Tree Don't Care What A Little Bird Sings

I have not read much of Robert Fogel's work, not much at all, but I may need to read more of it. A Fine Theorem, one of the more under-appreciated blogs, has a summary of Fogel's Without Consent or Contract. Here's part of it:

... the paradox rests on the widely held assumption that technological efficiency is inherently good. It is this beguiling assumption that is false and, when applied to [American] slavery, insidious.”  

Roughly, it was political change alone, not economic change, which could have led to the end of slavery in America. The plantation system was, in fact, a fairly efficient system in the economic sense, and was not in danger of petering out on its own accord.

Here's the rest.

There are multiple views of the politics of technology. (Technology is, at its core, information aggregation.) One says that technology is liberating. Another says that technology is enslaving. Another says that technology is fueled by the state for purposes of control. (Oddly, skeptics of markets often make the first point of that point without understanding that the second point is the corollary.) Technology can destabilize the political equilibrium (but does that only apply if it goes in one direction? I doubt it). It's worth googling a bit for the views of Farrell, Drezner, and Lynch on this. It's worth noting that modern authoritarian regimes try to get to the technological frontier as rapidly as possible but they tend to have a tough time managing it. Francis Spufford's Red Plenty is on sale at Amazon right now, if you don't mind probably giving some of your metadata to the NSA.

Sarah Jaffe (on Twitter) asked for a political economy of the surveillance state. (Here's a short take, not very good.) I haven't got the time or background knowledge to build a real model, but if I was going to I'd start with Tilly and Scott and Weber at the foundation and ask what purpose this really serves. Knowledge is power, is it not? Power is needed for protection (in the Tillian sense), is it not? After that I'd go to Orwell like everyone already is, but not the dystopian cliches. Remember in 1984 that Winston Smith was pretty much the only one in society bothered by Big Brother. (Probably not, if you've read your Timur Kuran, but as far as Smith could tell he nearly enough was.) Everybody else just got on with it. The proles sang their songs and read their magazines. Sure, Julia was a bit inconvenienced by the whole thing, but it's not like she really had principles.

Now think about Havel. Now think about samizdat. Is information so easily controllable? Can the state not oppress on the basis of allegation, innuendo, or missing data? Can the citizenry not resist simply by living? Does the state need all information to "keep the locals in line" or just a vague threat -- the vaguer the better? Corey Robin addresses this and gives a precis of his book on the politics of fear. Stalin didn't have Bukharin's metadata... just the ability to credibly say "we know where your kids are". That hasn't changed. Yglesias is right: the biggest thing to fear from the surveillance state isn't the state, per se. But that's a micro story, and micro stories can dictate macro policies.

The U.S. public is not concerned about this. To the extent they are it's for partisan reasons, not out of principle. Note that this is not new. Note that, so far, it appears that these programs are legal at least in broad terms. Intellectuals are more concerned that the median pollee, as they should be, since they are much more likely to be targeted than a randomly-selected person. (If I was Glenn Greenwald I'd go back to snail mail and pay phones for a good long while.) But so? Democratic politics does not guarantee puppies and roses. As we debate whether or not this is constitutional we should remember that James Buchanon's insights do not only apply to economic policy. We should also remember that politicians and celebrities have been subject to heavier levels of scrutiny than this for as long as there has been human society.

Data, even metadata, can be used for ill. (Or good, as the case may be, since the 21st century version of Paul Revere is probably someone Healy wouldn't meet for a beer at Ye Olde Tavern. Possibly this isn't what Healy's driving at.) But let's not get carried away. The U.S. government is sophisticated in many ways, but this program has only $20mn in funding. Let's say they spend $5mn of that on high-powered computers (that's probably less than what the supercomputer I ran a bunch of my dissertation on cost), and the rest on twenty-somethings making $200k/year each (as Snowden apparently did). That's 75 guys trying to make sense of the 2.5 quintillion bytes of data created each day. Good luck with that. (No I don't believe only $20mn was funneled into this. Not for a moment do I believe that. But I'm not sure how much $20bn could really do absent some good old fashioned police work.)

So after you've read the Spufford (or even before) you might want to read some of the discussion at Crooked Timber on the book. See especially this wonderclass by Shalizi which has as much to say about social science theory and methods as it does about historical political systems or the contemporary political economy of the surveillance state or novels. The key question is Shalizi's first one: what is being optimized?

Then recall that Hayek's slippery slope is a logical fallacy to which the historical record is not kind. Should we be less concerned? Probably depends on how concerned you were in the first place... anonymity is a myth.

Remember too that the government oppresses and kills and makes terrible decisions when it doesn't have good intelligence. Given that, is the expected utility of (American or other) society better or worse with PRISM or without it? Apparently this program stopped one or more attacks at the London Olympics. What would the cost of those attacks have been? Was preventing them worth $20mn dollars plus some false positives? (The TSA spends $6.5 billion a year and probably gets almost nothing for it.) Could PRISM have stopped Nidal Hasan had it been better-implemented? If it could have, would it be worth it? We are quite literally behind the veil of ignorance at the moment (just a bit less in the wake of Snowden's leaks), but if we take engaged citzenry to be a desirable normative end in itself we need to put our Bayesian caps on now and start updating our priors.

What tail event has a greater probability: that this program is abused in such a way that it devastates liberal society, or that it prevents a significant attack the fallout from which would devastate the same society?

In the end the biggest repercussions of NSA spying might be felt in the US-EU trade negotiations.

Nevertheless, I oppose PRISM and related programs very strongly. I do so because I am not risk-averse.

I believe this is the most Cowen-esque thing I've ever written. I also believe that every link in this post is worth clicking on.

Marginalia

Corey Robin has written a long article arguing that Austrian economic thought and marginalism in general is descended from Nietzsche. Hence, Hayek et al are a bunch of aristocrats dedicated to oppressing society. I'd be happy to be persuaded that the marginalists -- at least as Robin uses the term, which isn't the only way -- are Nietzschean, but Robin's article didn't do it. Too many strong assertions based on tenuous evidence, and Robin is not exactly an impartial observer. This follow-on John Holbo post -- while exceptional in many ways -- doesn't do it either. Partially because it rests so heavily on a peculiar (I think) reading of this quote from Hayek in The Constitution of Liberty:

To grant no more freedom than all can exercise would be to misconceive its function completely. The freedom that will be used by only one man in a million may be more important to society and more beneficial to the majority than any freedom that we all use.

This does not have to mean that "some people’s freedom is a lot more valuable than other people’s freedom", as Holbo wrote in a previous post and quotes here. In light of the rest of Hayek's work (or even the rest of the passage from which this quote is pulled: see below) it is strange to argue that this passage means anything like what Holbo thinks it means: "Ideally, we would find that one man and even make all others his slaves, if that is what it took to let him exercise his freedom to the fullest. Hayek thus affirms a freedom monster argument somehat analogous to the classic pleasure monster reductio."

The Hayek quote refers to the exercise of liberty, which may not be universal even if the liberty is extended universally. Hayek is arguing that it does not follow from the fact that the exercise may be non-universal that the liberty should be restricted. Instead, those who would exercise their liberty should be free to do so. In fact, there are a million liberties. None of us can act on all them, but all of us will act on some of them. Restricting liberties that the majority isn't exercising may be tempting, but it would be wrong to do so since the exercise of liberties leads to the improvement of society. That's the argument.

To get from Hayek to Holbo's interpretation of Hayek you have to take a few steps. First you'd have to ignore the footnote on the very passage Holbo pulls, which contains this quote (from some people I've never heard of): "If there is to be freedom for the few who will take advantage of it, freedom must be offered to the many." How does that imply enslavement of the masses for the benefit of one? Suppose I proposed universal suffrage while acknowledging that many people will stay home on election day. Would that make me anti-democratic? It's a strange argument.

