"Can Immigrants Assimilate?” with Garett Jones
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Aqua Utopia|海の底で記憶を紡ぐ
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One Nice Bug Per Day

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Origami Around
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YOU ARE THE REASON
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@new-classical
"Can Immigrants Assimilate?” with Garett Jones
This interview with David Elikwu was great fun 🎙How Culture Shapes Economies with Garett Jones
Laissez-Faire Lockdowns
Normal tort law alone would probably have pushed big business at least halfway toward the so-called lockdowns Americans lived through over the past year:
Airlines glad to fly, but requiring people to wear masks and click a bunch of disclosures
Wedding planners terrified of the legal liability if an elderly guest catches Covid, like at the White House superspreader event for ACB
Grocery stores nudging people to spread out, but keeping the stores fairly well stocked
Corporate restaurants following the Covid rules--deep pockets!--while sole proprietor restaurants flout half or more of the same rules.
The galaxy-brain case against government lockdowns would be that laissez-faire lockdowns would accomplish almost all of the very wise job of locking down, especially when one takes into account the fact that many elderly Americans became much more cautious voluntarily.
The galaxy-brain case for government lockdowns would be that they're mostly just emulating laissez-faire lockdowns, rounding up some.
But notice that this creates a problem for anti-lockdown activists: If the Invisible Hand would have replicated most of the lockdown, it also would likely have replicated most of the harms--including loneliness, deaths from delayed doctor's appointments, job market problems--that the government lockdowns have created.
We can't look at the harm from lockdowns and attribute them to government, because it's reasonable to think that spontaneous order would have created many, perhaps most, of the same harms.
Speaker Pelosi said we can't trust British vaccine data, so thousands more Americans need to die.
We'll wait longer for more vaccines because the Congressional Dominance theory of the federal bureaucracy is kinda true.
WSJ:
A View Across the Potomac
A Draft Critique of the Meritocritique
The big problem with critiques of meritocracy is that the critics are rarely clear about they want instead. Mere calls to “be better” are just the Nirvana Fallacy, and aren’t worth addressing. And those contributing to the “meritocritique” aren’t usually even calling for a replacement for meritocracy, they’re just loosely suggesting some kind of redefinition of merit—often holistic approaches instead of SAT scores, even though elite schools and private employers already use a holistic approach.
I recently looked for empirical papers that looked at one way to compare meritocracy to some concrete alternative: Are Ivy grads in today’s SAT era better or worse than those that graduated before the SAT era?
George W. Bush, for example, was at Yale just around the time that SAT scores started mattering more, and some profiles of W noticed the tension in the Ivies at the time—old money competing in the classroom against smart outsiders. It was just a fast-enough transition that an enterprising economist could try using it as a natural experiment that asked a question like this:
Are there more or fewer Nobel laureates/U.S. Senators/patent holders/CEOs/leading philanthropists from one era rather than another, adjusting for the expected time trends? Does it look like a structural break in graduate quality?
I couldn’t find much of anything; though since it’s outside my area, perhaps I’m not searching efficiently. But here’s one interesting paper, looking at CEO performance by using 2 measures of stock performance, published in a good management journal:
“We found that an Ivy degree granted before 1960 did not confer any performance advantage; the opposite was true for degrees granted after that date. Thus, the value from an Ivy degree is derived not so much from the social capital conferred during the earlier era of social elite selection, but rather the talent associated with selection in the more recent meritocratic era.”
That’s not a clean test, since it really is just lumping all CEOs older than 55 in one group, and all under 55 in another, but by measures of both statistical significance and economic significance, the Old Boys’ Network looks at most half as valuable as the New Meritocrat’s SAT-Infused Diploma. The cynical “Matthew Effect” would predict that the value of an Ivy degree should increase with age as your network of Ivy insiders grows tighter and more powerful, but in real life it shrank—just what you’d expect if SAT-driven college admissions were actually a good way to find real-world, practical talent.
