Cary Coglianese and Nancy Nord of the University of Pennsylvania Law School organized a panel called “The Cannabis Conundrum: An Experiment in Federalism or States’ Rights Run Amuck?” with Peter Conti-Brown of Wharton talking about banking regulation and Judge James Colins of the Commonwealth Court talking about a case brought against the Commonwealth by some unsuccessful applicants for growing and distribution licenses under Pennsylvania’s new medical-marijuana program. I’m on (from about 9:45 to about 26:45, aka “too long”) talking about how the states are screwing up legalization and only federal legalization can unscrew it.
Iâ€™ve been puzzled why Richard Thalerâ€™s â€œnudgeâ€ idea attracts such hostility from some people to my political left (including very smart people such as Henry Farrell and Cosma Shalizi). The worst thing you can say about nudging as I understand it is that it’s not very powerful; other than that, nudging is like chicken soup: it can’t do any harm.
So Iâ€™m grateful to Tyler Cowen for clarifying matters for me. Either Cowen or I badly misunderstands Thalerâ€™s idea; if Cowen is right, you can add me to the list of anti-nudgers. But Iâ€™m pretty sure the Cowen is wrong about what Thaler says, and certain that his account confuses things that ought to be distinguished.
Nudging, as I understand it, involves changing â€œchoice architectureâ€ â€“ altering the way options are presented or the time choices are made, or changing the â€œdefault outcomeâ€ if no option is explicitly chosen â€“ in order to bring peopleâ€™s actual choices more closely in line with their true preferences, as measured by the choices they would make with full information after serious reflection. That is, nudging is simply the opposite of temptation.
One of the defining features of a nudge (understood this way) is that it doesnâ€™t narrow the range of outcomes available to the chooser. For example: presented with a menu of retirement-savings options, many employees will pick none of them, in part because of the psychological costs of decision-making and the fear of getting it wrong (“analysis paralysis”). This can be true even in the case when inaction is clearly the worst option (e.g., when the employer is picking up all of the cost). In that case, a nudge strategy would be to make enrollment in the plan that seems to experts most appropriate for the largest number of employees the default option: i.e., what happens if an employee just doesnâ€™t fill out the form.
Crucially to the definition of a nudge, an employee who doesnâ€™t want that option can costlessly (other than the effort of making the decision) switch to another, or none at all. As long as thereâ€™s no deception involved, and the people designing the choice architecture know what theyâ€™re doing and have the welfare of the people making the choices in mind, nudging seems to me almost entirely benign. A program that doesnâ€™t limit freedom of choice canâ€™t properly be said to reduce liberty, so replacing â€œopt-inâ€ with â€œopt-outâ€ should be thought of as facilitative rather than coercive. The same is true of, e.g., putting the salad bar first in the cafeteria line.
However, Cowenâ€™s understanding of nudgery has a much harder edge. He gives examples where a choice less preferred by the government (or whoever is setting up the system) is made materially less attractive or more expensive, such as legally complicated and expensive divorce procedures, or abortion restrictions that force women to travel inconvenient distances. Cowen even wants to call restrictive immigration laws â€œnudges,â€ because would-be immigrants who canâ€™t get visas can always forge documents or sneak across the border!
In my view, that sort of cost-imposing policy is radically distinct from â€œnudging;â€ Steve Teles calls it â€œshoving.â€ I donâ€™t doubt that some such â€œshovesâ€ are justified on paternalistic grounds: taxation to reduce cigarette consumption is an example. (Shoves are often justifiable on non-paternalistic grounds, such as taxes to reduce air pollution.) But such strategies arenâ€™t always benign; people who keep smoking in the face of heavy tobacco taxes wind up just as sick as they would have otherwise, and poorer. And of course for those with limited means making something expensive can amount to barring it entirely.
