What makes people vote republican? (morality vs. policies)

Aunque estoy poco capacitado para evaluar la originalidad del argumento, este ensayo me parece bastante interesante.  If he is right, are (some sort of) political scientists also missing an important point?  Saludos!

 

WHAT MAKES PEOPLE VOTE REPUBLICAN?

By Jonathan Haidt

What makes people vote Republican? Why in particular do working class and rural Americans usually vote for pro-business Republicans when their economic interests would seem better served by Democratic policies? We psychologists have been examining the origins of ideology ever since Hitler sent us Germany's best psychologists, and we long ago reported that strict parenting and a variety of personal insecurities work together to turn people against liberalism, diversity, and progress. But now that we can map the brains, genes, and unconscious attitudes of conservatives, we have refined our diagnosis: conservatism is a partially heritable personality trait that predisposes some people to be cognitively inflexible, fond of hierarchy, and inordinately afraid of uncertainty, change, and death. People vote Republican because Republicans offer "moral clarity"—a simple vision of good and evil that activates deep seated fears in much of the electorate. Democrats, in contrast, appeal to reason with their long-winded explorations of policy options for a complex world.

 

Diagnosis is a pleasure. It is a thrill to solve a mystery from scattered clues, and it is empowering to know what makes others tick. In the psychological community, where almost all of us are politically liberal, our diagnosis of conservatism gives us the additional pleasure of shared righteous anger. We can explain how Republicans exploit frames, phrases, and fears to trick Americans into supporting policies (such as the "war on terror" and repeal of the "death tax") that damage the national interest for partisan advantage.

 

But with pleasure comes seduction, and with righteous pleasure comes seduction wearing a halo. Our diagnosis explains away Republican successes while convincing us and our fellow liberals that we hold the moral high ground. Our diagnosis tells us that we have nothing to learn from other ideologies, and it blinds us to what I think is one of the main reasons that so many Americans voted Republican over the last 30 years: they honestly prefer the Republican vision of a moral order to the one offered by Democrats. To see what Democrats have been missing, it helps to take off the halo, step back for a moment, and think about what morality really is.

(...)

If Democrats want to understand what makes people vote Republican, they must first understand the full spectrum of American moral concerns. They should then consider whether they can use more of that spectrum themselves. The Democrats would lose their souls if they ever abandoned their commitment to social justice, but social justice is about getting fair relationships among the parts of the nation. This often divisive struggle among the parts must be balanced by a clear and oft-repeated commitment to guarding the precious coherence of the whole. America lacks the long history, small size, ethnic homogeneity, and soccer mania that holds many other nations together, so our flag, our founding fathers, our military, and our common language take on a moral importance that many liberals find hard to fathom.

Unity is not the great need of the hour, it is the eternal struggle of our immigrant nation. The three Durkheimian foundations of ingroup, authority, and purity are powerful tools in that struggle. Until Democrats understand this point, they will be vulnerable to the seductive but false belief that Americans vote for Republicans primarily because they have been duped into doing so.

 

JONATHAN HAIDT is Associate Professor of Psychology at the University of Virginia, where he does research on morality and emotion and how they vary across cultures. He is the author of The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom.

 

El ensayo completo (y un debate en torno al mismo) están aqui:

http://www.edge.org/3rd_culture/haidt08/haidt08_index.html

 

Obama vs. McCain

A few notable paragraphs of Obama speech at the Democratic National Convention (August 28th, 2008).  His criticism of McCain is a bit more nuanced than Palin--because you don't want to go ballistic with McCain the hero.

"Tonight, I say to the American people, to Democrats and Republicans and Independents across this great land - enough!  This moment - this election - is our chance to keep, in the 21st century, the American promise alive.  Because next week, in Minnesota, the same party that brought you two terms of George Bush and Dick Cheney will ask this country for a third.  And we are here because we love this country too much to let the next four years look like the last eight.  On November 4th, we must stand up and say: "Eight is enough."

Now let there be no doubt.  The Republican nominee, John McCain, has worn the uniform of our country with bravery and distinction, and for that we owe him our gratitude and respect.  And next week, we'll also hear about those occasions when he's broken with his party as evidence that he can deliver the change that we need. But the record's clear: John McCain has voted with George Bush ninety percent of the time.  Senator McCain likes to talk about judgment, but really, what does it say about your judgment when you think George Bush has been right more than ninety percent of the time?  I don't know about you, but I'm not ready to take a ten percent chance on change.