This is just one test—the world needs more. But the world also needs more than mere lamentations about how meritocracy is far from perfect.
Since the meritocritique is so vague, let’s consider nepotism and clientelism as the alternatives—if the meritocritiquers have a better concrete alternative, I hope they’ll spell it out.
But alas, economists usually blur together nepotism, clientelism, and corruption, and since the vague critics of meritocracy are really really sure that they are against corruption, it’s hard to point to evidence on the costs of nepotism and clientelism that holds corruption constant.
That said, I think the corporate governance literature has a relevant, non-utopian message: That the good old days of not-too-meritocratic corporations, the kind that JK Galbraith wrote about in The New Industrial State, were actually terrible, and that the relatively more meritocratic LBO era of Milken et al. was much better for the world, warts and all. As an SAT-style analogy:
Meritocracy is to corporate raider America as non-meritocracy is to pre-LBO America
Nostalgia for the comfy old days when insiders ran cozy corporate clubs is wildly misplaced, and likewise the utopianism of a more comfortable, less rough-and-tumble, not-too-meritocratic elite selection process is likewise misplaced. I’d turn to Shleifer and Vishny’s influential paper, “Survey of Corporate Finance” on this. Searching for the words “family” and “insider” in their paper gets as some of this.
To exaggerate only slightly, if meritocracy imposed a huge cost, then I’d expect current Italian and pre-Asian-Financial-Crisis Thai firms to be ruling the world: familial capitalism and crony capitalism should be winning corporate models.
Again, it’s hard to know what alternative to compare meritocracy to—vague utopian hopes of turning to “true meritocracy” seem to be the norm. Until the critique of meritocracy arrives at something like, “We want meritocracy done better, and he have a practical way to achieve it,” we should just treat it the way we treat complaining about death and taxes—to be ignored by serious people.
A non-utopian critique of meritocracy would probably have to start by providing serious evidence that the spoils system and at-will employment in government helped cause prosperity and human flourishing, and that the Pendleton Civil Service Reform Act, on net, hurt prosperity and human flourishing.
A non-utopian meritocritique should probably also offer evidence that the Foreign Service Officer Test is, on net, bad for the State Department and that the U.S. military should stop using the Armed Forces Qualifying Test to screen out military recruits. If you’re serious about the meritocritique, I suspect you’ll have to be serious about dramatically reducing the role of test scores in U.S. government institutions. Now that’s a critique I’d be interested to read.
-Garett Jones
The Decisive Vote is an Expensive Vote
When do votes matter? That's a vague enough question that it can mean anything, and so of course that makes it a good topic for social media discussion.
But in public choice we're against vague questions, so we'll distinguish between how votes matter for policy versus how votes matter for social perception. That's the heart of Shepsle's Congressional Pay Raise Dilemma in the textbook, and in a different way it's at the heart of Gordon Tullock's case against (most) voting (3 minute video) which we'll come across later in the semester.
In the Congressional Pay Raise Dilemma, no politician wants to be socially perceived as voting for the pay raise, but every politician wants the policy of the pay raise. So what will happen? The pay raise will pass with the absolute minimum number of votes, and probably with the votes of politicians in the safest seats.
Shepsle chose a particularly cynical example of the policy/perception tradeoff, but even more noble or more mundane legislation often has elements of a Congressional Pay Raise Dilemma. In 2003, Senator John Kerry, Democrat of Massachussetts and true Vietnam war hero, wanted to be socially perceived as disagreeing with President George W. Bush's tax cuts for higher earners, but he also wanted to be socially perceived as supporting funding for troops in Iraq and Afghanistan. And I believe that for both personal and political reasons, Senator Kerry wouldn't allow American troops to go without food and water in the deserts of Iraq and the mountains of Afghanistan. That's a formally untestable belief, but it's consistent with the way he's lived his life, both before and during his career in the Senate--so as a matter of policy he wanted the funding bill to pass in some form.
