Monday, November 14, 2011

What Really Leads to Hard Work and Discipline

Tyler Cowen had an interesting article in yesterday's NY Times regarding the dialogue of wealth and values.  It's a good article, though I disagree with much of it.  There's a few things I could pick out, but I think the end of the article displays the points I disagree with best.

The counterintuitive tragedy is this: modern conservative thought is relying increasingly on social engineering through economic policy, by hoping that a weaker social welfare state will somehow promote individual responsibility. Maybe it won’t.
For one thing, today’s elites are so wedded to permissive values — in part for their own pleasure and convenience — that a new conservative cultural revolution may have little chance of succeeding. Lax child-rearing and relatively easy divorce may be preferred by some high earners, but would conservatives wish them on society at large, including the poor and new immigrants? Probably not, but that’s often what we are getting.
...Nonetheless, higher income inequality will increase the appeal of traditional mores — of discipline and hard work — because they bolster one’s chances of advancing economically.That means more people and especially more parents will yearn for a tough, pro-discipline and pro-wealth cultural revolution. And so they should.

The issue I have with this is that while the narrative sounds nice, does this really describe what is going on?  This touches on a basic critique that I keep bringing up again and again on this blog, I think the basic frames of capitalism and socialism are dead wrong.

What does this have to do with Cowen's piece?  Well, there are a few curious things happening when the United States is compared with Europe and social groups within the US are compared.

The first one is my basic critique of the guiding ideologies of the US in Europe.  A common frame is that US policies are efficiency driven while Europe is equality driven.  There's some truth to this.  But, within the narrow question of what each system is doing to values, we see a few peculiar things.

First of all, while data is fairly sparse, most who study the question seem to agree that the US used to have far more income mobility than Europe.  However, Europe has matched and exceeded our income mobility over the last few decades, and there is some evidence that US income mobility in the bottom half of the distribution has declined over the past 30 some years.

Lets think for a moment about what this might mean for both ideologies.  Much of European policy is predicated on the idea that class identities are effectively set in stone, the proletariat and managers are essentially at odds and it is necessary to support incomes in order to prevent relative deprivation from breaking apart the social fabric leading to instability and human misery (vast oversimplification, but I'm writing a blog post not a book).

However, looking at the data, the motivating structural factors seem to simply not be true.  Once a person's income is supported their class characteristics seem to drop away, they start doing distinctly bourgeoisie things like investing in their children's education, deferring gratification by going to school rather than directly to work, and saving and investing more.  The class rigidities that motivated many of these interventions seem to disappear once these interventions are in place.  This doesn't prevent a number of damaging interventions based on notions of class rigidity from becoming institutionalized as well, Europe is famous for its labor rigidities, but when it is specifically welfare state policies under discussion they seem to erode class distinctions and promote behavior that most conservatives associate with personal responsibility.

By contrast, the measures promoted by conservatives in the US to promote personal responsibility seem to have the opposite effect.  As income disparity has increased, our social mobility has gone down, not up.  The incentives get larger every year yet we don't see any remarkable increases in social mobility in response to this.  A lazy answer would be that many of the poor simply don't possess the merit to rise above their station.

However, there are two easy answers to this.  First, every society ever has always argued this but with every reform that broadens access, such as the elimination of legal class distinctions, increased access to eduction (GI bill for an example), and income supports like those in Europe, we see an increase in the number of people able to rise above their station.  Each time we're told that there is something essentially lacking from those failing in the current system, but sooner or later there is always a reform that works and we find more people than we ever thought possible proving their worth and becoming upwardly mobile where before we thought of their class or social position as essentially stagnant, or at least that upward mobility was already at the maximum possible rate.  The second easy answer is why was our upward mobility once higher than Europe's but now isn't, there hasn't been a fundamental demographic shift that would locate the difference within the ranks of the bottom 50% of each society.

The second thing I want to pick up on is Cowen's bit about contrasting permissive values with discipline.  The problem here is that either with an in US comparison or a US-Europe comparison you don't see a simple dichotomy of discipline vs. laxness.  Rather, the approach seems to be either one of saying what we should or doing what we should, never both.

This is hard to explain briefly, so some examples.  In the US, it may be that divorce has become more lax.  However, the wealthiest groups have become far less likely to divorce, it doesn't seem to be their behavior driving the more permissive society, while the rules have become lax their actual behavior has become more disciplined.  Poorer people, who are more likely to express the more disciplined viewpoint, remain far more likely to have broken homes and to divorce.  One component of this seems to have been the development of informal rules among more elite groups, don't have sex until you love someone, not necessarily leading to marriage but reducing the number of sexual encounters while also leading to more stable future marriages.  Among poorer groups, the tendency to marry your high school sweetheart, and then get divorced within a few years of mental and emotional maturity in your mid to late 20s, seems more common (also, I think this partially explains why divorce went up among the wealthier before coming down, my parents generation retained the ideal of the highschool sweetheart early marriage, and got divorced when it was more permissive, my generation gets a career established before marrying and is thus more stable, no chance we're going to be virgins till we're 28-30 though so we need some kind of rules regarding when to have sex that don't involve marriage, the middle class and wealthy seem to have developed this but don't seem to be proselytizing about it to the disadvantaged).

