Cheaters Never Prosper

Adultery-facilitating website Ashley Madison has had its user data stolen. 37 million users, many of them presumably real people, are now at risk of extortion, identity theft, and that old-timey blackmail.

You can read Avid Life Media Inc's statement here.

I know what you might be thinking: the only site that deserves it more is maybe Gawker. And while I'm sure that law enforcement will be working diligently to find the culprits and bring them to justice, I might expect most citizens hearing the news will sniff and mutter, "they had it coming." Degeneracy like adultery deserves some sort of cosmic justice, and occasionally justice arrives in a chariot driven by a team of hackers (in this case, amusingly and appropriately named "The Impact Team"). 

I have my doubts that Ashley Madison has 37 million unique active users. But that is an upper bound estimate. 37 million already-shaky marriages further threatened by vigilante hackers is a heck of a lot of mischief. There are probably a heck of a lot of people waking up to a heck of a lot of fresh regret this morning. 

I sure hope if you're reading this, you're not one of them. If you are, godspeed. For you have an awkward, difficult conversation with your spouse to conduct, one that I hope I wouldn't wish on even a miserable moral wretch.

Of course, the first-order harm is the infidelity itself. Exposing it is a comparatively minor evil. Right? It seems that way. I think this might be an interesting enough question to explore in my ongoing altfic at Sweet Talk. Stay tuned.

Disrupt Cruelty

You will die.

You will die and your remains will wither to rejoin the earth and the air.

You will die and from the elements you shrug off new life shall arise. Life is fleeting, death is eternal. Because of this, men and women of good conscience treasure the brief gift that is a life well-lived. Because of this, men and women of good conscience inflict no pain, wreak no suffering without just cause. Because of this, because everyone dies alone, humanity has adopted expensive, enduring institutions, occasionally profane, but mostly sacred around the inescapable clutch of the grave.

Does the logic of prohibition apply to animal testing? Recall that by banning alcohol, rum-running hooch-slingers contributed to a gangland culture that gave us such niceties as denatured alcohol and the Saint Valentine's Day Massacre. The War on Drugs gave us massive, powerful cartels. And the ongoing offensive against sex work is, well, offensive. But what would happen if governments up and banned live animal testing altogether? It seems rather unlikely that black markets in test monkeys would arise.

In cases like this, I return to my old habit of considering the underlying exchange. With alcohol, the best evidence indicates that with sufficient treatment, subjects obtain classical symptoms of drunkenness. Similarly, a dose of LSD will expose the glowing heart of the hidden universe. The thing itself, the drug, the treatment is just a technology to obtain an effect. With drugs, I think that the opprobrium is against the effect, as the technology is otherwise unobjectionable. With animal testing however, the ends are generally valuable enough to tolerate the abrogation of the tug of the conscience that stubbornly insists on mercy.

In EE terms, the BATNA of animal testing is delayed or eliminated drug tests, constipated disease research, and a halt to cosmetics innovation. I'll take the bold stance that if it means fluffy little bunnies don't have to suffer to produce a new shade of blush indistinguishable from the enormous palette already available, this is probably not a welfare-destroying choice (assuming animals contribute to the social welfare function, which I admit is a contentious claim). But curing (infectious) disease is as close to a pure public good as I can easily imagine.

Wouldn't it be just great if we could get the wonderful benefits of animal testing without having to inflict torture in the name of testing? I think it would.

Unfortunately, the Dickey-Wicker Amendment boilerplate in every spending bill since 1995 restricts the use of federal funding for human embryos in research. The moral intuitions there are interesting. I suspect it engages  Jon Haidt's disgust moral dimension, which means that the alternatives of either animal testing or marginally slower research are likely to stick around.

Of course, people are clever. When we told them they have to pay fruit pickers higher wages, farmers made better, faster machines to do that work. When we told them they couldn't put CFCs in cannisters anymore, hairspray makers switched to finger pumps. Now that we're telling them to hike the pay of fast food clerks, burger slingers are taking the path of the banks in their switch from meat-and-bone tellers to ATMs by automating the ordering process. To borrow a classic Jeff Goldblumism, commerce... uh, commerce finds a way.

Consider the possibility that if instead of incinerating culled embryos, they could be donated to federally-funded research facilities that they might use the insights gleaned to work towards a more cruelty- and morally-objectionable-free research environment. End Dickey-Wicker now.

But don't be too shocked when it doesn't happen. Legislation is notoriously hard to repeal.

R.I.P. Dwayne Goettel

The Very Model of a Postmodern Major-General

Will human genetic engineering be euvoluntary?

Kaffeeklatch nattering on the nature of fiddling with genes tends, in my experience, towards the far-mode. Most of the conversations I've had on the topic center on aggregate social consequences. The few near-mode chats I've had tend to be fairly mundane: a genetically engineered child still needs periodic diaper changes, cuddles, and bandages on skinned knees. Designer babies still get the sniffles, have their hearts broken, and climb up on the counter to sneak a few jellybeans while daddy's upstairs writing a blog post about human genetic engineering.

In my remarks in my previous post, I omitted much discussion of the peace dividend. Forgoing or delaying child rearing is accompanied by a non-violent mien. Bronies are not generally aggressive. At least not individually. Try to imagine an Applejack cosplayer mugging you for drug money. Now try to stop snickering. Now try to imagine a multitude of families, each playing slightly (sometimes very) different status games, often overlapping, with different status markers, in different communities. Grass-eaters might beget grass-eaters, and outsource protection to genetically modified bodyguards. Is this a problem? Should we expect to see EE violations in a HGE world?