How did John Kerry address this Military Spending Dilemma? He voted for a military funding bill that was never going to pass in the Republican-controlled Senate--a bill that paid for the extra spending by repealing some of the Bush tax cuts. And then Kerry later voted against a military funding bill that was surely going to pass--a freestanding spending bill, supported by the GOP Senate majority, which just like almost every other Congressional spending bill didn't explain how it was going to be funded.
When asked on the 2004 Presidential campaign trail why he voted against the legislation that ultimately funded the troops then in the field, he gave the famous answer, which captures the social perception theory of voting:
"I actually did vote for the $87 billion before I voted against it."
While the Bush campaign mocked Kerry mercilessly for this example of what they called "flip-flopping," Kerry was actually being honest about they way politicians often try to signal that they like part of a bill without liking all of it. This time it didn't sell well with much of the voting public, and Kerry lost both the popular vote and the electoral college in 2004's presidential contest, but Kerry's strategy of "voting for it before voting against it" is worth keeping in mind. It's one example of this important fact:
When a piece of legislation has enough votes to surely pass with a few extra votes more than needed, no single legislator's vote matters for policy.
But every single legislator's vote still matters for perception.
Kerry knew the troops in Iraq and Afghanistan were going to be funded, so his vote was not the marginal vote, the decisive vote. He could feel free to socially signal. This is true on literally any piece of legislation that passes with one extra vote to spare: Any one legislator can feel free to vote for or against the bill to make what we usually loosely call a "political statement," because the vote will have zero effect on policy.
Think a bill to increase health care spending with 225 votes in the House, while good, isn't progressive enough? Feel free to vote against it and make a speech on "unmet needs."
Think a campus free speech bill with 64 votes in the Senate doesn't go far enough in protecting on-campus First Amendment rights? Again, vote against it, knowing that the bill will easily beat a filibuster, and call for following the "principles of the Founders."
Once enough other votes are secure that the policy is guaranteed, the marginal vote in a legislature is no longer a policy vote: it's a perception vote. Shepsle's Congressional Pay Raise Dilemma was a fun example of a bigger issue: policy-irrelevant votes are everywhere in legislative politics.
And that means that when the votes to pass aren't secure, when a bill needs just one more vote to pass, then your vote truly is both a policy vote and a perception vote.
That's one important reason why it's better (in many cases) for a bill to pass the House by 219 rather than 218. When a bill looks like it has 217 votes and you're deciding whether to vote for it, you are, to use microeconomics language, the marginal voter. But so is everyone else who isn't in the "Yes" camp! And when you're the marginal voter, you're the responsible voter, the decisive voter. And if there's one thing humans, inside and outside of politics, have an incentive to avoid, it's being responsible.
But sometimes politicians do take responsibility. Here's one historically important case, one that has already become part of the Congressional canon:
Elsewhere in the discussion board I told the story of Congresswoman Marjorie Margolies-Mezvinsky, a Democrat who lost her seat in part because she was the 218th vote for President Clinton's 1993 deficit reduction package.
The House's biography of her is very good on this topic, and Margolies-Mezvinsky was clear about the distinction between a policy vote and a perception vote:
[S]he made a last–minute switch to support the 1993 Clinton budget after months of publicly voicing her opposition to the bill because it did not contain enough spending cuts...On the day of the vote, she appeared on television and told her constituents that she was against the budget. Minutes before the vote, however, on August 5, 1993, President Clinton called to ask Margolies–Mezvinsky to support the measure. She told him that only if it was the deciding vote—in this case, the 218th yea—would she support the measure. "I wasn't going to do it at 217. I wasn't going to do it at 219. Only at 218, or I was voting against it," she recalled.
If you're not what she called the "deciding vote," and what economists would call the "marginal vote," your vote doesn't matter for policy--so you might as well be perceived however you like. Her 218th vote, the marginal vote, created a difficult political perception back home, and was part of the reason she lost her seat after just one House term. I presume she took the hit to her perception because she wanted this policy more than the opportunity cost, the most likely alternative.
