Friday, January 04, 2008

What Is Not Known

Responding to the list of certainties offered by Tyler Cowen of Marginal Revolution.

Interesing that what one person thinks is nearly certain, another thinks is mostly false. Let's have a look.

1. Polarizing America won't make interest group politics go away, no matter how hard either the right-wingers or progressives wish it so.

I can actually agree with this, but do not (as seems to be suggested) take it as an argument against polarizing America (or anything else, for that matter).

First of all, the nature of governance as it is currently is that it will reflect interest group politics, because the evolution of policy is based on the organization and cumulation of support, much more so than the nature or rationality of the position. So interest group politics are currently inevitable with or without polarization.

And second, polarization is not inherently a bad thing, or more accurately, polarization is not always a worse thing than the alternative. From my perspective, if the abatement of polarization requires that I agree to a version of policies that (say) sanctioned unprovoked warfare, arbitrary dentention, surveillance, torture, and the rest, then my response is to accept polarization over a dangerous concession to arbitrary rule.

2. We cannot do economic policy as we might arrange pieces on a chessboard.

Perhaps, but surely some economic policy is better than none.

What you ask for is rarely what you get, and your recommendations had better be prepared for this discrepancy.

This is because economics is a complex discipline, not (as it is so often portrayed) a simple cause-and-effect system, in which given inputs produce given outputs. What this means is that the algebraic representation of economic principle is seldom, if ever, reliable, and should not be used to formulate policy or predict the consequences. Saying simple things like 'tax cuts will stimulate the economy' should be discouraged as sophistry and nonsense.

That said, so much as possible, we should attempt to model economic systems, so that we can be as forewarned as possible of dangerous feedback loops or the potential for catastrophic interventions. Saying 'there is no way to predict the outcome', for example, is no excuse for allowing a government debt to run out of control, because in most scenarios this creates an unrecoverable predicament.

3. Government-dominated health systems, insofar as they work well (a number of them do), succeed simply by lowering costs.

This is false.

Although, as a matter of fact, government health case systems lower costs, their great benefit in a society is greater security and protection from risk.

In Canada, it is not possible to 'become uninsured', for example, which means not only that people are freed from the worry that a serious illness will ruin them financially, they are freer to move from job to job or to work for themselves.

Moreover, in a government health care system, the major motivations for misrepresentations and outright falsehoods is greatly decreased. People are more inclined to trust recommendations made by health care practitioners because the financial incentives are not there for them to lie.

Finally, because the system is accessible to everyone, people are more likely to access health care services earlier in the case of an illness or injury, which has the impact of preventing much more serious consequences later.

These factors would make a government health care system worthwhile even if it cost the same as a private health care system (and, indeed, because of the disinformation spread by America lobbyists, many Canadians actually believe their system is more expensive - but they *still* won't support abandoning it, by margins of 85 - 90 percent).

Health care has a murky relationship to human health, pharmaceuticals and broken limbs aside. A version of the single-payer system, as might be adopted in the United States, would not lower costs.

It is ironic that this simple economic prediction comes only a few sentences after the assertion that you cannot do economic policy with simple predictions. Perhaps this sentence should have been extended to include prohibition on *unsupported* economic predictions.

The American health care system is the mot expensive in the world. It is hard to imagine any form of government insurance that would not lower costs. The systems used by other nations, most of which involve some or another degree of government intervention, all involve lower costs.

We would be raising taxes and lowering medical innovation to give poor people a good deal more financial security and a slight bit more health; that is the relevant trade-off.

With 50 million people in the United States currently uninsured, the benefit reaches substantially more than just 'poor people'. If we include the people who dare not risk losing their corporate health care, we find that it includes most of American society.

As for the measure of 'a slight bit more health', current measurements - including factors such as infant mortality and life expectancy - indicate statistically significant differences in outcomes, a difference that becomes all the more evident when we take into account that most of the health in America is concentrated in a small percentage of the population.

4. Overall, despite its many flaws, America is a force for liberty in the greater global community.

This is not currently the case, sadly.

The current administration is an occupying power in two nations, has supported proxy wars (such as in Somalia) in others, supports military dictatorships (including one that is nuclear-armed), 'disappears' people in foreign and domestic abductions, sanctions torture, runs concentration camps in which innocent people are detained without trial or representation, surveils its citizens constantly and in violation of the law, subverts election results with rigged electronic voting systems, awards contracts without tender to government insiders, exposes American agents for political purposes... and more.

You simply cannot do all of this and then claim to be a 'force for liberty'.