1. Conventional ownership. Do you own your genes? Do your genes own you? Do you find it comical, tragic, or perfectly reasonable that gene sequences enjoy IP protection (at least for agricultural products)? If by "conventional" you mean "there's some case law on this" then yes, we have some idea, some precedent for residual rights over gene sequences. But if by "conventional" you mean an established tradition that resides in the minds of the citizenry, my impression (about 60% supported by the most recent release of the General Social Survey) is that the typical person is not of the opinion that tinkering with human genetics is a task for the mind of Man, but rather reserved to the authority of God. The relevant question is this: will opinions change and conventions arise once the practice becomes commonplace? The evidence from other popular technological advancements suggests that, yes, conventions will shift to accommodate valuable exchange opportunities.
2. Conventional capacity to exchange. Let's review Shackel's Motte and Bailey Doctrine. There is a core argument (lynching blacks is an inarguable evil) that is res ipsa loquitor obvious, and a less-defensible, but related claim (racial quotas enforced by state mandate is a natural right) that may or may not be true, but can be defended from the ethical comfort of the core claim (if you oppose race-based university quotas, you may as well put on a white hood and robes, because you're basically a klansman already). In the case of genetic engineering, the Bailey (the core, easy-to-defend proposition) is that there's a whole range of genetic disorders that could be wiped from the earth in but a few scant generations. Huntington's, Crohn's , Cri du Chat, Fragile X—the list is pretty long—these can all be corrected by manipulating embryonic genes (someday). Most respondents would be loath to toss the eradication of these diseases on the dunny heap, so expect most of the rancor to erupt in the Motte: designer babies, with +3SD IQ or the strength of Hercules or what-have-you: these sorts of exchange are outre, and in the interest of honesty, these are the ones I'd like to defend by encouraging you to think about them carefully. So for the rest of this little essay, assume I'll be spending all my time in the middle of the muddy Motte.
3. Absence of regret. Few parents express sincere regret for having had children. It's conceivable that parents might regret having designer babies, but the sorts of duplicitous sales practices that could lead to regret are already covered under the Uniform Commercial Code. Systematic individual regret therefore seems unlikely. But it's aggregate regret that I think worries most skeptics. In agriculture, genetic engineering often results in monoculture: superior strains of corn or wheat or whatever now dominate production, This monoculture leaves the entire species vulnerable to a well-targeted attack: some virus with a taste for a particular protein produced by a swapped-out gene could easily result in widespread crop devastation, leading to famine. In Talebian terms, such a system is fragile. If human genetic engineering produces a similar monoculture in the human population, a clever enough misanthrope might design a bio-weapon that could eat a very popular gene sequence, resulting in a near-extinction event. It might be worth it to invoke the precautionary principle in this case.
4. No uncompensated externalities. This is one where my own beliefs seem at odds with the popular sentiment. I am of the opinion that the success of others does not diminish my own. I believe that specialized production and exchange makes both parties richer, and I believe that envy is an unseemly vice, whether or not it makes its way into statute law. I also think I'm in the minority here. I suspect that if you told regular folks that some idle rich Beverly Hills clan maven had poured a million bucks into designing a superbaby, you'd get sneers, scoffs, looks of disgust, and a tidy sum of invective. How often do you hear "the rich keep getting richer, while the rest of us get left behind?" Having studied economics to some brief extent, I think this sentiment is bunk rubbish. Having studied politics, I am perhaps more inclined to agree with it. If a genetic sequence could be isolated that allows individuals to obtain political favor more readily, then there seems to be a pretty substantial downside. However, there is something that will mitigate this risk. Let me get back to it in a moment.
5. Neither party coerced by human agency. This one is actually the one I worry about the most. Human genetic engineering is so fraught with bioethical issues that it's very likely to be heavily regulated nearly everywhere. Heavily regulated (or banned) industries selling products or services with extremely high consumer surplus tend to encourage black or gray markets. And just like a market in heroin or sex, the logic of prohibition applies. It might be weird to consider bootleg gene re-sequencing, but during the heyday of the Apollo program, was it any sillier to imagine that the computing power of the reel-to-reel mainframes would be utterly dwarfed by tiny little handheld devices in the pockets of everyone from heads of state to boardroom executives to humble day laborers? Unaccountable genetic merchants operating out of the panopticon's view might very well dupe customers. Ne'er-do-well organizations might well kidnap or otherwise coerce hapless women into breeding them an army of genetically superior drug mules or super soldiers or suicide bombers or whatever. If this sounds far-fetched, then consider it a tail risk: unlikely but still possible. So, much like the unsolicited advice I regularly offer for sin taxes or prohibition, it is wise to consider what sort of underground markets would arise in response to attempts at prohibition. The cure might be worse than the disease.
6. Neither party coerced by circumstance. Does "keeping up with the Joneses" count as BATNA disparity? I think this is the presumed mechanism that ends in the gray-goo one-of-us conformity end game many skeptics fear. That, or the parable of the peacock, wherein parents select for socially-impressive-but-practically-useless traits in their progeny, like, oh, long necks or something. 

Here's why I think monoculture fears are (mostly) misguided: there is no one single arena for competition, even with our boring, inherited genes. Some of us are musically apt, others are good at basketball, others yet have tactical finesse in wartime. There are numerous margins along which to compete, and as we've seen with the flowering of leisure activities since the hockey stick of human prosperity took off, there are many more margins yet to be discovered. If there's big money to be had in Starcraft tournaments, don't be too surprised to find at least some parents selecting for fast-twitch muscles and uber micro. Other parents would probably go for an NFL defensive line package: dense bone and heavy muscle. Others would seek a well-tuned ear, others excellent balance, others high cheekbones, others an aptitude for research. Hipster parents might select genes that produce whimsical facial hair. Genetic engineering is more likely to result in more genetic diversity rather than less.

