Daron Acemoglu and Simon Johnson's Plan to Save Our Republic

Daron Acemoglu and Simon Johnson's recent Foreign Policy article has the grand title "It's Time to Found a New Republic." Let's take a look at what they propose. I'll give my reactions.  

Avoiding Internet Monopolies

Daron and Simon worry that big tech firms will establish long-lasting monopolies by their control of data. The suggestion of having users own their own data seems a good one:

The conventional commercial doctrine is that data are proprietary to the companies that collect them. This needs to change profoundly and completely since the playing field can only be leveled by making data available to all potential competitors. One way of achieving this is to ensure data belong to the people who generate the information, i.e., to individuals who drive cars, surf the internet, and buy goods.

I briefly worried that it would be hard to pay for free services if users weren't giving up data. But users giving companies the use of their data for the period of time they use the services should still be a substantial inducement to provide internet services. In other words, the internet companies would be renting the data rather than owning it. Or at a minimum, they would get non-exclusive access to the information. The user would have the right to share the information with another company. There are two possible rules: the website the user was using must erase the information if it stops providing the service, or the website the user was using may stop providing the service if the user shares the information with the new company. There are many possibilities that could work. 

Free Higher Education

Daron and Simon have a view of higher education similar to the one I lay out in "The Coming Transformation of Education: Degrees Won’t Matter Anymore, Skills Will." They write:

Making high-quality education free for everyone would be a step in the right direction in this context. Technology can help with this, including through all kinds of on-line instruction. Loading up on student debt does not really help anyone — or our nation — prepare for what comes next in the world economy.

My take in "The Coming Transformation of Education: Degrees Won’t Matter Anymore, Skills Will" is this:

The road ahead is clear: the potential in each student can be unlocked by combining the power of computers, software, and the internet with the human touch of a teacher-as-coach to motivate that student to work hard at learning. Technology brings several elements to the equation:

But since motivation—the desire to learn—is so important, a human teacher to act as coach is also crucial. In particular, without a coach, the flexibility for students to learn at their own pace can be a two-edged sword, because it makes it easy to procrastinate.

In the end, none of this will be hard. The technology and content for that technology are already good and rapidly improving. And although it is a bit much to expect someone to be both a great and inspirational coach and to be at the cutting edge of an academic field, the number of great athletic coaches and trainers at all levels indicates that, on its own, being an inspirational coach is not that rare. Being an inspirational coach in an academic setting is not quite the same thing, but I am willing to bet that it, too, is blessedly common. By having the cutting-edge knowledge from the best scientists and savants in the world built into software and delivered in online lectures, all a community college has to do to deliver a world-class education is to hire teachers who know how to motivate students.

As long as a community college education costs only as much to provide as it does now, it is not a big stretch to think that a community college education could be subsidized enough to be effectively free in the future. With the combination of technology and community college instructors as coaches, students will be able to learn a lot from free higher education. There would continue to be many elite, expensive schools that students would attend for reasons that go beyond academic and professional learning, but for those willing to settle for an excellent education academically and professionally, college would be free.

Reducing Labor Taxation

Daron and Simon want to shift taxation from labor to capital:

The economy needs a fundamental restructuring of the tax code to lower the taxation on labor and remove all of the subsidies to machines so that the playing field is leveled for labor.

I don't see capital as undertaxed. But it would be good to shift labor taxation more toward situations in which people tend to have low labor supply elasticities and to have some wage subsidies at the bottom. Prime-age first-earners in a family can be taxed more heavily. Those old enough to think about retiring, secondary earners in a family, and those who just might be able to make it onto the disability roles should have their labor income taxed more lightly. And we should either get rid of cash, or tax very lightly those at the bottom of the income distribution who might be tempted to get paid in cash and not report the income. 

Monitoring Government Officials

Corruption and semi-corruption are big problems. Technology can help. Daron and Simon write:

Money calls the shots in Washington not just because of campaign financing, but because of lobbying and the broader influence industry. Lobbies have traditionally been much harder to regulate, because much of their work is performed behind closed doors (as opposed to campaign financing, which is more clearly visible). The only way of neutralizing the effects of lobbies is by creating greater transparency.

