Ökonomen wie Kenneth Rogoff oder Miles Kimball wollen das Bargeld abschaffen.
I made it into the German press for wanting to demote—not abolish—cash, along with Ken Rogoff, who does indeed want to get rid of cash. (i wrote about Ken Rogoff’s views here.) Google Translate works fine on this article. Thanks to Rudi Bachmann for letting me know about this article.
I was interested in the news about the US Math Team (of high school students) this year because I was asked to be an alternate to the US Math Team in 1977, the end of my senior year in high school. I tell that story here, in a set of storified tweets that I link at my sidebar:
… the [Harvard] Faculty of Arts and Sciences disclosed a $17-million donation from the Pershing Square Foundation—founded by Bill (William A.) Ackman ‘88, M.B.A. ‘92, CEO of the Pershing Square Capital Management hedge fund, and Karen Ackman, M.L.A. ‘93—for a “foundation of human behavior” initiative grounded in behavioral economics and other disciplines. That gift provides for three new professorships and a research fund.
Clay Christensen, Jerome Grossman and Jason Hwang on the Three Basic Types of Business Models
In The Innovator’s Prescription, Clay Christensen, Jerome Grossman and Jason Hwang make good use of a typology of business models laid out by C. B. Stabell and Øystein Fjeldstad in their May, 1998 Strategic Management Journal article “Configuring Value for Competitive Advantage: On Chains, Shops and Networks." Modifying Stabell and Fjeldstad’s terminology a bit for clarity, Clay and his coauthors call the three types of business models solutions shops, value-adding processes, and facilitated networks. Clay, Jerome and Jason argue that these three types of business models are so different that it is difficult to efficiently house them under one roof. They give these definitions for these three types of business models (from about location 360):
These “shops” are businesses that are structured to diagnose and solve unstructured problems. Consulting firms, advertising agencies, research and development organizations, and certain law firms fall into this category. Solution shops deliver value primarily through the people they employ—experts who draw upon their intuition and analytical and problem-solving skills to diagnose the cause of complicated problems. After diagnosis, these experts recommend solutions. Because diagnosing the cause of complex problems and devising workable solutions has such high subsequent leverage, customers typically are willing to pay very high prices for the services of the professionals in solution shops.
The diagnostic work performed in general hospitals and in some specialist physicians’ practices are solution shops of sorts. …
Organizations with value-adding process business models take in incomplete or broken things and then transform them into more complete outputs of higher value. Retailing, restaurants, automobile manufacturing, petroleum refining, and the work of many educational institutions are examples of VAP businesses. Some VAP organizations are highly efficient and consistent, while others are less so.
Many medical procedures that occur after a definitive diagnosis has been made are value-adding process activities….
These are enterprises in which people exchange things with one another. Mutual insurance companies are facilitators of networks: customers deposit their premiums into the pool, and they take claims out of it. Participants in telecommunications networks send and receive calls and data among themselves; eBay and craigslist are network businesses. In this type of business, the companies that make money tend to be those that facilitate the effective operation of the network. They typically make money through membership or user fees.
Networks can also be an effective business model for the care of many chronic illnesses that rely heavily on modifications in patient behavior for successful treatment. Until recently, however, there have been few facilitated network businesses to address this growing portion of the world’s health-care burden. …
Clay, Jerome and Jason’s central idea is that medicine will be more efficient if there is one medical institution designed for inherently expensive “solution shop” activities such as difficult diagnoses, other much more convenient and inexpensive clinics for the routine treatment of well-diagnosed diseases, and online networks for patients to discuss their contribution as patients to disease management with others who have the same disease. What wouldn’t survive would be the current hospital model where the solution shop aspect of what they do confers high expense on many other activities that don’t have to be so expensive. Here is the way Clay, Jerome and Jason say it:
The two dominant provider institutions in health care—general hospitals and physicians’ practices—emerged originally as solution shops. But over time they have mixed in value-adding process and facilitated network activities as well. This has resulted in complex, confused institutions in which much of the cost is spent in overhead activities, rather than in direct patient care. For each to function properly, these business models must be separated in as “pure” a way as possible.
This is not just a matter of static efficiency:
The health-care system has trapped many disruption-enabling technologies in high-cost institutions that have conflated two and often three business models under the same roof. The situation screams for business model innovation. The first wave of innovation must separate different business models into separate institutions whose resources, processes, and profit models are matched to the nature and degree of precision by which the disease is understood. Solution shops need to become focused so they can deliver and price the services of intuitive medicine accurately. Focused value-adding process hospitals need to absorb those procedures that general hospitals have historically performed after definitive diagnosis. And facilitated networks need to be cultivated to manage the care of many behavior-dependent chronic diseases. Solution shops and VAP hospitals can be created as hospitals-within-hospitals if done correctly.
Further Musings: Even apart from this application to health care, I have found the typology of solution shop, value-adding process and facilitated network very interesting to think about for understanding my own work life (as a complement to the kind of analysis I talked about in my post "Prioritization").
I work at the University of Michigan. Universities combine research—which is quintessentially a solution shop activity—with teaching, which has a big component of value-adding processes. And of course, Tumblr, Twitter and Facebook, where I put in effort as a blogger, are facilitated networks.
The idea of a value-adding process highlights the gains to be had from routinizing something. It is good to periodically ask oneself if there is anything in my daily activities that I can make more routine and streamlined.
The idea of a facilitated network highlights the gains to be had by having users do a lot of the work. That in turn is related both to the benefits of laissez faire under a decent system of rules and the idea of delegation, which typically involves giving up some control at the detailed level.
I find for me, however, that I love the “solution-shop” aspect of life so much that I think I resist routinization. I don’t know if this is what I should be doing, but I would rather keep thinking about how I am doing things than have everything fade into the background of routine. That does cost me extra time, as I do things inefficiently because I am thinking too much about them as I do them.
From 8:30 a.m. to 4 p.m. Monday through Friday the children learn math, interspersed with some reading, physical education and lunch. Each gets 120 hours of instruction during the three weeks, equivalent to what they would get in a year at a typical public school.
Among many other serious problems with education in the United States, our attachment to the idea of summer vacation is an important one.
What, then, is the rightful limit to the sovereignty of the individual over himself? Where does the authority of society begin? How much of human life should be assigned to individuality, and how much to society?
Each will receive its proper share, if each has that which more particularly concerns it. To individuality should belong the part of life in which it is chiefly the individual that is interested; to society, the part which chiefly interests society.
Though society is not founded on a contract, and though no good purpose is answered by inventing a contract in order to deduce social obligations from it, every one who receives the protection of society owes a return for the benefit, and the fact of living in society renders it indispensable that each should be bound to observe a certain line of conduct towards the rest. This conduct consists first, in not injuring the interests of one another; or rather certain interests, which, either by express legal provision or by tacit understanding, ought to be considered as rights; and secondly, in each person’s bearing his share (to be fixed on some equitable principle) of the labours and sacrifices incurred for defending the society or its members from injury and molestation. These conditions society is justified in enforcing at all costs to those who endeavour to withhold fulfilment. Nor is this all that society may do. The acts of an individual may be hurtful to others, or wanting in due consideration for their welfare, without going the length of violating any of their constituted rights. The offender may then be justly punished by opinion, though not by law.
