Does socialism cause dishonesty?

Dan Aireley finds that protecting workers’ right to unionize improves population-level morality. Oh, wait …

Here’s an interesting natural experiment.

For external, historical reasons, workers in one half of a culturally and linguistically unified but politically divided country had the right to organize unions to defend their interests against employers, while in the other half of that country workers’ organizations were state-controlled in the interests of management, and genuine union activity was punished by firing if not worse.  After that country was reunified, randomly chosen people from the union half and the non-union half were subjected to a standard psychological test measuring the propensity to cheat.  Those who had grown up under conditions were ordinary people could defend themselves openly from oppression by their bosses turned out to be more honest than their peers from the non-union part of the country.

Conclusion: Unionization makes people behave well, while union-busting makes them behave badly.

Of course, it’s not an entirely clean experiment. The non-union side (East Germany) was under foreign control, with a secret-police network that recruited as much as one-third of the population as informants. So possibly dishonesty is caused by living in a world of fear and distrust, rather than by the absence of workers’ rights alone.

Worse than that, the non-union half was systematically looted by the occupying power, while the union half was treated much better by its conquerors and became rich. So maybe it’s scarcity, rather than or in addition to denial of workers’ rights, that makes people dishonest.

Still and all, the result is what it is: a strong labor movement is associated with improved morality.

Only somehow that’s not the conclusion the authors of the study (including Dan Ariely, a perominent behavioral economist and the author of a good semi-popular book on the subject, Predictably Irrational) decided to draw. Instead, they focused on the fact that West Germany had, alongside wealth, the rule of law, personal freedom, and a strong trade-union movement, a primarily market-based economy, while East Germany was under the Soviet system – what Orwell accurately labeled “oligarchic collectivism” – with arbitrary government, no rule of law, and no respect for human rights; residents could be and were shot for trying to emigrate, and many tried to leave just the same.

Using a definition favored only by Bolsheviki and fans of plutocracy, Ariely et al. elect to call the East German tyranny “socialism,” and pretend that their study shows that living under “socialism” worsens the morals of a population.

Having reached an extreme conclusion from a single poorly-defined case study, Ariely and his colleagues then stop, without trying to test their conclusion out of sample. Sweden, for example, has great personal liberty, honest government, and the rule of law, but much more state ownership of enterprise, more tightly regulated markets, and a far more redistributive tax-and-transfer system than Germany.  Swedes are also (if we restrict our attention to mostly-Lutheran Northern Germany) culturally similar to Germans.

Would Ariely and his co-authors be willing to bet that Swedes are less honest than Germans (or Norwegians, living under a regime closer to German mixed capitalism than to Swedish social democracy)?  If so, I’m happy to take the other end of the bet.

The same applies if we were to compare Israelis raised in explicitly socialist kibbutzim to other Israelis, or  Englishpeople raised before the Thatcher era with those raised after, or Canadians with Americans. (After all, the same people who use the word “socialist” to describe Stalinist tyranny also use it to describe national health insurance.)

Of course in all of those cases one could name other factors that might influence the outcomes. But that’s precisely the point: the same is true of the German case. Yet Ariely and his co-authors seem to think they’ve proven something, and the Economist and Alex Tabarrok (who certainly knows better) at Marginal Revolution and Mark J. Perry at AEI (who may not know better) swallow it whole, without raising a single methodological red flag. “When it comes to ethics, a capitalist upbringing appears to trump a socialist one,” trumpets the Economist, hoping that its readers will vote to help the rich get richer and the poor get poorer while “reforming” union power out of the labor markets.

To call this a “mistake” would, it seems to me, be far too generous. A blunder that extreme only happens when the people making it want to fool themselves and others. It’s an example of what Dan Kahan calls “motivated cognition.”

Do the thought experiment for yourself.   Imagine that the results had come out the other way: say, showing that Chileans became less honest while Pinochet’s minions were gouging out their opponents’ eyeballs and Milton Friedman was gushing about the “miracle of Chile”? How do you think the paper would read, and what do you think the Economist, Marginal Revolution, and AEI would have had to say about its methods? 

I know that some of my libertarian friends consider my views of their movement uncharitable, but honest to God, the combination of high IQ and good formal economics training with great willingness to believe and repeat obvious nonsense that characterizes that group is really hard to take.  Of course con-cons and professional lefties also believe some truly stupid sh*t,  but neither group is as good as the glibertarians at pretending to be Serious Social Scientists.

Here’s a Pro Tip: If you never reach and publish a conclusion that doesn’t support  your prejudices, no one has any reason to take any of your results seriously.

The “Nudge Squad”

Applying behavioral insights to choice architecture is an obviously good idea; the only question is how big the effects can be in various domains. But the obscurantism and unreasoning government-hatred on the Right blinds even libertarians to the virtues of an approach they ought to love.