The truth is, on issue after issue that would make a difference in your lives - on health care and education and the economy - Senator McCain has been anything but independent.  He said that our economy has made "great progress" under this President.  He said that the fundamentals of the economy are strong.  And when one of his chief advisors - the man who wrote his economic plan - was talking about the anxiety Americans are feeling, he said that we were just suffering from a "mental recession," and that we've become, and I quote, "a nation of whiners."
(…)
Now, I don't believe that Senator McCain doesn't care what's going on in the lives of Americans.  I just think he doesn't know.  Why else would he define middle-class as someone making under five million dollars a year?  How else could he propose hundreds of billions in tax breaks for big corporations and oil companies but not one penny of tax relief to more than one hundred million Americans?  How else could he offer a health care plan that would actually tax people's benefits, or an education plan that would do nothing to help families pay for college, or a plan that would privatize Social Security and gamble your retirement?  It's not because John McCain doesn't care.  It's because John McCain doesn't get it.

For over two decades, he's subscribed to that old, discredited Republican philosophy - give more and more to those with the most and hope that prosperity trickles down to everyone else.  In Washington, they call this the Ownership Society, but what it really means is - you're on your own.  Out of work?  Tough luck.  No health care?  The market will fix it.  Born into poverty?  Pull yourself up by your own bootstraps - even if you don't have boots.  You're on your own.

Well it's time for them to own their failure.  It's time for us to change America."

 

Palin goes negative

I really like (some of) the smears and negative campaigning that we have heard in both the Democratic and Republican convention.  If nothing else, they make it easy for even the most undecided or uninformed voters to contrast and ponder each candidate's strenghts and weaknesses.  Obviously, you have to hear both sides. VP candidates are the official attack dogs in presidential campaigns. These two are excerpts from Sarah Palin speech at the RNC that I particularly liked:

 

"Before I became governor of the great state of Alaska, I was mayor of my hometown. And since our opponents in this presidential election seem to look down on that experience, let me explain to them what the job involves. I guess a small-town mayor is sort of like a "community organizer," except that you have actual responsibilities. I might add that in small towns, we don't quite know what to make of a candidate who lavishes praise on working people when they are listening, and then talks about how bitterly they cling to their religion and guns when those people aren't listening."

 

"I've noticed a pattern with our opponent. Maybe you have, too. We've all heard his dramatic speeches before devoted followers. And there is much to like and admire about our opponent. But listening to him speak, it's easy to forget that this is a man who has authored two memoirs but not a single major law or reform — not even in the state senate. This is a man who can give an entire speech about the wars America is fighting, and never use the word "victory" except when he's talking about his own campaign. But when the cloud of rhetoric has passed ... when the roar of the crowd fades away ... when the stadium lights go out, and those Styrofoam Greek columns are hauled back to some studio lot — what exactly is our opponent's plan? What does he actually seek to accomplish, after he's done turning back the waters and healing the planet? The answer is to make government bigger..."

 

Coming soon: my fav excerpts from the DNC speeches...

 

The political power of daugthers

Daughters and Left-Wing Voting

Andrew J. Oswald (University of Warwick and Cornell University) Nattavudh Powdthavee (University of London and University of York)

From the paper introduction:
“In remarkable research, the sociologist Rebecca Warner and the economist Ebonya Washington have shown that the gender of a person’s children seems to influence the attitudes and actions of the parent.
Warner (1991) and Warner and Steel (1999) study American and Canadian mothers and fathers. The authors’ key finding is that support for policies designed to address gender equity is greater among parents with daughters. This result emerges particularly strongly for fathers. Because parents invest a significant amount of themselves in their children, the authors argue, the anticipated and actual struggles that offspring face, and the public policies that tackle those, matter to those parents. In the words of Warner and Steel (1999), “child rearing might provide a mechanism for social change whereby fathers' connection with their daughters undermines … patriarchy”. The authors demonstrate that people who parent only daughters are more likely to hold feminist views (for example, to favor affirmative action). By collecting data on the voting records of US congressmen, Washington (2004) is able to go beyond this. She provides persuasive evidence that congressmen with female children tend to vote liberally on reproductive rights issues such as teen access to contraceptives. In a revision, Washington (2008) argues for a wider result, namely, that the congressmen vote more liberally on a range of issues such as working families flexibility and tax-free education.
Our aim in this paper is to argue, with nationally representative random samples of men and women, that these results generalize to voting for entire political parties. We document evidence that having daughters leads people to be more sympathetic to left-wing parties. Giving birth to sons, by contrast, seems to make people more likely to vote for a right-wing party. Our data, which are primarily from Great Britain, are longitudinal. We also report corroborative results for a German panel. Access to longitudinal information gives us the opportunity -- one denied to previous researchers -- to observe people both before and after they have a new child of any particular gender. We can thereby test for political ‘switching’. Although panel data cannot resolve every difficulty of establishing cause-and-effect relationships, they allow sharper testing than can simple cross-section data. The paper checks that our result is not an artifact of family stopping-rules, discusses the predictions from a simple economic model, and tests for possible reverse causality.”