Now, I agree with Cowen that the â€œshovingâ€ for paternalistic reasons he wants to label as “nudging” is often preferable to more drastic means of protecting people from their own bad decisions: means that we might call â€œmanhandling.â€ A tax on cigarettes is more respectful of liberty, and less prone to generate bad side effects, than an outright prohibition would be. But â€“ in contrast to nudging â€“ shoving is like manhandling in making those who donâ€™t take the hint worse off. Changing incentives isnâ€™t the same thing as changing choice architecture, and requires much stronger justification.
Nudging is no panacea, because changing choice architecture can only go so far in changing choice. Some people will continue to fall into behavioral traps even if the traps are clearly marked. And when the intervention is on non-paternalistic grounds, a considerable amount of shoving, or even manhandling, may be both justified and required. But there is clearly some room for improving outcomes at low cost and without diminishing liberty from the use of pure nudges. Itâ€™s therefore worthwhile to distinguish clearly â€“ as it seems to me Cowen’s analysis does not â€“ between generically benign nudges and the less benign alternatives he wants to include under the same label.
Cigarette taxes protect health by reducing smoking.
But tax disparities across states create a multi-billion-dollar annual market in smuggled tobacco products. Current enforcement efforts are inadequate and ill-organized.
As a result, the illicit trade in tobacco products (ITTP) is growing, and the larger the market grows, the harder the problem of controlling it. (That’s the usual positive feedback problem in violation rates due to enforcement swamping.) So inaction now has long-lasting costs.
Tax equalization would solve the problem, but isn’t likely to happen. Feasible changes in enforcement strategy could protect health and revenue while reducing crime.
In the aftermath of the Grenfell Tower fire,
Jeet Heer posted what seemed to me a thoroughly ungenerous Tweet aimed at Megan McArdle, a frequent punching-bag for the Twitter left. (Full disclosure: I regard Megan as a friend, and intensely admire her book on failure, The Upside of Down.)The Tweet has a picture of a friend of one of the victims, and reads (in full) â€œMegan Mcardle [sic] should tell him that libertarian cost/benefit analysis proves his friend’s death is totally worth it.â€ Since the original Tweet didnâ€™t link to anything McArdle had written, it looked as if Heer had simply picked her at random as his target.
But that wasnâ€™t in fact the case. The Tweet was an allusion to a McArdle essay on Bloomberg NewsÂ headlined â€œBeware of Blaming Government for London Tower Fire.â€ And while that piece does not in fact say that the deaths in Grenfell Towers were â€œtotally worth it,â€ it really is just about as unfeeling as Heer makes it out to be. Worse (from my somewhat unusual perspective), itâ€™s also a catastrophically bad piece of policy analysis. This is a case where the self-parody is even meaner than the parody. As someone who teaches and practices benefit-cost analysis, let me say that Meganâ€™s essay is the sort of thing that gives the rest of us cold-blooded, heartless bastards a bad name. Continue Reading…
The inferno in London is out, mainly because the entire flammable contents of the building have burned up. Â Fire hoses cannot deliver water to the upper floors of such buildings, and the ladders trucks can bring to the scene don’t reach nearly high enough.Â Many more deaths will be recorded–I expect a toll in the dozens–as the search for the missing continues. Police and fire brigades told people to stay in their flats and close their doors rather than escaping, and those people have been incinerated. As the structure of the building, whether concrete or steel framed, has certainly been compromised, possible collapseÂ will make it impossible to search for bodies for quite a while. [update 14/VII: they are using drones! Nature imitating art; theÂ Economist big drone wrapup was published last week.)
How is such a thing possible?Â Well, first we should note that dying in a fire is rare and getting more so in all industrialized countries: annual fire deaths per million in the US are only about 12, and remarkably, down by two-thirds since 1979. The UK is on a similar trend and about a third safer overall. We should also note, as more information about administrative and regulatory failures dribbles out, that this was housing for poor people.