Behavioral economists and the associated social and cognitive psychologists have demonstrated that choice behavior responds not only to “objective” benefits and costs but to various features of the “choice architecture” the world presents to the people making the choices. If non-enrollment is the default option with an opt-in requirement, fewer people will wind up enrolled than if enrollment is the default, with a fully disclosed and easy opt-out. Since there must be some default setting, there’s no such thing as a neutral choice architecture that elicits subjects’ “true preferences.” The same is true about organizing the food in a school cafeteria: what the kids eat depends in part on where different selections are placed.

People in the sales business spend a lot of time trying to design choice architectures that maximize profits. It seems obvious that people in the public-policy business ought to try to design choice architectures that serve public purposes.

In particular, in cases such as retirement planning and diet, where there’s a systematic difference between what experts recommend and subjects think is in their best interest on the one hand, and subjects’ actual behavior on the other, it seems natural to try to nudge people toward the behavior that’s in their own long-term interest as they see it, which generally means that it has external benefits as well. The same applies, with even more force, to energy conservation, where ordinary consumers systematically leave tons of money on the table for no benefit whatever; a better-insulated house more than pays for itself, quickly, and is also more comfortable to live in.

That’s the idea behind the Thaler and Sunstein “nudge” approach. The current right-wing coalition in the UK has been using it, and the Obama Administration is moving in the same direction.

Of course, it’s always an open question how much good this sort of thing can do. (See below the fold for some examples from the White House release; of course there’s no comparable list of failures.) But it’s really hard to see why anyone would be against strategies that (1) respect autonomy (2) economize on public expenditure and (3) have unambiguously positive results when they have any results at all, especially when the proposal is to do intensive experimental testing rather than rolling out grand schemes. At last, we have a polarization-proof policy proposal!

Oh, wait … I’d forgotten about the utterly pathological government-hatred and obscurantism on the contemporary American right. Fox News breaks the story with a “Govt Knows Best?” scare headline. Nick Gillespie at Reason Hit & Run writes:

Critics point out that a) expert advice is often proven wrong quickly after being implemented and b) government might have more essential functions that gulling citizens into acting one way or another.

In other words, according to Gillespie, since knowledge isn’t infallibility, ignorance is better than knowledge. And governments ought to ignore the the science of human behavior and not think about how to “gull” people into going to school, getting jobs or paying their taxes. By “critics” Gillespie must mean “idiots.” All of this is echoed, with some routine paranoid Obama-bashing added, at the usual collection of wingnut websites.

I don’t expect any better from Fox or PJ Media. But an outfit that calls itself Reason ought to be embarrassed when one of its writers displays such a flair for illogic. Does Gillespie really believe what he writes? I’d hate to think so, and don’t in fact believe it. This is the case Upton Sinclair described: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” Come to think of it, that’s a testable proposition in behavioral economics.

Continue reading “The “Nudge Squad””

Prof. Thomas S. Szasz, M.D. (1920-2012)

Tom Szasz died on September 8, 2012. I met him in the early 1990s, when he was in Cambridge to participate in a symposium on drug policy. Keep in mind, please, that what I know about public policy, psychiatry and the War on Drugs could fit into a teaspoon. Mark asked me to help him host a post-forum dinner for the panelists solely because of his faith in my social skills. Two of the men at the party were known to square off against each other based on a difference of ideology, and Mark wished to avoid unpleasantness. I was touched by his groundless belief that good manners could prevent a food fight, and I resolved to do my best.

As things turned out, there was no need for oil on troubled waters. The dinner guests kept it civil, and I got to meet Tom, who was seated across from me. I don’t want to sound melodramatic, but it was a life-changing experience for me. Continue reading “Prof. Thomas S. Szasz, M.D. (1920-2012)”

Greg Mankiw gives pretty good argument for other side

Greg Mankiw’s odd paen to federalism.

(cross-posted at Blog of the Century).

I like Harvard economist Greg Mankiw. He’s a terrific writer and economist. A year ago today, I wrote a complimentary column about Mankiw’s support for gas taxes. Wow, do I disagree with his social policy vision. In today’s Times, he has a column on federalism, “Competition is healthy for governments, too.” I find this a pretty sound argument for the other side.

Our federalist system has long proved problematic when it comes to meeting the basic needs of severely disadvantaged people. State governments face tight constraints on taxation. Their administrative capacity is often limited. Moreover, states are often expected to do the most in helping the needy at precisely the moment when national or global economic forces are battering the state economy.

When wealthy people can move, states face clear limits on progressive taxation. When poor people can move, states face very strong incentives not to be the softest touch. In the resulting competitive equilibrium, many states end up with much less progressive policies than their citizens would otherwise want, and much less progressive than the optimal national policy would be.