Hayek believes that social progress occurs partially through experimentation, the results of which are ex ante unknowable. The "unknowable" part is extremely important for Hayek. It's how he can simultaneously support a welfare state and public provision of public goods while opposing egalitarian redistribution and social ownership of the means of production. "Knowable" advances can be socially planned, and Hayek was fine with using the power of the state to do so. ("It is the character rather than the volume of government activity that is important.") Unknowable advances cannot be planned but are nevertheless desirable, thus experimentation must be allowed through constitutionalization and encouraged by the preservation of (market) reward for experiments that succeed. Holbo is correct that this is Millian -- J.S. Mill's "utilitarianism" is dynamic, not static: society benefits at time t+1 from the exercise of individual liberty at time t. Whether this is actual utilitarianism or something else is, I suppose, the question -- but wrong when he implies that Mill, by way of Hayek, was Nietzschean.

Hayek seems to believe that the majority of society will choose not to experiment because they are risk averse -- "The freedom that will be used by only one man in a million..." emphasis added -- or because they are exercising some other liberty, but it is socially optimal to have somebody doing some experimenting. Those who are interested in doing so, those who will exercise their liberties while others do not, should be allowed to do so, since society will benefit if they succeed. The rest of the passage in The Constitution of Liberty quote above goes:

The less likely the opportunity, the more serious will it be to miss it when it arises, for the experience that it offers will be nearly unique. It is also probably true that the majority are not directly interested in most of the important things that any one person should de free to do. It is because we do not know how individuals will use their freedom that it is so important. If it were otherwise, the results of of freedom could also be achieved by the majority’s deciding what should be done by the individuals. But the majority action is, of necessity, confined to the already tried and ascertained, to issues on which agreement has already been reached in that process of discussion that must be preceded by different experiences and actions on the part of different individuals. 

The benefits I derive from freedom are thus largely the result of the uses of freedom by others, and mostly of those uses of freedom that I could never avail myself of. It is therefore not necessarily freedom that I can exercise myself that is most important for me. It is certainly more important that anything can be tried by somebody than that all can do the same things… What is important is not the freedom that I personally would like to exercise but what freedom some person may need in order to do things beneficial to society. This freedom we can assure to the unknown person only by giving it to all.

How can one (e.g. Holbo) read this and come away thinking Overman? It's more like the open source movement. Which makes sense, since Hayek's view on this goes back to his 1945 essay "The Uses of Knowledge in Society". He argues there that because much knowledge is local, and centralized planning cannot incorporate local knowledge, that centralized planning will fail. This argument is what he's drawing from to say that the exercise of liberty by some -- who are in possession of local knowledge not available to all -- is not suboptimal.

Now, possibly you could argue that Hayek's view of the masses is too dim (even though he includes himself in them) and that is where the aristocracy comes in and takes us to Nietzsche. Or possibly you could argue that the "knowable" advances are greater than the "unknowable" advances. Indeed, this is the argument against which Hayek dedicated himself to in writing The Constitution of Liberty, which was published in 1960 -- a time after Sputnik when Paul Samuelson was predicting that the USSR's GNP per capita would surpass the US's within a generation or so -- so you'd at least be meeting him where he is. The question Hayek is trying to address is whether society will benefit more from planning or from spontaneous emergence. He obviously believes it is the latter. He may be wrong, but not because he's a Nietzschean.

The better argument is the one made by Amartya Sen: it is not necessarily local knowledge which precludes some from exercising certain liberties, but rather material opportunity. It may not be that some will not exercise their ability but that they cannot do so. In this case they are not free. Hayek says almost nothing about this directly, but does say that just because some are free does not mean that all should be enslaved. Those who can exercise their freedom should do so, as this will provide benefit for society.

This is the point, I think, that Hayek goes astray. His argument about the importance of local knowledge and decentralization falls apart when those with local knowledge cannot employ it and opportunity is centralized. His claim that innovations by the few will benefit the many is empirical: sometimes they do, often they do not. His argument that order is spontaneous is contingent, in other words, not a law of nature. Complex systems can, and do, break down. To simply admit does not require giving anything else up.

But, again, this is not Nietzschean. Which is why Objectivists do not like Hayek. This is an argument that Hayek should revise his beliefs to include a role for a marginally bigger -- although not fundamentally different -- state, or some other redistributionary apparatus. This is doable using Hayekian language, even if Hayek himself and many of his supporters recommend a minimalist state. Hayek is reconcilable with somewhat-modest forms of social democracy, in other words, and social democracy is reconcilable with a deregulated-but-redistributionary political economy.

But to do that you'd have to admit that Hayek was not quite a moral monster. Corey Robin is dedicated to showing that the right wing is authoritarian in all its guises. He believes that when Hayek writes "Why I Am Not A Conservative" he simply cannot be trusted: he's a reactionary like all the rest, and all the rest are motivated first and foremost by a lust for exploitation and oppression. There is nothing inherently wrong with this intellectual project, and I've learned a lot by following it. But it is inherently limiting at the same time, and it commits one to answers before questions have even been asked.

It Isn't Always Appropriate in Comparative Politics, Either

Jay over at the Dart-Throwing Chimp  extends the argument we have been making here and in print about the mismatch between the complexity that characterizes the real world causal mechanisms we study and the research designs we typically employ to study them. Though we have focused on the implications of this mismatch for studying politics in the global economy, Jay extends the logic to comparative politics. He suggests that it is "impossible to understand persistence and change in national political institutions without thinking about how those institutions are embedded in a larger global context." As he elaborates:

We’re stuck in a complex adaptive system that doesn’t really distinguish between national and international, political and economic, human and natural, and our theories of stability and change in political institutions should take that whole more seriously...The simplifying assumption that states are separable units certainly has its uses, but we shouldn’t conflate that utility with causal relevance. Like maps, all models are simplifications, but those simplifications aren’t useful if they ignore the very causes they’re meant to locate.

Of course, I think Jay is absolutely correct. It makes no sense to speak of the third wave of democratization (or the second or the first waves, for that matter) without recognition that some sort of global process may be at work. It makes no sense to speak of the Arab Spring (or is this the fourth wave?) without recognition that some sort of regional process may be at work. And, as Jay points out, the issue isn't that students of comparative politics fail to recognize these cross-country dependencies and the issue isn't that we lack statistical tools to address them. The issue is that the modal approach to theorizing is to theorize about states as if they are independent. And so as a general rule, they are omitted from theories and empirical models.

It seems that we might theories and methods are now emerging that allow us to develop and evaluate theories that incorporate explicitly these dependencies. They could be applied fruitfully to comparative political development, as well as to international and comparative political economy.

Against Ceteris Paribus Theories of International Relations, A Prelude

A quick hit from me, as I'm swamped with dissertation work and am also in grading purgatory. But this, via Tyler Cowen, is interesting:

Since 2008, in response to the economic downturn, most big European countries have cut defence spending by 10-15 per cent. The longer-term trends are even more striking. Britain’s Royal Air Force now has just a quarter of the number of combat aircraft it had in the 1970s. The Royal Navy has 19 destroyers and frigates, compared with 69 in 1977. The British army is scheduled to shrink to 82,000 soldiers, its smallest size since the Napoleonic wars. In 1990 Britain had 27 submarines (excluding those that carry ballistic missiles) and France had 17. The two countries now have seven and six respectively.

And yet Britain and France are commonly regarded as the only two European countries that still take defence seriously. The British point out that, even after the current round of cuts, the UK will have the fourth-largest military budget in the world. Britain is also, for the moment, one of only two European nations to meet the Nato target of devoting 2 per cent of gross domestic product to defence – the other is Greece.

The situation in most other European countries is worse – Spain devotes less than 1 per cent of GDP to military spending. And much European military spending goes on pensions or pay, not equipment. The Belgians distinguished themselves in the Libyan campaign of 2011. But about 75 per cent of Belgian military spending now goes on personnel – causing one critic to call the Belgian military “an unusually well-armed pension fund”.

Britain and France now have one aircraft carrier... combined (they share it). What this means is that the US now accounts for 50% of the world's naval power.

Why does this matter? For awhile I've been hoping to carve out time for a short article with the working title "Against Ceteris Paribus Theories of International Relations". It is intended as a retort to those who claim, based on stylized comparative statics, that US military spending is essentially wasted and therefore those funds should be re-directed either to shoring up the social welfare state or tax rebates. (As of now I'm planning on targeting John Quiggin particularly, who has made similar arguments to these in especially egregious form on numerous occasions, but the scope may broaden, narrow, or shift in some other direction at the point of writing.)