John’s argument that “every one who receives the protection of society owes a return for the benefit” is one that Elizabeth Warren has been echoing to argue for the legitimacy of taxation to support a wide range of government activities. E. J. Dionne’s review of her book A Fighting Chance in the Washington Post offers these quotations from the book:
1. “There is nobody in this country who got rich on his own,” she said. “Nobody. You built a factory out there? Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for.” …
2. “There’s nothing pro-business about crumbling roads and bridges or a power grid that can’t keep up,” she writes. “There’s nothing pro-business about cutting back on scientific research at a time when our businesses need innovation more than ever. There’s nothing pro-business about chopping education opportunities when workers need better training.”
Although her specific examples of government action in these quotations sound fairly benign, the way Elizabeth is using the argument that ”every one who receives the protection of society owes a return for the benefit” does not provide any obvious principle for putting a bound on what the government can legitimately raise taxes for. I suspect that, if magically revived in the modern world, John Stuart Mill would argue for a more limited government than the one Elizabeth Warren advocates. (And it is clear from the passage in On Liberty quoted above that he would not go along with her invocation of a “social contract.”)
I think you missed an opportunity to criticize academic journals for excessive cost and severe paywall constraints. The inability of many readers to access the underlying research is a major problem for blogs to advance serious debate. While in many cases, working paper versions can be located, this applies to only a fraction of the research that is out there. You should criticize academics who don’t post their work in places like SSRN or on personal web sites. My understanding is that unless you literally sign away your rights, you have the right to post your own work on your own web site.
In other words, each of us who produces published research has a lot of discretion to make the results of our research available inexpensively. Let’s do it.
Clay Christensen, Jerome Grossman and Jason Hwang on Intuitive Medicine vs. Precision Medicine
I found the passage below from The Innovator’s Prescription(location 333), by Clay Christensen, Jerome Grossman and Jason Hwang especially insightful. It puts diagnosis at the center of medicine, especially when viewing medicine from a business point of view. Better and better diagnosis opens up the possibility of more cost-efficient treatments for those diseases that are precisely identified. But that possibility must be seized.
Our bodies have a limited vocabulary to draw upon when they need to express that something is wrong. The vocabulary is comprised of physical symptoms, and there aren’t nearly enough symptoms to go around for all of the diseases that exist—so diseases essentially have to share symptoms. When a disease is only diagnosed by physical symptoms, therefore, a rules-based therapy for that diagnosis is typically impossible—because the symptom is typically just an umbrella manifestation of any one of a number of distinctly different disorders.
The technological enablers of disruption in health care are those that provide the ability to precisely diagnose by the cause of a patient’s condition, rather than by physical symptom. These technologies include molecular diagnostics, diagnostic imaging technology, and ubiquitous telecommunication. When precise diagnosis isn’t possible, then treatment must be provided through what we call intuitive medicine, where highly trained and expensive professionals solve medical problems through intuitive experimentation and pattern recognition. As these patterns become clearer, care evolves into the realm of evidence-based medicine, or empirical medicine—where data are amassed to show that certain ways of treating patients are, on average, better than others. Only when diseases are diagnosed precisely, however, can therapy that is predictably effective for each patient be developed and standardized. We term this domain precision medicine.
… disruption-enabling diagnostic technologies long ago shifted the care of most infectious diseases from intuitive medicine (when diseases were given labels such as “consumption”) to the realm of precision medicine (where they can be defined as precisely as different types of infection, different categories of lung disease, and so on). To the extent that we know what type of bacterium, virus, or parasite causes one of these diseases—and when we know the mechanism by which the infection propagates—predictably effective therapies can be developed—therapies that address the cause, not just the symptom. As a result, nurses can now provide care for many infectious diseases, and patients with these diseases rarely require hospitalization. Diagnostics technologies are enabling similar transformations, disease by disease, for families of much more complicated conditions that historically have been lumped into categories we have called cancer, hypertension, Type II diabetes, asthma, and so on.
When I was a kid, we talked about “curing cancer” as the prototypical world-shaking accomplishment. The reason there is no one “cure for cancer” is that cancer is not one disease but hundreds of different diseases involving different genes going awry in the direction of too much growth. A cure needs to be found for each one of those diseases in order for there to be a cure for the amorphous notion of “cancer.” Many of these diseases have been cured and others are well on their way to being cured. But other diseases under the general heading of “cancer” have not even been identified yet (in the sense of carefully distinguishing them from other diseases with similar symptoms). Once they have been identified at the level of the particular gene that goes awry to produce that particular disease, they will be halfway to being cured.
The term “personalized medicine” is sometimes used for what I would call “treating the disease someone actually has instead of some other disease.” A better phrase for that is the phrase Clay, Jerome and Jason use: “precision medicine.”
I kept my working title as the title of this companion post, since it better reflects the content of the column.
If you want to mirror the content of this post on another site, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:
The reason China’s economic rise matters for US grand strategy is that China has a much larger population than the United States. … if China has 1/4 the per capita GDP, but four times as many people, its total GDP will be the same size. … Power corrupts. So … it should surprise no one that the US has done some bad things as a superpower. Yet I am convinced that the combination of Chinese nationalism and “Communist” oligarchy—or the combination of Chinese nationalism with some tumultuous future political transition in China—would lead a dominant China to behave much worse than the US has.
I believe a future in which India joins China and the US as a superpower would be a safer world than one in which China and the United States are the only superpowers. News of Chinese saber-rattling over territorial disputes has become a commonplace in the last few years. Here is a recent example. And the 25th anniversary of the Tiananmen Square Massacre is a reminder of the ugliness of China’s politics now and the tough road China has ahead even in the best-case scenario in which it does become more democratic.
Narendra Modi’s own past is a reminder that India has its own political ugliness. He is the only person to ever have been denied a US visa based on a law designed to punish foreign officials for “severe violations of religious freedom,” since as the head of the Indian state of Gujarat, he failed to stop a Hindu vs. Muslim riot that left more than 1,000 people dead.
Yet, India has been a functioning democracy since 1950, with genuine handoffs of power between different political parties since 1977. And both the religious tensions Modi fatally mishandled and the welfare state he now challenges point to the orientation of Indian politics primarily toward domestic issues, rather than territorial disputes with neighboring countries. What ideological gap exists between the Indian electorate and the US electorate would be narrowed further if further economic liberalization in India is successful. So I do not worry about what India might do as a future superpower the way I worry about what China might do.
What does India’s new government plan to do to make the Indian economy as big as possible, as fast as possible? One key element of the policy address by India’s president Pranab Mukherjee earlier this week, reflecting the prime minister’s agenda, is to make making agricultural markets more competitive, so that farmers can get a better price for their crops. The Wall Street Journal explains:
Subsidies and make-work schemes discourage farmers from concentrating on maximizing yields. Under the Agriculture Produce Marketing Committee Act, they are required to sell produce to monopolistic middlemen. As a result, much of India’s harvest rots before it gets to consumers, further driving up food prices.
“basic infrastructure such as roads, shelter, power and drinking water” in rural areas;
helping farmers to farm better in order to raise yields;
pursuing irrigation projects;
more use of massively open online courses (MOOCs) for education with the most bang for the buck;
toilets for everyone;
making sure girls receive an education and are protected from violence;
encouraging groups of states within India to cooperate on economic development;
combating corruption with “transparent systems and timebound delivery of government services;”
trying to eliminate “obsolete laws, regulations, administrative structures and practices;”
digitization of government records;
“Wi-Fi zones in critical public areas” and broad-band in every village;
social media as a way of getting feedback about how government is doing;
“rationalisation and simplification of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth” including reducing taxation of saving and investment by shifting toward a value added tax;
reducing red tape to “enhance the ease of doing business;”
providing workers with “access to modern financial services;”
creating “dedicated freight corridors and industrial corridors” as attractive destinations for investment;
more airports and upgraded seaports;
100 newly developed cities;
allowing more foreign investment in making military equipment to make this sector more efficient.