The ways to avoid fire deaths are as follows:
- start fewer fires
- faster emergency response from fire brigades
- buildings that resist fire spread after ignition
- buildings that facilitate escape
- proper behavior by occupants
- better medical care for survivors
No. 1 is the biggie, and it has to do partly with electrical codes and enforcement, but progress in recent years has mainly to do with smoking, both less smoking overall and safer cigarettes. A third of residential fires used to be caused by cigarettes, usually dropped on upholstered furniture. Cigarettes used to be laced with enough saltpeter to keep them burning if not puffed on, so the tobacco company could sell another cigarette when one left in an ashtray consumed itself; at least in the US that’s no longer true. But fire can start in many ways; see 5. below.
No. 2 is occurring, because fewer fires mean engine and ladder companies are less busy, and because it’s politically difficult to close unnecessary fire stations. Nearly all engine and ladder sorties in the US now are actually medical calls.
No. 3 is a matter of codes and code enforcement: hour-ratings for partitions and doors, less flammable materials, UL listing for electrical components, etc. and honest, effective inspections to be sure that’s all happening. Otherwise known as job-killing regulatory government meddling in the free market, don’t you know. Here the US is disadvantaged by traditionally building with wood rather than masonry. It’s also a matter of the most reliable, proven, life- and building-saving technology, sprinkler systems; something the Grenfell Tower seems not to have had, even in the corridors and escape routes.
No. 4 involves a variety of features. Small things like an alarm system (have you checked the batteries in your smoke detectors lately?) and quick-release locks on the bars people in poor neighborhoods put on their first-floor windows matter. For larger buildings, it’s a matter of having two escape routes from every location, and one of these has to be protected from filling with the smoke that kills more people than heat and flame; an example is theÂ exterior fire escape we see on older buildings. I was appalled to read in the Guardian that 1970’s high-rise UK buildings of the Grenfell era hadÂ â€œone escape stair which is not designed for a mass evacuation, but is designed for a small number of people to get out whose individual flats are on fireâ€. No; two stairs, and one has to be open to the outdoors (sometimes an interior “fire court” open to the sky) at every landing. When I was working in architects’ offices in the 70s and 80s, this was completely standard practice. It still is. If you live in a high-rise, do you know how to get to your fire stairs in the dark? If not, practice.
Twenty-four stories is a long way to walk down in the dark, afraid, aroused in the middle of the night from a sound sleep, in pajamas or nothing, especially with terrified little children. I would not live above the twelfth floor of any building. I wonder if the people enjoying the view from high up in the fifty-story condo buildings popping up in New York think about this.
No. 5 includes some training (point the fire extinguisher at theÂ base of the flames) and occasional drills, not filling your apartment with unnecessary inflammable stuff (what doomed the partiers at the Ghost Ship in Oakland), not storing the gasoline can for your lawn mower in the same room as a water heater, staying in the kitchen when you have a frying pan on the burner, and so on. And do you know where your kitchen fire extinguisher is, and how to use it, and have you checked the pressure gauge?
Where fire comes to your house from outside, as in Mediterranean climate landscapes that burn regularly and will do so more with climate change, you have to maintain what we call “defensible space” in California, and stay on top of it as grass and brush try to grow into it.
The Japanese have a long history of living close together in wood and paper houses, and cooking indoors on open charcoal fires, but theirÂ fire death record is not much different from other industrialized countries: this is assuredly the result of learning to respect fire, and that hibachi. It’s also socially unacceptable to have a fire in Japan, an expert in fire safety told me a few years back: if you do, even a small one, you probably have to leave your home and move to another city. The FEMA study linked above notes, interestingly, that incendiary suicides inflate Japanese figures.
Every catastrophe has multiple ’causes’, so there will be lots to learn about this one as the facts come in. Whatever they are, they will include irresponsible, probably corrupt, behavior by people who should have known better.