Also related:

Washington, Ebonya. (2008) “Family socialization: How daughters affect their legislator fathers’ voting on women’s issues.” American Economic Review, forthcoming.


Abstract. “Economists have long concerned themselves with environmental influences, such as neighborhood, peers and family on individuals' beliefs and behaviors. However, the impact of children on parents' behavior has been little studied. Parenting daughters, psychologists have shown, increases feminist sympathies. I test the hypothesis that children, much like neighbors or peers, can influence adult behavior. I demonstrate that the propensity to vote liberally on reproductive rights is significantly increasing in a congress person's proportion of daughters. The result demonstrates not only the relevance of child to parent behavioral influence, but also the importance of personal ideology in a legislator's voting decisions as it is not explained away by voter preferences.”

Set Theory 101

I found this on a good friend's website. Not only it is very true but it could also help teach some basic lessons in set theory, trade offs and the pareto frontier. Enjoy.

Lant Pritchett - Let their people come

Acaba de salir un libro sobre los beneficios potenciales de una mayor movilidad internacional de la mano de obra (léase migración).  La premisa de Lant Pritchett--economista de MIT, profesor de Harvard e investigador del World Bank--es sencilla:  en el mundo actual, las ganancias de  una mayor movilidad laboral son mucho mayores que las ganancias de disminuir, aun más, las barreras al comercio internacional. 

¿Por qué?  Imperfectos  como lo son, los aranceles y tarifas promedio del mundo ya son relativamente bajos.  En cambio, las barreras migratorias siguen siendo gigantescas y socialmente costosas.  ¿Evidencia?  Los diferenciales en precios de bienes y servicios entre un país rico y uno pobre son de, digamos 30 a 40% (ie, el precio de una ipod o una big mac alrededor del mundo no difiere demasiado).  Sin embargo, los diferenciales en salarios entre un pais rico y uno pobre llegan a ser de más del 500%, es decir, de un orden de magnitud superior.   

In short, in today's world, being pro-migration is much more pro-poor than being pro-trade.

El libro está disponible en linea aqui:
http://www.cgdev.org/content/publications/detail/10174

Dixit (non) system of work

This is Avinash Dixit advice on keeping research simple and papers short:

"Over the last two decades the average length of economics papers has increased quite a lot. Advances in word-processing technology have greatly reduced the cost of producing words, but not the cost of producing ideas, with the result economists should expect -- massive substitution.

My ideal is neatly captured in a question Frank Hahn posed to an author. As an editor of the Review of Economic Studies, Hahn asked the author to cut down his paper from 40 pages to its essential core of three pages. When the author wrote a long and indignant letter, Hahn responded in two sentences: "Crick and Watson described the structure of DNA in three pages. Kindly explain why your idea deserves more space."
(...)
I have saved for the end the most important lesson I have learned from my experience, and which I believe has very general validity. Maintain a youthful sense of freedom to choose problems and the directions of work on them. Imagine yourself at twenty-three, not yet labeled or confined to a particular "field," and not yet pressured to produce something quickly for the approaching tenure review. Try to preserve this mental frame in your research, even as your body, and the part of your mind dealing with other matters, continue to age and decay. 

Unfortunately, in the US most academics do not regain this freedom until they are thirty-five, by which time it is too late for many of them to be twenty-three. Their research brain is beyond rejuvenation, and it is time for them to leave the research frontier and join the conference circuit or the policy community."

 

Democracy and revolution

A no-nonsense quote of the day from Tyler Cowen in his NYT column:

 

It's an Election, Not a Revolution

This election is certainly important. But based on the historical record, it isn't likely to result in a major swing in economic policy. Fundamentally, democracy is not a finely tuned mechanism that can be used to direct economic policy as a lever might lift a pulley. The connection between what voters want, or think they want, and what ultimately happens in the economy, is far less direct. (...)