In other words, the article will argue that if the US significantly lowered its military spending the effect would be dynamic, not static: an increase in security dilemmas worldwide, which would be marked by a large and sustained increase in military spending in the non-US world. The net effect could very well be great global military spending; this would be something of a tragedy on its own, since most military spending does not go to uses which expand human dignity and well-being. But it could be worse if security dilemmas lead to arms races which spiral into conflict.

The core of the argument will be this: take away 50% of the world's naval power... do you think anything else might change? Put into the language of economics, some sectors of the economy are natural monopolies; it just wouldn't be efficient to have 100 different telephone companies putting up poles all over the place. Similarly, from the perspective of global welfare, it is probably more efficient for the US to spend disproportionately on its military. There are downsides to this, of course, similar to market monopolies. Nevertheless, the most efficient outcome is likely for the US to out-spend the rest of the world to such an extent that security dilemmas (and concomitant arms races and conflict) do not result, accepting the negatives that go along with this positive.

Anyway, that paper is roughly 20th in the queue so I'll probably never get around to it.

When Is Reductionism Not Appropriate in Theory?

In "The Reductionist Gamble" Oatley actually makes a weak argument: we can't know when outcomes we observe are independent from each other (what he calls data-generating process (DGP) "A") and when they are not ("DGP B"). In Oatley's framework assumptions regarding the DGP may be trivial in many cases even if they are not always trivial. Oatley, in other words, is arguing that our inability to directly observe the data-generating process should make us humble and encourage us to investigate international politics under a range of assumptions regarding the DGP. Instead, IPE -- at least as it is represented in the APSR and IO -- has honed in on one: the Open Economy Politics (OEP) paradigm, which he calls "reductionist" because it assumes independence of observations, both theoretically and methodologically, and because it recommends beginning analysis at the lowest unit-level (individuals or firms), while bringing in systemic effects only when necessary. Oatley argues, persuasively, that in some cases the assumption of independence will be false, and when it is false the reported empirical results are not reliable.

In my view this argument should be uncontroversial. Oatley is not saying that all OEP research is wrong, nor that most of it is; he's merely saying that OEP contains a critical assumption which ought to be justified more regularly than it is. This is Research Design 101. Since it is not, there is a strong likelihood that some unknown percentage of OEP research has been done under false premises, and is therefore biased in an unknown direction. Oatley re-estimates several empirical models central to the literature, while adding terms which allow for conditional "systemic" effects, and finds that the reported results are called into question.

I'm going to make a stronger argument, in speculative form (i.e. I'm trying to be a bit sensational): almost all of the theoretical traditions in IR/IPE suggest DGP A is not a trivial assumption, but most of our research designs go on to assume DGP A anyway. My argument is that, in the typical case, our empirical design does not match our theoretical structure.

Regarding Oatley's post (and article), it might be helpful to think of some of the major theoretical orientations in IPE -- within which mid-level theories are ostensibly embedded -- and place them into different bins: those which assume independence of observations (DGP A) and those which assume non-independence of observations (DGP B). For these purposes, "observations" refers to realizations of some outcome at a given unit of analysis. The outcome could be "amount of trade" or "incidence of war" or "occurrence of a financial crisis". The unit of analysis could be states, firms, or advocacy groups. To greater or lesser extent, all of the prominent grand theories involve an assumption of non-independence: DGP B. David Lake (and presumably other OEPers) hate isms so this might not be of interest to them, but it's useful as a starting exercise.

1. Various realist theories suggest that states will modify their behavior in response to the international environment within which they operate. In particular, state behavior is conditional upon the underlying distribution of power in the system. If that is the case, then treating states as if they are realizations of independent and identically distributed observations is not theoretically sound: the behavior of state A is reactive to the behavior of state B, and is contingent upon the underlying distribution of power in the international system. Economic coercion, "redistributive cooperation", the structure of trade, and other outcomes are responsive to interactions between states.

2. Institutionalists argue that the behavior of international actors is modified by the ways in which they interact. Membership in common organizations -- e.g. the WTO -- can have an impact on common outcomes -- e.g. increased dyadic trade -- even after controlling for domestic factors. The US, for example, does not decide how much it should trade based solely on local factors; how much the US trades depends at least partially on its ability to find willing trading partners. This logic is easily extended from dyadic relationships to systemic relationships: the amount that the US trades with France may not be independent of the amount that the US trades with the UK, by virtue of the common membership of the US, UK, and France in organizations which are designed to facilitate trade. In this way, we are starting to understand that even pairs of states are not independent from other pairs of states, much less individual states. Indeed, even the most vigorous findings in a dyadic context -- such as the democratic peace -- often have trouble holding up in a systemic analysis.

3. Varieties of constructivism also think in terms of DGP B. The identities, beliefs, and actions of agents cannot be understood outside of the social structure within which they exist. For constructivists, interests are not assigned according to immutable materialist Laws of the Cosmos, but emerge via processes of interaction. Thus, it is nearly impossible for constructivists to theorize about social actors and entities as if they existed independently from one another.

4. In its most basic form, which has obviously been complicated in thousands of ways, Marxists believe that the material conditions of society lead to exploitation and imperialism, and that this is a global phenomenon. E.g., the exploitation of labor in the global South is a necessary component of the enrichment of capital in the global North. It is thus impossible to explain the outcomes in the "base" of society -- e.g., employer-employee relations -- without reference to the "superstructure" of society -- its organization of political power. Because capitalism is a global phenomenon, the superstructure is itself global in nature. Therefore, employer-employee relations in Britain are not independent of the British imperial exploitation of the Indian subcontinent. Treating the two as if they were same misses the entire point of the theory.


5. First wave IPE was concerned with "complex interdependence". The name itself implies that an assumption of independence of observations is not warranted (even though its authors didn't generally argue in those terms), and that patterns of dependency will not be simple or monotonic. There were varying types of interdependence that Keohane and Nye were concerned with. Among them was the non-independence of the economic system from the political system; the impact of transnational nonstate actors in influencing power politics; the effect of international integration on the formation of states' perception of interests, the effectual nature of international institutions, etc. There is no contemporary research paradigm centered on complex interdependence (yet), but this rhetoric has colored IPE theory ever since the 1960s. In a recent essay, Robert Keohane professed some nostalgia for the "Old IPE", which focused on complex interdependence, over the new IPE which assumes it away (at least methodologically). He expresses hope for the future by way of diffusion and network analyses; methods which do not assume unit independence:

[T]he null hypothesis that national governments make decisions independently is not sufficient to explain the spread of liberalism or of convergence in certain sectors. Competitive pressures seem to play a major role, and there is some evidence, less clear, that coercion, learning and emulation also are significant factors. In other words, the distinctively international and transnational processes studied by IPE have to be brought back into the picture. 

Moving to theoretical orientations which are often thought of as being "middle range", and thus in the wheelhouse of OEP, we can consider:

6. Theories of globalization posit non-independence in many ways. "Golden straightjacket" and "race to the bottom" models believe that global forces coerce national governments to behave differently than they otherwise would, largely in response to market structures and the nature of strategic interactions with other states as well as market actors. Even careful studies which have complicated these accounts have concluded that policymaking at the national level responds to international developments in strong, if narrow, ways. Other theories of globalization focused on cultural hegemony, homogeneity/"Americanization", and a diffusion of norms and practices across countries all argue that what happens in Country B is not independent of what happens in Country A. That assumption is a necessary component of DGP A.

7. The long tradition of dependency theory obviously requires non-independence. Some read Oatley's "Reductionist Gamble" (and a subsequent article forthcoming in Perspectives on Politics) and thought he was advocating for a return to dependency theory, because of language like "core" and "periphery". That's not unreasonable, although I don't know if Oatley would claim the mantle. Dependency theory has been making a comeback in other corners of mainstream IPE as well.

