Home Economics Vol 1: Telescopic Morality and Peas

Raise your hands if you were ever told something like "clean your plate because there are starving kids in Africa." Keep them up if you've ever uttered the sentiment. I'd wager that if the readership here is a random selection from the population along this particular issue's dimensions, better than half of you will still have your hands up.

Assuming you're parents of course.

It isn't, after all, something you'd say to a dinner companion or to a stranger in an airport restaurant. It's specifically an injunction you make to your children. It has the overtones of being what my great pal Adam Gurri dismisses as telescopic morality, but only rhetorically. Every child who hears it almost immediately summons the obvious comeback: "if you're so worried about hungry African kids, then mail them my chicken in aspic." Children are sensitive enough to be offended when the suffering of others is deployed as a morality prop.

From the parents' perspective, we want our children to be properly nourished and to have a well-developed palate. Man does not live on peanut butter and jelly alone. Cajoling and bribery doesn't always work, but guilt can sometimes be effective. Still, there's the guilt of "you're breaking your nana's heart; you know she has a weak heart" and then there's accidentally training your children to think of destitute populations as inferiors with no agency of their own.

Part of the Mother's Problem is menu planning. The economics of the household involves a great deal of detailed private information of who eats what, whose tastes are changing because she's eleven now and she doesn't eat kids' cereal anymore, who's decided to go HARDxXxCORE VEGAN because factory farming is an orgy of cruelty, and who needs a little extra fiber in his diet because the cholesterol numbers from the last physical were alarming to say the least. This is no secret to anyone in the house. Indeed, quite a bit of talk at home is split between affirmations of affection (good or bad) and nutrition (again, good or bad). So to associate the nitty-gritty decisions made in front of the hearth with the thorny institutional problems of global poverty is an error of rhetoric that eventually, if not immediately contributes to the injustices of international paternalism.

By all means, get your kids to eat their peas (and if you're a kid, do your suffering mother a favor and eat your peas), but please reconsider using the suffering of others as a crowbar to pry open recalcitrant jaws. A better, more just world will include the children of poor countries having better access to trade opportunities. Training another generation to think of the destitute as little more than charity cases is a lousy way to improve political and economic institutions.

Don't Dream It; Be It

Fallout 4, the latest in a wildly-popular post-apocalypse video game series was recently announced. Bethesda, the production studio in charge of the property recently demonstrated some of the new features of the game at the annual Electronic Entertainment Expo, affectionately known as E3. Included in the new features is a detailed crafting system that reminds me of a few of the off-brand voxel-type games we've seen crop up since New Vegas was released. Think Rust or Planet Explorers or even Kerbal. Now, the Fallout series has always had some crafting in it, but it's usually just re-purposing junk to make stimpacks or a pressurized air gun that shoots teddy bears and baseballs at marauders. This new title will allow you to build houses, fortified bases, even entire villages from scrap materials scattered around the wasteland. For anyone who picked up the build-your-own-house DLC in Skyrim, the prospect of homesteading in a big ol' themed sandbox world could well sound like a heck of a lot of fun.

I'm not the only one to think so, evidently.

The #Fallout4 crafting system is cool. Imagine how much cooler it could be if it wasn’t SO focused on building stuff to kill other stuff.

— Feminist Frequency (@femfreq) June 15, 2015

For those of you who don't already know her, the author of that tweet is something of a controversial figure among video game enthusiasts. Reaction to this remark on Twitter was predictably swift and gangrenous. Which is a pity, since Ms. Sarkeesian offers a relatively simple market test: make it.

Create a game without violence as a core gameplay feature. If the game appeals to enough people, you'll make a fortune and be proven correct all in one fell swoop.

Of course, making a game is a risky, expensive, tedious process. Tripe-A titles have eight-figure budgets, putting them below summer blockbusters, but that that far below. Sinking $30 million into a project means giving your customers what they want. You'd better be sure you know what your customers want.

That's the contention though: the customers just should want something different. The question is then how to convince them that 360 no-scoping a Super Mutant isn't as fun as establishing farming colonies and securing trade routes around a bombed-out Boston? Hectoring folks could be one way. Another is to build a better mousetrap.

Still another is the Minecraft route. In Minecraft, you can set the game to "peaceful," which prevents hostile mobs from spawning. If you can turn off enemies in Fallout 4, it'd be more like a grimdark 50s era post-nuke sandbox simulator. Build yourself a nice little rust fort and snuggle in for the nuclear winter.

For the world of entertainment to be more euvoluntary, more inclusive, it's worth thinking about the lowest-cost ways to please the most customers. Open-world, sandbox style games have the decided advantage that many of the parameters of the game are just that: parameters, and they can be adjusted simply. Just let players access the settings. If you want to focus on animal husbandry, go ahead. If you want to kill deathclaws, go ahead. We can each enjoy the game as we see fit. Everyone wins.

And isn't that the beauty of free people transacting as they see fit? My pleasure does not come at the expense of yours, nor yours mine?

I have to admit. I am fairly excited about this title. The custom power armor looks to be quite an improvement over the slim scavenging we had in New Vegas.

Rules vs Discretion (again)

For your viewing pleasure:


Police don't make the laws. Legislators do, at the request of constituents. Constituents therefore bear responsibility for the thuggish displays that arise as a direct consequence of their petitions for redress of injury.

A pair of little girls selling lemonade should occupy the top tier of what can rightly be considered euvoluntary exchange. The relentless quest for prior restraint cannot.