There is always a big gap between government promises and government performance. But this list of initiatives is remarkable for what it doesn’t emphasize. There is not much in the way of direct handouts. By contrast, I learned at a“Cashless Society” workshop, sponsored by New York University’s Urbanization Project, that under the previous Indian government, when government officials came to take the biometric measurements to make it possible to establish identitywithout needing an identity card, people were happy to cooperate because they see government officials coming to town as a sign that some new handout, subsidy, or goody is on the way.
Most of the things Modi’s government is promising are things that, if delivered, will foster the quantity and quality of private economic activity. To give just two examples, more toilets would not only reduce the number of girls who get raped while going out to the fields to relieve themselves, it would save those girls a lot of time every day that they could devote to their schoolwork. And pushing the educational system heavily in the direction of massively open online courses could speed India toward the kind of low-cost, effective education that ace management guru Clay Christensen and his coauthors predict is the future of education everywhere in the world.
The policy address by the new Indian government is also relatively sophisticated in realizing the obstacles to rolling out new policies. It recognizes that, as a practical matter, many things that need to be done for economic development need to be done at the level of Indian states or groups of Indian states, rather than at the national level. If some states are more willing to work with the national government to foster economic development than others, those states can move ahead faster, and hopefully at some point, citizens of the remaining states will insist on policies like the successful policies of neighboring states.
In a previous election, Modi’s Bharatiya Janata Party (BJP) began using the slogan “India Shining.” If the new Indian government is able to implement even half of its policy agenda, and subsequent Indian governments continue to push further along the road of supply-side improvement, it won’t be long before “India Shining” is no longer just a slogan. It will be an accurate description of the world’s newest superpower.
Populations of the Most Populous Nations. I found the population figures in Wikipedia’s “World population” for the most populous countries very interesting.
United States: 318,201,000
I hadn’t realized that the US was the third most populous nation. All of Europe, including 110,000,000 in the European part of Russia, is only listed at 742,000,000. The reason it makes sense to focus on population figures is that catch-up economic growth up to the cutting-edge level of income per capita is much easier than the economic goal of the US of pushing income per capita to levels the world has never seen before for any large nation.
I was clued into India being headed for beating out China in overall population by Thomas Piketty’s Capital in the 21st Century. It is a fat enough book that I am only partway through. And I am glad I am reading it on a Kindle.
“The type of personal responsibility that is needed to be good in the clutch is different. It is always there, but under pressure it becomes purely focused and is the underlying force in the action: I am doing this because it is the right thing to do, and if I fail, I know I tried. Responsibility here is not accounting for your actions; it is your actions. And however it turns out, you are the one who did it. … That is responsibility. That is doing what is right and leaving the rest to be sorted out.”—Paul Sullivan, Clutch p. 143
Having changed its policy to allow men of African descent to be ordained, could the Mormon Church ever allow women to be ordained? On the one hand, the Mormon Church recently excommunicated Kate Kelly for founding and leading the group Ordain Women, which advocates allowing women to be ordained to the Mormon priesthood. (See Emma Green’s June 24, 2014 Atlantic article "Kicked Out of Heaven for Wanting Women Priests." And here is a podcast of an excellent interview with Kate Kelley that Sid Sharma alerted me to.) On the other hand, it seems as if Ordain Women’s efforts are having some effect. Among those efforts, one of the most powerful has been organizing women to line up to get into (and get turned away from) the “Priesthood Session” of the Mormon Church’s twice-a-year “General Conference.” The Mormon Church’s sensitivity to this bit of activism is indicated by the efforts it has made to ban news cameras from Temple Square to avoid more pictures of Ordain Women’s protest about women being excluded.
Kate Kelly did not want to be thrown out of the Mormon Church. My view is that, given the realities of how the Mormon Church as an institution operates, Kate Kelly’s sacrifice of being willing to stand her ground and be excommunicated was an important contribution toward greater equality between men and women in the Mormon Church, for two reasons. First, organizing women for a highly visible protest of women’s exclusion—and Kate’s excommunication itself—get Mormons talking about the issue.
Second, the advocacy of Ordain Women creates space for quite a bit of movement toward greater equality under cover of saying “Those women trying to get into the Priesthood Session of General Conference are going too far, but …”. In other words, progress often requires someone to volunteer to be the hippie for “hippie-punching.” (See Josiah Neeley’s guest post “The Science of Hippie-Punching on Noah Smith’s blog Noahpinion for an explanation of the term “hippie-punching.”)
Even top leaders of the Mormon Church can now push for greater equality between men and women while reassuring more conservative colleagues that they won’t go too far in undoing the traditional exclusion of women from positions of power by agreeing that Kate Kelly had to be excommunicated. (The concern of more conservative Mormon leaders would be to (a) keep the Mormon Church from looking bad and (b) to set limits.) Given the likely discussions among top Mormon leaders about what to do about Ordain Women before Kate Kelly was actually excommunicated, it is appropriate to see Mormon Apostle Dallin Oaks’s General Conference talk "The Keys and Authority of the Priesthood" as the outcome of such dynamics within the leadership of the Mormon Church. (As you can see from Suzette Smith’s Ordain Women blog post "Reflections on Elder Oaks’ Remarks in the Priesthood Session of General Conference,” I am not alone in seeing Dallin Oaks’s talk as a favorable development for women’s equality in the Mormon Church.)
In the Mormon Church, the longest-serving apostle still alive becomes the head—President and Prophet—of the Mormon Church. And seniority in this sense of time in rank is also very important in how Mormon leaders interact with one another. Dallin Oaks is currently the 5th most senior apostle, and several of the more senior apostles are in poor health due to advanced age. Also, before being appointed to high church office, Dallin Oaks was a high-powered lawyer. So other Mormon Church leaders trust him to present their position well. Given his lawyer’s training, Dallin is careful to represent the collective views of the Mormon Church leadership, but he himself has a mild liberal streak, having served as founding member of the editorial board of Dialogue: A Journal of Mormon Thought, which sometimes hosts articles in opposition to official positions of the Mormon Church (including keyarticles that helped prepare the way for the extending the Mormon priesthood to men of black African descent.
1. With the exception of the sacred work that sisters do in the temple under the keys held by the temple president, which I will describe hereafter, only one who holds a priesthood office can officiate in a priesthood ordinance.
Mormon temples are at a much higher level of sacredness than the regular meetinghouses where Sunday services are held. They are the site of many powerful and very interesting rituals that non-Mormons never see. The passage just above from Dallin’s talk is remarkable for openly acknowledge that in Mormon temples, women officiate in certain rituals in what to all appearances is a priestly capacity fully parallel to the way in which men officiate in a priestly capacity in the corresponding rituals. If Mormon women took roles this closely parallel to those taken by men in rituals outside of temples as well, they would have a version of the Mormon priesthood in all but name.
2. We are accustomed to thinking that all keys of the priesthood were conferred on Joseph Smith in the Kirtland Temple, but the scripture states that all that was conferred there were “the keys of this dispensation” (D&C 110:16). At general conference many years ago, President Spencer W. Kimball reminded us that there are other priesthood keys that have not been given to man on the earth, including the keys of creation and resurrection.
Dallin’s reference to one of my (unfortunately deceased) grandfather Spencer W. Kimball’s statements is a reminder that, as the official distillation of Mormon belief into thirteen “Articles of Faith” says, “we believe that [God] will yet reveal many great and important things pertaining to the kingdom of God.” In context, this is a positive note that God could open the door to ordination, or at least more extensive priestly or priest-like roles for Mormon women. (A good example of an additional priest-like role for Mormon women that would not be too radical a change from current policy would be if Mormon women were once again encouraged, as they were in the 19th century, to give healing blessings—that is, when appropriate, to put their hands on someone’s head while saying a prayer for that person to recover from a sickness.)
