The economic geography of a universal basic income

Adam Ozimek has been doing some great work lately on the importance of helping the smaller, struggling places left behind as America’s economic center of gravity has shifted toward a few prosperous metropolises.

This is extremely refreshing. For years, the economic conversation has been dominated by the “moving to productivity” story, the intriguing but flawed idea that the way to a better and more prosperous country was simply to encourage migration into the cities where, by the numbers, people seem to be unusually productive. The most widely discussed problem with “moving to productivity” is the rigidity of urban housing supply. Evacuating the hinterlands into existing, built-up cities would require more housing supply dynamism than stable, prosperous communities seem likely ever to tolerate. We are left with a continuing war between immigration enthusiasts and urban “incumbents” who see themselves as working to preserve their homes and communities. (I’ve weighed in on this controversy, here, here, and here.)

But there are many other problems as well. Measured production per hour worked is higher in leading cities for sure, but how much of that is a selection effect? Baumol’s cost disease ensures that, for an individual, immigration to high productivity cities will lead to higher wages even for lower productivity workers. But it’s a fallacy of composition to imagine that can scale. At an aggregate level, the productivity edge of prosperous metropolises may be caused by a “creaming” of those who might be productive elsewhere but are drawn by urban amenities and can afford the prices. Or perhaps cities do indeed enhance the productivity of their populations, but only because the residents who self-select and then pay up to live in them are unusually suited to take advantage of often industry-specific opportunities. In either case, less selective immigration would blunt cities’ productivity edge. Or, suppose that it is not selection, that the higher measured productivity of large, dense cities arises because dense copresence makes new forms of collaboration, specialization, and trade practical (“agglomeration effects”, in the lingo). Then how much of the apparent productivity effect is due to improved collaboration in production, and how much of it is due to improved collaboration in contesting for economic rents? High-powered cities include concentrations of highly paid lawyers, financiers, and other professionals who collaborate intensively at least in part to maximize on behalf of themselves and their clients the share of production they capture, rather than to increase the overall level of production. Businesspeople in cities may be unusually capable of coordinating to exercise monopoly power and restrict production. The dollar value of expensive professional services and artificially overpriced products then gets incorporated into “gross metropolitan product” and productivity statistics. If big, dense cities confer advantages in a zero- or negative-sum game to capture economic rents, by the numbers they would look like the most productive places in the country when in fact they might be among the least.

To be very clear, I don’t think cities are in fact “a zero- or negative-sum game”. I think cities excel at encouraging both good and bad sorts of collaboration, but their virtues far outweigh their costs. Even if you buy the rent extraction story, there is little reason to think there would be less rent extraction overall under a different geographic reality. Rents might just be distributed differently. In the zero-sum game of baseball standings, a city like New York can put together an unusually dominant team like the Yankees. But without New York, the game would still be played and there would still be winners and losers every year. Rents can be and long have been extracted by monopsony employers in smaller towns, for example. Regardless, the geographic distribution of rents may not match the geographic distribution of production, and empirically the two are difficult to disentangle.

Also, if part of the apparent productivity advantage of larger, denser cities is due to creaming, then we have to consider the flip side: a brain and talent drain out of smaller, less dense places. If certain kinds of talented people exhibit positive spillovers, that is, if they inspire and organize activity that creates value for other members of their communities that they cannot themselves capture, it may be individually rational for them to leave smaller communities for the big city, but socially very costly. The marginal contribution of one unusually talented person to the productivity a big city already chock full of talented people may be much smaller than the marginal cost to a community with many fewer talented people of losing that person.

Cities are great, but I think the claim that everybody moving to the very largest cities would yield a massive, otherwise unachievable, productivity boost is as implausible as it is impractical. Historically, economic activity was far less concentrated during the decades when America enjoyed its strongest growth. Perhaps technology has changed everything. But perhaps much of the apparent productivity advantage enjoyed by large, powerhouse cities over medium-sized cities is due to creaming, sorting, and particularly high-powered coalitions of rent-extractors, rather than hypothesized quadratic-returns-to-scale human connectivity effects.

Then, of course, there is all the stuff that economic analysis tends to overlook: Community, history, attachment to family, attachment to the land itself, the perhaps quaintly aesthetic notion that a civilized country should not be composed of gleaming islands in a sea of decay and poverty. And politics. Politics seems to be a thing now. Rightly or wrongly (and I think the question is more complicated than many of us acknowledge), the United States’ political system enfranchises geography as well population. (This is not unique to the United States and the compromises made over slavery in the drafting of our Constitution. In the EU, for example, many actions require unanimity among member states, giving citizens of tiny Malta rather disproportionate influence.) In the American system, piling people into a few, dense cities is a sure recipe for disenfranchising most of the humans. A nation of mid-sized cities distributed throughout the country would both spread the wealth geographically and yield a more balanced politics than the dream of hyperproductive megacities.

An underdiscussed virtue of a universal basic income is that it would counter geographic inequality even more powerfully than it blunts conventional income inequality. By a “universal basic income”, I mean the simple policy of having the Federal government cut periodic checks of identical dollar amounts to every adult citizen, wherever they may live. Importantly, a universal basic income would not be calibrated to the local cost of living. Residents of Manhattan would receive the same dollar amount as residents of Cleveland. But a dollar in Cleveland stretches much farther than the same dollar in Manhattan. The value of labor income covaries with place. Moving from Cleveland to Manhattan requires paying higher rent, but it may also yield higher pay. Real labor income may rise or to fall from such a move, depending on the individual. There is no such ambiguity with UBI checks. Migrants to high-cost of living cities would take a cut in real terms on the UBI portion of their income. Emigrants from high-cost-of-living cities would get a raise that might partially compensate for lower payscales. At the margin, for those willing to let economics guide their choice of home, UBI would shift demand from expensive capitals to cheaper mid-sized cities, and take some of the pressure off of powerhouse city housing markets. A UBI would tilt the residential playing field towards a country with lots of vibrant, geographically dispersed cities rather than a few “closed-access” capitals. (See also Conor Sen.)

Of course, not everyone is willing or able to treat their choice of home as an income maximization problem. Many people will remain, for better or for worse, in the communities where they were raised, rooted by place or family or church, by love, fear, stewardship, or poverty. For these people, a UBI would bring some measure of prosperity to where they are, rather than requiring them to succumb to the discipline of a dynamic national labor market. In a fascinating post, John Michael Greer writes:

What’s more, the working class people who point to a lack of jobs as the cause of middle America’s economic collapse are dead right. The reason why those tens of thousands of American communities are economically devastated is that too few people have enough income to support the small businesses and local economies that used to thrive there. The money that used to keep main streets bustling across the United States, the wages that used to be handed out on Friday afternoons to millions of Americans who’d spent the previous week putting in an honest day’s work for an honest day’s pay, have been siphoned off to inflate the profits of a handful of huge corporations to absurd levels and cater to the kleptocratic feeding frenzy that’s made multimillion-dollar bonuses a matter of course at the top of the corporate food chain. It really is as simple as that. The Trump voters in the neighborhood south of my home may not have a handle on all the details, but they know that their survival depends on getting some of that money flowing back into paychecks to be spent in their community.

Often people (foolishly, ridiculously) think of a universal basic income as a substitute for work, and imagine that UBI would lead to a world in which most people would sit around collecting government checks and masturbating all day. The same people often emphasize the importance of work to living a meaningful life, and argue that we ought not deprive people of this virtue by giving them money. But giving people money does not eliminate the social and spiritual benefits that come with being active, valued, and productive. In affluent communities, capital income seems to coexist just fine with a strong work ethic and perhaps too much ambition. Wealthier people sometimes do take advantage of their liberty to be productive in ways that don’t yield low-risk labor income, such as starting up uncertain businesses. In poorer communities, starting up businesses that aim to cater to a local clientele is particularly dicey, since many customers lack sufficient income to pay for all but the most basic goods and services. We can argue at a national level about fiscal policy and monetary offsets, but at a local level, in underemployed communities, crude Keynesian multipliers obviously obtain. Income begets economic activity and economic activity begets income. A UBI, unlike means-tested welfare programs, does not discourage work or create poverty traps. If financed with a progressive income tax, a UBI would not increase effective marginal tax rates until relatively high levels of income. A UBI does affect labor supply by increasing peoples’ reservation wage. People with no other income sources accept shitty work at low pay. People with a UBI might not. But since humans do in fact value productive activity, UBI recipients in poor communities are likely to accept decent work at modest pay, or go back to school, or care for children and aging parents, or try starting businesses. Income is the difference between communities that are slovenly and decaying and communities that are ordered and active. Income is precisely what a UBI provides, to communities, via individuals.