Yellow Rose; Red Light

Via ENB, Texas unanimously passed HB 10, "AN ACT relating to certain criminal and civil consequences of trafficking of persons, compelling prostitution, and certain other related criminal offenses; to the prevention, prosecution, and punishment of those offenses, and to compensation paid to victims of those offenses." A little wordy, so the press has been calling it a "sex trafficking" bill. Pithy, yes?

If you're anything like me (odds are slim here) you'll find yourself a little puzzled why a legislature would bother passing a bill banning something that's already illegal. Shall we parse the bill together?

Hoc est Corpus Juris

Part 1
Part 2
Part 3

So far I've proposed the following as an analytical adjunct to standard relative price economics:

1. Part of the rental value of certain spaces arises from a single-use characteristic. If it would be odd or off-putting to conduct the activities reserved for a particular location elsewhere, then such a space can command a higher rent than a general-use space. (lemma) Negotiation over these rents is not a priori obvious, and will tend to be historically and culturally contingent.
2. Single-use rents require that users observe the restrictions on the use of the space. Maintaining observation among users is a standard collective action problem in economics, and real-world solutions to these collective action problems is a task for post hoc investigation and analysis. 

So far, we have a church (RNC HQ | Apple store | strip club), we have parishioners (partisans | customers | clients), but I've not mentioned the clerisy. Nor have I explicitly mentioned what role the rise of the sharing economy might have on the generation and capture of sacred rents. This is relevant to EE because it is precisely the transitional gains trap that often gooses incumbents into obstructing innovations that benefit citizens. Moreover, if incumbents hold their privileged positions with the blessings of (constituents | clients | parishioners), dislodging them or buying them off will be exceptionally challenging. 

In this taxonomy, a priest is the residual claimant of a sacred rent. So is Tim Cook, so is Debbie Wasserman Schultz, so is Satoru Iwata. So also divine-right kings of yore (perhaps the King of Thailand today), so also a few Soviet premieres (Lenin for sure, probably Stalin too), so also Ieyasu Tokugawa. The faithful, the partisans, the devoted customers, the loyal subjects are tenants if you will: beneficiaries of the rental value of the sacred space. Threats to this rental value are treated accordingly.

This is one of the reasons I think the Team Red/Team Blue analytical framework could use a little scaffolding. Team members are opposed to each other, but in much the same way as the Knicks might be opposed to the Lakers: they're rivals, but at least they're both playing basketball. Team Gray (or is it 'grey'?) is a pack of apostates: they're playing intramural Frisbee golf. Apostates are generally ignored, unless they start actually threatening the institutions of the organization itself. Libertarians were a bunch of fringe kooks until 2008, when they sort of amorphously began to gnaw at the bunting around the debate stage. That happened, and hey-presto, both Team Blue and Team Red partisans began hauling out rhetorical cannon against all the astroturfing. Or you see zealots on Twitter castigating a Reason reporter who spills all her ink on topics like sexual liberation and reproductive rights as being a shill for oligarchs:

.@ckilpatrick @enbrown Whenever Ames' reporting fucks with oligarchs, the baggerbot smear machine starts wailing. Like an air raid siren.
— Yasha Levine (@yashalevine) November 7, 2014

 Gimme gimme that old-time religion.

In political space, at least in the US, Duverger's Law locks in the party monopoly. Even if you don't like the Knicks, you're still going to watch the basketball game regardless. But note very closely reactions to even modest threats to the overall institutional integrity of the system. Homeschooling is the Uber of the indoctrination of the young. If successful, it strips the secular priesthood of the devoted. Right now, Team Red isn't raising too much of a stink because it sort of looks like homeschooling is handing them the ball. But if it turns out that homeschooled kids grow up as political apostates, expect both teams to mount up and ride out against homeschooling in full force.

As a general-purpose apostate myself, I feel obliged to share my biases with you, my fine audience. I am of the opinion that sacred rents are a fine thing, an excellent thing. Such rents enrich the human existence. It is a wondrous delight to abandon yourself to those sublime moments when you connect yourself to a larger, mysterious other. A sense of belonging is simply critical to social animals enjoying the fullness this existence has to offer us. However, this does not imply that elevating a distinct class of elites to wield dominion over these rents is either wise or just. In this sense, I'm a thoroughgoing anabaptist: the clerisy exists to serve the parish, the statesman to serve the constituency, the retailer to serve the customer. Any time any residual claimant of a scared rent begins to extract unjust rents or to exert excessive dominion, the covenant is ruptured. Courageous parishioners, courageous citizens, courageous consumers of ethical game journalism are obliged to pick up their hammer and nail their Ninety-Five Theses to the doors of the Church | Legislature | Gamestop. Reclaim your sacred rents. Your heart is your own. Treasure it. If not for yourself, then for your children.

Playground Phronesis

Michael J. Lewis pens a lament against dismal conformity. Riffing on the widely-shared Deresiewicz New Republic piece deriding Ivy League admissions, Lewis's fretting over scholastic ossification is even more menacing when juxtaposed with Cass Sunstein's recent Bloomberg article on partisanship (the story is more complicated than Sunstein claims, but illustrating why would take too much space, and is off-topic to boot). If America is becoming both more heavily partisan and less intellectually flexible, the risk of civil unrest rises. Otherwise intractable political differences of opinion are eventually solved by the sword.