With one important exception: longevity. Immortality is a nearly universal human aspiration. As soon as genetic engineers can switch off the aging process, expect it to become part of the standard package without delay. Everyone will want this. And if anything will increase resource allocation disparity, it will be a cohort of Tolkenian elves freed from the shackles of making hay while the sun shines. All else equal (including what other genetic advantages might attend), extremely long life instantly bottoms out discount rates. If you expect to live centuries, prudent investment is no longer something you take for granted. Similarly, all the good things we're slowing training each other to value, like conservation, environmental quality, honesty and transparency in politics, all the little things we foist on future generations become things long-lived GE people foist on themselves. A lot of my pals on Twitter fret about a Jeb v. Hil ticket in '16. I don't. Political dynasties at least have the virtue of wishing to preserve the integrity of the system. They're less likely to be rapacious in the short term. Jeb in '16, Chelsea in '24, Jenna in '32. Given present institutions, that's how you ensure stability. Genetically modified quasi-immortals would do the trick too. Good stewardship strikes me as too good to pass up.

Now about the downside risks: GM armies, foreign or domestic, running roughshod over the enemy, crushing all resistance. Here, I'm not exactly sure I see the marginal influence of genetic engineering. Modern war is chiefly a matter of capital battery. Yes, infantry still has an important role, but to cow resistance, we tend to use naval and air superiority. Marines storming fortified beachheads is as antiquated as the hauberk and the blunderbuss. Send in the drones. Same goes for defense. As for guerrilla war, suicide bombing, et al, I again direct your attention to the longevity issue. Being personally invested in peace should, I think, give the political elite an incentive to direct more resources towards resolving lingering conflicts. And even if that isn't successful, it seems difficult to believe that folks who would resort to detonating the faithful and gullible would be particularly inclined to engineer a better suicide bomber. If you've got that kind of walking-around money, then as with nation-state armies, it's probably better to just invest in capital. 

Are there any downside risks that I can't comfortably dismiss? Well yes. Political risk. If HGE becomes cheap and effective, and it ends up banned anyway, I think it's reasonable to expect prudence to be an early casualty. One of the more disruptive outcomes would be outright speciation, where the GM offspring bred by one organization is so genetically distinct from those bred by another that they would be unable to mate successfully. High fantasy settings with elves, dwarves. orcs, and men are nearly always only ever held in homeostasis with the generous addition of applied phlebotinum. There's only room on this planet for one sapient species, pardner, and you better bet that it's the one with the nukes. Yes, that's an extreme scenario, but the stringent downside risk hints very strongly in favor of (twice in one post, oh my) invoking the precautionary principle: be very careful about enforcing a drug-war style ban on human genetic modification. A gene war could be devastating.

I think I'll leave it at this for now. This post already exceeds my already generous self-imposed word limit. I think I'll reserve a few other thoughts for a future post. For now, I'll just say that HGE is too dangerous to ban. 

Trade Unions

Generally speaking, folks who share the same camp as me tend to shy from supporting the idea of trade unions. Even absent the risk of corruption, even without union management slowly but steadily alienating the workers they represent, even when everything is going according to the stated goals of the organization, it's tough for folks who believe in the freedom of individuals to associate with whom they choose (under the contract terms they find amenable) to support exclusionary labor cartels with great cheer.

Part of Smithian political economy is devoted to the endless task of slaying the mercantile hydra without the benefit of a barrel of pitch. To use a well-worn metaphor, mercantilist economics is concerned with how to divide the pie of national opulence, whereas marginalist economics is concerned with how to make the pie bigger. Who cares, goes the argument, how large your relative slice is, so long as the absolute slice is bigger than it would have been under an alternative arrangement. That's why we here at EE get away with (or try to, anyhow) cheering suboptimal arrangements like sweatshops, organ sales, and drug and sex work legalization. It's not because we're fond of low wages, desperate hawking of a kidney to pay for bread, shooting smack, or visiting a dingy massage parlor. It's because the next most attractive alternative is often dirt farming, starvation, overdosing, and vice units stretched too thin to actually pay attention to the horrors of real-deal human trafficking. Sweatshops at least give their workers the slim change of scrimping a few bucks together to send their kids to college (or to America, God willing). No such options exist for subsistence farmers.

So why bother turning any attention to a dying institution? Trade unions, after all, exist to protect workers' share of producer surplus against a specific threat: the threat of cheaper domestic labor. Unfortunately for the needleworkers, auto welders, elevator constructors... well, check the wiki page for a full list, scabs aren't the only threat to union members' wages. Capital mobility means that firms can shutter domestic plants and hire labor elsewhere in the world. Capital deepening (and cheap credit) means that firms can more easily shift towards capital-intensive production (more robots). If you're a consumer, you welcome the greater abundance of material goods available at lower prices. If you're a neoclassical economist, you welcome the triumph of your discipline over the craven misanthropy of the mercantilists, or something. But if you're one of the poor saps with your leg caught in the transitional gains trap, smug smirks decorating economists' lips is salt in the wound. You, after all, are the one swept up in having to train for an economy that has little to no use of the skills you worked so tirelessly to perfect in yon Detroit factory.

"So you have to learn some new skills" they say, those tweedy, reedy economists. "The gain to society brought by greater productivity more than offsets your personal loss." They remind you from their tenured positions that job security is not in the description, and that uncertainty is an inescapable condition of life. While I share many of these sentiments, I also give occasional thought to alternative institutional arrangements that could both provide a robust, dynamic economy and make sure that workers (who retain dignity both on the clock as workers and off as shoppers) don't get bruised too badly when they get thrown out on their keister by the robot uprising.

There's something of an agreement in economics that the government should provide those public goods not produced by private voluntary associations. Depending on whom you ask, the set of public goods can be quite expansive, or it can be extremely narrow. I'd guess that if you polled a random selection of professional economists (the KFF Survey of Americans and Economists on the Economy doesn't ask this specific question), a majority would claim that low, stable unemployment is a public good, while a very large supermajority would agree that an individual job is a private good (at least for the worker; many would also acknowledge that from the point of view of the public and the firm, labor is a production cost).