We are all learning, I think, just how dangerous to a national community, and to any hoped-for transnational community, inequality between localities can become. National community depends on the idea that “we”, all citizens, are in it together. Inequality at an individual level renders that not-necessarily-true, a rising tide may leave some boats sunk. But as long as those who are drowning are scattered and atomized, perhaps a polity can muddle through just ignoring them. Unfortunately (or fortunately), wealth and poverty are not uniformly distributed. They coalesce into geographies, and then into communities segregated by place and often by race, which organize and act politically. Sometimes prosperous communities can simply disrupt and suppress less fortunate communities — c.f. colonialism or Jim Crow or slavery. Hopefully readers will not find those attractive models for managing the political fault lines emerging within the United States and Europe. A better approach is to reduce the disparities between communities, to marry our fortunes together. We’ve all come to look for America. A UBI is one tool that might help us to find it.

Let us be lovers.


Acknowledgments: I first encountered the “moving to productivity” story in a talk Ryan Avent gave at an Kauffman Foundation economic bloggers’ conference. Avent has become a delightfully textured thinker on these issues, see e.g. here. You can also read his new book, which is excellent. (He sent me a free copy. If you think that’s why I’m recommending it, well, that’s what you think!) Much of my thinking about urban housing and our increasingly painful geographic stratification was inspired by Matt Yglesias’ work as well. The best excellences are the ones you disagree with, that inspire you to mull, then argue, then hopefully to talk.

Election angst

Domestic politics in the United States are worse at this moment than they have ever been in my sad 46 years of life. And if your response is “they did it”, whoever they are, you are, I think missing the point, missing the problem. We are in this together. Once we’ve made a civil war of it we have already lost, however just the side you choose to fight on. Often moral errors feel like moral imperatives at the time.

One of the many ways contemporary social science is a poor mode for understanding human affairs is its fetish for individual-centered explanations, “methodological individualism” in the lingo. The most robust fact of social affairs is that communal characteristics trump individual characteristics in explaining almost any phenomenon of interest. All of the things we idiot idolize — educational attainment, future earnings, likelihood of poverty, likelihood of imprisonment, whatever — are much better explained by communal factors than by individual factors to the degree that we can orthogonalize the two. [1] Political phenomena are social phenomena. All social facts, characteristics that we too easily essentialize like race, characteristics we perceive as facts of nature like the unity and continuity of our identities, are socially constructed. It is much more accurate to say that communities create individuals than to say that individuals create communities, although of course both statements are true in their ways.

Politics is not about individuals. It is about communities and communal identities. Osama Bin Laden was a wealthy man, the men who brought down the twin towers were educated people who would have been able to live and prosper in Western countries. Surely, then, such acts of terrorism have nothing to do with the poverty and pathologies and resentments of Middle Eastern countries, since the individuals who perpetrate terrorism are not primarily the poor or those most directly affected by those pathologies? Terrorists must just be motivated by terrorism, that is the only explanation. I hope that the shallowness of this argument is self-evident, dear reader.

Dylan Matthews at Vox writes:

There is absolutely no evidence that Trump’s supporters, either in the primary or the general election, are disproportionately poor or working class. Exit polling from the primaries found that Trump voters made about as much as Ted Cruz voters, and significantly more than supporters of either Hillary Clinton or Bernie Sanders. Trump voters, FiveThirtyEight’s Nate Silver found, had a median household income of $72,000, a fair bit higher than the $62,000 median household income for non-Hispanic whites in America.

Vox is a wonderful publication along many dimensions. One of its virtues is that it provides constant exercises in how a few statistics or credentialed quotes combined with ones own authoritative voice can mislead bright writers into thinking they know the one scientific truth of things. Matthews and several of his peers at Vox have invested themselves in a narrative that says the sophisticated, carefully evidenced take on the Trump phenomenon is that it’s all racism, nothing else matters. Now, it is obvious that racism and nativism and neofascism are an important and particularly disturbing aspect of the Trump phenomenon, that people who overtly identify as racist or neo-Nazi have found a home in a tent that Donald Trump has made comfortable for them. But it is also obvious that, within the Republican Party, Trump’s support comes disproportionately from troubled communities, from places that have been left behind economically, that struggle with unusual rates of opiate addiction, low educational achievement, and other social vices. If you insist on focusing on individuals, you may miss the connection, because the worst off within communities — actual chronic discouraged workers, addicts — are likely to express no opinion to the degree they can be polled at all. Trump primary voters are white Republicans who vote, automatically a more affluent baseline than the white voters generally. At the community level, patterns are clear. (See this too.) Of course, it could still all be racism, because within white communities, measures of social and economic dysfunction are likely correlated with measures you could associate with racism. Social affairs are complicated and the real world does not hand us unique well-identified models. We always have to choose our explanations, and we should think carefully about how and why we do so. Explanations have consequences, not just for the people we are imposing them upon, but for our polity as a whole. I don’t get involved in these arguments to express some high-minded empathy for Trump voters, but because I think that monocausally attributing a broad political movement to racism when it has other plausible antecedents does real harm. (See also Carl Beijer on the same Vox piece.)

A nation-state is a relatively new form of human community. Its singular problem is scale. Among nation-states, there is a strong inverse correlation between nation-state “success” (however we want to measure that) and “socioethnic fragmentation”. Nation-states “work” when their members are most powerfully attached to a common, broadly shared, communal identity. When members attach themselves primarily to more local or parochial identities, destructive politics of intercommunal struggle often plague the polity. Unfortunately, many people understand this relationship in a very simple, static way. The Nordic countries are famously “homogeneous”, and so are unusually successful as nation-states. Lebanon is a hodgepodge of sects and ethnicities, and has a hard time thriving.

But causal arrows in social affairs usually go both ways. It is equally accurate to say that the Nordic countries have succeeded as nation-states, and so have become “homogeneous”, while Lebanon has not thrived as a nation, and so finds itself ethnically fragmented. Shared communal identities across millions of geographically dispersed people simply do not arise without political organization. Nations create their own publics, or else they fail to do so and then they fail. The United States’ main claim to fame, its main claim to virtue in my view, is E pluribus unum. The United States, during some periods of its history, has been very good at integrating disparate groups of people into a strong national community. Communal identities are never static. Nation-states experience centripetal forces that tend towards integration and centrifugal forces that pull towards fragmentation. Open commerce, frequent geographic mixing, universal education, broadcast communication networks, rich transportation networks, a national civic religion, political consensus, a widely-shared popular culture, shared lifestyles across a broad middle class, and perceived general prosperity are all sources of integration. Physical segregation, widely divergent education, commercial segmentation or exclusion, self-organizing point-to-point communication networks, the absence or decay of civic religion, political polarization, absence of a broad popular culture, economic dispersion that stratifies lifestyles, perceived unfairness in patterns of prosperity, and immigration from external communities can be sources of fragmentation. Some of these “sources of fragmentation” are very good things! Self-organizing point-to-point communication and physical segregation derive from freedom of association. They potentially help enable a diversity of subnational communities and a rich civic society. Tolerance of immigration confers an incredibly valuable option upon potential immigrants, and can support the growth and economic strength of the nation-state. But a successful nation-state must budget the centrifugal forces it can tolerate against the centripetal forces it can generate.

