Wednesday, January 30, 2013

Thinking About What Inequality Means for Free Trade

Not sure why, but I've been reflecting a bit about what rising inequality means for the case for free trade. I don't question the general* case that free trade results in net benefits, ceteris paribus.

However, the rise in inequality, and the decline of labor's bargaining power, is making me wonder whether ceteris paribus conditions hold in the real world. If we assume that growth results primarily from the cumulative efforts of the bulk of society, rather than from the capital expenditures of the wealthy few,** then it is possible that the concentration of wealth will undermine growth and prosperity. If free trade shifts economic power in favor of holders of capital (such as by threatening to move a factory), their enhanced bargaining power may serve to shift economic rewards towards them and away from labor, increasing capital's share of a shrinking pie (as inducements for hard labor and skill acquisition decline relative to the rewards for simply holding wealth, to name one plausible mechanism, this would also be consistent with rational behavior on the part of individual owners of labor and capital, though it is irrational in the aggregate). If this inefficient shift away from labor outweighs the gains from trade, it would be possible for free trade to result in net loss.

As a second problem, as the safety net and redistribution comes under attack, the possibility for uncompensated losses become greater. There are always winners and losers from trade, the standard argument being that the winners can compensate the losers. As economic power shifts, this compensation becomes less likely and the winners more likely to simply pocket the gains while letting the losers fend for themselves. This isn't a threat in countries that have developed egalitarian institutions (it's striking how the ideal of American equality and egalitarianism has declined since the 19th century), but as the makers and takers nonsense becomes a common refrain among certain groups it appears increasingly less likely that the low-skill groups which tend to bear most of the costs while receiving a small share of the benefits through market mechanisms alone will receive any compensation for their losses through redistribution (targeted trade compensation programs appear to me to be both inefficient and inadequate, targeting the groups as a whole would be both more efficient and more just)

None of this means that I am willing to come down on the side of protectionism, I continue to believe free trade is a net good; if not as strongly as I did before. But I am listening now, where I wasn't before. Given economic indicators over the past 30 years the case against free trade is the strongest it has ever been and is worth at least hearing out.

Tuesday, January 29, 2013

In What Instances Have State's Rights Protected Indivdiual Rights Against the Government

[Update: To clarify, where there is a strong reason for authority to be at the state level we tend to see this argued on the merits, without reference to state's rights. It is only where a policy has little to no merit, or where someone seems to believe a given issue isn't really a problem (like Medicaid or poverty relief) but feels the public is pressuring them to take a stance that we see devolution to the states proposed (as a non-solution, since devolution is really just buck passing unless tied to specific policies), that we really see state's rights or devolution advanced as a serious argument.  So we see alcohol (mentioned specifically because I think the state's rights argument has a great deal of merit with regard to the legal drinking age, which should be congruent with the habits and beliefs of the people immediately impacted rather than the beliefs and values of people thousands of miles away, but to my knowledge this argument is not seriously advanced), tobacco, and the speed limit regulated at the state level based on the merits, but we see state's rights used to defend slavery or Indian removal or advanced as a solution to poverty by people with an appalling record on poverty relief. I may be wrong about this one, but after reading the argument being used time and time again to strip people of life, liberty, and any chance of happiness I feel it is bizarre the argument is still advanced given its terrible history and would really like to know the other side of the ledger so I can understand why it is still used.]

I mean this as a serious question. After reading about the 19th century I see state's rights used time and time again to justify the oppression of weak individuals by stronger groups and individuals within society. The worst instances are slavery, later segregation, and Indian removal. We see the poor oppressed, often killed, maimed, stripped of their property, dignity, and even humanity. States rights were used to justify opposition to any action by the Federal government (in many cases with the collusion of Federal officials, with men such as President Jackson likely encouraging these actions by the states) to mitigate these wrongs.

Now, I'm aware of the principled defense of state's rights, arising both from the Constitution and from quasi-natural rights arguments such as their closeness to the people.* But, I have a deep distrust regarding our ability to discern natural rights or to derive just policies from principle. We must always be aware of our own weakness and seek to determine from the consequences whether or not our principles are correct or if we are deceiving ourselves.

Even where states have acted in advance of the Federal government to protect individuals against oppression by others or by organized groups, such as with gay rights, these arguments are made on their merits rather than by recourse to states rights. I can think of many instances where states rights were used to provide a principled veneer to otherwise indefensible evil and exploitation, I can't think of any where states rights were actually used to advance individual rights in the face of oppression (my lack of knowledge does not mean such cases do not exist).

Given that we have more than 200 years of history, what are the empirical results of this particular idea? I have noted many particularly awful instances in which states rights has been used by powerful individuals and groups to oppress those weaker then themselves. What is the empirical evidence on the other side? When have state's rights successfully defended individuals from oppression, rather than providing a seemingly principled defense of powerful individual's and group's oppression of others different from or weaker than themselves?

Mistaking Human Sin for God's Will

[Update: Added links and corrected some grammar. Also, I feel the need to note I got a little carried away here and ended up mashing up what were meant to be two posts, which I think is somewhat apparent after re-reading it. Something I meant to add was that reading about the 19th century has driven home what I feel is a frequent gap in my analysis, I tend to attribute disagreement to varying conceptions of what is good and to honest disagreements about how to get there. But confronting issues like slavery and Indian removal drives home that some people are just downright nasty and are advancing arguments solely for the good of themselves and whatever they define as their kind, no matter how great the consequences are for others, including rape, murder, and torture. If this isn't evil, I don't know what is.]