Rather than being cynics, we should be realists. Democracy is reasonably good at some things: pushing scoundrels out of office, checking their worst excesses by requiring openness, and simply giving large numbers of people the feeling of having a voice. Democracy is not nearly as good at others: holding politicians accountable for their economic promises or translating the preferences of intellectuals into public policy.

THAT might sound pessimistic, but it's not. Many Americans will be living longer, finding new sources of learning and recreation, creating more rewarding jobs, striking up new loves and friendships, and, yes, earning more money. Just don't expect most of these gains to come out of the voting booth or, for that matter, Washington.

Tracking the 2008 US Presidential election

Aquí están las últimas encuestas de Gallup:
http://www.gallup.com/poll/election2008.aspx

Y las cotizaciones de los betting markets:

Iowa electronic market
2008 U.S. Presidential Vote Share Market
2008 U.S. Presidential Winner Takes All Market
2008 U.S. Democratic Convention Winner Takes All Market
2008 U.S. Republican Convention Winner Takes All Market

Intrade:
Democratic to win Dem convention
Obama to win presidency

Social science and the public

This is Robin Hanson (at Overcoming Bias) on how much social scientists know and how little of it makes it to public or political debates.

Social scientists know lots.
As a physics student and computer science researcher, I assimilated the usual "hard science" perception that "social science" is an oxymoron -- no one knows much about it, so your opinion is as good as anyone's. When I finally decided I needed social science credentials, to turn my institution hobby into a career, I focused on experimental economics, the only sort a hard scientist could trust, and Caltech, with impeccable hard science credentials. But I was soon thoroughly convinced: social scientists know tons.

Why then do so many people think otherwise? Many say it is because social scientists are stupid, or the social world is too complex or uncontrollable. Better answers are that social expertize conflicts with our overconfidence about familiar experience, or with our democratic ideology that everyone's political opinions should get equal weight. But the best answer, I think is that most public talk by social experts reflects little social science. That is, what social experts say in legal or congressional testimony, or in newspapers or magazines, mostly reflects what they and we want and expect to hear, instead of what expert evidence reveals.

(…) social scientists have data and theory giving powerful insight into a great many social issues, at least to those with open minds. Open minded social scientists talking privately can make great intellectual progress. But powerful forces are eager to distort the messages social scientists give the public on important topics. Academics with deserved reputations for careful accurate work on obscure academic topics tend to adopt different standards when writing editorials or advising politicians. Even if most academics would not do this, those selected for such roles usually do.

(…) a mechanism that could cut through this fog and tell the public what honest social scientists really think might have great social value, at least if the public could be shamed into listening to them.

New Hampshire and momentum in presidential primaries

Las elecciones primarias en USA apenas comienzan pero ya arrojan resultados interesantes.   He aquí una especulación sobre las encuestas en New Hampshire y, por otro lado, teoría y evidencia sobre  el "momentum" durante las primarias de 2004.

 

What was going on with the New Hampshire polls?

 

Before Iowa, Hillary was beating Obama in NH by like 20 points, or at least double digits. After Iowa, Obama got this huge surge in the polls. You can see the time series here. It's a mystery why the polls were so wrong. I think it comes down to:

 

First - Erikson, Panagopoulos, and Wlezien wrote a paper showing that the Gallup poll overestimates fluctuation in the electorate when using the likely voter screen early in the election. In a nutshell, what happens is this: because the Gallup poll (and most other polls) are interested in interviewing "likely voters" only, they ask a series of screening questions at the beginning of the poll to gauge the respondents' interest in the election. They then have some formula to determine who is a "likely voter", and they throw out the remainder of the results. This paper examined the results that were thrown out along with the poll and found that, when something is going wrong for a candidate, their supporters are less enthusiastic and therefore less likely to be considered "likely voters" during this screening process. As a result, many of the supporters of the "losing" candidate just aren't counted in the poll, because pollsters think they're not going to vote. This makes fluctuations in polling seem more dramatic than they actually are. (…) This means Obama was never actually leading in NH, and all this talk about "something happened in the last 24 hours" is all a load of BS.