I confess to being a bit of a Cassandra when it comes to the pending demographic pressures faced by US residents. An aging population coupled with anti-immigrant sentiments, berserk spending by local and state political elites who find themselves unbound by any hard budget constraints, and a constituency characterized by a curiously strong faith in the ability of the sovereign to immanentize the eschaton by executive fiat. In other words, the US has some very large, very politically powerful public unions whose members will command immense tax-funded pensions upon retirement. And if taxation technology (remember that income taxes are merely one way of funding government) can't keep up with the promises made to police, fire, teachers, & al by politicians now decades out of office, the alternatives will be actuarially messy. Debt financing of pensions can lead to big-brick interest payments (and God forbid you actually have to start issuing debt in order to keep up with interest payments). Giving pensioners a haircut is an option, but the political fallout of that kind of decision would be nasty enough to give even a nation of Scott Walkers pause. You could default on the sovereign debt I suppose, but I'll leave the consequences of that as an exercise to the reader.

Thus the pickle: except for a few wild-haired libertarians, everyone agrees that society needs a decent police force, a reasonable public education system, and (as long as every other sovereign nation on earth is armed) some appropriate level of national defense. We also all mostly agree that the total lifetime compensation for this work should reflect the total social productivity of the work. But future taxpayers might not be able to afford it. Yikes yikes, triple yikes. You don't tug on Superman's cape, and you don't welsh on cop retirement pay (isn't that the plot of the first Robocop movie?). So how do we eat that pickle?

Well, a good start would be to reflect for a little while on the underlying exchange made between constituents and the folks laboring on their behalf. The euvoluntary exchange between police and citizen is the provision of law and order, not the banditry of asset forfeiture, not the goonery of no-knock drug raids, not the petty thuggery of stop-and-frisk. The euvoluntary exchange between educator and student is literacy, not teach-to-the-test one-size-fits-all Ritalin-fueled college prep. The euvoluntary exchange between ATF agents and individual is non-existent because the mere existence of drinking statutes contributes to non-salutary campus binge drinking and all the sexual misconduct that entails.

The culture of petty popular tyranny is not free, and the bill will come due once all the Baby Boomers retire to comfort, leaving the burden of their care to a nation weaned on the fiction of government-as-parent. I wonder whether or not it's too late to renegotiate the terms of some of these big ol' service contracts. Pot legalization is a step in the right direction, so let's not hope it's another disappointing case of closing the barn door after the cows have fled.

Justice and Justification

Part V of a Mungerfesto in five parts is now available at Bleeding Heart Libertarians. The theme is "autonomy". A more euvoluntary society is one that preserves, even encourages autonomy. Munger surveys three proposals that would increase individual sovereignty against the status quo: basic income, state-funded education, and single-payer health care. Importantly, to remain in the realm of euvoluntary, these shall be state-funded, but not state-provided. State provision is coercive.

Munger's tone throughout is strongly Aristotelian. Or at least that's how it seems to me. Perhaps I've just got Aristotle on my mind lately. But consider this passage:

[T]he core precept of autonomy is that people be held responsible for their own choices. If the consequences of those choices are good, and create value, then people profit. If the consequences are harmful, then people suffer losses. The problem is that if exchange settings are not euvoluntary, people cannot be held responsible for their choices, either for good or bad. That’s why societies fail: people are prevented from enjoying the benefits, or suffering from the harms, that they participate through their choices in creating.

 At the risk of quibbling (and second-guessing), I think what the GTM means by "responsible" is "accountable." Responsibility is an individual, internal virtue. Accountability is the public side of responsibility; accountability calls for a reckoning of responsibility. But both are bound by the prescriptions of justice. If Aristotle was right that the natural limits of a mature justice fit inside Dunbar's Number, then the campaigns of paternalism waged through the tripartite bureaucracies Munger would dismantle only ever risk the possibility of being Just (in a Platonic sense) by sheer dumb luck.

Accountability as a measure of euvoluntarity rests on a critically important question: accountable to whom?

In-kind transfer programs suffer from nasty accountability problems. Ideally, the consumption decisions of welfare check (I know, I know, it's TANF or SNAP or the Farm Bill or oil company subsidies or whatever) recipients should be justified to the people ultimately writing the checks, i.e. the taxpayer. But is there a genuine accounting there? Or do the public's bureaucratic proxies face incentives that may not properly align with the wishes of the taxpaying public? Under a Basic Income, everyone would justify their spending decisions the same way: first to their conscience and then to their family, friends, and neighbors.

Likewise for public education. As primary education slouches toward the Potomac, extremely important neighborhood relationships risk being weakened. There is no justice when a student in Pasadena is rendered accountable to a career bureaucrat in Sacramento.

Ditto for health care. I can't say for sure exactly whether or not the PPACA is a marginal improvement over the status quo, but even if it turns out that way, it's damning with awfully faint praise. It's not even clear to health care professionals exactly to whom they are accountable. Patients? Insurance firms? The state? The public?

The muscular individualist formulation of libertarianism is, I think, wrong in its role as a bit of descriptive philosophy. Nicomachean justice is not a solitary pursuit, just as humans are not a solitary species. It is wise to question the relentless aggregation and nationalization of an increasingly large set of human activity, but it's an error of the same type to push too far back in the other direction. The Mungerfesto shows how it is that a political philosophy can be consistent with both autonomy and community. It's not so much an exercise in finding an illusory middle ground as it is in recognizing and respecting the natural limits on what can be circumscribed by a wise, informed, virtuous set of institutions.

I wonder if there's a way to rehabilitate methodological individualism along similar lines.

Morality and Social Science: Time, Money, Ethics

Time, Money, and Morality 
Francesca Gino & Cassie Mogilner 
Psychological Science, forthcoming

Abstract: Money, a resource that absorbs much daily attention, seems to be involved in much unethical behavior, which suggests that money itself may corrupt. This research examined a way to offset such potentially deleterious effects - by focusing on time, a resource that tends to receive less attention than money but is equally ubiquitous in daily life. Across four experiments, we examined whether shifting focus onto time can salvage individuals' ethicality. We found that implicitly activating the construct of time, rather than money, leads individuals to behave more ethically by cheating less. We further found that priming time reduces cheating by making people reflect on who they are. Implications for the use of time primes in discouraging dishonesty are discussed.