8. Many developments in trade theory suggest that a focus on domestic factor endowments and political institutions (as exogenously-given) are missing a lot of the picture. New trade theory in economics suggests that scale economies play a major role in determining the type and size of trade, quantum trade theory argues that "beachhead costs" and other factors influence how and why governments might invest in trade-generating policies. We've employed gravity models which explicitly assume that the probability of trade relationships forming is not equal across all observations (while only allowing for several forms of dependence, especially proximity and the size of a state's internal market. We're beginning to look at how the structure of trade networks impacts the establishment of future trade. All of the major advancements in economic and political theories of trade over the past three decades have been at the expense of an assumption of independent and identically distributed observations. All of our theoretical improvements, in other words, make it harder and harder to assume DGP A.

9. Transnational financial flows also involve complex processes which make independence a questionable assumption. How do countries get "lumped in" to categories by investors, so that what happens in Thailand has an effect on Indonesia? How does petrodollar recycling lead to a crisis in Brazil? How might US Federal Reserve policy have influenced the Arab Spring? How could a collapse in home prices in the US threaten the existence of the European Union? All of these questions require a theoretical structure which assumes non-independence: DGP B.

I could go on, but I'll stop here. The point is that it's hard to think of a major theoretical orientation -- whether "grand theory" or "mid-range theory" -- in IPE that establishes DGP A. And yet the dominate research paradigm -- open economy politics -- explicitly argues in favor of such an assumption. There is a disjuncture here.

I believe this is why does an article like "The Reductionist Gamble" resonates with some and infuriates (or confuses) others. Why should such an article exist in the first place? How did we get to this point? That will be the subject of my next post.

Why Political Scientists Should Take Political Science Seriously

Warning: This post is intentionally inflammatory, over the top, and abrasive. Also, some claims are over-stated. Nevertheless...

So I was just going on a rant to my wife the other day about how we IR folks frequently waste our time because we don't know what other (non-IR) political scientists are doing. For example, the big trend in studies of trade politics now is to find new and novel ways to figure out what peoples' trade preferences are. So scholars are spending tons of time (and sometimes money) running surveys and experiments to figure out whether attitudes towards trade reflect sociotropic interests or self-interests.

All fine and good, but ultimately it just doesn't matter. Why? Because no election in American history  has ever been a referendum on trade policy.* Hardly any elections are decided on foreign policy more generally. Study after study shows that voters don't care about foreign policy, don't know about it, and don't change their vote because of it unless something has gone horribly, horribly wrong. That is, if IPE knew any damn thing about what political scientists who study American politics know we'd leave trade preference formation to the psychologists (and preference aggregation to the Americanists). And if security scholars actually took domestic politics seriously they likely wouldn't've wasted thousands of pages on audience costs, or the "transparency" of democracies vs. non-democracies as causing them to be more peaceful overall (which they aren't).

Instead, we've got reams of literature showing contradictory results regarding the link between trade preferences and policy, and the existence/non-existence of audience costs and democratic propensity for conflict, and then we try to figure out how to rectify these divergent results. Well the answer is to ignore them completely -- at least in the case of the U.S. -- because the supposed mechanism doesn't exist. We would know this if we paid attention to political scientists working in other sub-fields.

This is prompted by this post from Nexon:

Among other things, Saunders argues that theories of “democratic international relations” — particularly those surrounding audience costs — need to incorporate a central insight from the last fifty years of American politics research: that most voters are “low information”* when it comes to most things political–and especially foreign policy.** Thus, elites who provide “cues” to the voting public in general, partisans, ethnic groups, etc. are often key intermediaries in the relationship between foreign-policy and electoral pressures. ...

Saunders spent a lot of time walking us through arguments about low-information voters, partisan cueing, and various aspects of contemporary theories of political behavior. During the Q&A period, I asked her, basically, “why are you spending all this time telling us things we already know when you could be using that to further elaborate the implications for international-relations theory?” She responded that, in essence, when she presents the paper, “about half the time” she gets “that reaction”; “the other half of the time people are surprised.”

My reaction to this was, more or less, how could anyone working in political science in 2013 not know this stuff? I don’t mean know it well – I certainly don’t know a lot of the relevant literature or the intricacies of key debates — but rather: know the basic contours at all. And after the last few Presidential campaigns? I suspect most readers of this post will have the same reaction.

My reaction is that social scientists don't take social science all that seriously, and they take the work of other social scientists even less seriously. When was the last time an IR scholar cited The Macro Polity to note that foreign policymakers are generally not constrained by domestic mass politics?

I can't believe I'm even typing this, but despite its many (theoretical, empirical, rhetorical, etc.) flaws a book like The Israel Lobby is at least on the correct track. Foreign policy can be influenced by strong domestic interest groups and is influenced by strong domestic interest groups, so when IR folks study domestic politics we should probably focus on which groups are doing the influencing, rather than inferring causal relationships from mythical qualities of regime type.

I'm sure there are times and places in which foreign policy is exceptionally salient for mass publics. I know, for example, that common people pay lots of attention to exchange rates in Japan. I'm sure that the typical Greek pays more attention to central bank activities than the modal American. But to acknowledge this is to reinforce my point: if we in IR are going to theorize about domestic politics, we cannot simply assume that all polities are the same in all times and places. And we especially cannot do that when comparativists (yes, Americanists are comparativists) are telling repeatedly that that is not the case.

*This is not to say that campaigns will never use trade policy to target particular groups like, say, sugar growers in Florida or steel manufacturers in Ohio. They will. Occasionally winning the support of these groups might even be critical for winning elections. Interest group politics is real, and IR folks should be concerned with the phenomenon. But knowing what the median voter thinks on "trade" as a general intellectual concept just isn't very helpful.

When the Positive to Normative Two-Step Goes Wrong: Scientists, Engineers, and Ideologues

Noah Smith has a nice post running down the history of modern macroeconomics through the lens of Greg Mankiw's "scientists vs. engineers" taxonomy. This is another way of framing the Saltwater vs. Freshwater debate, but instead of calling it a "debate" Mankiw wants to make it a division of labor. Smith, however, is having none of it:

Note that if the microfoundations are misspecified, it doesn't matter whether a model satisfies the Lucas Critique or not. Even if "tastes and technology" really are policy-invariant things, if tastes and technology don't really work the way the model says they work, the model will not give you useful advice about policy. 

Now, terrible microfoundations might not lead to a terrible model. But if by some lucky happenstance, crappy microfoundations produce a model that matches the macro facts, then it might as well be one of those "aggregate-only" models that Greg Mankiw labels "engineering". In this case, RBC has no theoretical advantage over a New Keyneisan model.

Emphasis added. On another day I might have wanted to get involved in this discussion on its own terms, but for now I'm interested in something else: the shift from positive argument to normative argument. It's a subtle two-step, but it happens all the time in the social sciences. Here's how it generally works. Some social scientist will say: "Given that the world works according to mechanism X (as I've just demonstrated), we should do Y." Often the "we should do Y" is masked by caveats, hedges, and other devices which allow one to walk back the initial claim; nevertheless it is almost always there in some form in almost every piece of social science research. Or if not in every particular research article, in the paradigm within which the article operates.

The problem arises when when the positive argument -- the part that goes "Given that the world works according to mechanism X" -- isn't true. And by "not true" I don't mean "not strictly true but true enough as an approximation of reality that the model works out alright". By "not true" I mean sufficiently false that the model doesn't actually work out alright. In that situation, the positive argument goes away and the normative argument is all that remains. When people advance normative arguments as if they had a valid positive argument underlying them, but they do not actually have such a positive argument, they are not doing anything like science, as Smith rightly notes:

So basically, I charge that the New Classical/RBC/freshwater macroeconomics paradigm is not really science, and not really like science...not yet, anyway. In science, evidence rules all; if a model doesn't fit the evidence you toss it out.

Once again, I'm less interested in the particulars of Smith's case than about the phenomenon he's highlighting. To go back to Mankiw's taxonomy, if the "scientists" aren't doing science and they're not doing engineering either, then what are they doing? Restated, once the foundation of the positive to normative two-step crumbles, what intellectual project remains? It is ideology, and its practitioners are ideologues.