Whether generous states truly are “welfare magnets” remains unclear. The empirical literature is a bit mixed. In the disability arena, I would not be surprised to find that the story has substantial validity. Consider the following story…. Continue reading “Greg Mankiw gives pretty good argument for other side”

Ron Paul’s other 1964 (okay 1965) problem

Congressman Paul’s unfortunate newsletters should not blind us to the deeper message of his candidacy.

I missed the chance to chime in on the Ron Paul controversy during the Iowa caucuses. Congressman Paul’s unfortunate newsletters should not blind us to the deeper message of his candidacy. I find this deeper message is almost as objectionable as the various bigotries published under Paul’s name in is cheesy newsletter.

Not that one should ignore these newsletters. A surprising number of moderates and progressives find Ron Paul’s mix of views morally, politically, and politically complex. It’s not. The man is a charmingly eccentric bigoted crackpot who deserves the coolest of civilities. He’s interesting because of the many people who find him so, not because of what he actually says. That he holds the occasionally progressive issue position is really beside the point. Continue reading “Ron Paul’s other 1964 (okay 1965) problem”

If conservatives think the individual mandate is totalitarian, why on earth do they back a commerce-clause case?

Libertarians and conservatives have become fond of calling the individual mandate totalitarian–or at least a gross and unconscionable deprivation of individual liberty. But if so, why are they so comfortable with the prospect of courts finding it unconstitutional only when the *federal* government imposes it?

Once in a while I have an objection to a common argument that seems so obvious that I think my logic circuits must be misfiring.  This is one of those times.

It’s become quite popular in libertarian and conservative circles to call the Affordable Care Act, and the individual mandate in particular, totalitarian.  (I must admit that Republicans have all the best totalitarian ideas.) Googling “Obamacare totalitarian” yields almost three million results. The top hits include posts on patientpowernow.org and bluecollarphilosophy.com, and this rather unhinged one on moonbattery.com. More recently there was this by the always fascinating Tim Cavanaugh at Reason.

But I just can’t understand why, given this, conservatives seem completely unfazed by the fact that the court challenges against the ACA are basically commerce clause cases.  The whole question is whether a failure to buy insurance counts as commerce so that it is within the power of Congress to regulate it. I have yet to see a serious legal argument that would place the individual mandate beyond the police powers of an individual state.  (Bruce Brown at The New Republic has pointed out that such an argument would have to rest on due process, presumably of a substantive kind, and would be very marginal in that form.)

There’s clearly some confused argumentation out there. Take this from the Wyoming Liberty Group:

If the individual mandate to purchase health insurance withstands its current court challenge and the challenge of health care freedom amendments, there will be nothing to stop the government from mandating that we drive “environmentally friendly” automobiles. After all, if the mere fact that we will eventually utilize the health care system puts us within the grasp of the Commerce Clause, then surely the fact that we will eventually drive or ride along in trucks, SUVs, Corvettes and other glorious machines on national highways does so as well. It’s only right, then, that government mandates what kind of cars we drive. Chilling.

But in addition to the oddness of the example (hate to break it to them, but the government already regulates what kinds of cars may be offered for sale, and we lack the liberty to buy one without a seatbelt), the mention of the Commerce Clause gives the game away. Nothing the Supreme Court says about the Commerce Clause, either way, will do a damn thing to protect individual liberty against a “government” that happens to be a state government. Wyoming could constitutionally compel every resident to buy a pickup truck any time it wanted to.

The prevalent conservative and libertarian constitutional position is, bluntly, this: totalitarian infringements on individual liberty are perfectly constitutional provided that a state enacts them. Whenever you hear the typical slippery-slope arguments—if this is upheld, the government can require us to buy broccoli, or wear tattoos, or drive Priuses or whatever—keep this very clearly in mind, because conservatives sure won’t. Anyone making a commerce-clause argument is already conceding that Sacramento or Nashville may constitutionally require such things. The only question is whether Washington can follow suit. The lawyers are arguing not about whether people have the liberty not to buy broccoli but about which level of government has the power to nonchalantly ram the green flowery stuff into our shopping carts. Little Brother is already watching you.

Blaming unemployment on “unemployees”

Hit & Run’s Tim Cavanaugh to “unemployees”: if you don’t like being discriminated against in job searches, get a job before you start.

The President’s proposed jobs plan contains a provision that would bar employers from saying no currently unemployed people need apply for their jobs. Hit & Run’s Tim Cavanaugh doesn’t like it.  He objects to creating a “new protected class” and thinks that barring employers from putting a no-jobless proviso in their job ads raises “First Amendment Issues” (the same ones raised, I suppose, by the current prohibition on housing ads that say “no Blacks, please”?).