Money, Moral Transgressions, and Blame 
Wenwen Xie et al. 
Journal of Consumer Psychology, forthcoming

Abstract: Two experiments tested participants' attributions for others' immoral behaviors when conducted for more versus less money. We hypothesized and found that observers would blame wrongdoers more when seeing a transgression enacted for little rather than a lot of money, and that this would be evident in observers' hand-washing behavior. Experiment 1 used a cognitive dissonance paradigm. Participants (N = 160) observed a confederate lie in exchange for either a relatively large or small monetary payment. Participants blamed the liar more in the small (versus large) money condition. Participants (N = 184) in Experiment 2 saw images of someone knocking over another to obtain a small, medium, or large monetary sum. In the small (versus large) money condition, participants blamed the perpetrator (money) more. Hence, participants assigned less blame to moral wrong-doers, if the latter enacted their deed to obtain relatively large sums of money. Small amounts of money accentuate the immorality of others' transgressions.

The Headline Meme Persisteth: Paid in Beer

Amsterdam alcoholics paid in beer for collecting litter.

Moral intuitions engaged: BATNA desperation, ex post regret, conventional capacity to exchange (funded as this is by the public coffers).

A euvoluntary feast, no?

How Do I Sold Babby?

Should you be able to sell your infant to the highest bidder?

No, I'm not asking this question just so I can imagine the smoke curling from your ears. I'm being quite serious. The first-order effects are likely to be welfare-enhancing. In a voluntary transaction, the biological mother is better off, by definition with the cash instead of the baby, the adoptive parents are better off with the child than with the cash, and the child itself is better off in a relatively affluent home than abused, neglected, or aborted by a mother who didn't want to keep it.

But that's mere first-order reasoning. We've all studied economics and criminal justice. We know that an unregulated market in children turns kids into chattel and young women into biological factories, right? Wouldn't child pornographers have an incentive to buy up kids and force them into brief lives of unimaginable horror?

Isn't that what they do anyway? How would making it legal for childless couples to transact for adoption affect their sordid business model in the slightest? It's still illegal to produce child pornography, so what changes?

And is a career as a surrogate mother really so bad that it needs to be banned outright? Is the risk of ex post regret systematic or idiosyncratic? There's no fraud as far as I can tell, so it has to be the latter. Unpaid surrogacy is perfectly legal, so I have a hunch that the paid version has something to do with BATNA disparity. How dare those rich people take advantage of poor women by paying them to bring another human life into the world? Exploitation!

Exploitation that redistributes not just money but genes. It seems to me as if Rawls would approve. I don't see how it's any better that the child have no chance of life at all or that it's raised in relative destitution.

But even if I could convince you of all that, there's still an interesting bit of residual moral intuition. It seems to me that holding everything else constant, folks would probably be more okay with paid surrogacy than with the sale of a child already born. If my hunch about this is true, what's the difference? And does that difference engage with folks' moral intuitions on other reproductive rights topics?

Abortion is not Euvoluntary

Few topics generate as much heat and as little light as abortion. I've found it interesting that it seems to come up relatively infrequently among those libertarians whose company I frequent. Something tells me that there's not a salience problem. Indeed, I imagine that almost every liberty-minded person out there has spent time mulling this thorny issue, wrestling with its complexity, weighing implicit, stochasic agency against predictable regret, noting likely BATNA scenarios. Giving the topic its due, as it were.

So it's particularly interesting for me to see a libertarian heavyweight tangle with arguably one of the most deservedly important living economists in the world. Bryan Caplan engages Richard Thaler.

Apart from Mario Rizzo's ongoing campaign against the camel's nose in the tent, the idea of soft or "libertarian" paternalism flared up again right here on EE with a post I wrote about the British Parliament's efforts to make salacious materials on the Web available to homes on an opt-in basis. Way off down under in the Land of the Kiwi, crazy Canuck Eric Crampton had similar thoughts at Offsetting Behavio[u]r. Professor Thaler emphatically denied the Nudge link on Twitter, even though "choice architecture" and his work was directly referenced by the politicians designing the scheme.

That's the funny thing about ideas. They're a common pool resource. It'd be nice if there were a lifeguard on duty, making sure nobody's running and that the splashing and horseplay is kept to a minimum, but sure as the day is long, that old burrito is bound to catch up with Smalls and he'll crap right in that pool. That's the nature of politics: it encourages, nay, demands that someone take a dump in the ol' swimmin' hole sooner or later. Virginia Political Economy details this mechanism with sufficient clarity and detail that James Buchanan won a Nobel Memorial Prize for it. I don't think he ever used any pool-pooping metaphors though. That undignified nonsense is 100% Sam. Point is, the originator loses control of an idea once ceded to a legislative authority. Perhaps this is obvious to me only because I'm a public choice student, and expecting others to share my esoteric knowledge is excessive. I should temper my expectations.

The conversation continues with Caplan posing a pointed question to Nudge Paternalists: why not nudge expectant parents away from the decision to abort a fetus? Included in the terms is what seems like a reasonable proposal, regardless of your stance on choice architecture: end government subsidies. After all, to get more of something, subsidize it, and I don't think that even the most staunchly pro-choice left liberal actively seeks more abortions, unless perhaps they subscribe to eugenic or NPG philosophies. Which they might. I know such people. Here's how Thaler responds: "what do you think the ban on government money does? Medicaid=poor. yikes!" Bryan follows up here.