Take an example closer to (my) home. Stephen Walt writes a blog with the grandiloquent subtitle "A Realist in an Ideological Age". This is meant to suggest that Walt recognizes the world as it actually is whereas his opponents are in denial or a state of intellectual confusion. It is a claim that the positive argument is on his side -- the world works according to mechanism X, which in this case means that (all) states pursue their national interest above all else, especially security as measured by relative power differentials -- therefore his normative prescriptions (and perhaps his frequent proscriptions as well) -- that therefore the United States should do Y, which is to also maximize its national interest, especially security as measured by relative power differentials -- are sound wisdom. This attitude is made clear by the William Arthur Ward quote at the top of his page:

The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.

Walt is clear on which of these he believes himself to be. The realist cannot change the wind. The realist can only adjust to it. And in fact the realist only should adjust to it, since complaint is wasted effort and optimism is folly. Yet in almost every one of his blog posts Walt writes something like this:

Instead of harping on our "global responsibilities," Americans ought to focus instead on their national interests. The litmus test of any foreign policy commitment is not what it will do for others, but rather what it will do for us.

Walt has spilled quite a lot of ink describing how and why the United States has lost its way, has forgotten its national interest, and how this has caused a series of catastrophic mistakes in both foreign and domestic policy. Can you tell the problem?

The problem, simply, is that if the United States is not pursuing its national interest, as defined by Walt, then there is no reason to believe everyone else is either. And if everyone else is not, then the "wind" is not blowing in the direction that the realist believes it is: the positive argument that supposedly justifies the normative claim is false. Perhaps some conception of "national interest" other than maximizing one's relative power is in operation. Perhaps states pursue a range of interests at different times and in different places. Perhaps the entire notion of a singular "national interest" is misguided. Perhaps different groups or individuals use the power of the state to pursue group or individual interest. Whatever. Something about Walt's foundational positive argument is not correct. As a result his normative advice is a non sequitur.

When this happens the positive to normative two-step is reduced to just one step: make a normative claim, advance it whenever you can, and defend it at all costs. This is not science and it is not engineering; it is ideology. For the purpose of this post I do not claim that ideology is inferior to science or engineering, but I do claim that ideology which masquerades as science or engineering should be resisted in order to preserve the latter two categories as distinct and worthwhile.

This is something that social scientists struggle with, because it involves admitting that we could be wrong. About everything. Nobody likes being wrong but intellectuals hate it because our status and income is predicated on our not being wrong. So, sometimes, we transition from scientist or engineer to ideologue -- probably without realizing it -- and once we've gotten there it's very hard to find our way back. Eventually we end up advancing arguments that are contradictory in order to defend our ideology, rather than casting aside the ideology in favor of science or engineering, all the while continuing to claim the mantle of science as our own. This is a grave mistake.

On Obama, Race, and Political Survival

Ta-Nahisi Coates has been (rightly) given a lot of praise for his thoughtful essay on how race relations has affected Obama's presidency and the current political environment. He does a good job of highlighting some key political science research demonstrating that Obama's race cost him a non-negligible number of votes in 2008 -- roughly 3-5% of the popular vote overall -- and that race has shaped his presidency in powerful, if subtle, ways.

Most of the attention both in the article and surrounding it has focused on the broader American culture, histories of black political participation, and the reasons why Obama has largely declined to discuss race at all during his presidency. I find that interesting, but I find it interesting less as an endpoint of discussion and more as the setting for a bigger topic: politicians' quest for political survival. Coates plays around with this a bit in the essay, and ends up critical of Obama for not directly taking on difficult issues regarding race in America. But in the interview above, Coates admits that while this makes him angry it is almost surely the correct decision. That is, if Coates' argument about current race dynamics in American politics is true, then Obama could not gain or maintain power by emphasizing race. Coates concludes -- literally -- by saying that Obama's supporters in the African American community (and elsewhere) understand this, so they are willing to overlook or at least forgive his inaction on issues they care about.

In ending the essay there Coates missed an opportunity to have a broader discussion about the politics of reform and change. Because this issue is not limited to Obama, nor to race. It affects all politics, and all politicians. Coates' mission in writing the article was to comment on race in American politics as it relates specifically to Obama, and he did a good job in that, but thinking more broadly can help us identify similar dynamics elsewhere. It can also prevent us from making conclusions like this one, the only part of the essay in which Coates deals directly with foreign policy:

The political consequences of race extend beyond the domestic. I am, like many liberals, horrified by Obama’s embrace of a secretive drone policy, and particularly the killing of American citizens without any restraints. A president aware of black America’s tenuous hold on citizenship, of how the government has at times secretly conspired against its advancement—a black president with a broad sense of the world—should know better. Except a black president with Obama’s past is the perfect target for right-wing attacks depicting him as weak on terrorism. The president’s inability to speak candidly on race cannot be bracketed off from his inability to speak candidly on every­thing. Race is not simply a portion of the Obama story. It is the lens through which many Americans view all his politics.

Italics added. This may indeed be true, but it doesn't have to be true to explain Obama's behavior. It is well established that Republicans "own" foreign policy as an issue; that is, voters tend to believe that Republicans manage foreign affairs better than Democrats. This was true before Obama, and it will likely be true after Obama. The question is whether they'd trust a black Democratic president less than a white Democratic president. This is a different question than any Coates asks, and he can't answer it. (Note that Obama is up 12 points over Romney on foreign policy.)

And even if it is true, we don't know how this would motivate Obama toward more aggressive behavior. After all, if Obama wanted to be seen as "getting tough on terrorism" there are more public ways of doing that than sending flying robots over remote parts of Yemen to take out individuals that Americans have never heard of.

What we do know is that, whatever his race, Obama has an incentive to consolidate power. We know that he has done very little to roll back the expanse of executive power conceived during the Bush administration, and has continued that expansion in at least some areas. We know -- as Coates says in the interview -- that Obama's first motivation is to win elections. Unless he first does that nothing else is possible. There are many bones to pick with selectorate theory, but at its core it's pretty hard to deny that the logic of political survival is sound at its core. So if we were hoping to explain why Obama has chosen to expand the drone program, continue assassinations of questionable legality, renege on his campaign promise to close military prisons, further derail the Doha round, and violate Pakistan's sovereignty in pursuit of bin Laden -- all policies that would have been likely under a McCain presidency, much less that of another Democrat such as Hillary Clinton -- Occam's Razor would dictate that we rely less on race dynamics than Coates suggests, even if that is precisely where we should look to explain Obama's actions in other policy areas.

In other words, the fact that Obama is a black president in a country with a complicated past (and present) of racial politics might go some distance in explaining why Obama say less about race than any other Democratic president since 1960. But to make that explanation cohere we can't just leave it at that and then complain, as Coates does, that "a total submission to [prejudiced voters] is a disservice to the country". What matters is that Obama wants to keep power, and he'll do what he needs to do to keep it. Service to the country, which means nothing at all when stripped of its normative assumptions especially in this context, is not Obama's concern.*

What does this mean? It means that while Obama may be different from every other American president in one respect, he is exactly the same as his predecessors in another. It is the latter fact that best explains his presidency, including his approach to racial politics, and not the former.

*And if "service to the country" could mean anything with any substance, "total submission" to the voters -- whether prejudiced or not -- seems like the most likely candidate to me.

IR Theory

-- Phil Arena has written a new post on it. Every time he does it's a must-read. This is the must-readest yet.

-- Dan Nexon and Patrick Thaddeus Jackson have a podcast on it. I haven't listened to it yet, as I'm at a conference this weekend, but I'm sure it will be good. I bit at PTJ's heels a bit when he posted at DoM on the subject, so I might have more to say later.

I'm at a conference on public choice. I'm hoping it will engage me on a number of levels, including blog-worthy topics. I'm already pondering one on how Tyler Cowen's recent focus on trust as essential for economic development may be (or may not be) related to Charles Tilly.

More later, time permitting.