3. The divine nature of the limitations put upon the exercise of priesthood keys explains an essential contrast between decisions on matters of Church administration and decisions affecting the priesthood. The First Presidency and the Council of the First Presidency and Quorum of the Twelve, who preside over the Church, are empowered to make many decisions affecting Church policies and procedures—matters such as the location of Church buildings and the ages for missionary service. But even though these presiding authorities hold and exercise all of the keys delegated to men in this dispensation, they are not free to alter the divinely decreed pattern that only men will hold offices in the priesthood.
Just as Mormon Church leaders said about extending the Mormon priesthood to men of African descent, Dallin is saying it would take a special revelation from God to extend the Mormon priesthood to women. But of course, Mormons believe that God did give a special revelation in 1978 that the Mormon priesthood should be offered to all faithful men. So that is not at all ruling out more extensive priestly roles for women, only saying that Mormon Church leaders would have to feel they had a powerful subjective spiritual experience (which they interpreted with confidence as an actual communication from God) in favor of such a change before they would think they had the warrant to do so.
4. In an address to the Relief Society, President Joseph Fielding Smith, then President of the Quorum of the Twelve Apostles, said this: “While the sisters have not been given the Priesthood, it has not been conferred upon them, that does not mean that the Lord has not given unto them authority. … A person may have authority given to him, or a sister to her, to do certain things in the Church that are binding and absolutely necessary for our salvation, such as the work that our sisters do in the House of the Lord. They have authority given unto them to do some great and wonderful things, sacred unto the Lord, and binding just as thoroughly as are the blessings that are given by the men who hold the Priesthood.”
In that notable address, President Smith said again and again that women have been given authority. To the women he said, “You can speak with authority, because the Lord has placed authority upon you.” He also said that the Relief Society “[has] been given power and authority to do a great many things. The work which they do is done by divine authority.” And, of course, the Church work done by women or men, whether in the temple or in the wards or branches, is done under the direction of those who hold priesthood keys. Thus, speaking of the Relief Society, President Smith explained, “[The Lord] has given to them this great organization where they have authority to serve under the directions of the bishops of the wards … , looking after the interest of our people both spiritually and temporally.”
Thus, it is truly said that Relief Society is not just a class for women but something they belong to—a divinely established appendage to the priesthood.
We are not accustomed to speaking of women having the authority of the priesthood in their Church callings, but what other authority can it be? When a woman—young or old—is set apart to preach the gospel as a full-time missionary, she is given priesthood authority to perform a priesthood function. The same is true when a woman is set apart to function as an officer or teacher in a Church organization under the direction of one who holds the keys of the priesthood. Whoever functions in an office or calling received from one who holds priesthood keys exercises priesthood authority in performing her or his assigned duties.
In giving this quotation from Joseph Fielding Smith, an earlier church leader who later became President of the Mormon Church, Dallin not only alludes again to the clearly priest-like functions women perform in Mormon temples, but also says that while women do not have “the priesthood," they routinely have "the authority of the priesthood" in the many "callings" (appointive church volunteer positions) in which they serve in the Mormon Church. The effect is to more nearly equate the prestige of the callings women serve in to the callings men serve in.
5. As stated in the family proclamation, the father presides in the family and he and the mother have separate responsibilities, but they are “obligated to help one another as equal partners.” Some years before the family proclamation, President Spencer W. Kimball gave this inspired explanation: “When we speak of marriage as a partnership, let us speak of marriage as a full partnership. We do not want our LDS women to be silent partners or limited partners in that eternal assignment! Please be a contributing and full partner.”
In the eyes of God, whether in the Church or in the family, women and men are equal, with different responsibilities.
Despite its origins as a document hoping to hold the line against legal gay marriage (a topic I address here), and its essentialist views on gender, “The Family: A Proclamation to the World” does say that men and women are equal. This and other official statements that men and women are equal because they have the potential to counteract the very understandable inference by Mormons that since only men hold the priesthood, men are more than equal to women. It is this difficult-to-suppress inference that is the most damaging aspect of Mormon women being excluded from priesthood offices—much more damaging than the (significant) hurt from not being able to perform certain rituals.
6. In his insightful talk at BYU Education Week last summer, Elder M. Russell Ballard gave these teachings:
“Our Church doctrine places women equal to and yet different from men. God does not regard either gender as better or more important than the other. …
“When men and women go to the temple, they are both endowed with the same power, which is priesthood power. … Access to the power and the blessings of the priesthood is available to all of God’s children.”
In most religions that have ordained women, women have gained the opportunity to take on exactly the same offices as men. That is the usual pattern. But in Mormonism, what the threads of past tradition point to as a more likely resolution of the current structural inequality between men and women is (a) the recognition of a parallel priesthood for women that is different, but of equal dignity and (b) inclusion of women in all the decision-making councils of the church on the basis of their separate but equal priesthood. Already it is well within the discretion of the bishop who leads a Mormon congregation to include female leaders in the key decision-making meetings. (And many do.) A simple step for the Mormon Church would be to insist that all bishops do this, rather than merely allowing it. A more radical step would be to recognize the top female leader in a Mormon congregation as the co-equal of the bishop, just as the church leaders Dallin quotes recognize the wife as a co-equal of the husband in a marriage.
One of the great strengths of Mormonism is its adaptability. Unlike in Catholicism, where the Pope is limited to interpreting the preexisting tradition, the Mormon Prophet can declare de novo revelations from God. And to the extent precedents are desired, Joseph Smith, the founder of Mormonism, was creative enough (and other Mormon leaders also felt latitude to be creative given the doctrine that they could get inspiration from God) that a wide variety of precedents are available. The Mormon hierarchy is set up in such a way that it is led by old men, who have a great deal of wisdom from their life experience. So it is resistant to fads and sometimes resistant to changes that should happen. But with the lag one would expect from the age structure of the leadership, many changes that should happen eventually do happen. Someday, I expect women to have a much more equal station in the Mormon Church than they do now. As part of that equality, I see a future Mormon Church that is led by wise old women as well as wise old men.
Despite being a non-supernaturalist myself, I know that religions that expect belief in the supernatural matter a lot to their adherents, just as religions that fully welcome non-supernaturalists matter to people like me. And having grown up within Mormonism, and having many friends and family who are still believers, makes me care about Mormonism. I think that equality between men and women is important for both supernaturalist and non-supernaturalist religions. However, in religions that believe in the supernatural, beliefs about the distribution of supernatural gifts between men and to women matter. One way or another, I hope that Mormonism finds its way to a greater level of equality between men and women, as I think it will.
I saw the personal computer revolution firsthand. It all went down very fast. In December 1973, when I was 13, I got a chance to use a calculator for the first time. I was visiting my brother Christian Kimball (1, 2), who was then an undergraduate at Harvard; there was a calculator in one of the Harvard libraries that allowed me to do conversions between 3-dimensional radial coordinates of nearby stars to xyz coordinates so I could better understand the layout of our interstellar neighborhood. A year and half later, in 1975, I learned a little computer programming at an NSF supported math camp at Utah State University. In 1978 and 1979 I had to get special access to Harvard Business School computers in order to run some regressions. But in August 1983, I convinced my father (1, 2) to help me buy a used Osborne “portable” computer. It wasn’t easy to learn to use, but I did ultimately write my Harvard Ph.D. program economic history paper "Farmer’s Cooperatives as Behavior Towards Risk" (which was ultimately published in the American Economic Review). In 1986 and 1987, when I wrote my dissertation, I was only able to manage to typeset all of the equations because my wife Gail was an ace scientific secretary with access to the needed computers and software. (After I convinced her to marry me and move to Massachusetts, she found a job working as a secretary first for professors at Harvard Business School and then later for Eric Maskin, Mike Whinston in the Economics Department.) But by Fall of 1987, as a new assistant professor at the University of Michigan, I could typeset equations myself using TeX (not yet LaTeX) on the new desktop computer the University of Michigan had given me.