Nations are either integrating or they are fragmenting. The United States spent much of the 20th Century integrating. It is currently fragmenting. We currently discuss and perceive this in very racialized terms (a fact which in my view is itself a symptom of the fragmentation). Through about the 1990s, more and more groups of people integrated into a community it is now offensive to describe as “American”. We now refer to this community as “white”, in order to emphasize by contrast the unfairness and horror of the United States’ greatest shame, our failure to fully integrate descendants of the immigrants we involuntarily imported and then brutally enslaved. Since around 2000, in my view, the “white” United States has been fragmenting. Integration has been replaced by ethnogenesis. The communities from which Trump enthusiasts disproportionately arise may be increasingly white supremicist, but they are no longer unproblematically “white” in its meaning as “default American”. They compete for national identity with ascendant “people of color”, sure, but before you go on about racial last-place aversion, note that they compete more directly and much more bitterly with a cosmopolitan but disproportionately “white” urban professional class, whose whiteness has itself been problematized, as underlined by a resurgent anti-Semitism where Jews stand-in for this class broadly.

And before we get caught up categorizing and imposing moral rankings on the various new ethnicities we are inventing, we should pause to emphasize that these are accidents, not essences. Our polity was going to fray, because we have allowed centrifugal forces to grow much stronger than the forces that might tend towards integration. Regular readers will be unsurprised that I think economic stratification and differential stagnation are the deepest sources of fragmentation and the first that we should address. We may also need to consider ideas like universal national service, or Singapore-style residential integration incentives. I hope we won’t consider rolling back our chaotic, open communication networks in favor of a more “curated” shared information environment. I hope we will find ways to define a more multidimensional space for our politics to play out, rather than limiting ourselves to an increasingly polarized line between two camps neither of which adequately represent us. Whatever we do, we will have to reconcile sometimes conflicting goals of national integration, economic success, and respect for liberal values.

For the moment, we have to get through the catastrophe that this election has become. A fault line was always going to appear between the economically dominant class and much of the rest of the country which has been left behind. In my view, it is a very great tragedy that Bernie Sanders did not win his primary campaign to represent the left-behind in a positive and inclusive way. All humans are racists in some ways and to some degrees, but it was not at all inevitable, I think, that we end up in a “battle between cosmopolitan finance capitalism and ethno-nationalist backlash”, as Chris Hayes put it. Donald Trump offered a particularly comfortable home to the most ethno-nationalist fraction of the left-behind, and no home at all to people of color. But many not-unusually-racist “white” people who, fairly or not, perceive Clinton as an icon of a corruption, now see Trump as the only game in town. It is tempting, among those of us who would be appalled by a Trump victory, to try to sway undecided voters by equating voting for Trump with racism full-stop. That’s a bad idea. If it becomes the mainstream view that Trump voters are simply racists, it leaves those who are already committed, those who are unwilling to abandon Trump or to stomach Clinton, little choice but to own what they’ve been accused of. Racist is the new queer. The same daring, transgressional psychology that, for gay people, converted an insult into a durable token of identity may persuade a mass of people who otherwise would not have challenged the social taboo surrounding racism to accept the epithet with defiant equanimity or even to embrace it. The assertion that Trump’s supporters are all racists has, I think, become partially self-fulfilling. In and of itself, that will make America’s already deeply ugly racial politics uglier. It will help justify the further pathologization of the emerging white underclass while doing nothing at all to help communities of color except, conveniently for some, to set the groups at one another’s throats so they cannot make common cause. It will become yet another excuse for beneficiaries of economic stratification to blame its victims. Things were bad before this election. They are worse now, and we should be very careful about how we carry this experience forward. These are frightening times.


P.S. I will be voting for Hillary Clinton. Not happily. Perhaps there is room for optimism. Perhaps I’ll be pleasantly surprised. I very much hope that the Democrats win the House and Senate as well. If I’m to be disappointed, I’d rather have clear lines of accountability rather than have blame diffused by claims of gridlock. I don’t think Donald Trump should be President. I think he’s unfit, and a statue of an upraised middle finger would be a better choice for all concerned. Regardless of my views, I respect your vote however you choose to cast it, because that is the first courtesy we owe one another in a democracy.


Update: James Kwak offers a much better and more careful discussion of the Vox piece I didn’t like so much.


[1] What does that mean? For example, if you tell me an individuals’ parental incomes, that’s very informative about, say, likely educational achievement. But you are giving me information both about the individual and about her community, since incomes aren’t uniformly distributed across communities. If you offer me just one of (a) the decile of parental income within a person’s community (under almost any reasonable definition of community, but without identifying the community) or (b) the identity of the community from which which she hails without the specific income information, (b), the identity of the community, will be more informative.

Update History:

  • 17-Oct-2016, 10:10 p.m. PDT: Add bold update with link to James Kwak’s piece.
  • 7-Nov-2016, 1:30 p.m. PST: “…most powerfully attached to a common, broadly shared…”; “The United States main claim to fame…”; “But And before we get caught up categorizing…”

Attributions of causality

Like a lot of people, I think, I’m a bit dazed by the fact that apparently, really, the British public has voted to leave the EU. I’d prefer we lived in a world that was coming together rather than fraying apart. Other than that I’ll refrain from comment and just wish everybody the best.

I do want to remark on a piece by Kevin Drum, written perhaps too quickly in reaction to the results. Drum writes:

I am sick and tired of watching folks like Boris Johnson, Marine Le Pen, Donald Trump and others appeal to the worst racial instincts of our species, only to be shushed by folks telling me that it’s not really racism driving their popularity. It’s economic angst. It’s regular folks tired of being spurned by out-of-touch elites. It’s a natural anxiety over rapid cultural change.

Maybe it’s all those things. But at its core, it’s the last stand of old people who have been frightened to death by cynical right-wing media empires and the demagogues who enable them—all of whom have based their appeals on racism as overt as anything we’ve seen in decades. It’s loathsome beyond belief, and not something I thought I’d ever see in my lifetime. But that’s where we are.

I would never want to shush Kevin Drum. I’m extraordinarily fond of him. But I think he is making a mistake here, empirically and morally.

It is not in fact broadly true that emerging racially-tinged right-wing movements are a “last stand of old people”. Marine Le Pen’s Front National, for example

is strongest among younger voters. It took the votes of 30% of those aged under 35, 27% of those aged 35 to 59 and 21% (noticeably less than its average vote) among the over 60s.

Greece’s overtly fascist Golden Dawn movement

are mainly men with low incomes…43 percent of the voters are between 25 and 39 years, followed by 24 percent being 40 to 50 years old and 15 percent aged 55 to 64 years.

In Great Britain, Leave supporters skew old, as do Trump supporters in the US. But if you wish to look for commonalities between right-wing nationalist movements, I think you’d be better off looking at gender, or profession, or the economic status of the localities from which people hail, more than age.

Drum is certainly right to characterize the explicitly racist appeals of these movements as loathsome. But it isn’t enough to say “that’s where we are”. His interlocutors are right to point to economic anxiety and other disruptive changes rather than leave it there. We have to share the same world with every other human. Drum and I have to share the same country with Trump voters. We try to understand the world in order to better live in it. Explanations or assertions that don’t contribute to that are not worth very much.

How we attribute causality is a social choice, and it is a choice much less constrained than people who clothe themselves in the authority of “social science” or “the data” often pretend. Quantitative methods like instrumental variable analysis at their best indicate that some element is a factor in causing a measured phenomenon. For anything complex, they are rarely strong enough to even suggest either the necessity or the sufficiency of a factor. Social outcomes like susceptibility to racist appeals are affected by lots of things, and are probably overdetermined, so that one could generate equally strong results implicating a wide variety of different factors depending upon what is excluded from or included in ones model.

In political life, there are nearly always multiple reasonable models to choose from. Our choice of models is itself a moral and political act. For example, conservatives prefer cultural explanations for communities with high rates of young single motherhood, while liberals prefer economic explanations. These explanations are not mutually exclusive, both can be simultaneously true, but cultural explanations serve mostly to justify the social stratification that correlates with single motherhood, while economic explanations invite remedies. It might be true, and demonstrable in the usual statistical ways, that a certain neurological state “causes” the verbally expressed sensation of hunger. It might also be true and demonstrable that a prolonged absence of food causes the same expressed sensation. Both of these models may be true, but one of them suggests a more useful remedy than the other. And a more moral remedy. Prescribing a drug to blunt the hunger may yield a different long-term outcome than feeding food, in ways that are morally salient.