If Lewis and Sunstein are correct, safety-mad school districts and the Department of Education are unintentionally injecting institutional uncertainty (fragility, if you prefer) into the US constituency. Play, free play forces kids to cooperate, if not in the actual conduct of the game, then at least about the rules or meta-rules of the game. It obliges kids to consider model rules of law for ordering their model societies. Stripping them of that opportunity atrophies the crucial faculties that allow them to legitimately question authority.

Play is euvoluntary. the risk of personal injury now is insignificant compared to the risk of civil war thirty years hence.

Give kids back their recess. For the love of the republic.

Standards and Practices

In the brittle bones of Autumn, Jack Frost quickens, a half-dram of winter spirits freshening the pumpkins' shell. As the mercury does the timid turtle shuffle, central air switches from cool to warm, knitted sartorial delights emerge reluctantly from their summertime sequester, and stockpiles of hot cocoa begin to refresh their seasonal dalliance with those tiny puffballs named after the tuber of the Nile river flats mallow. There's a nip in the air if you will. Bundle up.

Unless you've contracted services with a day care provider. In which case, you've also "agreed" to the regulations of your state's department of family services. In the Commonwealth of Virginia, it's the "Department of Social Services" and here are the standards for licensed family day homes, effective July 17, 2013 published by this most august of public agencies. In there (p. 66) is a ban on blankets for children under 2 years of age.

The standard argument for state intervention is that, on occasion, private voluntary association is insufficient to obtain desirable outcomes. Because by cutting corners on things like safety or attention, agents can pocket the cost savings and lie to the principal about the lapse. In a daycare, the kids are too naive to reliably monitor shoddy supervision.

So there is at least a theoretical case for third-party monitoring of home care providers. But dare I say the 120 pages of regulations curated by our friends at the VA DSS runs a small-scale version of what Hume warned about in Of Commerce or what economist Robert Higgs calls the "ratchet effect" or  what Munger colorfully refers to as the "metastasis of the state." Bureaucrats bear next to no cost for adding to the stock of mandates. Indeed, since monitoring duties serve to encrease the dominions of their office, they benefit from adding regulations whose marginal cost to parents exceed the marginal benefit.

But I suspect that state-mandated regulations about the sort of bedding caregivers can use will be politically popular even though suffocation risks for an 18 month old toddler are remote. Safety rhetoric is high status, and since daycare costs are at least party socialized (thank you, taxpayers of Virginia for paying for my daughter's lunch despite the fact that my household income is a bit above median in one of the top 5 highest income counties in the US), benefits are concentrated and costs are diffuse. It's a tiny hassle for me to bring a jumper for my kid to sleep in, and only a small fraction of my state taxes go towards DSS, while I get to enjoy the marginal peace of mind that my kid who seems to be able to sleep comfortably with blankets in our home at night, faces no such threat from killer fabrics as she dozes off for a couple of hours in midday.

Ex post regret is the moral sentiment here. Worst-first and at-any-cost thinking dominates discussions of children (follow Free Range Kids for more examples) well beyond what should be reasonable using rational risk analysis. And because of the logic of public choice, it's unlikely to change anytime soon.

Unless of course, sensible constituents can wrest from the Helen Lovejoys of America the mundane moral apotheosis and shame enforcement agencies into sticking to the crucial purpose of their charter: to investigate and prosecute actual, systematic abuse of children. The War on Fluffy Pillows wastes vital public resources.

Partisan Rancor Meets Simple Charity

Leering at me from an underlit recess at the end of the hall is the beetled brow of my hunched American ancestry, twinkles of anger and disappointment sprinkled atop a foundation of cold contempt. I have failed him. I have allowed my beloved country which he fumed, hewed, hacked, and slashed from its dusty wooden bones to descend into petty, fulminous bickering over clear, uncontroversial, basic humanitarian duties.

There are children on the southern border. Children without homes, children fleeing violence. Children that have braved perilous journeys of many hundreds of leagues, placing frail hopes on the slender reed that strangers in the north might breathe a puff of air into the rusty bellows of simple charity.

Perhaps these wayward sons and daughters should have done their homework first. Perhaps they should have realized that since they're apt to grow up and register with the Democratic Party, they're not welcome here by the opposing faction. Perhaps they should have realized that since they can't hold a job (ever?), they're a net drain on the already debt-ridden public fisc. Perhaps they should have been ever so slightly more diligent and discovered that the curable diseases they've brought with them have to be treated by doctors who could be more gainfully employed tending to people with the good sense to be born north of the Rio Grande.

Because our political equilibrium is so frail and our need for military might so urgent, we just can't possibly afford to let our fellow citizens exercise basic private charity. It is imperative that we send these children back to the chaos they went to great lengths to escape. The Republic could not stand otherwise.

Sweet Jumping Hotcakes, people. This is why we can't have nice things. Look, I get it, migration is not euvoluntary. In this case, we're neck deep in Locke's Venditio: these kids are the proverbial foundering ship at sea, in dire want of an anchor. You may or may not have an individual duty to assist, that's between you and your conscience. But to claim that you have the moral authority to stand between your fellow citizen and their moral imperative to help for reasons of partisan politics seems ...well... slightly monstrous, don't you think?

Examine your BATNA. Examine theirs. Exercise analytical sympathy. It's not that difficult. Recalculate your moral intuitions.

And then face the inevitable conclusion that if this is the best we have to offer refugee children, some of them under ten years old, then the prospects for meaningful immigration reform will be dashed on yon rocky shore until the median US constituent finds a better heuristic for the proper role of the sovereign.

Solon wept.