I think Thaler's making a claim underpinned by EE conditions! One of the strongest arguments for keeping abortion legal is founded in BATNA considerations: one alternative to safe, legal abortion is dangerous, black market ("back-alley") abortion, which is riskier for the mother. Of course, that's an assumption. Elsewhere, JR has proposed a new logical fallacy: "I proclaim a new rhetological fallacy: the error of assumed opportunity, e.g. pursuit of leisure costs productivity, instead of leisure." It works well here, since the Right assumes that the alternative is childbirth and the Left assumes that the alternative is the medical equivalent of Jesse Pinkman in season 1 with a surgical mask... okay, let's leave the rest of that alone. More sophisticated arguments on both sides acknowledge multiple margins or a continuum, but most of what we hear are simplified platitudes. Hence the "much heat", "little light" above.

As the novelty account based on Dr. Phil lower in the Tweet thread notes, the median price for an abortion is around $470, and I checked about the Medicaid thing. Only 15 states allow Medicaid to help with the out-of-pocket cost of abortions. I can imagine how I would set up the econometric strategy to find out where the substitution margins actually are (it's not an easy specification, in case you were wondering), but something tells me that even carefully conducted empirical studies are unlikely to cause a whole lot of people to change their minds on this particular subject. It's pretty likely that this is based on strong moral considerations, not on dispassionate utilitarian evidence.

Maybe the reason libertarians don't like talking too much about this subject is because of the problem I'm having right now. I can't write a snappy concluding paragraph. I can't even beg you to consider the issue in a new light. You've heard the arguments, you know the positions. I have nothing new to add to the conversation. All I can say from an EE point of view is that in the exchange of services between a pregnant woman and a physician, the potential future human whose life is at stake gets no say in the transaction. That's it. I can make no further positive claims than that. This observation does not imply in any way any sort of policy position one way or the other and principled people can have legitimate disagreement over what to do next. This is a clash of values, not of beliefs. Our deontology here includes consequences, but the actual moral calculus is not ours to solve on your behalf.

Best wishes everyone, and sorry about the poop jokes. I get nervous when I tackle difficult subjects and it sometimes manifests poorly.

Update: another take here from Joe Colucci. I think he makes an excellent point when he notices that the nudge camp wants to quietly alter knife-edge behavior. Abortion is anything but. The decision to abort is fraught with distress, moral panic, and deep consideration. This is another reason why disinterested third parties have a very difficult case to make for interfering.

Everybody Poops (Peas and Gravy)

In yesterday's post on wagers, I casually asserted that attempts to combine the sacred and the profane is fingers on a chalkboard for regular folks. In my haste, I neglected to support this claim. Here is that support.

Michael Sandel. What Money Can't Buy: The Moral Limits of Markets

I think that even after you've read Sandel (and you should, he's as good as you're likely to get on the subject), you'll mostly agree with me that his claims are fundamentally aesthetic. But here's the difference you get with Sandel compared to a prototypical hand-wringing anti-capitalist: he makes normative claims about the extent of markets underpinned by rigorous positive aesthetic analysis. Whether Michael Sandel likes the idea of paying cash to see Shakespeare in the Park is not relevant to his argument, it's that he's (correctly, as far as I can tell) identified that ordinary people in their ordinary lives object to these sorts of arrangements.

Well, maybe ordinary folks don't care that much about Shakespeare per se, but let's not let that distract from the key point. Toddlers like their food touching about as much as grown-ups relish impersonal monetary transactions in deeply personal settings. We call it "tithing" and tell each other and ourselves that the geld goes to "God". Parishioner please. Economists are trained (and the good ones continue to hone this valuable skill) to peer through petticoats like these to the truth hidden beneath. We trade in sacred goods all the time, we just have a knack for calling it something else. TANSTAAFL.

A question then of values: the economist would have you swallow your discomfort, encourage you to simply and honestly acknowledge that incentives matter, that to get more of something you want, you must must must pay for it. The economist will also give you a laundry list of good, convincing reasons why impersonal voluntary exchange tends to be the most efficient way to trade. Hey-presto, job done, right? Everybody poops, so why just plainly and publicly acknowledge that and then get along with the business of business?

Or is this all just intolerably indecent? Am I a bad person for advocating for the legal (and marginally safer) trade in sexual services? Or for vigorous resale markets? I reject the notion that my own sentiments of disgust should be elevated to the realm of public policy; does this make me an ogre? Should I conform to the shared fib that denies that from all living buttocks emerge feces? Does that make for a better world? Is my position a minority one because it's just plain wrong? Prices are information, but maybe I'm totally wrong and it's sometimes more comfortable to dwell in ignorance.

Money for Nothing, and Women are More Moral

Who Is Willing to Sacrifice Ethical Values for Money and Social Status? Gender Differences in Reactions to Ethical Compromises 

Jessica Kennedy & Laura Kray
Social Psychological and Personality Science, forthcoming

Abstract: Women select into business school at a lower rate than men and are underrepresented in high-ranking positions in business organizations. We examined gender differences in reactions to ethical compromises as one possible explanation for these disparities. In Study 1, when reading decisions that compromised ethical values for social status and monetary gains, women reported feeling more moral outrage and perceived less business sense in the decisions than men. In Study 2, we established a causal relationship between aversion to ethical compromises and disinterest in business careers by manipulating the presence of ethical compromises in job descriptions. As hypothesized, an interaction between gender and presence of ethical compromises emerged. Only when jobs involved making ethical compromises did women report less interest in the jobs than men. Women’s moral reservations mediated these effects. In Study 3, we found that women implicitly associated business with immorality more than men did.

Class M-3 Model B9, General Utility Non-Theorizing Environmental Control Robot

ERROR WILL ROBINSON ERROR.

John and Maureen Robinson survived their stint on Alpha Centauri, so Will and Penny never had to languish in foster care, cringing in the corner when Johnathan Harris would simper by to leer at the boy and sneer at the girl.