It may or may not be accurate to attribute the political behavior of large groups of people to racism, but it is not very useful. Those people got to be that way somehow. Presumably they, or eventually their progeny, can be un-got from being that way somehow. It is, I think, a political and moral error to content oneself with explanations that suggest no remedy at all, or that suggest prima facie problematic responses like ridiculing, ignoring, disenfranchising, or going to war with large groups of fellow citizens, unless no other explanations are colorable. It turns out that there are lots of explanations consistent with increased susceptibility to racist appeals that also suggest remedies less vague and more constructive than, say, “fighting racism” or censoring the right-wing press. With respect to Britain’s trauma, for example, Dan Davies points to Great Britain’s geographically concentrated prosperity, and the effect that has had on the distribution of native versus immigrant young people. I can’t evaluate the merits of that explanation, but it might at least be useful. It does suggest means by which the British polity might alter its arrangements to reintegrate its divided public.

I don’t mean to pick on Kevin Drum, whom I’ve read for more than a decade, and whom I really like a great deal. But it seems to me that the alleged “good guys” — the liberal, cosmopolitan class of which I myself am a part — have fallen into habits of ridiculing, demonizing, writing off, or, in our best moments, merely patronizing huge swathes of the polities to which we belong. They may do the same to us, but we are not toddlers, that is no excuse. In the United States, in Europe, we are allowing ourselves to disintegrate and arguing about who is to blame. Let’s all be better than that.


p.s. Read more Chris Arnade [and more].

Update History:

  • 25-Jun-2016, 2:30 a.m. PDT: “writing off, or, in its our best moments, merely patronizing”
  • 25-Jun-2016, 3:15 a.m. PDT: Added extra “[and more]” Chris Arnade link.

A parliament without a parliamentarian

I mean to write a bit about the “DAO hack“, which provides a fascinating true-crime introduction to the fascinating (virtual) world of blockchains and cryptocurrency if you don’t already follow this stuff. But before saying what I think about that DAO-stardly DAO-eed, I think it might be useful to explain what I think “blockchains” are, in social rather than technical terms.


A blockchain is just a parliament without a parliamentarian.

Like a parliament, a blockchain is a means by which a group of people collaborates to produce an ordered list of accepted “resolutions” that is deemed authoritative and legitimate by some community it represents. That list of resolutions may cause the construction of alteration of some side-product. Laws passed by Congress create or alter the United States’ legal code. “Blocks” accepted by Bitcoin “miners” change account balances in an implicit ledger of who owns what Bitcoins. But the authoritative source is always an ordered list of accepted resolutions, from which the state of the side products may mechanically be derived.

A traditional parliament requires a lot of work and organization, and it doesn’t scale very well. It’s hard to coordinate getting even a few hundred legislators into a room to vote on a resolution. Keeping an orderly chamber requires organization and hierarchy. Typically there is some kind of leadership, there is a hierarchical structure and “rules of order”, whose purpose is to orchestrate the consideration of resolutions. A “parliamentarian” acts as a keeper and adjudicator of those rules, which are often obscure even to the membership of the parliament. The parliamentarian and the hierarchy her rules enshrine may not be neutral. Most obviously, the leadership of a deliberative assembly may be capable of preventing consideration of resolutions that the membership would pass if required to vote on the question. Anyone who follows real-world politics understands that it matters very much who “controls” a legislative house.

A blockchain represents a deliberative assembly that may be very large (thousands or millions of participants bound by computer networks), and that may be very open (anyone may participate, “legislators” may come and go at will). Traditional rules of order are not up to the task of managing this sort of assembly. Further, the inventors of blockchains did not approve of the traditional prerogatives of a parliament’s “leadership”. Among blockchain enthusiasts, preventing the consideration of a potentially acceptable resolution is usually referred to as a “censorship attack”.

So, instead of a “leadership” that orchestrates the consideration of resolutions, blockchains hold a kind of lottery among its legislators, who are called “miners”. Every few minutes, or even seconds, the winner of a new lottery is announced. The winner gets to submit resolutions for consideration by the parliament, and is financially rewarded if her “block” of resolutions is accepted by the majority. The proposal of resolutions is not restricted to miners. They may be submitted by, well, anyone at all. Miners check the resolutions and decide if they are likely to pass. They combine the ones that do seem likely to pass into a “block”, and hope to win the lottery. A miner may try to exclude resolutions that are likely to pass but that she herself disagrees with, but that sort of censorship is unlikely to have any effect, since she is unlikely to win the lottery in any particular round. Once a block of resolutions pass, each participant updates its own personal copy of the list of passed resolutions to include the new ones. Only participants with a fully up-to-date copy of the list may participate in the next lottery. Since winning the lottery and proposing a successful block is financially rewarded, while censoring proposals or ignoring blocks that the majority would accept is ineffectual, participants usually propose anything that they think would pass and go along with anything that has already passed. Blockchains reward consensus: It is lucrative to go along with most others would go along with. Understanding the will of the majority of their colleagues and bending to it is the job of each and every legislator.

In the most prominent, current blockchains, the norms about what sort of resolution is likely to pass are simple and widely shared. On the bitcoin blockchain, most resolutions amount to something like, “Unspent money belonging to User A in an amount of 3 BTC should be assigned to User B.” A miner checks that User A does in fact have 3 BTC unspent, and that the resolution is properly signed by User A. If so, this transaction is very likely to pass, as the core shared norm of the community of BTC miners is that people should be able to spend their own unspent money however they choose. Note, though, that this in only a norm. If more than half of the participants in the Bitcoin blockchain suddenly decided that User A was evil and should not, in fact, be permitted to spend her money, then lottery-winners would quickly learn to exclude her resolutions, and that would become a new, communally enforced norm. People in the Bitcoin community who consider a norm like this illegitimate would refer to it as “censorship” or a “51% attack”. But “51% attack” is just another way of describing “majority rules” when you don’t like the decision of the majority.

But majority of whom? Open blockchains, like Bitcoin and Ethereum, permit anyone who wishes to participate as a miner, without any kind of vetting or “voter ID”. That’s obviously a problem, because over the internet it is easy to pretend to be a hundred or a thousand or a million people if you want to (a tactic evocatively referred to as a “Sybil Attack” in the blockchain community). To prevent that, instead of “one person, one vote”, blockchains are something like “one GHz, one vote”. Ones weight in the parliament is determined by how much computing power one can bring to bear, and, it turns out, sometimes by the form of the computing power, as Bitcoin for example is best run by very specialized chips. The legitimacy of blockchains, as of more traditional parliaments, derives in part from notions of participation or at least representation, and also from expectations that they will honor and reinforce communal norms. The power of blockchains, as of more traditional parliaments, may depend to a certain degree on their continued legitimacy, but might also survive a loss of legitimacy by virtue of network effects. Congress itself produces nothing but a set of official minutes, but those minutes create important social facts because we each expect other people to take them seriously, so we ourselves take them seriously, so the contents of those minutes create important social consequences. The Bitcoin blockchain produces lists of who spent what to whom of an imaginary, artificial, funny money. But Bitcoin users have become willing to surrender objects of real value for appearing on lists of Bitcoin recipients, and as long as we expect that to be true, we must take the blockchain’s adjudication of who owns what seriously. A blockchain, like a parliament, is much more a social institution than a technological one, although very clever technology was necessary to design blockchain systems that could become socially credible. Like political systems, some mix of continued legitimacy and path-dependent coordination equilibria (“network effects”) determine how durably and powerfully blockchains will be able to shape social facts into the future. Continued legitimacy may depend on continued adherence to widely shared norms, on perceptions of fairness and representation, and on how effectively the blockchain’s decisions serve the actual interests of the community that relies upon it. Ethereum‘s is the most interesting and ambitious widely deployed open blockchain, a parliament whose job is to enforce the behavior of social institutions and financial contracts inscribed as directly consequential computer programs rather than in human habit or legal text. That was never going to be straightforward, and the DAO hack has beautifully surfaced some the difficulties and contradictions inherent to the enterprise. More on that soon, I hope.