Lately, I've been reading "What Hath God Wrought," an excellent history of 19th century America.* This has been forcing me to reflect the impact of human evil** on history (and living in a more religious area and encountering more people of deep faith has led to me having more confidence in sharing my own views inspired by faith).

So, reading, "For John Hagee, Hitler Was God's Will, but Hagel Must Be Stopped," provided me with a concrete instance of how human sin and ignorance continues to combine to produce evil in the world.***

To quote Hagee (from a Huffpo post linked to on TAC, not my ideal source admittedly):

"'And they the hunters should hunt them,' that will be the Jews. 'From every mountain and from every hill and from out of the holes of the rocks.' If that doesn't describe what Hitler did in the holocaust you can't see that."
I'm not qualified to attempt any Biblical exegesis here, but I can say that it is wrong to attribute evil to God when human ignorance and sin are sufficient explanations. The Holocaust occurred because of Hitler's particular evil and Hitler's rise of power is explainable in terms of the willed actions of numerous individuals that brought about catastrophic consequences. If Germany had not faced such punishing reparations, if monetary authorities had acted with greater wisdom, and if the powerful had acted with greater concern for the common man, none of that would have happened. Hitler has nothing to do with God and everything to do with man's fallen nature and our inability in that  instance to correct our ignorance and to rise above our petty tribalism and greed. We had choices to make,**** and we made very poor ones. That is our fault, and it we will be taking the Lord's name in vain***** to explain our own failings by his will.

The above is largely stating the obvious, but I mean for it to point to a larger problem. Too often, we excuse the abuses perpetuated by both the institutions we have created and by our own sin as simply being the results of the natural order (outside of some narrow circles it is generally unfashionable to attribute this natural order to God, but it is often implicit). I see this very often with market oriented rhetoric, as if the market is of divine creation rather than the result of human action and will. Only somewhat less often do I see the Bible used to to cloak our tribalism and bigotry, as if we can conceal the hatred and spite of our words by taking the Lord's name in vain to hide them.

Monday, January 21, 2013

"To save man from the morass of propaganda, in my opinion, is one of the chief aims of education."

Martin Luther King day is providing an excellent opportunity to reflect on some of his writings. The Washington Post has provided an interesting list of quotations. In particular:

Education must also train one for quick, resolute and effective thinking. To think incisively and to think for one’s self is very difficult. We are prone to let our mental life become invaded by legions of half truths, prejudices, and propaganda.  At this point, I often wonder whether or not education is fulfilling its purpose. A great majority of the so-called educated people do not think logically and scientifically. Even the press, the classroom, the platform, and the pulpit in many instances do not give us objective and unbiased truths. To save man from the morass of propaganda, in my opinion, is one of the chief aims of education. Education must enable one to sift and weigh evidence, to discern the true from the false, the real from the unreal, and the facts from the fiction.
I'm afraid that I strongly agree with Dr. King that the education system continues to fail in its purpose, and that both educated people, as well as those not so educated, often seem to fail at thinking both logically and scientifically. I don't really know enough about education policy to address solutions, though it seems that focusing mathematics classes more on statistics and less on other topics like geometry as well as addressing topics such as cognitive biases at the high school level would help, but I do think that addressing the difference between political and empirical questions are worth addressing.

In many of the major topics of ideological division in America, such as taxes, climate change, guns, and the welfare state, we see political considerations and empirical questions conflated. If we are going to have a meaningful conversation on these topics it is necessary to distinguish between the two.

Since I've been writing about it, take gun control for instance (I thought about using global warming, but haven't been writing about it lately). In most discussions of the topic we see the political topic of should we impose controls on firearms conflated with the empirical questions of whether firearms contribute to crime.

This creates opportunities for the propaganda that King references to have an undue influence on the debate and interferes with our efforts to think about the topic objectively. The political question of what we should do about guns is entirely distinct from the empirical question of what effects guns have (guns are hardly unique in this).

Yet, most discussions on this topic make it sound like these are the same question with individuals becoming polarized on both sides around both normative, subjective political questions and objective, empirical questions. This is sloppy thinking, answering the empirical questions regarding the effects of guns does not tell us the answer to the normative question of what we should do about guns, it only allows us to have a grounded conversation about our normative, subjective beliefs regarding how we should react to the data unearthed by our empirical investigation. Without first grounding our beliefs empirically, however, we cannot reach the point of discussing our normative beliefs, we instead get bogged down in pointless discussions of speculative effects rather than discussing how to reconcile our conflicting normative beliefs about what to do in response to these known effects.*

* Not that effects can often be known with certainty. But the weight of evidence of competing claims is an essential element that needs to be added to our normative political discussions. It is simply not true that there is equal evidence to the video games cause homicide and guns cause homicide hypothesis, yet in most common media sources these hypotheses are presented equally simply because someone can be quoted as presenting them. This is a flaw that is in desperate need of correction and better scientific, and especially social scientific, literacy would help to make these discrepancies in evidence clear.