In The Innovator’s Prescription(location 316), Clay Christensen, Jerome Grossman and Jason Hwang give this analytical account of the personal computer revolution:
Until the 1970s there were only a few thousand engineers in the world who possessed the expertise required to design mainframe computers, and it took deep expertise to operate them. The business model required to make and market these machines required gross profit margins of 60 percent just to cover the inherent overhead. The personal computer disrupted this industry by making computing so affordable and accessible that hundreds of millions of people could own and use computers.
The technological enabler of this disruption was the microprocessor, which so simplified the problems of computer design and assembly that Steve Wozniak and Steve Jobs could slap together an Apple computer in a garage. And Michael Dell could build them in his dorm room.
However, by itself, the microprocessor was not sufficient. IBM and Digital Equipment Corporation (DEC) both had this technological enabler inside their companies, for example. DEC eschewed business model innovation and tried instead to commercialize the personal computer from within its minicomputer business model, a model that simply could not make money if computers were priced below $50,000. IBM, in contrast, set up an innovative business model in Florida, far from its mainframe and minicomputer business units in New York and Minnesota. In its PC business model, IBM could make money with low margins, low overhead costs, and high unit volumes. By coupling the technological and business model enablers, IBM transformed the computing industry and much of the world with it, while DEC was swept away.
And it wasn’t just the makers of expensive computers that were swept away. The systems of component and software suppliers, and the sales and service channels that had sustained the mainframe and minicomputer industries, were all disrupted by a new supporting cast of companies whose economics, technologies, and competitive rhythms matched those of the personal computer makers. An entire new value network displaced the old network.
The key point in this account is the difficulty many existing computer firms had in adapting to the personal computer revolution. The key problem is that many existing firms were good at doing things in an expensive way, but not so good at doing things cheaply. Indeed, making smaller, less powerful computers to sell at a much lower price the mainframes and minicomputers they were so good at making didn’t look to their evaluation systems like a very good way to make serious profits.
This is a very insightful article, vividly illustrating a phenomenon I also learned about from reading Matt Gentzkow’s and Jesse Shapiro’s Econometrica article "What drives media slant? Evidence from U.S. newspapers." I would love to have the corresponding article on right-wing use of language to pair with it. But the fact that both parties do it does not make it innocent.
Even in a year when the abortion issue has been relatively quiet, the struggle over abortion policy continues to make news. On June 26, the Supreme Court decided that a 35-foot buffer zone around abortion clinics was too great an imposition on the free-speech rights of anti-abortion activists. On June 3, the US Court of Appeals for the 9th Circuit struck down restrictions on pills that induce abortion early in pregnancies.
The American politics of abortion generates a lot of heat because of the passion of those with extreme views. Yet most Americans have moderate views on abortion. The debate over abortion restrictions involves a tragic conflict between a human life—however small and undeveloped—and the freedom of a potential mother to determine the course of her life.
Bill Clinton famously said during the 1996 presidential campaign: “Abortion should not only be safe and legal, it should be rare.” In saying this, he missed another important proviso. According to most Americans, abortion should be not only safe, legal and rare—when there is an abortion, it should be done early in pregnancy.Gallup polls from 2012 indicate that only 31% of adults think abortion should be illegal in the first trimester, but 64% think abortion should be illegal during the second trimester, and 80% think abortion should be prohibited in the third trimester. And these attitudes have been remarkably stable over time.
I agree with the majority of Americans. It makes sense to me that someone ought to have the right not to be killed the day before they would otherwise have been born. And it makes sense to me that, despite its potential, the interests of a single human cell from a recently fertilized egg cannot weigh as much in the balance as the interests of a woman in choosing one of the most basic aspects of what her future will look like. In between, I see the ethical weight of nascent human life as increasing gradually over time. There are milestones along the way: fertilization, implantation, getting a heartbeat, becoming able to feel pain, being born. But even those transitions, seen up close, are gradual ones. For example, birth is not one moment of transition, but many: the breaking of the water, the emergence of the baby’s head, the first breath, the cutting of the umbilical cord, and many key moments along the way.
Even after birth, loving parents feel a baby becoming more and more precious with every passing day. And with passing time, the child gains a greater and greater consciousness of its own existence, and (in all but pathological cases) its own strong desire to live. At the other end, even before conception, I like to think that even the unconceived have at least some small ethical interest in getting a chance to become an actual human being.
So to me, there are no sudden ethical jumps, but instead, a gradually increasing ethical weight to a developing human life, at least from shortly before conception to shortly after birth. What this ethical view means for policy is that when an abortion does happen it is better to have it occur early. Laws against partial-birth abortion seem ethically appropriate to me just as laws against killing the baby one day later are, but attempts to discourage women from using morning-after pills such as “Plan B” do not. It takes many, many fertilized eggs to equal the ethical weight of a single one-month-along fetus aborted because a woman was kept from using a morning-after pill. And while it might be reasonable to consider short waiting periods to encourage people to think things through, restrictions on abortion (or harrassments to drive out abortion clinics) that force women to go to another state at the cost of weeks of delay magnify the horror of the abortion that ultimately does take place.
Unfortunately, the extreme viewpoints that have driven much of the policy debate have left little room for us to focus on trying to insure that the abortions that do occur are early ones. The politically most active parts of the pro-life movement claim that a fertilized egg is the moral equivalent of a baby, while the politically most active parts of the pro-choice movement are loath to give any rights to a human being the day before birth. So it is the duty of the rest of us—who have both pro-choice and pro-life leanings jostling in our hearts at the same time—to work toward policies that will insure that abortions are not only safe, legal and rare, but also early.
I have been publishing a post based on John Stuart Mill’s On Liberty every other Sunday since January 27, 2013. Each of these posts is a bit like a homily based on a passage of scripture; but the “scripture” in this case is On Liberty, and occasionally I disagree with John. (You can seem them all on my Religion, Science and Humanities sub-blog.)
I was deliberate in choosing July 4 to post the full column. The honor of our nation, which moves me deeply, is that it does not send tanks to suppress free speech.
In addition to my editor, Mitra Kalita, I want to thank my father, Edward Kimball, for excellent editorial suggestions in putting together this column. The Tiananmen Square Massacre is an event well-deserving in its infamy of a two-day memorial. My post the following day also remembered.
If you want to mirror the content of this post on another site, that is possible for a limited time if you read the legal notice at this link and include both a link to the original Quartz column and the following copyright notice:
It is now 25 years since the Tiananmen Square Massacre of June 3 and 4, 1989. On this anniversary of that wretched event, it is right that we honor the man in the iconic picture who at least for a while stopped a column of tanks by putting himself in harm’s way. But let us also honor the man at the controls of the lead tank, who stopped that tank dead in its tracks to avoid crushing another human being. In the final analysis, despots and tyrants cannot impose their will on a country of any size without the help of many thugs and other amoral enforcers to do their dirty work for them.
Every time one person refuses to enforce evil, evil gets weaker.