FD: I am a critic, but also an enthusiastic participant in the blockchain hyposphere. I am financially and professionally invested in the Ethereum project in particular. I am also a DAO token holder, directly injured by the DAO hack. I’m more intrigued than angry about it, though. Nothing that has already been perfected is very interesting.

Update History:

  • 19-Jun-2016, 5:05 a.m. PDT: “to explain what I think ‘blockchains’ are”
  • 20-Jun-2016, 4:50 a.m. PDT: “some mix of continued legitimacy and path-dependent coordination equilibria (“network effects”) determines how”

E pluribus unum

Many of us understand and agree that the way you lose to terrorism is to cop to its premises in the way that you react to it. If ISIS or Al Qaeda want to claim that there is a war of civilizations, a religious war between “Muslims” and “The West”, the worst thing we could do is to live up to the role into which the terrorists have cast us by indiscriminately harassing and attacking Muslims. Acts of ostentatious violence are calculated to goad us into reinforcing the enemy’s framing of the conflict. Unfortunately, the tactic frequently works, because “we” are not a monolith, and some domestic factions in fact share a commonality of interest with the terrorists. During the Republican primary season, at least as abhorrent as anything Donald Trump said was the emergence of recitations of “We are at war with radical Islamic terrorism” as a kind of litmus test of seriousness among the allegedly sensible candidates. Perhaps I am cynical, but the sprawling, shadowy, money-drenched national security state is still disproportionately a Republican constituency, and that strikes me as relevant to why these politicians would garb themselves so enthusiastically in a costume sewn by our enemies. (Of course, there is no evidence of any quid pro quo, and I’m sure the candidates are all perfectly sincere in their way. So let’s not call it corruption.)

Similarly, if Donald Trump wants to start a race war, I wonder whether the best approach is to step in and take the other side. You might win an election that way, but you might also take us from a country of people who, still, mostly, don’t think of themselves as partisans for their race to one in which organizing along racial lines becomes a matter of self-defense. Of course, it often has felt that way, and really has been that way, for African Americans. Although there might be a certain justice in extending that condition to the rest of the country, I’m not sure that it would ultimately work out well for any of us. Functional nation states generally try to reduce the salience of socioethnic difference in favor of a national identity. That one of America’s two political parties has sometimes sabotaged this objective for political reasons doesn’t mean it would be a good idea if they both did. It seems to me an overtly racialized United States would be a lot more, rather than less, comfortable place for Donald Trump or the 20th Century politicians to which he is often compared.

I think that the “war on terror” cannot be won by defeating ISIS or Al Qaeda or any other enemy, but will end when the people of the Middle East have hope of living decent lives in stable countries with legitimate governments. Most problems in the world must be solved, not defeated, however attractive the branding of yet another “war on” may be. In the United States, I don’t doubt that various forms of racial animus drive the support of Donald Trump, to some degree. But you can’t solve “Trumpism” by defeating racism. The so-called “white working class” has lots of reasons to be aggrieved besides race or resentment over changing racial hierarchies, including legitimate grievances that would be shared by the not-white working class. Racism itself is an outcome as much as it is a cause. If interpreters of political affairs make wild efforts to dismiss colorably legitimate explanations of grievance in favor of unsympathetic racial resentments, that might be politically useful in delegitimizing support of Donald Trump. It might, less usefully, actually be believed, both by the people whose concerns are being caricatured (and so who come to see themselves as racists) and by others (who take an ever harder line with a cartoon moral enemy).

Of course, socioethnic conflict can be useful. It is an old strategy of colonialists to create racial strife in order to divide and rule. In Europe, elites turned a crisis that emerged from venality among bankers and poor regulation by Brussels into an ethnonational morality play that has destroyed the legitimacy of the EU and continues to devastate several countries, precisely in order to deflect blame from themselves. An America as unequal as ours has become engenders lots of blame that may require deflecting. Carl Beijer writes, “[L]iberalism relentlessly co-opts identitarian politics as a way to channel civil unrest away from class struggle.” (ht Ryan Cooper)

To be clear, I don’t think the writers with whom I am taking issue are intentionally sowing discord. They are writers whom I often admire, who, I think, have given less thought to the implications of the lines they are taking than I wish they would.


Update: This piece is not a response to the awful events in Orlando, which I learned of just after hitting “post”. Stupid fucked-up world.

Update History:

  • 12-Jun-2016, 7:30 a.m. PDT: Added bold update re terrible Orlando shooting.

There’s no substitute for a substitute

Eric Fischer, after heroically reconstructing San Francisco housing data for much of the 20th Century, published an analysis of the determinants of median rents. The hat tip goes to Tyler Cowen, who concludes “basically SF is ****ed.” Less pithy commentators did what less pithy commentators usually do, and used the analysis to claim that it basically supports their preconceptions and what they have been saying all along. It was only March when Hamilton Nolan helpfully concluded, “Build some housing, assholes. A lot!”.

Well, far be it from me to buck the trend. The analysis supports my preconceptions and what I’ve been saying all along.

Fischer_v6_side-by-side-huge

Basically, Fischer estimates a model that puts plausible magnitudes on the price effect of new housing supply. How much new housing would we actually have to build in San Francisco to address the housing affordability problem? The model is certainly contestable, but at least it gives us plausible magnitudes to talk about. To stabilize real rents at their current, absurdly unaffordable level, Fischer finds that the number of housing units would have to increase in real terms by 1.5% per year, holding other factors constant. [*] So, is it plausible that San Francisco could build its way out of its housing crisis? As Fischer notes, that would imply a unit growth rate more than 3 times the average rate since 1975. Hamilton Nolan of build-some-housing-assholes fame concludes that

Those fortunate enough to have nice places to live in San Francisco (and the rest of the Bay Area) have had decades to get this right. And they haven’t. Drastic measures are in order.

Decades! Hamilton, you are more right than you know. The last time San Francisco achieved a unit growth rate of 1.5% was in… 1941. So many decades of NIMBYs! What was really different about 1941 compared to now? No exclusionary zoning regs? No pesky environmentalists? Maybe! But perhaps a more parsimonious explanation is the one that Fischer himself gives.

From 1935 to 1943, the Central Sunset and Parkmerced filled in. From 1944 to 1954, the Outer Sunset and Ocean View were built. And that was essentially the end of the easily developed greenfield housing.

In the history of San Francisco, 1.5% unit growth has never been achieved via “infill” development of an already occupied peninsula. There was a brief boom that managed a few years of 1% to 1.3% growth in the mid-1960s, but during that period developers “still could fill in the hillsides of Twin Peaks and above O’Shaughnessy Boulevard.” After that, the vacant land was gone. From 1967 to the present, the city managed a growth rate of more than 0.5% in barely one third of years (17 years out of the 48 from 1967 through 2014, when the data ends.) During the post-greenfield, post-1967 period, which years were best? Was it during the good old days before “homevoters” shut down the “growth machine” with their exclusionary zoning laws? No. The best years of the post-1967 period in terms of unit growth were 2008-2009, and then again in 2014 (the most recent year in Fischer’s data). No year exceeded 1% unit growth. But 2009 and 2014 did achieve a remarkable 0.9%.

Conventional wisdom has coalesced on the notion that it is NIMBY-ism and exclusionary zoning that are responsible for the crazy, crazy housing prices in San Francisco and other high rent cities, and so the solution to the problem must be a bloody, painful battle to overcome greedy incumbents’ attachments to their homes and neighborhoods. But before we destabilize neighborhoods and displace humans in the name of housing supply, we might want to ask, will all that pain really address the problem? Sure, at the margin, more construction will yield lower prices. And I understand that, following construction boom years, rental prices have stabilized in cities like DC and Chicago.

But within developed cities, construction booms are short and finite. Chemotherapy may be worth the nausea and hairloss if it adds years to ones life, but would it be worth it for an extra week? Infill densification is socially painful and physically expensive in terms of demolition and retrofitting infrastructure. And, yes, buying off the evil NIMBY’s and the permitting authorities who serve them adds to those costs. But how many examples are there of cities that have grown their housing stock in place at anything like the rate that would be required to meet the burgeoning demand in San Francisco or New York? Before we wage war on ourselves, maybe we should inquire whether victory is plausibly achievable. And, if it isn’t, maybe we should come up with a different plan?