Second - survey weighting. Whenever a pollster does a survey, they need to make the poll representative of the voting electorate. (They) essentially guess what the demographic makeup of the electorate is going to be. Usually this is done on historical data and census data, but it's always really hard in primaries because they're not very consistent.  So the pollster will first try to get this breakdown in who they actually talk to, and if they can't, they'll then "weight" the survey to simulate the expected breakdown. (…)The pollsters probably saw how weird the electorate was in Iowa (i.e. so many people turned out, and so many young people), that they probably tried to compensate by weighting young people a ton in the following polls to NH. Now, we know that young people support Obama disproportionately. If the pollsters overcompensated for young people, then Obama's support was artificially strengthened in the polls.

 

MOMENTUM AND SOCIAL LEARNING IN PRESIDENTIAL PRIMARIES

Brian Knight and Nathan Schiff (NBER Working Paper 13637)

http://www.nber.org/papers/w13637

 

Do outcomes of primaries depend upon the sequencing of states? Do sequential, relative to simultaneous, systems lead to different outcomes in terms of the selection of candidates? In our view, the key distinction is that sequential, relative to simultaneous, elections provide late voters with an opportunity to learn about the desirability of the various candidates from the behavior of early voters. This opportunity for late voters to learn from early voting returns can in turn lead to momentum effects.

We develop and estimate a simple model of voter behavior under sequential elections. In the model, voters are uncertain about candidate quality, and voters in late states attempt to infer private information held by early voters from voting returns in early states.  Candidates experience momentum effects when their performance in early states exceeds voter expectations. The magnitude of momentum effects depends upon prior beliefs about the quality of candidates held by voters, expectations about candidate performance, and the degree of variation in state-level preferences. Our empirical application focuses on the 2004 Democratic primary. We find that Kerry benefited substantially from surprising wins in early states and took votes away from Dean, who stumbled in early states after holding strong leads in polling data prior to the primary season.  

The estimated model demonstrates that social learning is strongest in early states and that, by the end of the campaign, returns in other states are largely ignored by voters in the latest states. The voting weights implied by the estimated model demonstrate that early voters have up to 20 times the influence of late voters in the selection of candidates, demonstrating a significant departure from the ideal of "one person, one vote."

Finally, we simulate the election under a number of counterfactual primary systems and show that the race would have been much tighter under a simultaneous system and that electoral outcomes are sensitive to the order of voting. While these results are specific to the 2004 primary, we feel that they are informative more generally in the debate over the design of electoral systems in the United States and elsewhere.

 

 

 

 

Labor market institutions

Next spring, in my political economy course, I want to cover some major public policy areas: education, health, pensions, poverty-alleviation, taxation, energy, trade and competition policy, and obviously, labor regulation. This would be a nice reading assignment:

 

Labor Market Institutions Around the World
Richard B. Freeman
NBER Working Paper No. 13242, July 2007

The paper documents the large cross-country differences in labor institutions that make them a candidate
explanatory factor for the divergent economic performance of countries and reviews what economists
have learned about the effects of these institutions on economic outcomes. It identifies three ways
in which institutions affect economic performance: by altering incentives, by facilitating efficient bargaining,
and by increasing information, communication, and trust. The evidence shows that labor institutions
reduce the dispersion of earnings and income inequality, which alters incentives, but finds equivocal
effects on other aggregate outcomes, such as employment and unemployment. Given weaknesses
in the cross-country data on which most studies focus, the paper argues for increased use of micro-data,
simulations, and experiments to illuminate how labor institutions operate and affect outcomes.

http://www.nber.org/papers/w13242.pdf

 

Campaign Advertising and Election Outcomes

The recent electoral reform in Mexico will surely change the use of TV and radio ads in political campaigns.  Will this make "media effects" larger or smaller?  The Brazilian experience seems to say larger.

 

 

Campaign Advertising and Election Outcomes: Quasi-Natural Experiment Evidence from Gubernatorial Elections in Brazil