[update 14/VI] Useful stuff is beginning to come in. Â Aside from the other terrible mistakes and oversights, Â it appears the exterior cladding, a Chinese aluminum/polyethylene sandwich, is so flammable that testing in Australia was suspended after the first sample practically blew up in the lab. Here’s an excellent post-incident report from a very similar fire in Australia. It has everything: Â ignition by cigarette, overcrowded units, cladding carrying the fire up the outside of the building…but also working alarms, sprinklers, and proper fire stairs for evacuation. Deaths and injuries: 0.
King Lear, Act 2, scene 4:
Lear: No, you unnatural hags,
I will have such revenges on you both,
That all the world shallâ€”I will do such things,â€”
What they are, yet I know not: but they shall be
The terrors of the earth.
This is very much the Trump style. I’ll cancel the Paris Agreement! Mexico will pay for the Wall!
Making credible threats is still an essential part of diplomacy. An Fengshan, spokesman for China’s policy-making Taiwan Affairs Office, said on 14 December :
Upholding the ‘one China’ principle is the political basis of developing China-US relations, and is the cornerstone of peace and stability in the Taiwan Strait. If this basis is interfered with or damaged then the healthy, stable development of China-US relations is out of the question, and peace and stability in the Taiwan Strait will be seriously impacted.
Major national interest? Check. Means to deliver on threat? Check. Careful wording allowing plenty of space for future escalation? Check. This threat is serious. Like this one.
You can also go wrong by being too specific. Theresa May, in her Brexit speech on January 17:
While I am sure a positive agreement can be reached â€“ I am equally clear that no deal for Britain is better than a bad deal for Britain. Because we would still be able to trade with Europe. We would be free to strike trade deals across the world. And we would have the freedom to set the competitive tax rates and embrace the policies that would attract the worldâ€™s best companies and biggest investors to Britain. And â€“ if we were excluded from accessing the Single Market â€“ we would be free to change the basis of Britainâ€™s economic model.
What had she been drinking?
The eminent Yale scholar of, and blogger on, constitutional law Jack Balkin has published a very nice article updating Issac Asimov’s famous Three Laws of Robotics.
It’s a rich short essay, not a treatise; an opening shot in a new debate, not the last word. Read it and comment please.
A few takes of mine. Continue Reading…
Three big lessons from this catastrophe.
First, think before you wish for ‘job-killing, economy-crushing regulations’ to be swept away. Fire and housing codes would have saved
33Â 36 young lives here if they had been enforced; an enormous fire in Cambridge the same day killed no-one, partly because there weren’t as many people crammed into one space, partly because the eleven old buildings involved met codes, or close, and had many ways out, partly because they weren’t full of paint thinner and the kind of flammables artists use at work.
Second, primary responsibility obviously rests with the owner and the building manager. But this was an implementation/management failure, not a policy failure: Oakland’s codes are entirely adequate to prevent this kind of thing, but they weren’t effectively used, whether because California has crippled its local governments financially by Proposition 13 and other short-sighted tax choices, or because the enforcement function in Oakland was incompetent or feckless.
The inspector who visited this deathtrap on Nov. 18 was “unable to gain access” and apparently the matter dropped there. It’s possible California needs some new legislation. For example, I have no trouble with the idea that the owner of anything larger than a single-family house has a duty to make himself Â (or a subordinate or attorney with the keys) reachable for purposes of inspection access within 48 hours of any safety-related complaint the city chooses to act on. If he doesn’t open the building for the inspector, the inspector can admit himself, by force if necessary, during business hours.
Berkeley had a similar episode a decadeÂ ago, which unfolded quite differently because the city kept after the landlord. No fire, no deaths, no tragedy…
…but a bunch of artists out on the street. Third, the housing/workspace crisis for artists in happening cities is real (not to mention for teachers, students, civil servants, and every kind of poor person). The resistance to cleaning up the Drayage building came from the tenants whose safety was the point of the enforcement action, and they correctly understood that they had no workable options; things are worse for artists now. Â Running around rousting artists from improvised housing and homeless from tent camps won’t fix this. Unless we make it easier to build, confront NIMBYism, and shovel out more housing supply–yes, including subsidized live-work spaces–we will have nightmares like the Ghost Ship and homeless camps under freeway ramps. People who can’t afford housing, whose price (in the Bay Area, and other places) has sailed into a completely unattainable stratosphere, will live somewhere, and that somewhere will be inhumane, intolerable, and dangerous in so many ways.