We can always compare actually existing legislation to our utopian dream of an ideal piece of legislation; but our utopian dreams are never going to make it to the floor of the House for a vote. The most likely alternative to Clinton's 1993 deficit reduction package was the status quo policy of bigger deficits, and that wasn't an appealing alternative to her. She knew her vote was going to be expensive. As Margolies-Mezvinsky told President Clinton at the time:
"I think I'm falling on a political sword on this one."
She was right. It was an expensive vote for a policy she preferred. If the bill had had either 220 or 215 votes lined up--sure passage or sure failure--she could have easily given a speech right afterwards, saying:
"This deficit reduction bill had good parts and bad, and I hope Congress can come together to create better legislation to reduce the long-run deficit."
A "Yes" vote is always concrete, since you're supporting an actual piece of legislation--but a "No" vote is a chance to weave dreams of an alternative that will probably never happen, something perhaps well to the left or the right of what actually became law. A "No" vote, by contrast, often has a flexible interpretation--like the meaning of a line in Shakespeare. "No" is usually politically safer--as long as you're better than Senator Kerry at talking about it.
As you probably know, they call votes like the one Margolies-Mezvinsky took a "tough vote." When you're a close to being the marginal vote, the decisive vote, it's often a "tough vote." So be on the lookout for "tough votes," because those are votes where, if the bill ultimately passes by one or two votes, there are probably quite a few politicians who voted against it but could, in a pinch, have been persuaded to vote for it.
Review Questions:
In this essay, who took the more decisive vote, Kerry or Margolies-Mezvinsky? There's only one right answer here.
In this essay, who took the more expensive vote, Kerry or Margolies-Mezvinsky? What about the vote made it expensive? With the right argument, either could more expensive, but it really has to be the right argument.
Not Independent
I sometimes hear that if independent agencies are so great, why didn’t the WHO do a better job fighting Covid? A reminder that WHO is not politically independent, not at all:
https://www.politico.com/news/2020/05/07/world-health-organization-tedros-adhanom-ghebreyesus-242030
Paul Romer talks Daily Covid Megatesting to Senator Toomey
Megatesting is the only plan that doesn’t rely on hope:
https://www.tribdem.com/coronavirus/sen-toomey-holds-roundtable-on-ideas-to-reopening-economy/article_a1aeb5f0-900a-11ea-94d5-f730cbce6cd9.html
South Korea to G-7
Higher total output than 2 members of the G-7, higher per capita output than 1, and a good government to have in the room.
La Stampa fears 10%
After publishing a review of my new book, 10% Less Democracy, it looks like the editor at Italy’s La Stampa has landed in hot water, and now is uttering science-free platitudes. Scientific, evidence- and theory-driven critiques of 100% pure democracy, dangerous they are!
https://www.lastampa.it/rubriche/public-editor/2020/05/05/news/una-recensione-che-non-doveva-diventare-un-endorsement-1.38806950
Amazon has high state capacity
Today’s FT: https://www.ft.com/content/4dc9b8fc-56f5-47ca-b468-a9a2afc2ec7b
10% Less Democracy reviewed in Italy’s La Stampa
https://www.lastampa.it/topnews/tempi-moderni/2020/04/27/news/ecco-perche-meno-democrazia-porterebbe-un-governo-piu-democratico-1.38765872
It’s the prices (for Covid tests) stupid:
Harvard’s Safra Center & the Rockefeller Foundation are now both on Team Megatesting. And Nobel laureate Paul Romer explains that the big barrier to Megatesting is everyday low prices: https://www.cnbc.com/2020/04/21/coronavirus-tests-rockefeller-plan-would-screen-millions-for-covid-19.html
My book “did not underwhelm”
http://highmodernism.com/2020/03/31/short-reviews-january-2020/
Evaluate this question
https://www.nytimes.com/2020/04/18/world/coronavirus-cases-tracker.html?action=click&module=Spotlight&pgtype=Homepage