Not All Substitutions are Created Equal

The Dub-MOE takes up Bryan Caplan's challenge and issues an essay on conservative authoritarianism. An excerpt:

Like liberals (and everyone else), conservatives can be guilty of mental substitution, which happens when people confronted with very difficult questions substitute much easier questions that don't require much reflection. This isn't the same thing as breaking a complex problem down into its constituent parts. It's changing the question, albeit subtly: "should the government punish people who produce and listen to this music?" becomes "do I want my kids listening to this music?" Sometimes the substitution is explicit for rhetorical effect: "do you want your kids listening to this garbage?!" Indeed, the best examples of conservative authoritarianism that come immediately to mind involve sex, drugs, rock & roll, war, and immigrants.

Art (who I can now count as a co-author!) buries the lede a little. The problem isn't that conservatives (or anyone, really) make little mental substitutions, but that they make rubbish substitutions.

Consider the same question mulled by Solon. Instead of "do I want my kids listening to this music?", the Divine Maxim of Plato would ask "would I be willing to bar my parents from listening to this music?"

The role of the government is to act as the servant of the people. When the reverse occurs, dominion and injustice probably aren't all that far behind.

Substitute questions aren't wrong in principle. The puzzle is how to align folks' incentives to start making good ones.

Daunting, but our euvoluntary future depends on it.

Tragedy of the Commons: Fertility Edition

At Quartz, Sarah Perry claims that having kids has become a Tragedy of the Commons. Because the value of children now accrues more to the general public instead of to the family that begat them, would-be parents have less incentive to procreate.

ATSRTWT

The mark of a good claim is that it can be tested empirically. In that sense, this is a good claim. I am in the habit of being a bit leery of monocausal explanations for complex phenomena, as I am sure you are, but any relative price story has at least one treatment effect. Here, there's an embarrassment of econometric riches. We have lots of natural experiments with transfer payment legislation, varying both geographically and over time (for panel regressions), we have big treatments like the 1996 welfare reforms (for discontinuity regressions), and we have plenty of historical data (for time series econometrics). There's lots to choose from.

But behind all that are McCloskey's ol' admonitions: why is this question important? Are the results meaningful (i.e. are the coefficients substantial, and not merely statistically significant)? Who is the relevant population? What's the relevant counterfactual?

It's always that last one that needles me when I hear claims about changes in rates (of any kind). I strain to imagine why it should be that historical rates were somehow closer to a Platonic ideal than what we've got today. I keep a bottle of aspirin handy for the headaches that inevitably develop from all the eye-rolling I do every time I hear some DC politician wringing his hands over "cuts" to this program or that, as if last year's budget was some magical cloud farted from the candy-coated buttocks of a majestic unicorn in flight aboard a helicopter made of chocolate and powered by pixie dust.

That expressly is not what Perry is doing, however. I won't claim that Caldwell is or isn't making this mistake here, but I will note that there's a big gulf between positive statistical analysis and public opinion and that stealth assumptions have a nasty way of sneaking into your empirical claims and drinking all the milk in your fridge, so to speak. Perry is making a straightforward relative price claim that's perfectly consistent with ordinary plain-jane workhorse Economics 101. The tragedy is when someone reads that and goes all Helen Lovejoy, setting about to rush hasty legislation through hot on the heels of an imagined crisis: "won't someone think of the (unborn) children?"

The point is, if I were inclined towards the economics of the family (and I'm not, since competing in the same arena as Justin Wolfers means my contributions would be rapidly and summarily overshadowed), I'd want to very carefully establish the following:

1. Am I measuring the right thing? Should I care about fertility per se or about, say, a combination of fertility and mortality? Should I care about utility-adjusted life-years or something? Total aggregate discounted lifetime productivity maybe? How should any of this be measured? What controls should I include? Why?
2. Are historical comparisons appropriate? Why or why not? 
3. How strong is the treatment effect of state-provided goods (including in this case retirement benefits, education, direct transfer payments, and medical subsidies)? How does this effect compare to reasonable alternative hypotheses, like widely-available contraception, household composition effects, selection effects, et al?
4. Finally, what are the public choice implications? 

Sadly, many authors behave as if there is no four. There's quite frequently a throwaway closing paragraph in most empirical papers outlining what the appropriate policy response should be, but these tend to be laughably naïve, invoking the mighty powers of the Sikorskean unicorn referenced above.

Tradeoffs abound, including in the maternity ward. I'm very much a member of the Julian Simon club: people strongly tend to be net assets rather than net liabilities, so I'm naturally sympathetic to the idea of encouraging fertility. Similarly, my priors lean towards private provision of private goods (including most education), with perhaps some public funding where appropriate. But careful analysis must account for the public costs of policy alterations.

I have a hunch that thorough research would produce some of the same results. Proving definitively that a tragedy of the commons actually exists is a grueling task, but it could be an interesting exercise. If nothing else, it'd be a nice way to needle both the left and the right at the same time, and that's gotta be worth something to someone, right?

Kids aren't euvoluntary because regret. Consider very very very carefully what this might imply for public policy. Consider also historical context and the undeniable fact that people get mighty squirrely when confronting questions of reproduction.

h/t The Peej

Stocks Need Flows Need Stocks Need Flows Need Stocks

Anno Domini 2014 boasts a historically impressive amount of content. Not only does the world have all of the surviving lore of the past, not only do the residents of the world produce new material proportional to the raw adult population, but now more than ever before in the history of the world have the costs of accessing that information dropped so precipitously for so many. Even without the specific ability to read, ordinary humans can watch nature documentaries about exciting new discoveries, new frontiers in science, new ventures, new horizons.