Coerced by Conformity, Pierced Ears Edition

"Only a Sith deals in absolutes" -Obi Wan Kenobi

I don't know about the rest of you, but for me, moral philosophy is a good dubstep track: everything makes sense, then someone drops the bass and I reconsider my position in the universe. I can accept arguments in favor of an absolute morality, especially when grounded in common-sense reasoning; hence, accessible to ordinary folks who use moral codes to order their lives--moral logic belongs to the people, not strictly to navel fluff knitters in the academy. Other times, I question my devotion to objective morality or worry that it can be abused when folks start conflating morality with aesthetics (a cognitive failure that I suspect happens more often than folks recognize). Moral relativism is replete with its own shortcomings, a sort of folk theorem anything-goes, multiple-equilibrium problem, where adherents can justify any sort of monstrous behavior using flimsy cultural or institutional arguments. Caveat: I am writing up an old post from here on anthropophagy. I am making the argument that exo-cannibalism is a rational response to environmental constraints, but my analysis is free of moral postulates. Just because a practice is institutionally efficient does not render it moral.

All that said, I'd like to share a recent episode in the saga of the Incomparable Mrs. Spivonomist. My mother-in-law is fond of saying that she has no problem with earrings: if you don't have enough weight in your head, feel free to add some more. Aren't Lithuanians great at passive-aggressive jabs? Maybe it's just my wife's family. Anyway, her lack of pieced ears befuddled some of her co-workers, leading to a discussion about body modification and cultural norms. In the culture under discussion [not identified here], it's not uncommon to get lots of piercings and to get them young. Indeed, my wife's co-worker was complaining because she had to take her three-year-old daughter back in for the third time to get her ears pierced because the holes kept closing. This made her feel bad because her daughter found the procedure... distressing.

Now, it's well and good for me to sit here and claim that I can't imagine under what conditions I would have to find myself to intentionally inflict pain and suffering on my daughter (who is indeed the honeycrisp apple of my eye), but my culture coordinates on other conformity signals. Others (including my wife's co-worker's child) aren't so lucky. The group norm, which she had no hand in generating, is coercive: failure to conform imposes very real costs on the rogue.

There are a number of puzzles here, some of which appear in the real-deal peer-reviewed literature from time to time. Where do cultural norms like piercing the ears of a toddler come from? How are they perpetuated? How are they ever overcome? The corollary to "why so much stability?" is "why so much instability?" A sister project to EE is a systematic investigation of these sort of questions, and I think it might be about time to dust off my old blog to jot down some preliminary thoughts on this.

At any rate, to what extent is the pressure to conform coercive? Is it reasonable to expect people to have the courage to cease monstrous behavior when it's no longer institutionally adaptive?

Perhaps perhaps perhaps.

But perhaps perhaps perhaps not.

Yes, I am listening to Cake right now.

Example

From a FB post by JLW:

Michael Munger and John Locke may like this: Last Spring we had a garage sale. A relative priced most things, but due to circumstances couldn't put a sticker price on everything, so the rest was negotiable. Among those was an item in which $50 was offered from a neighbor who said she really needed it, but my relative negotiated down to $25 -- remember: my relative was the seller! That's to say, her gut told her to accept only $25 because $25 was the offer she would have taken from a stranger. THAT is ethics. You can't legislate it or regulate it, but it's there nonetheless.

Euvoluntarism and Opportunity Cost

The key to whether an exchange is euvoluntary, as I argued in the Toby Davis lecture, is the answer to this question:  do both (all) parties have outside options that are (a) not too disparate, in a relative sense, and (b) not too desperate, in an absolute sense.

Then, one must consider that, even if an exchange is not euvoluntary, the implied unfairness of exchange is so large allowing the exchange would actually be unjust.  It often occurs that outlawing non-euvoluntary (unfair) exchange is even more unjust than allowing it.  So, for example, if I decide that sweatshops are unfair, and I order the sweatshops closed, I harm the people I am claiming to care about.  The act of closing the sweatshop imposes the very outside option (abject poverty, perhaps starvation) that made me decide the transaction was unfair in the first place.

The very smart Isaac Morehouse nails this idea on his own in a recent article in the Freeman.  He explicitly talks about things in terms of "opportunity cost," or the outside option.  Very cool example:  He needs a quarterback for his fantasy football team.  Knowing this, another "coach" with two quarterbacks is asked to trade one of those quarterbacks.

This is very much like Locke's "Captain with two anchors" example, by the way.  Very, very much like it!  Check it out...

Anyway, they negotiate a deal.  The deal is not good for Morehouse, in some objective sense, but it is MUCH better than no deal.  Both parties are satisfied with the deal.

But the league commissioner nixes the deal, saying it is unfair.  In effect, the league commissioner is making exactly the argument that the exchange is not euvoluntary.

Is that cool, or what?

Webinar (also)

So, attended a "webinar" with the wonderful Sarah Straw of IHS, on the subject of EE and non-worseness. Very interesting experience, several good questions. Co-blogger Mike Munger gave the talk, and that was nice!

 I asked a question on consequentialism vs deontology and got back a very clear answer that I should have included in my recent post on the issue. Simply put, there are occasional conflicts between deontological objections to trade and the consequences they generate. When this happens, the circumspect thing to do is to consider whether the benefit you get from assuaging your moral discomfort is worth the practical price that others have to pay on your behalf. The "private benefits; public costs" problem is one of the cornerstones of Virginia School Public Choice, of which I count myself a student. I apologize to my readers for not being more clear and I thank the GTM for thoughtfully and gently reminding me without resorting to the name-calling I probably deserve.

Tolerance

At the risk of accusations of callowness, let me share with you my fifth-grade-level thoughts on what "tolerance" means to me. Please bear with me, I assure you I'm going somewhere with this and I don't want to encumber the main point with correct but nuanced distinctions.

Tolerance is to refrain from objecting to or forbidding aesthetically unpleasant activity. The chief difference (as I see it) between tolerance and acceptance is a feeling of revulsion. I tolerate things that gross me out, I accept things that are orthogonal to my interests. 