In this, technology can help. Artificial intelligence and big data analytics can be used to track everything that happens in the political sphere — automatically raising flags when they detect frequent meetings with certain networks of individuals or excessive amount of resources being expended relative to what is normal or regarded as acceptable. Crucially, this information will not be collected and guarded by a government agency, but will be made available to the entire public.

All elected politicians and their aides will need to agree to forgo a substantial amount of privacy in their public lives in order for this system to work. Some people may, as a result, choose not to subject themselves to this transparency and decline to go into the realm of public policy. But do you really want shadowy characters controlling the nation’s future?

For some time, I have been thinking along similar lines, as you can see from this Twitter discussion with Matt Stambaugh. Here is the way I am thinking about dealing with lobbying now:

  1. Draw a sharp line between government officials and those who are not government officials.
  2. Strict conflict-of-interest rules apply to government officials as now.
  3. Government officials can talk freely to other government officials about policy, including discussions behind closed doors, but ...
  4. ... any communication between government officials and those who are not government officials about policy must be totally public. If in person, video must be recorded and immediately posted to a public, searchable website. If by phone, audio must be recorded and immediately posted to a public, searchable website. If by email, the email must be immediately posted to a public, searchable website. 
  5. Mechanisms are provided to keep the identities of those outside government anonymous, but only to the extent their identities are also anonymous to the government official. Ideally, there would be some way to verify the truth of whatever partial identification is given—for example, "I am a constituent in your district."
  6. Government officials are not even allowed to talk about policy with family members who are not government official without recording that conversation and making it public.  
  7. Diplomatic discussions with government officials in other countries would count as a discussion among government officials. 

Certain accommodations would have to be made. There would need to be scope for government information gathering that did not count as a policy discussion. Some policy discussion between government officials and those who are not government officials might be classified; these would not be made fully public, but only public to those (including journalists) who could qualify for the necessary level of clearance. Systems would need to be set up to insure that enough people had the necessary level of clearance that these contacts between government officials and those outside of government could be appropriately monitored. Former government officials might be especially valuable monitors in such cases. 

I hope others are trying to think how to better monitor lobbying along these lines. I don't doubt that the details can be improved over what I am suggesting above. But it is important to not allow huge loopholes through which something like the lobbying status quo can be continued. 

Nonpartisan Redistricting

Daron and Simon share my view that nonpartisan redistricting is crucial to improve US politics. They write:

Gerrymandering — changing the boundaries around congressional districts to ensure a particular outcome — makes a mockery of democracy. It reduces representativeness and thus exacerbates the political fault lines. Technology can help here as well. A constitutional amendment could easily require a fair and automatic redrawing of boundaries as population shifts, where the parameters of how such redistricting will take place are specified in advance and transparently to avoid the temptation for political manipulation.

I have three posts that touch on nonpartisan redistricting: 

  1. Persuasion
  2. Nonpartisan Redistricting
  3. Statistical Tests to End the Curse of Gerrymandering

I am less optimistic than Daron and Simon that a purely technical solution is possible, though formal mathematical and statistical tests to judge proposals are a key part of nonpartisan redistricting. The key is to take redistricting decisions out of the hands of the politicians themselves. 

Overall, working toward nonpartisan redistricting is a worthy area for activism for people who want to make a difference. 

Fine-Tuning the Degree of Independence of the Civil Service and Judiciary

I favor more accountability of the civil service and judiciary to the political arms of government than do Daron and Simon. I don't disagree with this passage:

Another important step for strengthening our democracy is a constitutional amendment to increase the independence of the judiciary and the civil service, removing the power of the president to appoint judges (except Supreme Court justices) and prosecutors, and strengthening the role of career civil servants.