The situation is even worse than it appears. The current craze, the only hope on the political horizon, is “affordable density“, which would eliminate regulatory impediments to construction for developers who reserve a percentage of units for means-tested tenants who would pay below-market rent. This trend reflects some mix of a well-intentioned attempt to address displacement and pragmatic acknowledgment that a city that has priced out its teachers and service workers might have a hard time functioning. However, an awkward fact of market pricing is that effective supply is not the number of units built, but the number of units actually made available to the market. Compared to a laissez-faire counterfactual in which redevelopment simply pushes poorer residents out of the city (often the case historically), every human not displaced diminishes the degree to which densification reduces market-rate rents. A market is not a dinner party. The higher the affordable housing requirements, the greater the rate of unit growth required to stabilize market-rate prices. Have we mentioned already that infill unit growth is really hard?

Cities evolve. They grow, they change, they do become more dense. And that is great. San Francisco NIMBYs are always on about Hong-Kong-ization or Manhattanization of the city. I like Manhattan and Hong Kong, and would be excited to see San Francisco’s aesthetically blah, largely single-family-detached west side turn fun like that.

But those neighborhoods are already inhabited. People live in the single family homes. They plant gardens in the generous backyards. In time, I hope those neighborhoods will change, and become more dense. I’m for a whole lot of redistribution, but there are reasons why civilized countries redistribute via financial tax-and-transfer rather than “land reform“, i.e. direct reallocation of real resources. To people who characterize homeowners’ informal sovereignty over their neighborhoods as a subsidy to the “upper middle class” at the expense of the “economically vulnerable”, I’d ask a few simple questions.

  • In a country where the homeownership rate is more than 63%, is it right to characterize homeowners broadly, even in San Francisco, as “upper-middle class”? Many homeowners have lived in their homes for years, and many new homeowners are mortgaged to the hilt.

  • Given that even an ahistorical, sustained trebling of unit growth would probably only stabilize, not reduce, the real price of housing in San Francisco, is it fair to characterize the people who would be helped by increased space for new residents as the “economically vulnerable”?

  • And given that, for perfectly understandable reasons, homeowners and residents resist fast-paced densification of their neighborhoods, which homeowners and residents would most likely be forced to tolerate changes they dislike or that threaten the value of properties? San Francisco has its share of stunningly beautiful neighborhoods affordable only to plutocrats. Will we put high-rises in those neighborhoods? Or, in the anodyne language of economists for every bad thing, will it be the economically vulnerable who must “adjust”?

Is Tyler Cowen right, then? “Basically SF is ****ed?” No. San Francisco could be just fine. The thing about San Francisco is that while greenfields have been exhausted in the city, the San Francisco Bay Area is largely undeveloped. We are always arguing over San Francisco, or Palo Alto (ick). Outside of the 47 square miles of San Francisco proper are almost 3200 square miles in San Mateo, Santa Clara, Alameda, and Contra Costa counties. (I’ll leave out the hoity-toity North Bay counties — Marin, Sonoma, Napa — but if it’s Latin-America-style land reform you want, the vines there are ripe for revolution!) Nobody wants new suburban sprawl, thank goodness. But dense development is not sprawl, even when it is greenfield development. When I argue that Singapore is an example we look should look to, people think I’m trying to make some left-wing point about public housing. I’m not. I don’t actually care very much about that. What excites me about Singapore is this:

SingaporeLivability

It’s silly to characterize what Singapore does as “basically greenfield suburban growth“. Singapore’s new towns are denser than any US city, and nicer than most of them. They are designed for their density, not retrofit. What distinguishes Singapore is a “can do”, dirigiste approach to developing new living space, and a remarkable competence at making density green and livable. Singapore is an exuberant site of architectural experimentation, in both private and public building projects. Singapore’s “new towns” can house 100,000 people in less than 5 square miles. In the San Francisco Bay Area, there is plenty of space for Singapore-style new towns. Even Back East, room could be found for these compact conurbations.

Every piece of Earth has its stakeholders. As with densification of existing cities, plans to build new cities and their supporting infrastructure will provoke bitter controversy. But stakeholders for exurban land are fewer and more dispersed, and so less intensely affected, than city dwellers. The fights will be more winnable and the victories more meaningful in terms of the numbers of new dwellings that can be constructed. In the old city, we are condemned to bitter struggle over what ultimately may be too little to matter.

There are glimmers of hope for new towns, even in the US. See The Economist on “ersatz urbanism” in Florida. But it is in the San Francisco Bay Area, with its dreadful, painful housing situation, and its science fiction tycoons (several of whom individually could provide the necessary finance) where a full-scale, ecotechnological US microcity should really be attempted.

Soon.


Personal Epilogue: I live in San Francisco. I am a renter. I live in a neighborhood with no pretty Victorians, on a block with little anyone would want to preserve for character. My personal preference would be for a lot more density, in my own neighborhood and many others. My apartment building, like the vast majority of SF multi-family dwellings, is rent-stabilized. I support San-Francisco-style rent stabilization, under which initial rents are “market rate” but rent increases are regulated. I think it is a good policy regime. I don’t think the $300-ish per month I may be saving (after a three year tenure, figuring two 10% rent increases) much impacts my views, but “none of us can be perfectly objective arbiters of our own conflicts of interest“, so you be the judge. I detest San Francisco’s high housing (and other) prices, and feel that the cost makes the city culturally gross, a place full of insecure people (very much including me) tacitly or not so tacitly competing in crude financial terms for the right to live here. Conversations always turn to housing, in overt commiserations or covert attempts to feel out where the other person lives, whether they have space, how they can afford it. As I said, it is gross.

Nevertheless, I don’t support the broad-brush anti-NIMBY, anti-zoning, affordability-through-density movement, because I think it is counterproductive. I want more housing, more density, and more development, but I don’t imagine those can possibly address affordability even over the medium term. I think that attempts to supercharge in-place densification i) will not succeed at any remotely sufficient scale; and ii) will cause real harm, and not just or mostly to unsympathetic upper-middle-class baby boomers protecting price-appreciation windfalls. I am very fond, intellectually and personally, of people like Matt Yglesias and Ryan Avent who have made strong cases for upzoning and densification as the way to go. They deserve congratulations for how persuasive their arguments have been. At least within my socioeconomic milieu, their ideas have become enshrined as conventional wisdom. But in my opinion — which of course might be mistaken! — these ideas have supplanted consideration of more effective and less difficult solutions to the very real problems they mean to address.


[*] I’ve tried to reproduce Fischer’s work, see the embedded image above (also Mathematica source code). My version yields slightly different coefficients and requires only 1.3% growth to stabilize prices. Hooray!

Difference

Matt Yglesias, with characteristic perceptiveness, points out (ht DeLong) that

There are significant and salient tension between the economic and identity-oriented wings of the left that conservatives largely avoided… You saw this in the Clinton/Sanders primary where identity politics rhetoric and concepts were mobilized to shore up economic moderation.

Freddie deBoer offers a piece that I enthusiastically recommend. (But then I would, wouldn’t I?) deBoer writes

the existence of tens of millions of nativist racists represents a practical problem to be addressed no matter what your take on their origins. I am not talking about giving concessions that we consider contrary to our basic convictions in an effort to court these voters. I’m not necessarily talking about courting them, as voters, at all. I am not saying we shouldn’t defeat them in elections. I am asking, what do we do with them after the elections have been won? More, I am here asking that we consider whether we want to adopt the basic logic of conservatism: that some people’s distress is deserved and thus safely ignored.

In general, I think attitudes towards difference are an underappreciated fault line of contemporary liberal politics. By difference, I don’t mean individual difference or eccentricity, iconoclasm or nonconformity. What I do mean is consequential divergences of status across different, socially identified groups of people.

There are two axes of difference that seem to me to be particularly relevant. Yglesias identifies these precisely: There is an axis of “identity politics”, and an axis of economic stratification. Both of these axes are associated with “progressivism”, in the sense that both economic stratification and various socially defined identity groups have been associated with perceptions of disadvantage and oppression of the sort “progressivism” seeks to remedy. (See Arnold Kling’s axes.)