When enough people refuse to enforce a particular brand of evil, that brand of evil falls. By contrast to China, where 1989 was a year of bleak disappointment for freedom, in Europe 1989 saw civil servants in Germany, Hungary and Czechoslovakia opening loopholes that let people leave East Germany for the West. Then on Nov. 9, Gunter Schabowski, the Communist party boss in East Berlin, interpreted ambiguous instructions to announce that the gates to West Berlin were open a day earlier than higher-ups intended. Finally, the unwillingness of guards and their immediate superiors at the Berlin Wall to authorize deadly force led to the destruction of that obstacle to human freedom. At every step of the way, numerous officials in East Germany tilted their decisions bit by bit in the direction of freedom.
Those of us lucky enough to live in (relatively) smoothly functioning democracies are sometimes too ready to think the cause of freedom is won in our land. But the cause of freedom has never fully gained victory as long as there continue to be illegitimate exercises of government power, even when those actions follow the forms of democratic decision-making. No exercise of government power can be legitimate if those pushing it forward know in their hearts that it is not good for the country and the world as a whole, but is only a way to advance some private interest. When those making decisions have honest disagreements about public goods, there must be a way to decide, and at this stage of human history, democracy is, as Winston Churchill said, the least bad of the available options for many, many decisions. But when no one thinks in his or her heart of hearts that a decision is good and right, it doesn’t matter how many votes that decision can get based on narrow self-interest, it is still wrong.
What of those who want to avoid a questionable exercise of government power, but are under orders to do so? For them, a simple litmus test is that they should not execute such orders unless they believe that those orders might be in the interests of the country and the world, with all due allowance for the fact that one might be mistaken in one’s own opinions that are contrary to the views of higher-ranked leaders. But whenever an officer of the government can see no possible way that a directive could be for the good of the country and the world, I would rather risk a bit of disarray that might result from his or her not obeying that directive than the wrong such an officer of government believes is certain if he or she does obey the directive.
For those who work for private employers rather than the government, disobeying a directive to do wrong should be an easy decision, but often is not, because of the personal sacrifices involved in defying an employer. Human weakness is understandable, but for many, developing broadly valuable job skills and putting away a little savings can help reduce the temptation to do wrong. That is, if one can avoid depending on a particular job too much, then one is less likely to be tempted to save one’s own hide, financially speaking, by being a party to the furthering of evil. New doctors take an oath to do no harm. If we each vow not to do clear evil even when the powers that be urge us to help them in their corrupt and twisted designs, the world will be a better place.
If you think “setting priorities” is a pleasant platitude, you don’t understand what it really is. “Setting priorities” is the brutal process of deciding which things won’t get done.
This is actually something I could use some help with. Recently, I read the Harvard Business Review article "Find the Coaching in Criticism" by Sheila Heen and Douglas Stone. Like many Harvard Business Review articles, it is of high quality (and unfortunately, that high quality doesn’t come for free—it is supported in part by the revenue generated through the Harvard Business Review’s paywall.) They write:
Feedback is less likely to set off your emotional triggers if you request it and direct it. … Find opportunities to get bite-size pieces of coaching from a variety of people throughout the year. Don’t invite criticism with a big, unfocused question like “Do you have any feedback for me?” Make the process more manageable by asking a colleague, a boss, or a direct report, “What’s one thing you see me doing (or failing to do) that holds me back?” That person may name the first behavior that comes to mind or the most important one on his or her list. Either way, you’ll get concrete information and can tease out more specifics at your own pace.
I feel that I already get plenty of advice on things I should be doing more of—both for my academic career and for my career as an economic journalist (which is how I categorize my efforts on this blog). What I could use more of is advice on what I should be doing less of—things that I am putting time and effort into that don’t have an adequate payoff. To clarify, I need to say that I have three goals:
to carve out a reasonable amount of leisure time, especially time with my family,
Both my academic career and my career as an economic journalist contribute to both goals, but in different degrees. My academic career is still at least an order of magnitude more important in providing income than my career as an economic journalist. (Any change in that fundamental fact would be a change that would look dramatic to outside observers as well as me.) But I feel my career as an economic blogger/journalist is at least as important as my academic career in making the world a better place. So I definitely want to keep up with both my academic career and my career as an economic journalist. But what I do within each of those categories, and the exact balance between them, is something I could use advice on.
Notice that in both academia and in blogging/journalism, a certain amount of self-promotion and institutional promotion is optimal. If I manage to write something worth reading, it is worth putting forth a certain amount of effort to get 5000 people to read it instead of 500. And some aspects of promotion of a blog are cumulative over time. I see the goal of having at least one post a day in that category. Even during a stretch where no one post is a big hit, it means something to readers to know there will be something every day.
All of that is just meant to direct you away from some possibly tempting, but I think, misguided pieces of advice like “Quit watching TV” (What? Reduce my leisure time further and lose my chance to enjoy the premier art form of our time?) or “Quit doing your blog” or “Abandon your academic career and become an economic journalist full-time.” By contrast, three pieces of feedback I have received, which may or may not be the right advice, but are definitely the kind of thing I am looking for, are “Twitter beyond basic announcements of posts and maybe one more tweet a day isn’t worth the time it takes if the goal is blog promotion,” “You don’t need to copy over the whole text of a post to Facebook, the link alone is plenty,” or “Reading and commenting on 200 blog posts from your students in the course of a semester is above and beyond the call of duty.”
In addition to getting your advice for myself, I wanted to recommend that those of you who feel you are overextended and overly busy also consider asking those around you
What should I be putting less time and effort into? What do think I am doing that isn’t worth the time and effort I put in?
To get useful responses, you might need to spell out your objectives clearly as I tried to do above for myself.
The point of this one is that it would great if more people in the world were Jewish. Let’s give people a chance to become Jewish by letting them now how easy it is to join Reform Judaism. (Note that you don’t have to be Jewish yourself to give people this useful bit of information.)
To me, Reform Judaism in particular is an important religion because it is one of the rare religions that fully welcomes non-supernaturalists.
Scott Aaronson has a wonderful blog about math and computer science, called “Shtetl-Optimized”. I’m not sure why it’s called that, since the name has nothing to do with the blog (which you should check out if you are a hardcore nerd). But anyway, this post is about the name, not the blog, since the phrase “shtetl-optimized” got me thinking about Judaism.
I was raised Jewish, but gently set it aside when I grew up and lost my taste for life rules for which I couldn’t see a point (e.g. “Don’t mix milk and meat!”). But I still think there is a lot to be valued in Judaism - as there is in most major religions - and I am mildly frustrated by the failure of these good things to diffuse out into the wider world. You see, the Jewish religion is still shtetl-optimized.
A shtetl was a Jewish ghetto in Central or Eastern Europe, similar to the town featured in the musical Fiddler on the Roof. Modern Judaism developed much of its current mix of ideas and culture in those little ghetto towns. These are precisely the elements that I think much of the world would embrace: 1) a love of knowledge, education, and friendly argument, and 2) a concept of personal morality based on healthy living and positive personal relationships.
Of course, these things have naturally diffused into modern culture to some extent, through American academia and Hollywood (two institutions in which Jews have a large presence). But I think people in many countries would enjoy being able to have a religion that emphasized these things on a daily basis, and provided the kind of cultural community that religions are good at providing. In other words, I think a lot of people in a lot of countries would enjoy being Jewish.
Unfortunately, they don’t get the chance. Most people don’t realize that it is very easy to convert to Reform Judaism (the less strict flavor, which doesn’t make you wear a funny hat). They don’t realize that because Jews consciously avoid making them aware of this fact. Jews, you see, have a cultural taboo against proselytizing. When I suggested to my (more religiously inclined) cousins that Jews should accept more converts, they were horrified.
Making people aware of the ease of conversion is actually not the same as “proselytizing”. “Proselytizing” means trying to convince people to convert. But my bet is that in the Old Country of Europe, the Christians who surrounded Jews failed to see that fine distinction. My guess is that if there was any rumor that the local Christians were converting to Judaism, then some Jewish people’s houses were going to get burned.
So my guess is that Jews learned their insularity on the shtetl. The cultural taboo against informing people in China, or Brazil, or Indonesia that they can be Jews if they want is an anachronism. If Judaism is to survive, much less bring the benefit of its unique perspective to those who would enjoy it, it’s going to have to learn to inform the goyish (non-Jewish) world that they, too, can be Red Sea Pedestrians.
(Of course, there are a few Jews who are insular for a quite different reason - they want to preserve the purity of the Ashkenazic race - an ethnic group that is mostly Jewish. I myself belong to that group, but to me, preserving the purity of the Ashkenazic race sounds about as desirable a goal as giving myself a vasectomy with a Dremel.)
Anyway, the upshot is this: Jews, time to get off the shtetl! There are lots of people in China and Brazil and Indonesia who would love to join your religion. Why not let them know they can?
Paul Finkelman argues persuasively in the New York Times op-ed linked above that Thomas Jefferson’s racism and his proslavery attitudes should not be whitewashed. In this area, he was far worse than many of the other founding fathers. Here is a key passage of Paul’s essay:
…the third president was a creepy, brutal hypocrite.
Contrary to Mr. Wiencek’s depiction, Jefferson was always deeply committed to slavery, and even more deeply hostile to the welfare of blacks, slave or free. His proslavery views were shaped not only by money and status but also by his deeply racist views, which he tried to justify through pseudoscience.
It is quite possible that the Civil War itself can be laid at Thomas Jefferson’s feet. Paul Finkelman writes:
Jefferson also dodged opportunities to undermine slavery or promote racial equality. As a state legislator he blocked consideration of a law that might have eventually ended slavery in the state.
As president he acquired the Louisiana Territory but did nothing to stop the spread of slavery into that vast “empire of liberty.”
If slavery had withered away in Virginia and there had been no slave states in the Louisiana territory, there is a good chance the proslavery forces would have lost political power early enough that things would not have escalated into the Civil War. Or even if there were a Civil War, if Viriginia had become a free state, perhaps Robert E. Lee’s loyalty to Virginia would have led him to lead Union troops into battle, and so to a much quicker end to the war.
Thanks to John L. Davidson for flagging this essay.
Things start hard and then get easier. This can be true even for health care. Here are the examples that Clay Christensen, Jerome Grossman and Jason Hwang give in The Innovator’s Prescription:
The problems facing the health-care industry actually aren’t unique. The products and services offered in nearly every industry, at their outset, are so complicated and expensive that only people with a lot of money can afford them, and only people with a lot of expertise can provide or use them. Only the wealthy had access to telephones, photography, air travel, and automobiles in the first decades of those industries. Only the rich could own diversified portfolios of stocks and bonds, and paid handsome fees to professionals who had the expertise to buy and sell those securities. Quality higher education was limited to the wealthy who could pay for it and the elite professors who could provide it. And more recently, mainframe computers were so expensive and complicated that only the largest corporations and universities could own them, and only highly trained experts could operate them. (We will come back to this last example, below.)
It’s the same with health care. Today, it’s very expensive to receive care from highly trained professionals. Without the largesse of well-heeled employers and governments that are willing to pay for much of it, most health care would be inaccessible to most of us.
At some point, however, these industries were transformed, making their products and services so much more affordable and accessible that a much larger population of people could purchase them, and people with less training could competently provide them and use them. We have termed this agent of transformation disruptive innovation. It consists of three elements (shown in Figure I.1). Technological enabler. Typically, sophisticated technology whose purpose is to simplify, it routinizes the solution to problems that previously required unstructured processes of intuitive experimentation to resolve. Business model innovation. Can profitably deliver these simplified solutions to customers in ways that make them affordable and conveniently accessible. Value network. A commercial infrastructure whose constituent companies have consistently disruptive, mutually reinforcing economic models.
Using some terminology Clay Christensen uses in all of his books, the key problem with health care is that so much of it is set up on the “solution shop” business model. The “solution shop” business model is familiar to academics in research universities because the kind of research done in academic is almost always done in a solution-shop way, by specialized crafting of ways to get a scientific job done. The only way to make health care significantly cheaper is to routinize and “deskill” or at least “downskill” much of it so that the job for at least the easy cases can be done in a way that is more in the spirit of mass-production: as a “value-added process.”
Charles gives a succinct evaluation of both Thomas’s and Henry’s proposals:
Alas, Piketty’s global wealth tax and George’s single tax suffer from the same defect, and it’s not political impracticality — after all, George nearly got himself elected mayor of New York City in 1886.
It’s the inherent difficulty of separating the productive, untaxed component of the return on land or capital from the unproductive, taxed part. …
As a result, it’s hard to devise a tax on wealth that raises a significant amount of revenue but doesn’t discourage at least some socially beneficial saving or entrepreneurship. The potential for adverse unintended consequences — economic and political — is greater than Piketty seems to realize.
Quite distinct from this concern about incentives, Charles goes on to a positive note about having power in the hands of private individuals:
Great private fortunes can indeed entitle their owners to an undue share of society’s current income and political power. At times, however, private wealth can serve as a font of charity or, indeed, a bulwark against government overreach.
These are indeed the key issues to think about in relation to wealth taxation.
In particular, it seems impossible to compare in any precise way the value of pure land long ago with its value today. The principal issue today is urban land: farmland is worth less than 10 percent of national income in both France and Britain. But it is no easier to measure the value of pure urban land today, independent not only of buildings and construction but also of infrastructure and other improvements needed to make the land attractive, than to measure the value of pure farmland in the eighteenth century. According to my estimates, the annual flow of investment over the past few decades can account for almost all the value of wealth, including wealth in real estate, in 2010. …
… the fact that total capital, especially in real estate, in the rich countries can be explained fairly well in terms of the accumulation of flows of saving and investment obviously does not preclude the existence of large local capital gains linked to the concentration of population in particular areas, such as major capitals. It would not make much sense to explain the increase in the value of buildings on the Champs-Elysées or, for that matter, anywhere in Paris exclusively in terms of investment flows. Our estimates suggest, however, that these large capital gains on real estate in certain areas were largely compensated by capital losses in other areas, which became less attractive, such as smaller cities or decaying neighborhoods. (Capital in the Twenty-First Century, p. 197.)
Thomas Piketty’s example of the unearned rise in the value of one’s urban land may seem like an opening for non-distortionary taxation, but in fact from the standpoint of efficiency these positive externalities suggest subsidizing all activities that create these positive externalities for land values, of which just as many are private activities as are activities of the government. (And many activities of the government do not raise land values.) Also, I worry that urban governments often make land prices for certain favored plots go up while reducing the total value of land (and social welfare) by putting tight restrictions on building. This is a concern that Matthew Yglesias raises in his book The Rent Is Too Damn High: What To Do About It, And Why It Matters More Than You Think.
We are strong proponents of the idea that scientific progress—especially in economics—depends on a vigorous debate among widely divergent points of view.