The last global trade deal was the Uruguay round, finally agreed in 1994 after seven years of negotiations. The deal included the setting up of the WTO, a stronger organization than GATT, which it replaced. But no further global trade deal has been agreed. The WTO launched the Doha roundÂ in 2001, but it has fittingly run into the sand.
Trade negotiators are nothing if not obstinate, and tried a new tack. If a global deal is too difficult, why not try regional ones? So TTIP,Â the transatlantic deal, and TPP,Â the Pacific one, were born. Well, conceived.
Both are moribund. Hollande has declared France’s opposition to TTIP in its current form, which is also under sustained attack in the European Parliament, especially over ISDS.Â [Update 30/8: the French trade minister has called for the talks to be suspended. If this is a negotiating tactic, it’s reckless hardball – it would be very hard to walk back.] TPP is opposed by both Clinton and Trump. Obama still officially hopes to get TPP through the Senate in the lame duck session. (See supportive comment from Harold Pollack.) Do you credit this? McConnell has not shifted from his policy of Adullamite obstruction of every Obama proposal. Even if he allowed a vote, would senators really vote against the platforms of their parties, which accurately reflect a hostile public opinion?
This widespread failure of the trade liberalisation agenda is usually put down to a widespread turn in public opinion against free trade, now seen by many on both left and the populist right as a callous neoliberal plot to enrich capitalists at the expense of workers. (It is true that the compensatory support for workers who lost their jobs as a result of past agreements like NAFTA somehow failed to materialise.) Some trade advocates resort to the absurd argument that the failure of TTIP and TPP would put existing trade at risk. But there is very little support for proposals to roll back existing trade agreements, from NAFTA to Uruguay to the European single market. There is something in the trade negotiation process of these new deals that gets voters’ goat.
Let me nail up a thesis to the trade church door. Modern trade negotiations are illegitimate. In their current form they cannot possibly lead to a democratically acceptable result. That is why they are doomed to fail.
The argument has two parts. Continue Reading…
If you’re looking for a silver lining in the dark cloud of the Trump candidacy, you might notice that it has brought some Â attention to the worsening state of white people without a college degree. It’s not that the world is rosy for non-whites without college degrees, of course, but on average they were starting from a lower base; it’s the white part of the working and lower-middle class that seems to be experiencing fairly serious downward social mobility and social dislocation, as demonstrated most dramatically by increasing mortality rates in young adulthood and midlife.
Trump’s success in getting non-college whites riled up about immigration and trade doesn’t answer the question about how much of their plight can actually be traced to those causes, but it has served to remind advocates of the free movement of goods and workers that those policies produce losers as well as winners, and that one function of the political process is to ensure that a rising tide does in fact lift all the boats, rather than lifting the yachts while swamping the dinghies.
Megan McArdle lifts a libertarian voice to join the chorus. And she’s skeptical that income-transfer policies can fix things. (Though in my view we need them just the same.) Â What the downwardly-mobile need, McArdle says, is not income per seÂ as much as employment: “good work –Â by which I mean work that offers opportunity, stability, respect and enough money to raise a family.” And she argues that the answer can’t be turning working-class people into middle-class people by offering higher education to people “who donâ€™t have the ability, preparation or inclination to sit through four years of college,” and that politicians’ other answers to the problem of bringing back good blue-collar jobs are mostly beside the point.
This is way outside my policy wheelhouse, Â but from a distance this looks like a problem with a bunch of obvious solutions, though each of them is partial: