HT to AT
Homines libenter quod volunt credunt
As readers can tell, I’m basically withdrawn from my online presence, and hope to slowly extract myself entirely one day. We’ll see.
In the meantime, I want to write something about Earth Hour. Yes, as you all know I find this to be silly symbolism, and it probably directly makes the environment a tiny bit dirtier. But I don’t want those silly criticisms by me to be misconstrued as thinking the idea is bad on that there are not lots of sincere people who are just trying to do a tiny little but for the environment. I actually don’t know if in the long run these sorts of things do much good, nor do I know that they do anything bad. Maybe it’s no different than lots of people choosing to take a walk on some prearranged time. Would people be posting about that passionately, even in favor, or opposed? I think not. So that’s sort of what I am thinking about Earth Hour for now.
We all need to take a freakin’ chill pill.
Well, I can’t talk about it. But let me suggest one or two things to keep in mind.
There’s so much more to say, but I’m going to retreat back to writing my micro exam.
In our measures of welfare in economics, we pay careful attention to the impacts an exchange has not just on those parties who are involved in the exchange, but also to third parties who may be receiving benefits or incurring costs as a result of Person A exchanging with Person B.
What economics tends to not do is to consider the preferences of Person C, who is not impacted by the transaction, in our measures of welfare. This is not to say that most of policy ignores Person C, in fact it is my belief that a good chunk of policy considers the feelings of Person C almost to the exclusion of A and B. Consider kidney markets. Again, I do not wish to get into the details here, just an illustration. By allowing the sale of kidneys, we will impact the well-being of potential donors of kidneys and potential recipients of kidneys. But there are tens of millions of people whose lives will not in any material way be impacted by the sale of kidneys outside of their objecting to living in a world where kidneys are handled in any way other than making people wait in line for them. Whatever their arguments are, good or bad, I do not care. What I care about is the obvious fact that those arguments receive weighting in our “society’s” welfare functional and in fact kidney law is predicated on satisfying those preferences.
And when you see some criticisms of market transactions or efficiency measures of economists, we inevitably come across an appeal to, or an appeal from, third parties who do not have standing in the transaction (remember, we already model out externalities, so my focus here is on people beyond that scope). Perhaps a way to incorporate these preferences legitimately into welfare analysis is to argue that the policies we enact today may impact the values and costs that non-participants may receive in the future – but then this can be very generalized to any situation.
What I find interesting is that the voices and opinions and preferences of only SOME portion of Persons C tend to be included when we are deciding thinks like legalizing drugs, or relaxing zoning restrictions, or expanding school choice and such. While it seems like the argument, “I just can’t imagine living in a world where the government does not provide “free” quality schooling to every boy and girl” actually gets considered, how often does the opposite sentiment get considered and used to enact policy? For example, some non-affected third parties may absolutely delight to be alive in a world where zoning restrictions were relaxed, they may have extremely strong moral feelings in favor of legalizing kidney compensation, and so on. Not only is it socially uncouth to express positive preferences for these sorts of things, serious discussions of these and other policies rarely, if ever, openly consider that there are millions of people who share those preferences. It’s the morally opposed that are more “vocal” than the “morally supportive” … I wonder why. Perhaps it’s a case of the status quo bias, but I suspect something else is going on.
When my dad was 30, it was the year I was born, he was having the 5th of his 6th kids, and he was completing his 10th year of full-time work (he put himself through college while working). He had been married for 9 years.
When I was 30, I was just finishing my PhD in Economics, and had only recently been married, no kids, but a bunch of pets.
Chetty is comparing income at age 30 for a cohort born after WW2, and a cohort born just after me, so not unlike my dad and me. And maybe this is part of Cowen’s complacency story, but my dad had no choice but to earn as much as possible. I’ve clearly chosen not to.
Pardon my weekend thought. The post title tends to come off as more curmudgeony than I want it to, but my thinking is this. Suppose we move heaven and earth for the next several decades to make sure that every single person in the United States gets the very best and most equal education. In fact, suppose the science and delivery of education improves so much that every child who gets schooling reaches her maximum possible potential.
There are, nonetheless, already differences in IQ, or “g” or “intelligence” or “cognitive aptitude” or whatever you want to call it. Once we recognize this, ask the question about from where the high performing students will come in this world? In today’s world. there is a serious likelihood that high achievers are high achievers because they have more resources, sort into better peer groups, and so on. But if we end up equalizing “resources” and we also recognize that there will nonetheless some students who do better than others, from which group would future high achievers be coming? The answer would seem to be that in our future the “best and the brightest” would be coming from the actual “best and the brightest” and not just the prettiest and the richest. The implication here is rather startling – if we are finding outcomes to be highly heritable, that is most likely evidence that kids are not getting advantages from their parents.
The tough part of this idea is that it leaves us in a world where ANY possible outcome is subject to straw-man demagoguery.
Several years ago I was uninvited from co-chairing an effort on gay marriage because others in the group did not like my stances on unrelated issues like education choice.