The analogy that comes to my mind is biological evolution. Genetic variation is the crucial raw material on which natural selection operates in order to raise overall fitness, with all of the fascinating complexity of life that often accompanies higher fitness. Similarly, variation in viewpoints and approaches is the crucial raw material for the advances that result from scientific debate.
One of the key drivers of biological evolution is the need for disease resistance. (Indeed, the Red Queen Hypothesisholds that the key evolutionary driver for the origins of sexual reproduction was the need to outmaneuver parasites.) In agriculture, monocultures that gives a large share of a crop an almost identical genetic makeups run the risk of disastrous blights. In economics, having everyone look at things the same way would risk having no one prepared to understand new circumstances that the world might find itself in. As Noah and I wrote:
Scientifically, Freshwater macroeconomics plays an important role in laying out how the world should be if everyone thought like an economist.
In the future, more people may think much more like economists. And as I point out to my students, when talking about Real Business Cycle models, these models (done as well as possible, of course) establish, the benchmark of what the natural level of output is. And the dynamics of the natural level of output and the natural level of other macroeconomic variables in turn describe how the economy will behave in the future when (I optimistically predict) central banks will be much better at their task of keeping the economy at the natural level of economic activity. We need Freshwater Macroeconomics (again, done as well as possible) to be well-prepared for that possible future. (The blight in the analogy I am pursuing would be a blight on models that focus on the consequences of an output gap in a future when there aren’t much in the way of output gaps any more because monetary policy is so good.)
The circumstances which surround different classes and individuals, and shape their characters, are daily becoming more assimilated. Formerly, different ranks, different neighbourhoods, different trades and professions, lived in what might be called different worlds; at present, to a great degree in the same. Comparatively speaking, they now read the same things, listen to the same things, see the same things, go to the same places, have their hopes and fears directed to the same objects, have the same rights and liberties, and the same means of asserting them. Great as are the differences of position which remain, they are nothing to those which have ceased. And the assimilation is still proceeding. All the political changes of the age promote it, since they all tend to raise the low and to lower the high. Every extension of education promotes it, because education brings people under common influences, and gives them access to the general stock of facts and sentiments. Improvements in the means of communication promote it, by bringing the inhabitants of distant places into personal contact, and keeping up a rapid flow of changes of residence between one place and another. The increase of commerce and manufactures promotes it, by diffusing more widely the advantages of easy circumstances, and opening all objects of ambition, even the highest, to general competition, whereby the desire of rising becomes no longer the character of a particular class, but of all classes. A more powerful agency than even all these, in bringing about a general similarity among mankind, is the complete establishment, in this and other free countries, of the ascendancy of public opinion in the State. As the various social eminences which enabled persons entrenched on them to disregard the opinion of the multitude, gradually become levelled; as the very idea of resisting the will of the public, when it is positively known that they have a will, disappears more and more from the minds of practical politicians; there ceases to be any social support for nonconformity—any substantive power in society, which, itself opposed to the ascendancy of numbers, is interested in taking under its protection opinions and tendencies at variance with those of the public.
The combination of all these causes forms so great a mass of influences hostile to Individuality, that it is not easy to see how it can stand its ground. It will do so with increasing difficulty, unless the intelligent part of the public can be made to feel its value—to see that it is good there should be differences, even though not for the better, even though, as it may appear to them, some should be for the worse. If the claims of Individuality are ever to be asserted, the time is now, while much is still wanting to complete the enforced assimilation. It is only in the earlier stages that any stand can be successfully made against the encroachment. The demand that all other people shall resemble ourselves, grows by what it feeds on. If resistance waits till life is reduced nearly to one uniform type, all deviations from that type will come to be considered impious, immoral, even monstrous and contrary to nature. Mankind speedily become unable to conceive diversity, when they have been for some time unaccustomed to see it.
However wrongheaded they may seem, minority viewpoints, especially those articulately advanced, are to be treasured as a key to scientific advance and resiliency. Similar things can be said for minority political, cultural, and religious viewpoints. For example, whatever my differences of opinion with the Mormon Church, it is a prodigious generator of important social experiments, many of which may have turned up useful ways of doing things. See for example
(See also the discussion of non-monetary motivations in Scott Adams’s Finest Hour: How to Tax the Rich.) I am confident that those who know them better could point to similar contributions to the rich array of alternatives for ways to organize society that have been identified by other minority religions. (Hint for comments!)
As an example in the cultural vein, while some presume to make strong value judgments about different genre’s of music. I have found many German economists to be scathing in their view of Schlager music, for example, in an intensified version of the way many highly educated Americans look down on Country music as low class. My attitude is that substantial numbers of people enjoy a particular type of music, there is likely to be something to it. I listen trying to find the angle from which I too can get that kind of pleasure from each genre. I may not succeed, and then retain a preference for other music instead, but it is worth giving each genre a good try.
In politics, of course the disdain with which the Left looks upon the Right and the Right looks upon the left has been a target of mine since the beginnings of this blog. I insist that there are crucial insights on both sides of the political spectrum. Our nation and all other democratic nations would go disastrously wrong in their policies if either side of the political spectrum were eradicated from the range of opinions expressed in political action.
One of the most common temptations human beings face is the temptation to try to make people saying something disagreeable shut up. Another common temptation is to try to make people doing something that seems disgusting cease and desist. But stop and consider: a point of view (with its attendant insights) or a way of life (with its attendant practices) that does not currently agree with your own views may someday be your salvation.
Jonathan Clements’s June 14, 2014 Wall Street Journal article “How to Calculate Your Net Worth" is an excellent discussion of integrating human capital into your portfolio. Here are some of his main points. The bolded labels are mine, the rest is his:
1. Human Capital is a Big Part of Your Portfolio. If you’re under age 50 and gainfully employed, your most valuable asset is probably your human capital—your ability to pull in a paycheck. The Census Bureau estimates, based on a 2011 survey, that a college graduate who works full time for 40 years might have lifetime earnings of $2.4 million, while someone with a professional degree, such as a doctor or lawyer, might earn $4.2 million.
2. Insure Your Human Capital with Life Insurance. Your human capital should heavily influence how you handle your larger financial life. For instance, to protect your human capital, you likely need health, disability and life insurance. Suppose you go under the proverbial bus or, alternatively, go under the bus but survive. In either situation, the right insurance can help your family cope.
3. Borrowing Against Your Human Capital Can Make Sense. Early in your adult life, you might take on a heap of debt, including student loans, car loans and mortgages. Reckless? Arguably, it’s rational. By borrowing, you can purchase items you can’t currently afford, thus smoothing out your consumption over your lifetime. With any luck, you will have years of paychecks ahead of you, so you can service these debts and eventually retire debt-free.
4. For Some, Human Capital is a Relatively Safe Asset That Can Be Balanced Out With Aggressive Investment in Risky Assets. Your human capital is also the rationale behind investing heavily in stocks when you’re younger. Think of your regular paycheck as akin to receiving interest from a bond. To diversify your big human capital “bond,” you might devote your portfolio mostly to stocks. But as you approach retirement and your last paycheck, you should shift maybe half your portfolio into bonds, so you have investment income to replace the lost income from your human capital.
In the rest of the article, he talks about how (a) you might have some human capital even after you have “retired” if you don’t retire completely, (b) integrating social security wealth (the value of the future social security payments you will get) into your portfolio and (c) liabilities like everything you will need to spend on a kid.
Let me also flag Jason Zweig’s nice article the day before “Can You Handle the Market’s Stress Test?" about how to fight "loss aversion"—being very risk averse toward relatively small risks. Here is what I tweeted about it:
How to fight loss aversion: avoid nonfinancial stress and make sure to net out gains and losses against each other.