowns. (0 COMMENTS)

Don’t mess with taxes   According to The Dallas Morning News, [Texas governor Greg] Abbott’s office has been talking with Nasdaq and other exchanges about moving their data centers to Dallas because of a potential tax on financial transactions in New Jersey. The proposed tax would charge a quarter of a cent per “financial transaction” at entities in New Jersey that process at least 10,000 transactions annually via electronic infrastructure, the Dallas Morning News reported. That tax would generate an estimated $10 billion annually for the state. Most major stock exchange operators, including the New York Stock Exchange operate their trading platforms from data centers in New Jersey. This is from “Wall Street moving to big D? Nasdaq, other stock exchanges consider relocating to Texas,” ksat.com, November 10, 2020. One of the dumbest things to tax, whether your goal is raising revenue or minimizing deadweight loss, is goods or services whose elasticity of supply or demand is high. The reason is that in response to those taxes, the equilibrium amount that’s left to be taxed falls substantially. The Tobin tax, named after Yale University economist and Nobel Prize winner James Tobin, is a small tax on conversions of one currency into another. But since his proposal in 1972 in, coincidentally, New Jersey, others have extended the idea to taxing transactions in the stock market. The New Jersey tax above is not literally a Tobin tax but is a tax on transactions in the stock market. One of the easiest things to do, when your service is sold electronically, is to move to a place where you can still do it electronically but where it is untaxed. Thus Texas. (0 COMMENTS)

During the Euromaidan protests, journalists routinely described Ukraine’s prosecution and imprisonment of Yulia Tymoshenko as “politically motivated.”  The phrasing always struck me as odd.  If she were innocent, you’d expect journalists to call the charges “trumped-up” or “false.”  And this “politically motivated” meme is still going strong.*  Which raises a general question: When people dismiss charges as “politically motivated,” what do they actually mean? As far as I can tell, the “politically motivated” label means: “Yeah, the accusations are probably true.  But so what?  Either (a) the laws are stupid, or (b) they’re so broad that practically everyone is guilty, or (c) practically everyone in power is just as bad or worse than the accused.” Now notice: If true, all three of these claims are far more noteworthy than any specific set of accusations.  Imagine these headlines on the front page of the Wall Street Journal: “Ukraine Has Tons of Stupid Laws” “Ukraine’s Draconian Laws Turn Practically Everyone into a Criminal” “Ukraine’s Leaders Are a Pack of Crooks” Most journalists would no doubt be horrified to see these ugly generalizations published as news.  But when you casually dismiss accusations as “politically motivated,” you’re implicitly doing precisely that.  The only difference: When you openly declare, “Ukraine has tons of stupid laws,” you’re expected to provide evidence and arguments.  You’re expected to look for counter-evidence.  And you’re expected to choose between similar yet conflicting versions of your story. The upshot: It is the status quo that should horrify journalists, not my hypothetical.  Journalists already present ugly generalizations as fact.  But instead of sticking their necks out and responsibly defending these generalizations, they do so via vague innuendo and imprecise insinuation. * According to Google’s Ngram, the “politically motivated” meme has sharply declined since its peak in 1998, but remains at historically very high levels. (0 COMMENTS)