What struck me more than Cavanaugh’s (predictable) opposition to the proposal is the “exhortation” he applies to those who’ve been without work for ages:

Do any work you can, even if it’s day labor, rather than building a personal brand as an unemployee.

“Personal brand as an unemployee.” Lovely. I’m sure that all the people out there who lack work have made just this mistake. They considered cultivating a reputation for being employed but instead made the boneheaded decision to “build a personal brand” around joblessness instead.  And this is profound advice in general: if you’re unemployed and want employers to stop discriminating against you in job searches, make sure you have a job before you start searching.

It turns out that Cavanaugh has used the term “unemployee” before, at least twice. The first two times he was saying, arguably, that deliberately building a media reputation around your own unemployment is counterproductive (“is ‘unemployee’ a career path?“)—a criticism which, while potentially valid, can logically apply only to about three people who have publicly sought out roles as spokespeople for the unemployed rather than merely being, say, unemployed.  Even in those posts he couldn’t help suggesting that the problem facing unemployed people in general is that they’d rather complain publicly about their lack of work than seek work. In the second of his posts he suggests that the few spokespeople he cites represent a “much larger universe of unemployees: non-workers who have evolved careers as subjects of news stories about long-term unemployment.” One might how large that universe in fact is. Just large enough, it seems (N=at least 3) to make Cavanaugh feel much better about mocking, rather than supporting, government efforts to boost demand.

“Unemployee” is surely one of the ugliest neologisms to appear in some time. It reminds me of Margaret Atwood’s The Handmaid’s Tale, in which handmaids who can’t bear live children—never mind that it’s often the more powerful men they serve who are infertile—are labeled “unwoman” and sent off to labor, if I recall, mining radioactive materials.

Writes Cavanaugh,

[I]t’s common sense that ending your own unemployment is the first step toward addressing the unemployment problem. 

Unlike Cavanaugh, I think the average long-term unemployed person has, in fact, tried just a few times to take that first step. Perhaps the unemployed are even smart enough to have thought of it themselves. Cavanaugh might in turn pause to think about whether he’s proud of branding the unemployed with a red-hot, vicious label and then blaming them for seeking out the brand.

How not to attack Ayn Rand

We should by all means inform people about all the reasons Ayn Rand’s philosophy is distasteful. That she didn’t believe in God is, pace the “American Values Network,” not one of them.

The popularity of Ayn Rand in Republican and Tea Party circles has given rise, fortunately, to efforts to educate people on what she believed.  ThinkProgress has a three minute video showing Rand attacking Medicare as no better than robbery, extolling selfishness, attacking majority rule, conceding that very few people are worthy of being loved, and so on. It is, to my mind, entirely fair comment.  (Rand’s atheism comes out, but only in a snippet from a quotation containing other points.)

And then, from the American Values Network—and recommended as an indispensable tool of persuasion by The Democratic Strategist—there’s this:

The video hammers on the single point that Rand is to be feared for advocating “a morality [cue ominous type size increase] not based on faith.” The video refers to Rand as an inspiration for Paul Ryan’s brand of economic individualism and capitalism, but strongly implies that the reason to be wary of economic individualism is that it’s secretly linked to atheism. The video carefully edits the quotation mentioned above so that only Rand’s rejection of religion, not her political and economic positions, is left in.  (Transcript after the jump.)

Though I didn’t seem to convince many people when I said this about Jack Conway’s Aqua Buddha ad, I’ll say it again (and the argument applies even more clearly this time): this kind of appeal is reprehensible.  We would be appalled if a fundamentalist Protestant group attacked a candidate for reading books basing his or her world view on books by Catholics, Jews, or Muslims.  As I explained in the earlier post, this is not because there’s anything wrong with being Catholic, Jewish, or Muslim but because the implication profits from the prevailing prejudice (among the intended audience) that it is wrong, holds greater force the more we can count on that prejudice’s being unshakable, and slathers an extra coat of implied respectability on the prejudice. We should find it equally appalling for a progressive religious organization to attack Republicans solely and specifically for reading books having a worldview invented by an avowed atheist.

Attacking Rand for her politics is one thing. Attacking her for the particular value (selfishness) in the service of which Rand rejected the Christian faith is more or less the same thing (and completely fine, as in the ThinkProgress ad). Portraying Rand as ominous and evil because of her rejection of faith as such is something completely different. But that’s what the video does.

The American Values Network should be ashamed of itself. And The Democratic Strategist—to which I’ve contributed in the past—should stop blurbing its shameful appeal.

Update: A reader pointed out that the ad faults politicians for their avowed worldview, not merely for “reading books” as in the original version. Quite right—but the larger point stands.

Continue reading “How not to attack Ayn Rand”