What is most damaging to the cause of liberty, however, is that the government does all this and is *still* defended by its supporters as a beacon of liberty. And people look at this and say, "If this is what 'liberty' means, then it's a lie." And then the tradeoff of liberty for stability doesn't seem so bad. because, after all, this is the route very clearly and obviously being prusued by the United States. Sadly, and tragically.

5. We are programmed to respond to the "us vs. them" mentality and highly intelligent people are no less captive to this framing. We should try very hard to get away from this framing.

Forgive me if this sounds like someone saying "let's be friends" right before he hits me over the head with a 2x4.

The fact is, polarization isn't something that was 'programmed' into anyone's head, it was a policy that was deliberately adopted by the American right, which resulted in divisive politics of religion and race, and saw the proliferation of 'Republican attack dogs' that relentlessly sowed division and hate into every online and offline forum they could find.

And we saw the 'us versus them' approach adopted as a deliberate instrument of foreign policy, an approach intended to tell people, Americans and otherwise, "if you're not for us, you're against us." When we see an end to the support for a policy of American exceptionalism, we will be willing to believe that the days of the deliberately fostered 'us versus them' politics are over.

6. America is a beacon of innovation for the world, and it is critically important that we allow the preconditions for American innovation to continue.

This is not currently the case.

Closer observation will reveal that the perception of 'American innovation' is a consequence of three factors:

a. Purchase - American companies routinely import talent and creativity, which is why many innovations appear to be American even though they have their origins on foreign shores. (It's the Canadian business model - create something new, build a business, sell out to some American corporation - it happens over and over).

b. Publicity - Americans are relentless self-promoters, taking credit for innovation whether or not this credit is deserved.

c. Monopolism - American companies and government policies act to squelch innovation elsewhere by leveraging ts large market (and sometimes its military) in order to preserve the U.S. business advantage (Canadians, again, know this well, in everything from the Avro Arrow to the Blackberry).

It is worth noting that all three of these factors are currently under pressure. Americans, because they are deeply in debt, can no longer afford to import talent (and besides, the government's "us vs. them" policy is keeping many immigrants out). Media is increasingly in the control of non-Americans, and hence, so is the publicity. And American military and economic muscle is not what it was (and arguably, will never be again).

7. It would be a disaster if American taxation ever reached 55 percent of gdp.

This is another one of those simple-minded economic predictions.

Is it ok if taxation is at 54.9 percent and then a disaster once one more tax is added?

Is it a disaster if the result is that every single American is well educated, well fed, healthy, happy and creative?

It is ridiculous to adopt a unidimensional definition of 'disastrous' and then to say that this, of all things, is 'certain'.

8. Which institutions work well is often country-specific.

A better way to say that might be to say 'which institutions work well is often culturally specific'.

Because it is culture, not nationality, that makes institutions work better or worse.

9. The West European way of life is a marvel, unprecedented in human history. That said, I am not sure that the degree of economic security to date can persist in a more mobile and more diverse future (this second sentence retreats to what I am uncertain about).

It is worth noting that western Europe has achieved its status by (a) embracing diversity, and (b) redressing economic inequality. The difficulties faced in western Europe are caused, not by diversity, but by a new economic inequality that developed because of enlargement and an old inequality that is a residue of the colonial age.

The Europeans, to their credit, mostly realize that the way forward is not to stifle mobility nor to discourage diversity, but to address the hopes and aspirations of currently disaffected minorities by addressing their social and political disadvantages.

Nothing is sure. As the environment continues to degrade and as Europe works to adapt in a dwindling resource base, it will be more difficult to meet the needs of all its citizens. ut efforts under way in Europe to support environmentalism and to reduce consumption are th best hope for economic sustainability.

Unfortunately, no such effort appears to exist in American politics, and indeed, efforts are underway to actively undermine environmentalist and conservationist policies. As the delegate from Papua New Guinea said to the Americans at the Bali conference, "If you're not willing to lead, then at leas get out of the way."

10. No one has a good idea what the equilibrium looks like for nuclear proliferation. This is very worrying.

It would be less worrying if the American government was not propping up a nuclear-armed dictator in Pakistan. But I digress.

The fact is, the only 'equalibrium' that could exist is one in which all nations have nuclear weapons, or at least, like Canada, have the capacity to obtain them but have chosen not to. This would require that nations deal with each other through reason rather than force, since the consequences of using force are too terrible. If even North Korea understands this, we can hold out hope for reason.

Otherwise, the divide between those that have nuclear weapons and those that do not is the most dangerous flashpoint, particularly when those who have nuclear weapons are unable to resist using the threat of force against those who do not. The Iranians, for example, know very well that the continued threats from the U.S. would abate after the explosion of its first test missile. After all, it has worked for much more unpalatable and repressive governments.