However, there are two, quite distinct approaches to remedying this sort of oppression. One way is to alter the way people are sorted and the relative status of the different groups so that the socially consequential groupings are more legitimate. Another way is to try to diminish the legitimacy and the fact of distinctions between groups, so that what groupings remain are more like elective subcultures than implacable social facts.

Along the economic axis, this distinction plays out in the question of meritocracy. “Classical liberals” and the people sometimes referred to as neoliberals don’t challenge the existence of large, consequential differences between rich and poor. They seek to remedy what is oppressive in economic stratification by putting a humane floor beneath the consequences of being sorted downwards, and by working to ensure that the sorting is “fair”. They tend to promote equality of opportunity and emphasize education as a solution. People to whom the label “left” gets applied work instead to compress economic difference, to delegitimize the sorting or at least to dramatically reduce its scope relative to the unjust, socially destructive dispersion they perceive in the status status quo. Both groups find common cause, sometimes, in wanting to put a floor beneath the bottom. But they are in sharp conflict about whether stratification towards the top calls for making the sort fairer or imposing limits.

With respect to identity politics, there is a similar divide, but the labels aren’t as recognizable. There is a strand of left-of-center politics that seeks to simply end group difference, epitomized by Martin Luther King’s call for “a nation where they will not be judged by the color of their skin but by the content of their character”. There is a different strand that views group difference as legitimate, or else inevitable and therefore legitimate, and that seeks to remedy oppression by contesting in politics and society explicitly as groups in order to alter the sorting of material goods and social status across groups. As in economics, where meritocratic liberals and people to their left form uneasy alliances over “safety net” programs, universalists and identity-centered activists can and often do work together to try to remedy disadvantage and oppression attached to social identity. Just as meritocratic liberals acknowledge the fact of economic hierarchy, universalists are not reductionists, they (we) acknowledge the fact that social goods are differentially distributed across identities through mechanisms quite different from within-group economic sorting, and often much more brutal. But, as in the economic sphere, universalists and identity-centered activists ultimately have very different goals and so embrace very different tactics. Universalists want group identity to become less salient and consequential, and so resist tactics that highlight difference in order to promote intragroup solidarity and to sow open conflict with other groups. Identity-centered activists view solidarity and conflict as the best and perhaps only way to overcome identity-distributed oppression. To a universalist, tactics like “no platforming” sow precisely the sort of divisions we ought to be working to overcome. To an identity-centered activist, “no platforming” an apologist for racism or sexual violence is just winning. This distinction blurs in practice, because neither universalists nor identity-centered activists restrict themselves to “neutral” (race-neutral, gender-neutral) tactics. Procedural neutrality is a trope of conservatives, of people working to defend status quo distinctions rather than to alter them. But universalists adopt group-conscious tactics as a means of reducing the salience and importance of group difference (think of how Singapore actively manages the composition of its housing to prevent the emergence of distinct ethnoracial communities), while identity-centered activists work to advance the interests of the groups for which they advocate in ways likely to accentuate the salience of group membership and encourage continued group identification and solidarity.

The core dispute, I think, in identity politics as in economic policy, is over whether to embrace consequential difference across groups but make outcomes more legitimate, or whether to try to reduce the degree to which difference is socially and materially consequential.

The diagram above summarizes the differences as I see them among US liberal-to-left factions. Note that these are questions of more or less, not absolutes. I’d place myself in the “universalist left”, for example, but I do believe that some degree of economic stratification is legitimate and necessary, under economists’ usual rationale of preserving incentives to produce. I just think that the degree of economic stratification that currently prevails is way, way, way, way, way past the point where benefits of sharp incentives to produce are undone by even sharper incentives to cheat and outweighed by destructive social fragmentation.


Update: Eli Schiff offered some similar thought experiments recently, thinking about the acceptability and reputation effects of left- and right-flavored activism in a corporate setting or workplace, depending on whether that activism emphasizes identity or economic concerns. I chatted with Schiff about these, and am indebted to him in thinking about using emphasis on identity politics to cut a 2 x 2 grid. Take a look at his work, his initial cut, or his more elaborate take, also embedded below!

Update History:

  • 15-May-2016, 4:25 p.m. PDT: “…neither the universalists nor the identity-centered activists…”
  • 17-May-2016, 1:15 p.m. PDT: Added bold update re Eli Schiff’s thought experiments on the acceptability of workplace activism.
  • 19-May-2016, 1:15 p.m. PDT: Added horizontal line to separate conclusion from update.

Ten years after

I don’t know whether it is of note even to me, but today interfluidity is ten years old.

Here is the inauspicious first post. Thank you all for coming by, for reading, for putting up with me all these years.

So I’ll leave it up to you. If you live in one of those states, please vote today.

Policy as Mock UN

Ezra Klein offers a response to my previous post, and there’s a lot that’s good it in. I appreciate Klein’s characteristic effort to provide a nuanced and balanced take. Nevertheless, I can’t say that I am persuaded.

Before going into the substance of Klein’s piece, I want to clarify that my prior post was not a response to the controversy that has arisen following a letter from four former CEA chairs about Gerald Friedman’s projections of the effects of Sanders’ proposals. My piece was written last Monday, the CEA letter was published Wednesday, I promise you I have no moles on Mount Olympus. I do have an opinion about the “kerfuffle” provoked by that letter, and maybe I’ll express it in a future post. (Or maybe not.) But my post on theories of politics was not addressed to that controversy.

Anyway. Klein and I agree, I think, that “in a democratic polity, wonks are the help”. Elections are where voters set the interests and values in service of which wonks’ technical expertise will later be deployed. But Klein is quite correct to point out that we don’t elect disembodied interests and values, we elect people, and the competence of those people along myriad dimensions will determine whether they are capable of translating the interests and values they represent into meaningful social outcomes. I agree with Klein that voters are called upon to evaluate not candidates’ competence, but their competences, to trade off weaknesses against strengths, and sometimes to trade off evaluations of competence against their preferences with respect to interests and values.

As Klein very aptly puts it, “debating the details of campaign proposals is, on some level, fantasy football for wonks.” But, he argues

Watching a candidate run his campaign’s policy processes is one of our best ways of predicting how he would run his White House.

The key word there, by the way, is run. Some of the most important decisions the president makes are about how to run the processes that translate vision into policy. Those decisions include whom to hire, which advisers to listen to, which ideas make sense, which strategies are likely to work. The presidency is one damn decision like that after another. Obama, famously, is so exhausted by the decision fatigue of the job that he wears the same color suit every day so he has one less thing to decide in the morning.

This is one way in which campaigns give us insight into presidencies. Presidential candidates also have to decide whom to hire, which advisers to listen to, which ideas are truly good ones, which strategies are likely to work. To make those decisions well, they need a sound philosophy, yes, but they also need to want to hear good advice, they need to want advisers who will tell them when they’re wrong, they need to have good instincts for when something they want to believe is true simply isn’t, and they need to be realistic about the strategies that are likely to work and the ones that aren’t.

A White House has to be run, for sure, and Klein is eloquent and correct on the work and care that entails. But I don’t think a campaign’s policy processes tells us anything much about that. Presidential campaigns are not presidencies. The goals, incentives, and constraints are entirely different. The “policy process” of a campaign begins first and foremost with the work of a campaign, which is to signal the interests and values of the candidate. Policy details are, for the most part, elaborated reactively, as competing candidates try to work out inconsistencies between opponents’ broad policy visions and the interests and values of the electorate they are vying to win over. Policy details are also elaborated to signal competence and to concretize interests. Detailed white papers are more than most voters are willing to work through, but their existence, especially if certified by trusted experts, may persuade voters of a candidate’s competence. One way to appeal to voters’ interests is to be able to make claims like “the typical American family will save $5200 per year if my policy is enacted”, but making that sort of claim without some pretense at a projection opens candidates to attacks on character and competence. Candidates face tradeoffs between the benefits of making speculative or ambitious claims and potential costs in perceived credibility. They also face tradeoffs between perceived benefits of making promises and the constraints those promises may impose on their future choices or credibility should they be elected. These are the factors shape the policy details they come to offer.