But there should be a continued inquiry into exactly how much independence is right for each agency and each type of situation. This is an important area of institutional design. Daron and Simon point to several specific types of situations where a greater degree of independence is needed than now:

For example, not only can the president remove prosecutors who may be investigating those close to the administration, but the political appointment process often paves the way to secret settlements agreements with powerful people and organizations — and judges bless these deals. Elections for judges and prosecutors is not a better solution either.

Like Daron and Simon, I worry about the effects of elections for judges and prosecutors. 

Conclusion

Daron and Simon's suggestions are mostly reasonable. See if you can do even better!

 

John Locke: Rivalry in Consumption Makes Private Property Unavoidable

The French anarchist Pierre-Joseph Proudhon famously wrote in his 1840 book Or, an Inquiry into the Principle of Right and of Government "Property is Theft!" John Locke countered in advance in sections 25 and 26 of his 2d Treatise on Government: “Of Civil Government” (Chapter V "Of Property") with this argument:

  1. For many goods, consuming them makes them unavailable for anyone else. Economists call this "rivalry in consumption." 
  2. For the many goods that are rivalrous in consumption, the moment of consumption necessarily makes them private property.
  3. If everyone was prevented from consuming a good that is rivalrous in consumption, it does noone any good. 
  4. Hence, private property is unavoidable if we are to enjoy the benefits of consuming rivalrous goods.  

Here are the words John Locke uses:

Whether we consider natural reason, which tells us, that men, being once born, have a right to their preservation, and consequently to meat and drink, and such other things as nature affords for their subsistence: or revelation, which gives us an account of those grants God made of the world to Adam, and to Noah, and his sons, it is very clear, that God, as king David says, Psal. cxv. 16. has given the earth to the children of men; given it to mankind in common. But this being supposed, it seems to some a very great difficulty, how any one should ever come to have a property in any thing: I will not content myself to answer, that if it be difficult to make out property upon a supposition that God gave the world to Adam, and his posterity in common, it is impossible that any man, but one universal monarch, should have any property upon a supposition, that God gave the world to Adam, and his heirs in succession, exclusive of all the rest of his posterity. But I shall endeavour to shew, how men might come to have a property in several parts of that which God gave to mankind in common, and that without any express compact of all the commoners.

God, who hath given the world to men in common, hath also given them reason to make use of it to the best advantage of life, and convenience. The earth, and all that is therein, is given to men for the support and comfort of their being. And though all the fruits it naturally produces, and beasts it feeds, belong to mankind in common, as they are produced by the spontaneous hand of nature; and nobody has originally a private dominion, exclusive of the rest of mankind, in any of them, as they are thus in their natural state: yet being given for the use of men, there must of necessity be a means to appropriate them some way or other, before they can be of any use, or at all beneficial to any particular man. The fruit, or venison, which nourishes the wild Indian, who knows no inclosure, and is still a tenant in common, must be his, and so his, i. e. a part of him, that another can no longer have any right to it, before it can do him any good for the support of his life.

Sometimes when people wish there were no private property, they are wishing that there were no scarcity—or even imagining that there wouldn't be any scarcity if evil people were not withholding the earth's bounty. This is a fantasy. 

In other cases, when people wish there were no private property, they are really saying that private property—including the distribution of rights to use the "commons"—should be more equally distributed. This is a reasonable thing to think. (Nobel prize winner Elinor Ostrom persuasively argued the use of common pool resources is almost always regulated by the community. Hence, there are private property rights involved in the use of common pool resources.)  

But literally wishing there were no private property makes little sense given the fact that for so many goods, consuming them effectively makes them private property even if they weren't before. Indeed, in the case of eating, consumption literally makes the food part of one's own body, which is private property as long as slavery is banned. 

Don't miss other John Locke posts. Links at "John Locke's State of Nature and State of War."

Making Collective Choices: Quadratic Voting and the Normalized Gradient Addition Mechanism

Link to the video on the Becker-Friedman Institute site, with paths to related videos

This is a talk I gave April 7, 2016, at a conference on Quadratic Voting spearheaded by Glen Weyl. Just click on the picture. You can also see the other presentations at the conference by clicking on the link below the picture. Seeing the other presentations in the conference that you can access made me more interested in Quadratic Voting. 