New telenovelas.

A great deal of this immense tsunami of information is, to put it bluntly, rubbish. Much of, if not most of modern entertainment is pablum, sanitized and bland and the prophet of this excess of waste is destined to be remembered as the Greatest Man of the Early 21st Century: Michael Bay. He is the Orson Welles of the naughties. Here we have a director working in the same medium that produced Ikiru and Fitzcarraldo and 2001: A Space Odyssey and what does he do with it? 

Explode everything.

But as face-blasting and mind-numbing Bay is, he is not out setting fire to the last copy of the sheet music to La Bohème. Unless it's in one of his movies. Which might actually be pretty dang self-aware of him if he did. Point is, new material only ever adds to the cultural stock, and unless you, O my careful analyst, are willing to forward the curious proposition that the people responsible for The Jersey Shore would otherwise be toiling over parchment to produce fine Italian opera, there's no fine art/crude art (f-art/c-art) tradeoff to speak of, at least in the aggregate.

But that's in the aggregate. Individuals are not aggregates. As an individual, our entertainment puzzle is to estimate the share of the giant dogpile of history we're individually willing and able to add to our own small stock of cultural knowledge. Shall I treat myself to an operetta this evening or is it more of a dubstep night? Virgil or Palahniuk? Jan de Bray or Jan Švankmajer? My choice of flows directly determines my cultural stock. Everyone's choice of flow determines the future cultural stock insofar as producers respond to incentives. Give the public what they want, even if what they want is the easy pickings from the dung heap left over from a few years back.

I'm a bit curious though. Does my choice to consume pop culture junk food impose upon you a negative externality? Do I have a greater propensity to be a boor, a dolt, a jerk, or a misanthrope simply because I like to listen to Front Line Assembly more than I like to listen to Dvorak (most of the time anyway... I'm listening to the New World Symphony as I'm writing this, and the 4th movement of Part 1 just came on. You know the one even if you don't know the title)?

And if there is a negative externality, what's the correct policy prescription? the f-art/c-art dilemma doesn't resolve itself by wishful thinking, so subsidies for f-art are more likely on the margin to result in wasteful failure. And I trust you shudder to think of the tax incidence for going all Pigou on lowbrow art. Poor people are already poor enough without raising the price of the latest EA title. EA is perfectly capable of ripping off their customers without your help, I assure you.

The Helen Lovejoy of it is that kids don't know any better what to put in their media diet. I'm all for the idea of joyous tolerance, that I can just loathe to the depth of my being every single note of hee-haw, yee-haw, them-thar honky-tonk badonkadonk country music that's ever drifted across the airwaves, while exulting in the knowledge that I needn't impose my narrow prejudices on my fellow humans. Dominion is a far worse negative externality than any twang of a hayseed's banjo.

Of course, there's always the Rush problem. Not so sure about that one.

Plato's Divine Maxim: Vapor in the Wind

(via Reason) On June 18 2014, Senator John Davison "Jay" Rockefeller (D-WV) addressed the dire issue of "Aggressive E-Cigarette Marketing and Potential Consequences for Youth."

ATSWTWT

Well, perhaps you shouldn't watch the whole thing. It's two and a half hours of Senate testimony. I'm sure you can find marginally more productive things with which to occupy yourself.

Okay then. According to Senator Rockefeller, it's bad to convince kids to purchase electronic cigarette products. I think the worry is that the kids will then consume these products and become addicted, leading to health problems later in life.

Let's assume for the moment that the good Senator from the great state of West Virginia has conducted a thorough critical review of the relevant medical literature and has come to this conclusion without a hint of bias. Assume also that the standard public choice problems of incumbent firms seeking to protect political rents by shouldering out upstart rivals by way of offering special inside information to political elites who are legally exempt from insider trading statutes does not apply in this case and that Hume's warning against a sovereign that seeks to encrease his dominions offers no useful guidance here. Assume, in other words, no knavery.

What policy follows? From the majority statement: "beyond the flavors identified in our report, refillable nicotine liquid that is marketed can be found in flavors that include 'Bazooka Joe,' 'Gummy Bears,' and 'Chocolate Toot See.'” Are these flavors less euvoluntary than "Grandpa's Phlegmy Lucky Strike Cough" or "Bottom of a Crusty Ashtray"? Even if candy-flavored nicotine is intentionally aimed at children (and smokeless tobacco has had flavored variants in their products for decades with little public outcry), shouldn't a careful analysis include consideration of likely alternatives? Remember your Demsetz: the task of analysis is to compare alternative real institutions against each other rather than against an imaginary ersatz world. Pretending that kids would simply abstain from behavior that parents and legislators disapprove of thanks to regulatory efforts is the very essence of the nirvana fallacy. Moreover, product bans, speech restraints, and enforcement efforts almost never properly consider the full extent of the public costs. Consider that every federal and state inspector hired to interfere with the sale of electronic cigarettes gives up the opportunity to participate in the productive economy.

Then again, perhaps I'm looking at this the wrong way. Let's think in terms of comparative advantage and the Coase theorem. Assume that parents don't want their children using these nicotine products for the few years while they have custody. Assume further that these parents are insufficiently competent to prevent their kids from obtaining and consuming these products. The marginal costs of organizing to restrict advertising and sales are lowest in politics. Convening a Senate hearing is plausibly cheaper than parents organizing for a vociferous campaign of public censure (again, under the assumption that the value of Sen. Rockefeller et al's time is sufficiently low). So why shouldn't parents take full advantage of the services their tax dollars purchase and subcontract a portion of their ordinary responsibilities? Isn't Helen Lovejoy political economy simply a matter of low-cost provision of parenting duties? Why are the politically protected rents enjoyed by incumbent tobacco firms morally relevant? What matters is keeping nicotine vapor out of the hands of tender, innocent children. You know, just like the way that Schedule I keeps marijuana away from teenagers.