Certainly presidents have to sell policies to legislators, so you might argue that the sales job that is an election may not be not entirely alien to the process of governing. Mostly that’s wrong. What gets legislated is a function of constraints imposed by the legislature, and the interests that shape those constraints are very different from those of the open electorate. President Obama signaled in a State of the Union address his strong support for Universal Pre-K, as Hillary Clinton or Bernie Sanders probably both would in the context of this election. Universal Pre-K is good policy on the merits, and is popular with the public, but President Obama has made no effort whatsoever to transform his call into legislation. The skill that a President requires to get policy enacted is the ability, somehow, to get the constraints of the legislature and her own policy agenda aligned. That can be done Lyndon-Johnson-style, by backroom armtwisting; it can be done per Coase’s Theorem, with various kinds of side payments; it can be done as the prior Clinton administration did with welfare reform, by letting the administration’s agenda shift to become more hospitable to the constraints of the legislature; it can be done by creating outside threats, in terms of adverse public opinion and potential electoral risk, as Bernie Sanders proposes to do with his “political revolution”.

One certainly can draw connections between skills on display during an election and skills that will eventually be required to get policy enacted. It is not unreasonable to suggest that Hillary Clinton’s locking up of endorsements by political insiders at all levels might indicate real skill in Johnsonian arm-twisting and Coasean bargaining that will help her “get things done”. It is also not unreasonable to argue that Bernie Sanders’ remarkable success at organizing a grassroots donor and volunteer base and his clear intent (unlike President Obama) to ask those grassroots to engage publicly in conflict with political opponents, suggests a competence at creating electoral risk. Voters can and should consider these competing competencies, along with their adjudications of values and interests. But these competencies have little to do with the quality of the campaigns’ policy white papers. For the most part, wonk-quality is not a useful differentiator of presidential candidates.

Let’s look at an example. As Klein notes

There are plenty of criticisms to be made of Obama’s presidency, but I think the baseline competence of his administration has begun to dim memories of how important presidential management really is.

My own view of the Obama administration is mixed, but I am happy to second Klein here. I think the administration takes its policy process seriously, and generally does fine work along dimensions of technical competence. That doesn’t mean I endorse all of its work, or that the administration’s technical work is apolitical. It is not. All policy is ideological. Technical work carries ideology with it in how things are framed, what is assumed, and what is considered. Still, within the boundaries the Obama administration has chosen to define, its technical work is high quality.

But as Klein reminds us, eight years ago, on the core wonk controversy of 2008, Barack Obama took a position of astonishing technical incompetence. You can accuse Bernie Sanders’ campaign of touting optimistically shaded estimates or underplaying some costs, but his proposals are fundamentally sound in wonkish terms. Single-payer healthcare does work, and would eventually reduce costs, but the politics of getting there may be impossible, or we might have to tolerate a long transition period during which costs remain high to appease incumbents. What Barack Obama proposed in 2008 — universally accessible health care through individually purchased insurance without an individual mandate — was sheer absurdity. As Paul Krugman has reminded us many times, the Obamacare approach to universal insurance is a three-legged stool: guaranteed-issue leads to a death spiral without an individual mandate, and an individual mandate is unaffordable without subsidies, community rating + mandate + subsidies. (See also Ezra Klein.) If you think policy details during a campaign are the best predictor of the policy process of an administration, you would have expected very little of Barack Obama’s tenure. And you would have been wrong. I suspect that even at the time, Klein was not terrified that Obama would become his caricature of Jimmy Carter as a man whose good values were eclipsed by bad management. Obama signaled competence in ways that Klein could recognize, despite the fact that he took a ridiculous position on the core technocratic issue of the campaign in order to be more appealing to voters.

What I really think is going on is that humans, proles and elites both, have a wide variety of largely unconscious ways of reading candidates. Wonkishly inclined people don’t see themselves reflected in Bernie Sanders, as they did in Barack Obama and do in Hillary Clinton. For them like everyone else, that leads to skepticism and mistrust. But wonkishly inclined people tend not to leave it there. They are verbal, they regard themselves as rational, and so they rationalize. But Klein’s rationalization is, I think, not ultimately supportable. Neither the wonkishness of the candidate nor the quality of campaign white papers is a predictor of the success of a presidential administration. As Klein points out, George H. W. Bush was no wonk, but he was a good manager and in retrospect a decent president. From the perspective his supporters, Ronald Reagan was a phenomenally successful president, but he was no wonk, and I suspect his campaign white papers weren’t anything special either. Johnson, JFK, FDR, admittedly, the farther back we go, the harder it is to “measure” analogues of the contemporary wonk. But I don’t think you’ll find sustainable a theory of campaign policy details as a reliable predictor of actual policy competence. I think wonks, like other humans, have a tendency to see what they want to see, and to reach for theories that flatter their own views and that elevate their own role in the democratic process.

Your theory of politics is wrong

I support Bernie Sanders in the Democratic primary. I don’t support Sanders because I think he is brilliant in some academic way. I don’t support Sanders because I am particularly impressed with the details of his policy proposals, although they are not nearly as hopeless as some self-proclaimed technocrats make them out to be. A democracy is not a graduate seminar.

It is not that I am for Bernie Sanders, but that Bernie Sanders is for me. Bernie Sanders, more than any politician who has ever had a serious shot at the office of United States President, represents my interests and values. By that I don’t mean my interests in a narrow, self-interested sense, but in his vision for what kind of country my country can and should be.

A democratic polity does not elect a technocrat-in-chief, but politicians whose role is to define priorities that must later be translated into well-crafted policy details. Paul Ryan’s various budgets haven’t been wrong because they require giant magic asterices to make the numbers add up. They have been wrong because the interests and values Paul Ryan represents are wrong. The magic asterices don’t reflect dumb mistakes, but smart politics. The problems of our polity do not arise because one faction or another is too stupid to do high quality science. If your interests are the interests of the fossil fuel industry, and you are unwilling or unable to transcend the narrowness of those interests, then confusing the public about the science of climate change is a mark of intelligence, not stupidity. Being smart is great. You may be proud of your GRE scores, your PhD, your Nobel Prize even. And deservedly! But raw intellect is not scarce, and no faction holds anywhere near a monopoly.

In a democratic polity, wonks are the help. The role of the democratic process is to adjudicate interests and values. Wonks get a vote just like everyone else, but expertise on technocratic matters ought not translate to any deference on interests and values. If your theory of democracy is that informed citizens ought to cast votes based on the best social science, you have no theory of democracy at all. If you are honest, you will follow your own theory where it leads, as Bryan Caplan has, and work to limit democracy. But Caplan, whom I love, is mistaken, because he begins with a mistaken theory of politics. If you want to see how that theory of politics works in the real world, look no farther than the European Union, which is a real-time experiment in demoting democratic adjudication of values in favor of technocratic adjudication of facts. I know, you don’t agree with their science. Their economists haven’t died quickly enough to realize that a decades-old consensus has been discredited. Technocracy, like communism, like capitalism, has never been tried. Elevating technocracy above democracy is similar to, and as insidious as, letting military power escape civilian control. The problem with life under military rule is not that the army lacks patriotism, or that it doesn’t mean well. But the interests of the military are not the interests of the polity, and we invented democracy because human beings have a tendency to confuse their own interests with the public’s. The interests of the class of humans who might reasonably qualify as technocrats are also not the interests of the polity.

So, I am for Bernie. I am not against Hillary. But just as it’s foolish to say that Democrats and Republicans are “all the same” because they are both corporatist parties, it is foolish to claim that Bernie and Hillary do not represent meaningfully different interests and values. I’ll enthusiastically support either Bernie or Hillary over a Jeb Bush, Marco Rubio, Ted Cruz, or Donald Trump. But it is Bernie Sanders who is for me, and I’m supporting him without apology. If your interests and values are my interests and values, I hope that you do too.

Update History:

  • 16-Feb-2016, 1:00 a.m. PST: “which is a real-time experiment”