Toddler Steps Towards An Ontology of Building Things

I've been involved in comments to the previous post. In response to one I wrote this, in the form of a one-act play, but it got long so I thought I'd bring it up top. The point of the exercise, for me, is not to illustrate that the movement left is dumb or mendacious -- at least any more dumb or mendacious than the movement right -- but that this particular form of argument really doesn't hold up well to scrutiny. There are very good arguments for making the tax code more progressive -- and indeed I support doing so -- but this isn't one of them. For these purposes the "Rich People" are the top 10% of income earners, who take home roughly 43% of national income and pay roughly 70% of federal income taxes. I don't agree with all of the Rich Peoples' arguments, but this, I think, is their best shot. It's what liberals, egalitarians, and progressives have to be able to overcome to win the day.

Obama: You rich people didn't build public goods -- like roads and bridges -- that you use for your businesses.

Rich People: Maybe not 100% of it, but we contributed way more than anybody else did, so saying that we didn't build it is leaving a pretty wrong impression.

Obama: Nevertheless, no man is an island so therefore you are going to have to pay more.

Rich People: Wait a second, if no man is an island why are we the only ones who have to pay more?

Obama: Because you didn't build the roads.

Rich People: Yes, but we paid vastly more towards the construction of those roads than any other group did... only 10% of us paid more than 70% of the total federal income tax, much of which goes to *non* public goods like means-tested transfers anyway, and we only earned 43% of the money! So yeah: you could pretty much say we built the roads. 70+% of them, anyway.

People Who Don't Like Rich People: A-ha! Most of the roads were there before you got rich, so NO YOU DIDN'T.

Rich People: Are you serious? Fine, then the previous rich people paid the most for building the yesterday's roads, we're paying the most for building the today's roads, and other rich people will pay the most for building tomorrow's roads. Anyway, why do you all think that we got rich because we drove on the same roads as you? Why aren't you rich then? Seems like you've maybe omitted some important variables from your analysis.

Obama: You're right: the teachers. What about the teachers? You did go to school when you were a kid, right?

Rich People: Um, everyone got to go to public school. Not everyone is rich. Still not getting there. Anyway, we didn't go to public schools. We went to private schools, so our parents paid a bunch of money for a "public good" that we never even used. Do we get a refund?

Obama: No. Okay, what about the internet? "Government research created the internet so that all the companies could make money off the internet."

Rich People: You MUST be joking. Government research created a pre-internet communication system with no commercial applications. Several decades later innovators in the private sector figured out ways to put to it productive use and make money off of it. Oh, and the infrastructure used to send that communication via cable? Built by private companies -- mostly phone companies. Oh, as before, anyone that wishes to can use the internet. It's not gonna make you rich, tho.

Obama: Okay fine, Mr. Know-It-All. How did you get rich?

Rich People: It was a combination of factors, including good ideas, hard work, and luck.

People Who Don't Like Rich People: Ah-ha! You admit that you got lucky.

Rich People: Partially, yes.

People Who Don't Like Rich People: We should tax your luck. This is about fairness. You didn't do anything to get lucky.

Rich People: Define fair. It wasn't *all* luck, as President Obama often says, and we already pay a significantly higher percentage of tax than income we take. 75% more, in fact, and that doesn't include estate taxes, corporate taxes, property taxes, etc. So again... define fair.

People Who Don't Like Rich People: No.

RIch People: How about this: if we're all in this together, and we all benefit from public goods, then how about we all increase our income taxes by, say, 3%. Across the board.

Everyone: HELL NO!

Rich People: Why not? Wouldn't that be fair? Wouldn't that be coming together for the good of the nation? It's a pretty good deal for you, because I'm going to be paying in an extra $30,000/year, while those of you in the bottom 50% are only going to be tossing in several hundred. Think of all those extra public goods we could enjoy together!

Everyone: N TO THE IZZO! Are you crazy? That makes no sense. Haven't you heard of diminishing marginal utility? Your marginal dollar is worth less to you than my marginal dollar is worth to me.

Rich People: Yes I have heard of the concept, although I'm not sure how I feel about you defining my marginal utility curve for me. After all, I haven't gotten my private jet yet, and that sounds pretty freaking rad. But let's set that aside for now, along with the point that the law of diminishing marginal utility -- which isn't an empirical law at all -- refers to the consumption of one particular commodity, not the accumulation of money which may be spread over many different commodities. I mean, it's true in the limit, certainly, but I'm not in the limit. If I were, I wouldn't have all this new income; I would be on vacation, or retired. If we accept the principle anyway, at least as you seem to be defining it, it seems that we should redistribute until everyone's marginal utility for dollars is equivalent. So you're telling me that you want everyone to have a perfectly equal income?

Everyone: No! What are you, some kind of socialist?

Obama: I'm DEFINITELY not a socialist.

Rich People: Okay... so on what basis do you want me to pay more again?

People Who Don't Like Rich People: It is only fair.

Rich People: DEFINE "FAIR".

People Who Don't Like Rich People: No.

Rich People: So let me get this straight: because, like everyone else, I used a public good (which I paid for far more than anyone else by any measure), I now have to pay more (again) because under your definition of "build" the money I paid in taxes does not count towards the construction of infrastructure, but the money you did not pay somehow does?

Everyone: YES.

Rich People: This is wrong. To the extent that anyone can be said as having "built" public goods, I did. To the extent that anyone is continuing to build public goods, I am. To the extent that anyone is receiving private goods distributed the government, I'm paying for them. If you want me to pay even more, well that's what we have elections for. But don't sit there and tell me that *I* am leeching off of *you*. That's bullshit and it hurts my feelings and is, as it happens, empirically false.

People Who Don't Like Rich People: You can't use empirics to prove or disprove a normative concept like fairness.

Rich People: a) I'm not; I'm using empirics to disprove the allegation that I have not contributed to the provision of public goods, but nevertheless have enjoyed the benefits from them. I am using empirics to rebut the insinuation that *I* have been free-riding off of *you*. b) Define "fairness".

People Who Don't Like Rich People: No.

Rich People: Please?

People Who Don't Like Rich People: Fine. Okay. It's like... "justice". I think Rawls said that, so the matter must be settled since everyone likes Rawls.

Rich People: It isn't, actually, but let's go with it. If I ask you what "fairness" is and you reply "justice" and reference Rawls, I'll go and read Rawls and discover that he said something a bit different: "justice as fairness" not "fairness as justice". So we still need a definition of "fairness". One such definition of "fair", used often in the common tongue as well as more technical fields like probability and statistics, is equivalence. As in, a fair die has an equal probability of landing on 1, 2, 3, 4, 5, or 6 when rolled; a fair coin has an equal probability of landing on heads or tails when flipped. Applied to this conversation, such a definition would imply that you are saying that it is unjust that I have contributed an unequal percentage of my income so that others may benefit from my provision of public goods. If that's the case then I agree, but it's no biggie; I'm doing alright.

People Who Don't Like Rich People: No, that's not what we mean at all. Nor Rawls. He wanted redistribution and the provision of a basic minimum standard of living. And he also said that if I didn't want to live in a place with income inequality, then it was unjust for me to live there. So give me your money.

Rich People: Yes, but we've already established that we're redistributing from me to you. You're saying that we need to redistribute more, and I'm disagreeing. Rawls can't settle that one. He didn't say what the top marginal tax rate should be. I can make a strong argument that the conditions Rawls set for a just -- and thus fair -- society are being met: "equality of fair opportunity", by the very public goods you are saying that benefit all of us equally; "the difference principle", by the progressive taxation that provides for those public goods, as well as a system of means-tested transfers, to mitigate the luck factors that you're concerned with. And I'd also note that by the end of his career Rawls was becoming increasingly worried about the potential for moral hazard that systems of transfers could facilitate. As for the veil of ignorance, we're clearly not in "overlapping consensus" territory here.

Obama: Look everybody. We need to put this partisan bickering behind us and come together as a country to solve the problems we all face.

Rich People: Sounds great. What do you have in mind?

Obama: Your taxes go up. Nobody else's does. Some peoples' go down.

Rich People: How is that coming together?

People Who Don't Like Rich People: Just shut up! This is why business should NOT be allowed to interfere in politics.

Rich People: Wait, what? What about deliberative democracy? What about an open and inclusive public sphere? What about the marketplace of ideas? Okay, so if business is not allowed to interfere in politics, does that mean that, like, politics isn't allowed to interfere in business?