Invoking "children" is a natural defense against Plato's Divine Maxim (never to use violence to his country no more than to his parents). Obviously, the sovereign shouldn't treat kids with the same jurisprudential consideration as adults. So how can the armchair political analyst distinguish between a legitimate concern for minors and a mere political fig leaf? For me, I slightly alter Plato's Divine Maxim thus: would I be willing to completely prevent my parents from conducting an exchange to slightly increase the probability my kid wouldn't conduct the same exchange? Nota bene, I assume that on average, my parents will tend to be more law-abiding and conformist than my daughter. For e-cigarettes? Paternalist please. If you're going to let parents opt out of vaccinating their infants against communicable diseases, you sure as heck have no standing to ban vaping. Jenny McCarthy's preposterous drivel is a far greater threat to public health than smoking substitutes. Drag her in front of a subcommittee and then maybe we can have a little chat about how America's parents are justified in assigning their nicotine prevention and cessation duties over to the greatest deliberative body in the world.

H.R. 4341: the "Truth in Advertising Act of 2014"

Full text available from congress.gov.

ATSRTWT

A slice:

Congress finds ... An increasing amount of academic evidence links exposure to ... altered images with emotional, mental, and physical health issues, including eating disorders, especially among children and teenagers. There is particular concern about the marketing of such images to children and teenagers through distribution in teen-oriented publications, advertising displayed in public places outside the home, and online media.

Is the digital manipulation of photographic images coercive? If so, is there a compelling public interest in keeping these materials from the attention of vulnerable minds? Would you impose a fine on your parents for clumsily separating a model's thighs when retouching a photograph?

I grew up watching He-Man as a kid. I suppose that explains my propensity for trying to ride my tabby cat into battle against a muscle-bound demilich. Still, I'm grateful that the scolds of the PMRC era didn't get their meathooks too deeply into Mattel in 1983. The Castle Greyskull playset is quite the collector's item.

Maybe I'd be willing to grant that digitally manipulated images aren't euvoluntary. Maybe. I'd have to squint pretty hard and hold my breath, but maybe. Still, it's a mighty leap from there to "therefore we should empower government censors to review each and every image that lands on paper." Please check your totalitarian instincts before forwarding terrifying legislation like this. I beg you for the sake of the Republic.

Latest action as of 4/29: Sponsor (Ileana Ros-Lehtinen [R-FL]) introductory remarks on measure.

h/t Reason

Trading No

My inaugural post at the brand-spankin'-new Sweet Talk Bleg is available. In it, I treat the right to say "no" as a commodity. If, for whatever reason, a person finds that saying "no" is difficult, it might be a good idea to seek credible prior restraint. Trading the right to say "no" could certainly be euvoluntary.

But there's a difference between a specific and a general power of attorney. When agents of the state get to decide how and when to say "no" on your behalf, your status as a sovereign individual wanes. And it may perhaps wane more than you might like. I encourage anyone who seeks redress from the government to be sensitive about this risk.

Little Girl Upbraids Corporate Scuzzballs. You Won't Believe What Happened Next!

At 10, Hannah Robertson returns to the public eye by denouncing McDonalds for the second year running. Her claim? The Golden Arches uses immoral, deceptive marketing tactics (advertisement and bundling toys with meals) to trick kids into eating unhealthy food.

I'm a parent. My daughter isn't old enough to be an activist, but perhaps when she is, I won't get in her way if she wants to reprimand the real villain in this: Congress. McDonalds may be big, they may be sleazy, but they cannot force you to pay for their food. Congress can and does force you to fork over a chunk of your wallet to titanic agribusiness ventures (like the chronically revolting Archer Daniels Midland) to the tune of $19.5 billion in FY 2014. 

Non-euvoluntary exchange over a greasy fast food counter is one thing. Being fleeced by the tax collector to line the pockets of insanely wealthy plutocrats is something else entirely. Hannah, if you read this, I urge you to concentrate on the real villains here: corn processors and their pet legislators. The food from McDonalds comes from somewhere. Find out how it gets from the farm to the Happy Meal box and see what's rotten on the way. You might find that you're fighting the wrong battle.

Best wishes,

Sam.

h/t VDR

Accidents of Conformity

What's in a name? A classic paper in the labor econ literature is Bertrand and Mullainathan's 2003 field experiment in which they mailed out resumes to firms. The only substantive difference between the matched clusters of resumes were the names: some had stereotypically Caucasian-sounding names; others had stereotypically African-American-sounding names.

They were able to reject the null hypothesis that randomly-selected HR professionals (in Chicago and Boston) used no race-based selection heuristics to screen preliminary job applicants.

It is not my purpose here to comment on the method they used, nor shall I worry you with how their results have been improperly extrapolated among interested parties. Instead, let's accept that, indeed, the results are what they say on the tin: Emily and Greg are indeed more employable than Lakisha and Jamal. Given that this is true, is the decision to foist a disadvantageous name upon a child who does not know any better a euvoluntary one?