By:	Bernardo S. da Silveira (Department of Economic, New York University) João Manoel Pinho de Mello (Department of Economics, PUC-Rio)
URL:	http://d.repec.org/n?u=RePEc:rio:texdis:550&r=pol
Despite the "minimal effects" conventional wisdom, the question of whether campaign advertising influence elections outcome remains open. This is paradoxical because in the absence of a causal link from advertising to candidate performance, it is difficult to rationalize the amounts spent on campaigns in general, and on TV advertising in particular. Most studies using US data, however, suffer from omitted variable bias and reverse causality problems caused by the decentralized market-based method of allocating campaign spending and TV advertising. In contrast with received literature, we explore a quasi-natural experiment produced by the Brazilian electoral legislation, and show that TV and radio advertising has a much larger impact on election outcomes than previously found by the literature. In Brazil, by law, campaign advertising is free of charge and allocated among candidates in a centralized manner. Guber natorial elections work in a runoff system. While in the first round, candidates' TV and radio time shares are determined by their coalitions' share of seats in the national parliament, the two most voted candidates split equally TV time if a second round is necessary. Thus, differences in TV and radio advertising time between the first and second rounds are explored as a source of exogenous variation to evaluate the impact of TV advertising on election outcomes. Estimates suggest that a one percentage point increase in TV time causes a 0.241 percentage point increase in votes. Since TV advertising is the most important item in campaign expenditures, this result sheds light on the more general question of the effect of campaign spending on elections outcome.
Keywords:	Campaign Expenditures, Election Outcomes, Endogeneity, Quasi-Natural Experiments
JEL:	G12 C22 C53 E44

 

Rational chimps?

Luego de 20 mil años (o más) de evolución, científicos alemanes comprueban que los chimpancés juegan con más egoísmo juegos de ultimátum que los homo sapiens.  ¿Cómo interpretar esta evidencia?  Algunas posibilidades:

a) Los modelos de teoría de juegos son para chimpancés.

b) Los humanos son "rule utilitarians" mientras que los chimpancés son "act utilitarians"

c) Los chimpancés juegan "one shot strategies" mientras que los humanos como si fuera un juego repetido.

d) Los chimpancés tienen horizontes muy cortos o son más impacientes que los humanos. 

e) Los chimpancés no tienen noción alguna de "justicia" o no han desarrollado la convención social de reciprocidad.

 

Noten que empíricamente es muy difícil distinguir cuál es el mecanismo subyacente pues las opciones anteriores nos llevan a una predicción similar.

 

---

Chimps choose more rationally than humans
 

LEIPZIG, Germany, Oct. 8 (UPI) -- German researchers have demonstrated chimpanzees make choices that protect their self-interest more consistently than do humans.

Researchers from the Max Planck Institute of Evolutionary Anthropology in Leipzig studied the chimp's choices by using an economic game with two players. In the game, a human or chimpanzee who receives something of value can offer to share it with another. If the proposed share is rejected, neither player gets anything.
Humans typically make offers close to 50 percent of the reward. They also reject as unfair offers of significantly less than half of the reward, even though this choice means they get nothing.
The study, however, showed chimpanzees reliably made offers of substantially less than 50 percent, and accepted offers of any size, no matter how small.  The researchers concluded chimpanzees do not show a willingness to make fair offers and reject unfair ones. In this way, they protect their self interest and are unwilling to pay a cost to punish someone they perceive as unfair.

The study appeared in the Oct. 5 issue of the journal Science.

 

 

 

Il liberismo è di sinistra?

In Mexico the so called right-wing ruling party wants to raise higher tax revenues (to increase social spending, for instance), to allow private investments in energy (to promote growth and employment)--and many more so called neoliberal reforms—all of which the lefty oppositon party adamantly oppose.  Granted, such means and ends are somewhat debatable but remind me again which party is more concerned about the poor?  Indeed, the "left vs. right-wing" policy label brings more confusion than clarity in many countries.  This VoxEU short op-ed by Alesina and Giavazzi (authors of The future of Europe, MIT 2006) is right on the mark.  (By the way, I will surely refer back to VoxEU, the new and notable blog with "research-based policy analysis and commentary from Europe's leading economists", in my political economy class.)

 

Why the Left should learn to love liberalism

By Alberto Alesina  and Francesco Giavazzi (5 October 2007)

 

"Anti-reformists in Europe claim to be protecting Europe's weak and poor. Nothing could be further from the truth. Labour-market flexibility, deregulation of the service industry, pension reforms and greater competition in university funding might harm the interest of well-connected, privileged citizens but it would open up opportunities for Europe's youth and disadvantaged groups. A real left-wing agenda would embrace reform.

Continental Europe is in the midst of a burning discussion about the pros and cons of market-friendly reforms and greater economic liberalism. We all know what the package contains – competition, labour-market flexibility, liberalisation of services, lower taxes, and privatisations.