Everyone: Of course politics is allowed to interfere in business, silly. How else would we get you to pay for public goods?

Rich People: Well, as long we're all going to act in our own self-interest while pretending to embrace high ideals I guess I'm voting for Romney.

People Who Don't Like Rich People: Elitist asshole!

Rich People: Whatever. I'm eating a Douche Burger for dinner tonight. It wouldn't be half the fun if it only cost $665. See: the marginal buck actually can make a big difference, even if you're rich. You guys can eat cake, for all I care.

Academic Who Comes in Late: Hey guys, you do know that -- since they are rival in consumption and are also excludable -- roads and bridges and the internet are technically not public goods, right?

Everyone: Did that weird-looking thing over there just make some kind of noise?

Academic Who Comes in Late: Forget it.

News Media: BREAKING! Tom Cruise and Katie Holmes are getting DIVORCED! And coming up next: Lots of people go see mediocre superhero movie. Stay tuned for more.

Baby Steps Towards An Ontology of Building Things

If the people who pay a disproportionate share of the public funds used to create public goods did not, in fact, have anything at all to do with the construction of said public goods, then who did exactly? The Public Goods Fairy?

This may come across as snark, but I mean it to be a real question so I'll phrase it another way.

If the question is "Have the rich paid their fair share into the common kitty?" and the only true empirical answer is "Actually, more than their share when you compare percentage of national income earned to percentage of national taxes paid", then it what sense can it be a true statement "they didn't build that"? I guess in the strictest, most literal sense... most of them weren't actually out laying the concrete.

Short of that, though, if words are to have meanings then this would seem to be an indefensible statement.

Romney! Obama! Same Effing Difference (?)

Foreword: I have promised a fair few posts on other topics, but I caught the bug for this one and felt like getting it out first. More stuff on finance and politics TK, when I can find the time.

In 2000, in a fit of pique, I briefly became politically active. Disgusted by the cynical triangulations of the Clinton administration, and turned off by Dubya's anti-intellectual populism (and young enough to believe that both were something other than typical), I marched in a few rallies in support of opening up American politics to alternative parties. One of them became a touch violent -- and I was nearly pepper-sprayed by the police, and was nearly impaled by them as well... unfortunately for this story I narrowly escaped all harm -- and it was a great deal of fun.

One of the chants of the day was "Bush! Gore! Same fucking difference!" This was put only slightly less crassly by Ralph Nader, then Green Party candidate for president, as "The only difference between Republicans and Democrats is the speed with which they get on their knees when corporations come calling." Even in my piquedness I cringed at that one, although not as much as I did when my fellow protestors, in violation of multiple laws and menacing in numbers, began bellowing "This is what democracy looks like! That is what a police state looks like!" while gesturing to the men and women in blue who were doing nothing even remotely police-state-ish, but who did intend to maintain rule of law in protection of the actual majority of the population, which we did not represent. The cops did just that, with very little excessive force and that little bit in direct response to intentionally provoked duress. My fellow members of the mob had little sense of irony, apparently. They seldom do. It was more than just a bit off-putting.

(That reminds me to again refer to Milos Forman's surprisingly good essay on how people who lazily make reference to authoritarianism without real knowledge of what actual authoritarian regimes do and have done do a disservice not only to their own reputations but also to wider cultural memory.)

That was when I was a lowly journalism student at a community college. I had never heard of Duverger's law. I had never heard of the median voter theorem even, much less directional models or any further complication. Because things didn't make a ton of sense to me, in my ignorance and at that moment, I thought very much that the forces at work in politics must be sinister. Adbusters made quite a lot of sense, at the time. The WTO was sort of threatening, really, what with its internationalism and its governments and their suits. Who was controlling all of this? Weren't corporations going to profit from all of this? And wasn't that ipso facto a terrible outcome? I'd never heard of comparative advantage, all I know was that people -- people who looked like me -- were pissed right off. Plus we had cool people on our side. Fugazi sang (see above) "Never mind what they're selling... it's what you're buying." All politics is local, man. It starts at home. Far out.

When I was a child I spake as a child, I understood as a child, I reasoned as a child. When I became a man I put away childish things. I'll still consider myself part of the "left", but it's a "left" that mostly only exists in my mind. It's a "left" that believes that the redeemable parts of Marx reveal him as one of the first public choice thinkers; so he's of the "right" too, in his way, in my mind. It's a left that believes that had Marx witnessed the 20th century -- not even the bits of it done in his name -- his writings might have taken a different tone. It's a left that is dedicated to the idea that the best hope for an internationalist emancipatory movement is found in secular capital social democracy. I.e., it's a left that thinks that the Gotha program had something like the right idea after all. It's certainly not a left that is embodied in any actually-existing internationalist political movement of which I'm aware. So I'm not so politically active these days. I'm content to sort of shrug, think that the American "right" and "left" both embody a certain bastardized bit of truth, and take the long view that things in 21st century America are probably gonna end up far better than they generally have in the course of human history.

But. But! What about that "Same fucking difference!"? Well we hear every election that "this election is the most important election since" like 1932, or 1864, or 1776, or something. Every go round we hear it and we're hearing it again. But if Nader was right in 2000, if the only real choice we have is marginal rather than categorical, then we could either agree with my younger self that things are pretty sinister at the moment, or we could take the more restrained view that politics stays fairly close to the median as a matter of necessity. So which is it? Is there a difference between Romney and Obama worth getting up for? Is this election a clash of the mediocre, or will it decide the eternal course of the Republic?

Steven Landsburg provides one answer. He notes that Ezra Klein has published the following picture, purportedly showing the vast differences between the platforms of Obama and Romney on the issue of income taxation:

Leave aside for now the tacky Excel-template graphic... this message has been approved by Krugman and many others across the web. And it looks like a pretty big difference! Except:

What we actually have is an election in which both candidates are proposing massive redistributions from the top downward, one slightly less so than the other. You’d never know this from looking at Klein’s chart because it illustrates changes in rates, whereas what actually matters is the rates themselves. It makes no sense to ask whether any particular group ought to be paying more or less without reference to how much they’re already paying.

Indeed, this is a classic example of what I once called the “Grandfather Fallacy” — by focusing on changes instead of absolutes, Klein’s chart conceals any existing inequities and hence treats them as “grandfathered in”.

Maybe you could quibble with Landburg's use of the word "massive", but he does a quick-and-dirty correction of Klein's graph by plugging in the relevant pre-existing points, and comes up with this (tacky Stata-template) graphic:

Pretty big difference! In the story the graphs are telling, I mean. Not so much in the candidates' plans. Which will be subject to further moderation in both cases, meaning that they are highly likely to move closer together rather than further apart.

Now there's no reason to not consider both changes and levels. I get that both can be meaningful, especially symbolically. But while symbols are important the baseline reality is, unquestionably, even more important. Symbolism is often ephemera, and even if ephemera is often the stuff of politics those of who us who have put childish things behind us might wish to do better. The baseline reality suggests that there really isn't a qualitative difference between the two candidates, at least as it pertains to income taxation. And now that the GOP has made it a huge part of their platform to defend socialized health care at all costs, and that Romney is in favor of keeping the majority of PPACA intact too, I'm not super-clear on how they qualitatively differ on health care reform either. Maybe they'd differ greatly on foreign policy (paging Drezner!), but I can't for the life of me discern what Obama's foreign policy actually is -- "pivot to Asia" and "use drones to blow up whomever we damn well please" notwithstanding -- and Romney stubbornly refuses to even broach the subject*.

The point is that these differences are marginal, not fundamental. The argument is whether that is a good thing or not. And I really don't know... I think the fundamental conservative point -- that stability is ceteris paribus preferable to instability -- is not appreciated nearly enough by the left. At the same time I believe that the fundamental liberal point -- that we can always do better than we have done, and really should try to -- is not appreciated nearly enough by the right.

So score another one for the structuralists I guess. And score one more for the proximity models I guess. And give one more to the marginalists. And get cynical if that's your bag, or sit back and let it all wash all over you and think about how much worse it used to be. But please let's keep the argument running a bit longer. I'm not finished with it just yet.