Family life has long frustrated economists who struggle to measure the various utility functions involved in spending 18 or more years of one’s life changing diapers, listening to screaming fights, spending money on food and daycare and diapers and summer camps, and cleaning up vomit on road trips.   A new paper by Ariel Karlinsky and Michael Sarel published in the Israel Economic Review helps clarify the picture of how much kids cost in immediate monetary terms, which is a helpful thing to know. Traditional approaches have focused on comparing household income with household expenditures between households with and without children. The authors note that this very narrow monetary analysis doesn’t tell us much about anything. It ignores the question of living standards, the fact that people’s preferences and spending habits change dramatically after they have children, and the fact that children of different ages cost significantly different amounts of money (and time). Karlinsky and Sarel refine the traditional model through measures of standard of living (based on the proportion of income spent on shared household products), total household expenditure, and age and number of children. While this kind of analysis doesn’t — by design — have anything to say about broader economic sacrifices families make in order to raise children, it does clarify questions that may be helpful to policy makers or to judges in deciding child support payments, as the authors note. The authors also created a fun and useful calculator for estimating the costs of raising children at various income levels, ages, and numbers of children that you can play with here.    But even with the improvements they make to traditional methodologies, the study and its intentional limitations highlight how hard it is to study whether kids are worth it. They also emphasise that the kinds of economic and other sacrifices we make for our kids may be unmeasurable with any tools we have.    How and In What Ways Kids are Worth It There seem to be three ways (at least) of thinking about the costs and benefits of parenting. The narrow version, which Karlinksy and Sarel refine in their paper, focuses on the upfront monetary costs involved in having children. Whatever the various cost estimates and models, this is relatively straightforward (which is not to say simple).   Where things get more complicated though, is the second level of analysis, the one that policymakers really want, particularly for areas like gender equality and welfare policies. Areas the study does not cover, largely because these questions remain too complex, are questions of opportunity costs involved in raising children in terms of lost income, particularly for women.    As the authors note, we don’t have accurate data on how parenting affects male work habits, particularly over lifespan, but there’s a fair amount of research that demonstrates that women take an economic hit, not only in the direct costs of childrearing, but also in lost income over lifespan. In the COVID-19 era, more and more women are struggling under the combined burdens of working or searching for work while managing children’s schoolwork at home and also contributing to the usual burden of housework and food preparation. This takes a toll on women’s earnings and mental health. A recent U.S. report finds that over 800,000 women left the workforce between August and September alone, representing a full 80% of the workers who left. The timing of this mass exodus – just before a brutal school year with large numbers of children learning at home – is hardly accidental.   Questions of equity are also lost in these more narrow analyses. Karlinsky and Sarel, for example, use the standard adult two parent household as their baseline, which makes sense in a narrow material analysis like this one, but that decision makes it difficult to estimate the lifetime costs of having children for a lot of parents (more so in the United States, where a quarter of children live in single-adult homes), since single parent households face burdens dual parent households do not, and mothers face economic burdens that fathers do not, which are compounded if couples divorce. Even with the addition of child support (whose ad hoc character in Israel is one reason the authors leave single parent families out of their model), single parents face lost income due to childcare limitations, unshared direct costs like mortgages and childcare, or lost time shuttling children around or supervising housework. Dual parent households either do not face these issues, or they absorb them more easily because they have twice the manpower.   Similarly, the narrow expenditure model may obscure patterns in how the costs of child-rearing are distributed. Breastfeeding, for example, is cheaper in direct costs than formula, but in fact has an array of indirect costs that are hard to measure. Working mothers must have time to pump (or we must take into account a mother’s lost wages if she chooses to stay home). For low income women, particularly hourly wage earners or those who work in physical jobs where pumping may be extremely difficult, formula may be “cheaper” than breastfeeding on a variety of measures. But because these are indirect costs, the cash outlay for an infant may be higher for lower income wage earners who use formula than it is for higher income salaried workers who can more easily breastfeed, a disparity that only becomes apparent once we dig past the average expenditures and start measuring indirect costs. And in the U.S. women below a certain income level qualify for WIC, which covers formula, so one would have to take welfare benefits into consideration too. There may in fact be a group of lower middle class parents who pay proportionally more than either the very poor or the upper middle class, simply because they are more likely to be single parents, face greater indirect costs of parenting, do not benefit from economies of scale, and face greater opportunity costs. But this same group also does not qualify for government aid. Karlinksky and Sarel’s model does suggest, unsurprisingly, that the poor pay proportionally more to raise children than the wealthy do.   This broader analysis wasn’t the goal of the paper, so none of this is a criticism of the authors, but merely a reflection that what we think we know about families in the aggregate is much more complicated when we look at individual families and how income, family structure, education, and support networks affect the cost of raising children, both in economic and in more subjective terms.    Finally, there’s a much deeper question that the authors allude to when they argue that prospective parents might use their cost estimator to determine whether or not to have children. I’m not sure most parents think about parenting the way economists do. The question most parents ask is not “How much do kids cost?” but “Do kids make us happier? Are we better people for having children? Do the economic sacrifices we make balance out against the immeasurable joy and anxiety and grief that parenting entails?” These are not questions for economists, but one that most of the parents I know think (usually) has a relatively easy answer. I suspect this is one area where economics will continue to be trumped by a much more complicated and unquantifiable set of values. And that’s okay.       Lauren Hall is associate professor of political science at Rochester Institute of Technology.  She is the author of The Medicalization of Birth and Death (Johns Hopkins University Press, 2019) and Family and the Politics of Moderation (Baylor University Press, 2014) as well as  the co-editor of a volume on the political philosophy of French political thinker Chantal Delsol. (0 COMMENTS)

In 1960, San Mateo County voted for Nixon over Kennedy. On Tuesday, this highly affluent suburban county near Silicon Valley voted 4 to 1 for Biden. In 1960, West Virginia voted for Kennedy. This time around it went 68% to 30% for Trump. These two areas were “canaries in the coal mine” that is, early indicators of broader national trends. The affluent, highly educated and socially liberal people of Silicon Valley moved sharply to the Democrats in the 1980s, while West Virginia moved sharply to the GOP in the early 2000s. Other similar areas have been following along more recently. If you try to analyze America politics with 20th century conceptual frameworks you’ll be hopelessly confused. Why do blue collar areas vote for an anti-union party, while affluent areas vote for a party promising to raise taxes on the rich? Some people argue that the GOP now appeals to uneducated voters, but that’s way too simple. People who run 2000-acre farms producing corn and soybeans are highly skilled. So are petroleum engineers. You need to be highly skilled to run a large Ford dealership. I wouldn’t be very good at any of those jobs. And all three job categories are very likely to vote Republican. Industries where people work with “things” are much more Republican than industries where people work with ideas. We’ve seen politics change dramatically over my lifetime, with the South going from Democrat to Republican and places like California and New Jersey moving in the opposite direction. Expect further such changes in the future. Southern states with big “post-industrial” cities like Atlanta, Austin and Charlotte will gradually become more blue, while declining Midwestern Rust Belt states will continue to trend red. As recently as 1988, Iowa was one of the two or three bluest states in the country—that’s how fast things can change. Illinois and Ohio used to be similar Midwestern “swing states.” Now Illinois is very blue because Chicago has become a post-industrial city, an “idea city”, not the old “city of broad shoulders” that Carl Sandberg wrote about. In contrast, most Ohio cities (except Columbus) have not been able to successfully re-invent themselves, and thus Ohio has become quite red. In the recent election, we’ve also seen Hispanics shift somewhat toward the Republicans, and even black voters have moved modestly in that direction (albeit still overwhelming Democratic.) This Hispanic shift may be important for the future, given America’s large and growing Hispanic population, the high rate of intermarriage with other groups, and the tendency of many Hispanics to work in the same sort of industries as non-college white voters. A situation where low-skilled whites vote Republican and low-skilled Hispanics vote Democratic is not stable in the long run. Think of the earlier migration of working class Catholics from the Democratic to the Republican Party. The only constant in American politics is continual change. (0 COMMENTS)