The traditional debate runs as follows. These reforms are "right wing" policies. They may increase efficiency – perhaps even economic growth – but they also tend to increase inequality and to be detrimental for the poorest in society. Therefore – and here comes the typical "socially compassionate" European argument – be very careful moving in that direction. Governments should proceed cautiously and be ready to backtrack at any point.

Much of this reasoning is fundamentally wrong. Labour-market flexibility, deregulation of the service industry, pension reforms and greater competition in university funding is not anti-equality. Such reforms shift financing from taxpayers to the users themselves and, as such, tend to eliminate rents. They tend to increase productivity by basing rewards on merit rather than on being an insider. They tend to open up opportunities for younger workers who are not yet well-connected. Pursuing pro-market reforms does not imply facing a trade-off between efficiency and social justice. In this sense, pro-market policies are "left wing", if that means reducing the economic privileges enjoyed by "insiders".

 

Read the whole thing.

 

Should Economists Rule the World?

"Should Economists Rule the World?
Trends and Implications of Leadership Patterns in the Developing World, 1960—2005"

Anil Hira, Political Science, Simon Fraser University.

International Political Science Review, Vol. 28, No. 3, 325-360 (2007)

 

Abstract: This article examines more carefully the oft-made hypotheses that (1) "technocrats" or politicians with an economics background are increasingly common and (2) that this "improvement" in qualifications will lead to improvements in economic policy. The article presents a database on the qualifications of leaders of the world's major countries over the past four decades. The article finds that while there is evidence for increasing "technification," there are also distinct and persistent historical patterns among Asian, African, Middle Eastern, and Latin American leaders. Using statistical analysis, the article finds that we cannot conclude that leadership training in economics leads to better economic outcomes.

 

 

Por supuesto, no podemos dar crédito alguno a este análisis: obviamente este tipo de cosas no se pueden medir estadísticamente.  El autor, un politólogo, está sesgado por su agenda "anti-economista".  Lo que pasa es que los políticos y los poderes fácticos no permiten a los economistas implementar "fist best policies".  Es toda una conspiración... :-)

Sullivan's liberal mantra

A bit of motivational reading, for a change...

 

Life, Liberty and the Pursuit of Happiness - by Andrew Sullivan
Link (audio version included)  

 

"I believe in life. I believe in treasuring it as a mystery that will never be fully understood, as a sanctity that should never be destroyed, as an invitation to experience now what can only be remembered tomorrow.

(...) I believe in liberty. I believe that within every soul lies the capacity to reach for its own good, that within every physical body there endures an unalienable right to be free from coercion. I believe in a system of government that places that liberty at the center of its concerns, that enforces the law solely to protect that freedom, that sides with the individual against the claims of family and tribe and church and nation, that sees innocence before guilt and dignity before stigma. I believe in the right to own property, to maintain it against the benign suffocation of a government that would tax more and more of it away. I believe in freedom of speech and of contract, the right to offend and blaspheme, as well as the right to convert and bear witness.

(...) I believe in the pursuit of happiness. Not its attainment, nor its final definition, but its pursuit. I believe in the journey, not the arrival; in conversation, not monologues; in multiple questions rather than any single answer. I believe in the struggle to remake ourselves and challenge each other in the spirit of eternal forgiveness, in the awareness that none of us knows for sure what happiness truly is, but each of us knows the imperative to keep searching. I believe in the possibility of surprising joy, of serenity through pain, of homecoming through exile.

(...) And I believe in a country that enshrines each of these three things, a country that promises nothing but the promise of being more fully human, and never guarantees its success. In that constant failure to arrive -- implied at the very beginning -- lies the possibility of a permanently fresh start, an old newness, a way of revitalizing ourselves and our civilization in ways few foresaw and one day many will forget."

 

Krugman on political journalism

Paul Krugman has a blog now: "The conscience of a liberal".  Which is good news because, unlike his NYT column, the blog does not require a paid subscription.  For starters, I agree with his criticism of political journalism (which is slightly related to the troubles "narrative explanations in general).

What I Hate About Political Coverage

Warning: this is a bit (actually, more than a bit) of a rant.

One of my pet peeves about political reporting is the fact that some of my journalistic colleagues seem to want to be in another business – namely, theater criticism. Instead of telling us what candidates are actually saying – and whether it’s true or false, sensible or silly – they tell us how it went over, and how they think it affects the horse race. During the 2004 campaign I went through two months’ worth of TV news from the major broadcast and cable networks to see what voters had been told about the Bush and Kerry health care plans; what I found, and wrote about, were several stories on how the plans were playing, but not one story about what was actually in the plans.