*The lack of actual foreign policies from either the right or left is a topic for another day. My current thinking is that a) the right adopted the Manichean/Messianic view of the neocons -- most of whom were not Republicans in any other sense -- because it fit in with their Manichean view of foreign policy since World War II; b) Democrats found it tough to oppose because many of the neocons came from their ranks, and also because it was politically popular and because they had no other frame to adopt. Now that the neocons are out of sorts, no one has anything. I think HR Clinton's State -- via Slaughter -- is grasping towards something, but they aren't there yet and Obama hasn't latched onto it.

What We Have Here Is a Failure to Regulate

If you follow the same blogs as me you will have noticed an ongoing debate about workplace regulation. I'm not going to link to all the posts -- which by now number in the dozens -- but the key players have been the Bleeding Heart Libertarians, Crooked Timber, Marginal Revolution, Matt Yglesias, and Modeled Behavior. Two of those blogs are written by economists, one libertarian and the other... well I'm not quite sure how to categorize Modeled Behavior; one blog that is decidedly of the academic left, although from various factions of it; one blog of the academic non-economist right; while Yglesias seems to take his positions somewhat a la carte these days.

Perhaps predictably, given the roster, these groups are talking about different things. Moreover, they are talking about different things in different ways. As it happens I've spent a decent amount of time reading, thinking, and writing about regulation so maybe I can help clarify.

When economists think about regulation, they are coming from at least one of two schools of thought: those emphasizing the welfare-enhancing potential of regulation, and those emphasizing the welfare-destroying potential of regulation. Let's call the first school the "Utilitarians". Let's call the second second school "Public Choice". The first tradition has its roots in Smith, Hume, and (JS) Mill, but really takes off with Vilfredo Pareto, Arthur Pigou, and other 20th century economists. The second tradition gets a lot from Rousseau and Marx, but in its contemporary form has been best expressed by folks like Stigler and Peltzman.

The Utilitarians believe that regulation can be used to enhance social welfare by correcting market externalities. This is a situation in which the cost of a market actor's actions are not borne by her, but are passed on to someone else. (Alex Tabarrok made reference to this idea specifically at one point.) In this case, society has moved off of the Pareto frontier; total utility is below potential. Regulation is a tool by which we can move the equilibrium back up to its optimum.

A classic example concerns a firm that pollutes a river as a byproduct of its manufacturing; those who live downstream are the ones who suffer the most from the pollution, but they receive no profit from the production. Arthur Pigou suggested one mechanism for dealing with this -- taxing it at a sufficiently high rate as to bring private and social costs back in line, and redistributing the proceeds -- but regulating (i.e. limiting or outright prohibiting) the activity will often serve the same purpose.

The Public Choicers acknowledge that in this specific set of cases regulation can be welfare enhancing for society as a whole. But they posit another set of cases in which it will not be. That is because regulations, being restrictions, have a tendency to reward market incumbents and punish new entrants. The net result is an uncompetitive market prone to inefficiencies and other bad things.

Suppose the firm in the previous example acquires a market advantage by polluting. Once it has driven all of its competitors out of business, it then acquiesces to regulation restricting its activities. But all other firms must also adhere to this regulation. Because the incumbent firm is already capturing economies of scale and has a dominant market share, it will be very difficult for new entrants to be successful. The dominant firm may even initiate the regulation to prevent, e.g., a new firm from coming in, moving further upstream, and polluting there. The resulting lack of competition is also Pareto suboptimal. So the Public Choicers argue that eliminating the regulation -- and with it the concomitant barriers to entry -- can actually enhance aggregate societal welfare by fostering new competition, thus moving society back up towards the Pareto optimum*.

Both of these stories can be true in certain cases. It seems to me that Matt Yglesias and the Marginal Revolutionaries have been trying to tease out which is more true in the real world, in which cases, and whether the best thing to do is to increase regulation or decrease it. To do this they do the only thing they can do: refer to stylized models, simple intellectual exercises (would you trade being searched for contraband in exchange for an extra dollar an hour?), and what empirical evidence exists.

When the academic left thinks about regulation they are not thinking about to reach Pareto frontiers. They are not using stylized models**, as they reject the core assumptions of those models***. They are skeptical of econometric studies which, as Henry Farrell rightly notes, are susceptible to selection bias and questionable causality. In general, they have little use for the positive theories of regulation. What they care about are normative properties of outcomes as they exist in the actual world.

Instead of thinking about how to maximize Pareto optimality, the left is thinking about how power inequalities condition outcomes. There are two ways to translate this back into the economists' language: the first is to say "I care every bit as much about where along the Pareto frontier we fall as the fact that we're on it... the distribution of the pie is as important as the size of it"; the second is to say "I don't give a good goddamn if we're on the Pareto fronter at all... I want to improve the lot of labor, and particularly the poorest and weakest among the laborers".

Both of these reject the positive political theories of the economists. Or, actually, they (implicitly) accept them as intermediate steps in a necessary chain, but not as the culmination. If what matters to you is where along the Pareto frontier the actual distribution of utility between capital and labor lies, then you (implicitly) accept the positive Utilitarian theory of regulation as being welfare-enhancing in aggregate; you just think there's one more step to be taken which can be justified on normative grounds. If what matters to you is to improve the lot of labor full stop, then you accept the positive Public Choice account of regulation as being inherently redistributionary, adding a normative preference for redistributing from capital to labor.

So now we have four end points:

1. Utilitarians: The point of regulation should be to maximize social utility, so the biggest concern is reaching the Pareto frontier. This means regulating in the case of market failure but not otherwise, and the instances of actual market failure -- defined as deviation from the Pareto frontier -- are pretty rare. (The Bleeding Heart Libertarians' position)

2. Public Choice: Most of the time regulation will maximize private utility, not social utility; at minimum that will often be an unintended consequence. So the biggest concern is to limit regulation in order to reach the Pareto fronter. (The Marginal Revolutionaries's position)

3. Social Democracy: The point of regulation should be to maximize social utility as a preliminary step towards shifting the ex post distribution of aggregate utility along the Pareto frontier more towards labor. (The Matt Yglesias position)

4. Marxist/Post-Marxist: The point of regulation should be to maximize the well-being of labor, not capital, so who cares where the Pareto frontier is, even assuming I believe such a thing exists? (The Crooked Timber position, at least among some of them)

Despite what those involved in this argument might have you believe, these are all coherent theoretical positions. But as each of them have noted of the others at one point or another, they have all been somewhat detached from empirical reality. For example, are workplace regulations trying to correct a market externality? This question has been danced around but not really answered. For positions #1-3 the answer to this matters quite a lot. For position #4 not so much. Nor do any of them really get at the implications of power, although the CTers have come closest. Power matters quite a lot for #4 and somewhat for #2, but not at all for #1 and only a bit (and in different ways) for #3. 


There is a lot more to be said on these points, but this is long enough so I'll have to save it for another post. 

*This doesn't actually deal with the pollution problem of course.

**I'm not actually sure about this. I believe they have some model(s) in mind -- they must -- but they haven't clearly articulated what it is. In response to a Twitter query, Henry Farrell listed as some influences Jack Knight (a Tar Heel), Sam Bowles, and "no-bullshit Marxism which happens to work". Fair enough, although I'd prefer a clearer exposition on what that looks like in reference to this discussion. Chris Bertram, one of Farrell's co-bloggers at CT, has previously espoused (at least elements of) bullshit Marxism which does not happen to work, so perhaps that's his model. I imagine the left are coming at this from a variety of perspectives, which is fine.

***At least they think they do. In some cases I think they believe these assumptions are more severe than they actually are, so they're really rejecting a straw man. E.g., Farrell's repeated reference to "perfect competition", but labor models have moved well beyond perfect competition without markedly changing many of the relevant results. (Both Alex Tabarrok and Tyler Cowen have noted this, too, I believe.) Anyway, at least some of the left's interlocutors seems to be working from the even simpler, and even more unrealistic, model of monopsony. This obviously requires major assumptions too. At times the way they describe labor markets is in quasi-feudal terms; I doubt even Marx would have truck with that.