What does this have to do with euvoluntary exchange? I tend to think of euvoluntary exchange as acceptable to pretty much everybody. We've written here before on organ sales and I've echoed Jim Andreoni's point that much of the objection to trade in body parts is atavistic revulsion. For people to come round to the arguments we here at EE find compelling, they'd need to overcome that dreadful icky feeling and judge the (dare I say it?) consequences of their beliefs. They'd have to tolerate organ sales as beneficial to the greater good in spite of their deontological mores. 

I know this is just one example, but I have a hunch that acceptance and tolerance can help us shed light on the euvoluntary spectrum. I'm willing to claim that a good candidate for a demarcation line between euvoluntary and voluntary is the boundary between acceptable and tolerable. I'll put up with political advertising as tolerable despite my belief that it poisons minds because I find the alternative of state control of speech intolerable. I find TLC reality programming acceptable because I consume exactly zero of it and I don't see that it really does any meaningful damage to any of the culture that I care about.

With that in mind, if you buy my description, do you think it's reasonable to consider tolerance as a latter-day virtue on either deontological grounds (which is how it's often sold) or consequentialist grounds (since more tolerance increases the universe of available transactions)? If not, what are the reasonable bounds on tolerance? If it's a matter of aesthetics, what moral arguments would you cite towards efforts to restrict tolerance or to limit the scope of commerce? Is this even an important consideration? Should tolerance remain a platitude we preach to children? Indeed, is it even being taught correctly?

Curious stuff.

Corporate Social Responsibility

There are plenty of ways to raise economists' hackles. Price controls, trade barriers, subsidies, taxes, regulation, if the state has a hand in it, you can bet some economist somewhere has something to say about it.

Corporate social responsibility efforts are another kettle of fish however. Here we have private firms picking up the banner of charity and "giving back" to the community (under the assumption that they've earned their profits illegitimately, perhaps?). Freshwater economists point to firms' fiduciary duty and cry "foul": the responsibility of a firm begins and ends with maximizing share value. Profits are a signal that the firm is producing consumer surplus, that is, delivering value to the customer. This is what the firm specializes in: it is what they do best, and we are all made better off through specialization and trade. If shareholders are interested in charity, it is more efficient to convert dividends into donations to those organizations that specialize in the business of charity.

Is not corporate charity euvoluntary? Investors aren't coerced into buying stock of Home Depot (well-known for building community playgrounds and refurbishing forgotten municipal parks) or Whole Foods (never one to shy away from posting the money they've raised for a hodge-podge of community projects). There's no hint of coercion anywhere, not from the customers, not from the business owners, and not from investors. Customers can just as easily frequent the classic, miserly firms. Owners are constrained by standard competitive forces and the limits of their imagination. And investors? There are plenty of stocks on the NYSE and plenty of no-load index funds available. What's to object to?

It seems there's a bit of a pickle here (just a lil' gherkin though, not a big ol' kosher dill) for Free-Market Euvoluntaryists. Freedom of association is an important virtue, but efficiency is also good; efficiency is an ingredient in material abundance and is necessary for the amelioration of poverty. We want to see resources finding their way to their highest value use and when voluntary transactions conducted within good institutions, well-defined property rights and the rule of law don't get us there, it can be a little flustering. For those of you taking (or teaching) upper-division econ courses, here is how I might approach the topic with my students.

Questions for discussion:

• Do modern Western states actually have free markets in charity or has the state effectively crowded out smaller community organizations?
• For the charitable assistance that the state does provide, is it sufficiently welfare-enhancing? Are there gaps in the provision of assistance? 
• If the state has crowded out private charity, and it does do a relatively poor job of making communities better off, is there a role for other organizations to fill the void?
• Specifically, is there an appropriate role for corporate charity: do corporations conduct de facto social responsibility experiments or are they feel-good vanity projects with no feedback and little or no accountability? Where is the substitute for profit and loss signals? How do corporations stack up against organizations that rely strictly on voluntary contributions?
• If state-run transfer programs were discontinued, would you expect specialized private charities to bounce back or is it likely that corporate entities would continue or expand their charitable activities?

I'm not sure I have good answers to all of these questions. Predicting general equilibrium conditions is tricky and we don't have much empirical evidence of how private charities operate in a modern setting absent any current or past state intervention. Institutions are persistent and if corporate social responsibility is already a trope, it may well be here to stay.

Lost and Found

Rights over found property are legal curiosities. Marine laws of salvage predate many modern legal systems, yet ships' captains scrupulously hew to their tenets. Many countries, to a greater or lesser extent, observe squatter's rights. Homesteading (or Seasteading, if you're so inclined) is a bit like claiming found property. Lost and Found bins in daycare facilities, public libraries, stores, museums, amusement parks and university bowling alleys all occur not as a function of gaseous legislators scribbling away in the halls of legislature, but as spontaneous order, as natural law. Lost and found rules operate in the secret nooks of the social labyrinth, formed from a curious blend of playground rhymes, folksy economics, tradition and intuition. In some instances, "finders keepers, losers weepers" applies. In others, found goods are held in trust and publication requirements are to be satisfied before the finder obtains a legitimate claim. In the case of mining or homesteading claims, the ball bounces on a nebulous and uncertain criterion of "property development". Adverse possession is a rather large islet in the skerries of conventional ownership, so let's pilot the taco truck through those reefs. Yes, we've converted the taco truck for maritime use--big ol' inflatable tires and an outboard.

12 Parsecs

Smuggling is my favorite crime (to study, not to commit). Smugglers risk imprisonment (or worse) to connect buyers and sellers. In the face of state intervention, they boldly mancgere it up, moving goods and services from lower-value use to higher-value use. Two and a half cheers for the smuggling profession (I reserve the half-cheer for those who traffic in stolen goods or other cargo they have no justifiable claim over). How then ought I feel about those officials who aid and abet the noblest of the criminal class?