There are two big problems with this kind of reporting. The important problem is that it fails to inform the public about what matters. In 2004, very few people had any idea about the very real differences between the candidates on domestic policy. It remains to be seen whether 2008 is any better.

The other problem, which has become very apparent lately, is that this sort of coverage often fails even on its own terms, because the way things look to inside-the-Beltway pundits can be very different from the way they look to real people.

 

El enfoque Nirvana

En muchos debates de política pública, aunque menos de lo que uno desearía, es común recurrir a criterios de eficiencia (también llamado criterio costo-beneficio) para evaluar arreglos institucionales. Como tantas cosas, el uso descuidado de los criterios de eficiencia puede conducir a razonamientos falaces. En un famoso paper de 1969, Harold Demsetz criticó duramente el enfoque de eficiencia usado por algunos economistas (en particular, su argumento iba contra Kenneth Arrow, premio nobel de economía).  Demsetz llamó a esto el "Nirvana approach".

La idea básica es que si uno compara los arreglos institucionales del mundo real con una "norma ideal" (a menudo inexistente o irrealizable) es muy fácil concluir que el mundo real es ineficiente. Como sabemos, un enfoque comparado más útil consiste en evaluar los arreglos institucionales alternativos del mundo de real y, quizá usando la norma ideal como criterio, concluir que el arreglo que menos discrepe de esta norma es second-best efficient.

La sutil distinción entre estos enfoques es importante pues mientras el Nirvana approach te lleva a concluir que (casi) todo el mundo es ineficiente, el segundo enfoque te permite hallar (algunos) casos relativamente eficientes, dadas las restricciones del mundo real.

Según Demsetz, el Nirvana approach puede conducir a tres falacias adicionales:

The grass is always greener fallacy. Una vez que detectas una ineficiencia en el mundo real (digamos, una falla de mercado) inmediatamente asumir que una intervención (gubernamental, colectiva, divina, oenegera, etc.) puede llevarte a un mundo mejor. El problema es suponer que una alternativa aún no examinada es necesariamente superior al statu quo.

The fallacy of the free lunch. Suponer que tal intervención puede llevarse a cabo sin costos sociales significativos o sin distorsión alguna en los incentivos (a veces perversos) del mundo real. El problema es que si estos costos son más elevados que la ineficiencia detectada, a veces lo eficiente es dejar las cosas tal y como están.

The people could be different fallacy. Suponer que la mentada ineficiencia del mundo real desaparecería por arte de magia si tan sólo la gente fuera "mejor" (o más consciente, altruista, civilizada, sensata, educada, etc.) El problema es que es poco probable que la naturaleza humana cambie.

Las primeras dos falacias casi siempre aparecen juntas en muchos argumentos populares y académicos, mientras que la tercera puede aparecer sola o acompañada. Por otro lado, noten que la argumentación de Demsetz puede conducir a conclusiones conservadoras. En cualquier caso, sería deseable que nuestros analistas consideraran este tipo de problemas a la hora de evaluar el mundo o hacer propuestas de política para mejorarlo.

Referencia: Demsetz, Harold (1969). "Information and Efficiency: Another Viewpoint", Journal of Law and Economics 12(1), p. 1-22.

 

Los ricos cada vez son MENOS ricos...

Si comparamos la riqueza, en el mejor momento de sus vidas, de los multimillonarios norteamericanos y la traemos a valor presente (dólares de 2006), John D. Rockefeller sería varias veces más rico que Bill Gates.  Estos son algunos datos:

 

	Riqueza*	Ratio vs. Rockefeller
John D. Rockefeller (1839-1937)	305.3	1.0
Andrew Carnegie (1835-1919)	281.2	1.1
Cornelius Vanderbilt (1794-1877)	168.4	1.8
Richard Mellon (1858-1933)	82.3	3.7
Sam Walton (1918-1992)	58.6	5.2
Henry Ford (1863-1947)	54.3	5.6
Bill Gates (1955- )	53	5.8
*Cifras en "2006 US billion dollars"

 

Una lista más detallada está aquí: The all-time richest Americans. Estas cifras provienen de All the Money in the World -- How the Forbes 400 Make -- And Spend -- Their Fortunes, de Peter W. Bernstein y Annalyn Swan.