The best way to prevent nuclear proliferation is to make them unnecessary. This, however, requires a submission to international law - a step that the United States is singularly unwilling to take.

11. The possibility of pandemics receives insufficient attention. The world sleepwalked through AIDS for a long time, mostly because "it doesn't affect people like you and me." The next time around could be much worse.


It would be nice were the next logical inference drawn, that discrimination against subgroups that are 'not like you and me' is an irrational policy, one that leads to willful ignorance regarding very important events happening in society.

12. It is a big mistake -- even in rhetoric -- to conflate concern for the poor with comparative egalitarian intuitions. The left ought to turn its back on this mistake, although it would mean losing one of their most effective rhetorical tools.

I am uncertain whether this means the left should turn ts back on the poor, or whether it should turn its back on egalitarianism. Either way, it' not going to happen.

The corollary of point 12 is the fundamental (but so often unstated) right-wing dictum that people who are poor are poor, not because of systemic inequality, but because of character deficiencies. In other words, it's their own fault.

On a case-by-case basis, you can make that argument. You can look at a poor unemployed crack addict with a grade 4 education and a criminal record and say that it's his fault, that he made some bad life choices, like dropping out of school, packing a weapon, and shooting up.

On a society-wide basis, however, you cannot ignore the fact that the best predictor of things like health, education and crime is the person's socio-economic status. And no, you don't solve it simply by throwing money at people who grew up poor, and no, you don't solve it simply by moving poor people into rich neighborhoods.

But you do address it systematically, and you *can* address it systematically. We know it can be done, because it *has* been done, in nations like Canada and Australian and Europe, and it's not something that American culture specifically makes impossible - only the deeply held self-interest of people unwilling to bend even one iota toward a progressive social policy makes it possible.

13. Most people are sincere in their views (even if wrong), and polemic attacks on them signal a weakness of the attacker, not the attackee.

Well, it depends on how you define 'polemic'. Every statement of a position is in one sense or another a polemic.

In my own mind, the 'rules of debate' are the same as the 'rules of rationality', which I have tried in part to sketch elsewhere (I do have an update planned).

I will observe that I have found very little attempt by those opposed to my point of view to attempt to engage me rationally, based on reason and evidence. This - I'm sure you would agree - leads me to believe that reason and evidence are predominately in support of my own position.

And I would even go a bit further as to question the sincerity of some people I have faced in discussions. I have seen many times the advocacy of a position purely because it distracts from a deeper or more fundamental issue. I have seen advocacy at the behest of some foundation or corporate agent seeking to poster a certain frame or way of seeing the world. I have seen outright (and knowing) dishonesty about the facts of the matter (and sometimes on network television!).

My believe in the sincerity of my opponents is these days something that I need to see demonstrated rather than something I take for granted.

14. The chance that a protectionism will be an economically rational form of protectionism is very low.

This is another one of those simple economic statements.

Protectionism can be economically rational for a large number of reasons. One current example is protectionism as a response to dumping or economic subsidies. One country can absolutely ruin an industry in another country is the first country is large enough to sustain a loss in order to support its own industry. Thus, for example, subsidized grain production by rich western nations creates a situation in poor countries where their own farmers cannot survive, and the government cannot respond by matching the subsidy. The only way to remain self-sufficient in grain (necessary, in order to resist rising prices in a monopoly market) is to enact some for of protectionism.

It is also worth looking at different ways 'protectionism' can be created.

The simple and obvious type of protectionism is that created by duties and tariffs. They are basically a blunt-instrument mechanism for slowing the flow of foreign product into a domestic market. Viewed in this light, domestic subsidies can be viewed as an only slightly less blunt instrument for accomplishing the same aim.

But (as the negotiators at WTO know well) there is a whole raft of measures that can effectively perform the same function.

Measures such as standards and specifications also play this sort of role. For example, after one case of mad cow was found in Canada, all beef imports from Canada to the U.S. were banned for a number of years. This ban continued long after it was medically necessary to do so, at the lobbying of the U.S. beef industry. Given the incidents of mad cow in the U.S., the bad was medically meaningless. Yet it persisted. It was a form of protectionism.

Conversely, the United States has long lobbied for the abolition of the Canadian Wheat Board and similar agricultural marketing agencies. These bodies do not provide direct subsidies, but rather, the act as a 'single desk' marketing agency for a certain agricultural product. The board has a history of negotiating higher prices for Canadian wheat (and other products) and is strongly supported by farmers. It is, however, considered a form of 'protectionism' by American interests, if for no other reason than that it is protected by law and provides better marketing than American industries can provide on their own. Yet, removing this 'protection' would be devastating to Canadian agriculture, which would in effect be reduced to a third world status producing cash crops for the commodities market.