The contrast is also marked with Europe, out of wedlock childbirth is way up compared to the US in many European states but cohabitation is far more common, providing the same benefits as marriage (marriage does increase the stability of cohabitation, but given that stable cohabitation is more common in some countries with lower marriage rates it seems that other factors are more important to stable cohabitation than marriage).  Also, teen births are much lower in Europe than they are in the United States, while you're far worse off for engaging in these undisciplined behaviors in the US these behaviors are far more common here.  It's hard to find a better explanation than the relative degree of support available, give people support, and they act disciplined.  Don't give it, and they act wild and reckless.

To sum up, my basic problem with Cowen's argument is that if you want people to act disciplined and to advance themselves in a capitalistic sense, the best way to promote this is to simply give them money.  This isn't counterintuitive, it only seems so if you believe that the primary reason for work is consumption, if you believe instead that it is status and social position it all begins to make sense.  People that are just having to work to survive don't tend to engage in long run behaviors, they don't see there being any potential to advance themselves so they may as well live for the moment and not act in a disciplined fashion.  After all, if any increase in their wealth will just go to the next meal or for rent, why bother?  They get nowhere.

Supply these basics, let them know that they'll have what they need to get to work, that they can have enough to eat, that the money they earn won't all be consumed by daycare, and that they have a roof over their heads, and they start shifting towards being disciplined savers (in an aggregate sense, individual results will vary).  This seems to be basically what the data says.  Provide income supports and most people become more bourgeoisie in their habits, there's nothing essential about class.  Don't supply these supports and something that looks very like class comes into being.  Cultural cleavages develop, those that have resources begin to save, invest in their future, and grow in wealth.  Those that don't have resources spend almost all of what they have instantly, realize the pittance left over can't provide them with capital to start a business or send their kid to school, and decide to piss it away drinking.  Market outcomes, while they reward discipline, don't seem to lead to it in an aggregate social sense.  Providing necessities, however, does.

In the end, I fully support the conservative vision of a more wealth friendly, disciplined, and hard working society.  I just disagree that moral exhortation and carrots and sticks can get us there.  I see discipline as the result of being able to focus on improving ones position rather than providing for necessities, this seems very descriptive of both economic change in a historical sense as well as descriptive of contemporary cross state data.  There isn't a disagreement about where we want to go, the disagreement is about how to get there.  While I disagree with much of the article, I do applaud Cowen for raising the question.


  1. Great post, Tzi. I really get ready to jump out of my skin when liberals like Cowen want to compare the elites with conservatives. I am approximately in line with his economic analysis but there's just no room in liberalism for class warfare and it galls me a little that people can accuse Obama of that and then claim elite cultural determinism.

  2. Thanks Doug. To be fair to Cowen though, he does identify himself as having a conservative and libertarian background. I do agree that Cowen, and most libertarians, seems to share with liberals a certain contempt for most elites, feeling that they are failing to uphold some system of values that should have been necessary for them to achieve their status (and then seeking to use things like crony capitalism to explain how they became elites without these virtues).

    My basic problem is that Cowen basically handwaves how his conservative cultural revolution is supposed to come about. The incentives for being disciplined have always been huge, but even in the Victorian era the moral revolution mostly came after widely shared wealth and prosperity, not before. Accounts I've read show factory owners writing some pretty appalling things about the workforce they initially had to work with and bad habits persisted among backwaters like the highlands.

    I also dislike his projecting permissiveness on elites, the data say the opposite. For just one example, divorce rates are only about 20% for women that marry after 25, traits like high income and even better education make it even less likely. The high earners simply aren't the ones setting the bad example.

    Its frustrating, because there's a lot in the article I do like, and I especially like a focus on values, but without dealing in any way with why the values seem to be changing and by not acknowledging that the elites are in fact mostly showing strong values the article doesn't really go anywhere. It makes the majority of people too passive and gives elites some kind of powerful symbolic role that I just don't believe they have. There's simply no reason to believe a cultural revolution will just appear spontaneously, if we want one to happen our society will have to work towards that goal. Elites can't provide it by breaking out the stick to discipline their kids, which seems to me to be basically what his last few paragraphs are saying.

    I guess I basically find his ending disturbingly elitist, wear a stiff upper lip, teach the kids to behave, and stick with a crummy marriage and somehow it will all work out. I don't think that is how cultural change or economic outcomes happen, it ignores far more complex interactions.

  3. "divorce rates are only about 20% for women that marry after 25, traits like high income and even better education make it even less likely." And early widowhood probably helps a lot too.

    Yeah, I agree. I don't think a whole lot about the elites, I don't blame them for my bad habits and, in the end, I would consider regard for elite culture in, say, child-rearing, to be as bad a habit as permissiveness or promiscuity. Morality should be a person's first responsibility and things like work-ethic and family formation depend on it.

    But I'm also a big fan of Cowan's which is why cultural critiques like this are so frustrating. Economics, restaurant reviews and weight-loss seminars aren't enough scope?

  4. The biggest flaw in Cowen's argument would seem to eb that he conflaits income inequality with income mobility. That is, he assumes that if we increase income inequality, we have also increased mobility -- otherwise the incentives that he talks about disappear.

    But the evidence, from what I can see, doesn't really support that relationship. In fact, it appears that increased income mobility, including between generations, results from reduced income inequality. Not reduced to zero, but definitely lower than the United States currently displays.

  5. wj,

    I definitely agree with that. In theory, there is a good argument that inequality would increase mobility. In practice, there's little evidence of it and quite a bit of evidence for the opposite.