It may or may not surprise you to discover that not all countries are as lax as the US when it comes to naming children. I still recall my shock and horror when I found that Lithuania (to give an example near and dear to my heart) maintains a ledger with state-approved first names (surnames, too, but that's another issue). If you try to name your kid "Samuel" in LT, your application for a birth certificate (hence, passport) will get bounced. Or at least that's how it was ca. 2001. Maybe they've changed the statues since. My Lithuanian isn't good enough to track it down. Point is, we Yankees may have a propensity to take our liberty in naming our kids for granted in a way that might bemuse the rest of the world. And strict prudence would predict that given the Bertrand & Mullainathan results, some of the entries on the top 1000 list of baby names for 2012 (SSA) would probably have to be seriously reconsidered (how does "Xzavier" make the list at #614? Have you ever met a "Xzavier"?). But prudence doesn't rule. Only the starchiest of economists would assume that it does. Loyalty matters. Group identity matters. Pride matters. Heck, even plain-jane "coolness" matters (if I thought I could get away with it, I'd name my next kid "Banjo Mechasplosion Firenado Charterplane Lionstrangler In The Great Vast Expanse of Outer Space Wilson, Esq."). Methodological individualism loses no analytical power (and may indeed gain quite a bit) from acknowledging these simple, ordinary psychological observations.

And I think most regular folk acknowledge these observations. At least here in the states, there's a pretty strong presumption of liberty when it comes to naming your kids, even when it runs the risk of harming them. I do then wonder how and why it is that the same culture that suffers a kid to be saddled with a name yanked out of a popular TV show will suffer rubbish like a staged playground kidnapping in the name of protecting kids from a virtually non-existent threat (h/t L. Skenazy).

"Won't somebody think of the children?" Good idea. Start with your own, demonstrate a journeyman's understanding of everyday Bayesian reasoning, and then maybe we can have a little chat about whether or not you're adequately qualified to lecture others on their own hazard assessment. A sensible precautionary principle demands nothing less.

A Very Euvoluntary Open Borders Day

Today is Open Borders Day (according to the folks at Open Borders). The idea of free migration ought to be important for folks who find EE arguments compelling. And here's why:

Foreigners in distressed countries lack access to euvoluntary markets.

Worry over the typical American worker should be identical to worry over the typical foreign worker. Aristotle was right: faced with the natural limits of a mature sense of justice, 3000 miles is no different from 8000 miles. National borders are not morally relevant. And again, the consequences of failing to exchange with peaceful people means foregone wealth on both sides of the transaction.

And at the risk of being a Helen Lovejoy myself, consider what sort of misery children experience elsewhere in the world. If you have the stomach for it, check the World Bank's child mortality figures. The US is 7 per 10k.

Chad is 150.

If there were a jurisdiction in America with a child mortality rate that high, the public outcry would be deafening. But we've so convinced ourselves of the ironclad salience of national borders that the suffering of others elicits maybe a little hand-wringing and the rise of a mostly-unaccountable, nastily wasteful Foreign Aid apparatus.

The answer is obvious. Throw the crib door wide.

...Should Be Banned

Rarely is the question asked: "is our children using too much iPads?" Luckily, forthright Canadian meta-research is here to set the record straight. In ten simple bullet points (proper citations here), Cris Rowan presents a digested case for: "parents, teachers, and government to ban the use of all handheld devices for children under the age of 12 years."

You might be tempted to chuckle into your sleeve at the avalanche of post hoc hogpiffle in both the blog version and the meatier reference work. I urge you to resist that temptation. Consider instead the implications for commonplace moral reasoning among constituents and pernicious moralizing aggrandizement among political elites.

I (again) beg you to consider the difference between a private and a public health hazard (in this case, a developmental hazard). Definitions vary, but consistent with ordinary definitions from economics, a public health hazard is one in which individuals fall ill (or, I suppose, fail to develop within a tolerable error band from the mean?) from a free vector. In the jargon of public goods, illness transmission is non-rival (the fact that I'm sick doesn't prevent you from being sick either) and non-excludable (you can't easily avoid the vector). Typhoid or smallpox are stereotypical examples. A private health hazard is either non-contagious or can be contained at sufficiently low cost. Amyotrophic lateral sclerosis (Lou Gehrig's disease) is a private disease.

Assume for a moment that Rowan's ten bullet points (okay, the first nine anyway; the tenth is another matter entirely) do not suffer from the suite of econometric fallacies that plague many epidemiological studies and instead are indeed causal, with the arrow pointing one way and one way only. Do we then have a public health situation?

My guess is that consumption of electronic entertainment is presumed to be addictive. And there's a discounting problem. Kids will play their Saints Rows and their Starscraft and their Eves Online and it'll be years later when the real bill comes due in the form of psychosis, cankles, and (take a deep breath and bear with me) radiation exposure. Here's the question: does the perceived non-euvoluntarity of cartoons and video games elevate health risks from private to public? If so, by what mechanism? Video games aren't contagious, and I'm utterly baffled at how avoidance costs could possibly be all that high. Especially for kids under two, eliminating TV from an intellectual diet is trivially easy, even for the laziest, most indolent parents.

I wonder, is the public or private nature of human activity even a relevant question anymore? Has regulatory jurisprudence, informed by constituents' consent, progressed past the point where politicians need even bother making a rigorous public goods case anymore? Does, for example, California's runaway nanny state suggest that political elites need merely invoke public goods theory as a hollowed-out totem, bereft of analytical integrity?

At any rate, I'm not even sure I should be posting on this anyway. I can guarantee you that Mungo wouldn't have taken the bait. The last bullet gives the whole thing away as a lark.:

The ways in which children are raised and educated with technology are no longer sustainable (Rowan 2010). Children are our future, but there is no future for children who overuse technology. A team based approach is necessary and urgent in order to reduce the use of technology by children.

Not a bad punch line. Pretty good joke. I am Pagliacci.


Bullet Point #7 (couldn't resist [the command], sorry it's pitched up BTW, can't find the proper version):

Carpet Conflation: Slavery, Debt Bonds, and Child Labor

Harvard's FXB Center for Health and Human Rights releases a report on carpet manufacturing in India.

ATSRTWT.

TL;DR: making carpets is a rough affair. The work itself is dusty and dangerous. Workers spend hellaciously long shifts hunched over looms at dimly-lit stations, surrounded by sharp tools, litter, and rusty machinery. Pay is low, and even when workers agree ex ante to a particular wage, they often find ex post that actual wages are on the closed interval between zero and the agreed-upon wage, more than just a token epsilon from the right bound. Overtime pay is not a thing that exists there.

Please direct your attention to pages 22-23 of the report. There, we have a discussion of relevant legislation. The author takes the reader on a tour of the statutes defining forced labor, bonded labor, child labor, and human trafficking. Let me quote the latter verbatim so you can see for yourself how many of the EE conditions are engaged (statute in italics, EE-relevant passage also in bold):

Human trafficking is defined in numerous international conventions and domestic laws. The first international definition for human trafficking was provided by the 2000 United Nations “Palermo Protocol.” India ratified the Protocol in May 2011. Article 3 of the Protocol defines human trafficking as:

“Trafficking in persons” shall mean the recruitment, transportation, transfer, harbouring or receipt of persons, by means of the threat or use of force or other forms of coercion, of abduction, of fraud, of deception, of the abuse of power or of a position of vulnerability or of the giving or receiving of payments or benefits to achieve the consent of a person having control over another person, for the purpose of exploitation. Exploitation shall include, at a minimum, the exploitation of the prostitution of others or other forms of sexual exploitation, forced labour or services, slavery or practices similar to slavery, servitude or the removal of organs.

All there, black and white, clear as crystal. The investigation found just shy of 300 cases of human trafficking that fit this particular bill. And to their credit, they did heap much of the blame for these abhorrent working conditions on the institutions that support them, particularly the caste system, but mostly acknowledging that what's going on is coercion by circumstance (p. 29, Table 3). For the bonded-labor cases, parents valued cash advances more than they valued their kids not going off to make carpets. Rightly or wrongly, that shocks the sensibilities of well-to-do readers, particularly when 80% of the bond debenture was for "consumption." Why, just imagine sending your own child off to work with dangerous industrial equipment so you could pick up a PS4.

Smithian sympathy is hard. Framing matters. Context matters.

Everything in this report is good shoe-leather investigation up until the Recommendations section (p. 53). There, the author settles back into predictable feel-good Western, affluent-style nostrums that do precisely zero to address the underlying problems that generate heritable poverty. #9 is particularly risible: "Support and empower vulnerable communities." That's a fine idea, one quite consistent with good institutional analysis, but it's expressly not something that can be fixed with a wave of a magic wand. I daresay that my neoliberal dudebros AG and NS would agree that the Lindy Effect is not that bad a way to describe the durability of India's caste system: a British occupation ended suttee, but did little to eradicate untold generations of dominion-by-birthright. Reformers with no skin in the game are going to do better? Pollyanna please.

Look, the way to root out corrupt business practices like this must provide better alternatives for all parties. Bonded labor is a problem, so why not push for immigration reform so that poor villages can send folks to earn wages in highly productive enterprises and send home remittance payments? Prosecutions and investigations (#8) do quite literally nothing for the workers other than force them to accept a definitionally poor BATNA.

A soft heart is an asset. Please let's not couple it with a soft head.

Are Anti-Abortion Payments Exploitation?

Angie C sends us a story on Save Unborn Life, an organization that pays expectant mothers to refrain from terminating their pregnancies.

Save Unborn Life exists for the sole purpose of offering abortion-minded women money to bring their babies to term. After a meeting with Merriott, Hope was offered $3,000 not to go through with the abortion, which was scheduled for the next day. She immediately accepted the offer.

The anecdote in the piece is stuffed to the gills with woe. BATNA despair on full display.

I wonder if anyone would be willing to defend the position that SUL is exploiting women to forward their agenda. Ordinarily, the clash over abortion is mostly sound and fury, with plenty of speech but few real resources on the line. This is different: this pro-life group works not through coercive political channels, but by market(ish) incentives. But poor young unwed mothers are still in dire straits. There's no disengaging that bit of moral intuition.

The pro-choice folks I know lean in the direction of seeing the downside of state coercion on (at least this one particular) highly contextual personal decisions. I think they'd be okay with private subsidies to poor folks struggling to make ends meet. It'd be nice if many of them (again, the ones I know personally) would take this insight and apply it more broadly, but that's neither here nor there for now.

And it's not just BATNA engaged:

Merriott said that SUL also encourages poor women to sign up for federal assistance programs such as Medicaid and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and that adoption is often the best option for women who cannot afford to care for their children. But SUL’s main objective, she made clear, was to save one life from death and another from a lifetime of regret.

Regret too.

And I'd again encourage you to think about Basic Income.

PS: could this be an enforceable contract? I don't mean in a legal sense, but in a practical sense. SUL probably wouldn't be able to recoup in the event of a breach. How marginal are abortion decisions, on average?