Here is a link to the paper corresponding to this talk. Here is the official website of the published paper in the journal Public Choice. Below is the abstract of the published paper. 

Abstract:

Quadratic voting and the normalized gradient addition mechanism are both social choice mechanisms that confront individuals with quadratic budget constraints, but they are applicable in different contexts. Adapting one or both to apply to the same context, this paper explores the relationship between these two mechanisms in three contexts: marginal adjustments of continuous policies, simultaneous voting on many public choices, and voting on a single public choice accompanied by private monetary consequences. In the process, we provide some formal analysis of quadratic voting when (instead of money) votes are paid for with abstract tokens that are equally distributed by the mechanism designer.

Janet Adamy and Paul Overberg on Immobility in America

Americans are moving less than they used to. This is preventing rural wages from recovering as more and more of the good jobs move to the cities. Janet Adamy and Paul Overberg wrote a great article about why. All of the quotations are from that article, "Struggling Americans Once Sought Greener Pastures—Now They're Stuck," which was published in the August 2, 2017 Wall Street Journal. 

First, they lay out the magnitude of the issues:

In rural America, which is coping with the onset of socioeconomic problems that were once reserved for inner cities, the rate of people who moved across a county line in 2015 was just 4.1%, according to a Wall Street Journal analysis. That’s down from 7.7% in the late 1970s. 

Most of the rest of the article is about the reasons why. To preview, they are

  1. High Home Prices in the City Because of Restrictive Land-Use Regulations
  2. Occupational Licensing
  3. Aid for the Down-and-Out that Is Tied to a Locality
  4. Cultural Divides

1. High Home Prices in the City Because of Restrictive Land-Use Regulations

I have been struck more and more by the importance of land-use regulations in maintaining the class divide in America. I have written about that issue in these posts:

(Also see Emily Badger: There Is No Such Thing as a City that Has Run Out of Room.)

Here is what Janet and Paul have to report on this issue:

Economists say there are several practical reasons for the declining rural mobility—the first being the cost of housing. While small-town home prices have only modestly recovered from the housing market meltdown, years of restrictive land-use regulations have driven up prices in metropolitan areas to the point where it is difficult for all but the most highly educated professionals to move.

Even more pointedly, they quote Peter Ganong as follows: 

“We’re locking people out from the most productive cities. ... This is a force that widens the urban-rural divide.”

2. Occupational Licensing

I have repeatedly attacked occupational licensing as both an unwarranted infringement on liberty and as a way for the haves to keep down the have-nots. See for example:

In addition to those harms, occupational licensing requirements that differ by state can make it harder for people to move. Janet and Paul write:

Another obstacle to mobility is the growth of state-level job-licensing requirements, which now cover a range of professions from bartenders and florists to turtle farmers and scrap-metal recyclers. A 2015 White House report found that more than one-quarter of U.S. workers now require a license to do their jobs, with the share licensed at the state level rising fivefold since the 1950s.

Janna E. Johnson and Morris M. Kleiner of the University of Minnesota found in a nationwide study that barbers and cosmetologists—occupations that tend to require people to obtain new state licenses when they relocate—are 22% less likely to move between states than workers whose blue-collar occupations don’t require them.

3. Aid for the Down-and-Out that Is Tied to a Locality

In general, it is probably a good thing that America has a wealth of non-governmental forms of aid for people (see "How and Why to Expand the Nonprofit Sector as a Partial Alternative to Government: A Reader’s Guide"). But when the non-governmental aid is tied to a locality, it can inhibit mobility. Governmental aid tied to a locality can do the same thing. Janet and Paul write:

For many rural residents across the country with low incomes, government aid programs such as Medicaid, which has benefits that vary by state, can provide a disincentive to leave. ... Civic leaders here say extended networks of friends and family and a tradition of church groups that will cover heating bills, car repairs and septic services—often with no questions asked—also dissuade the jobless and underemployed from leaving. ...

Cody Zimmer, 29, of Ogemaw County toyed with moving to work for an uncle in New Jersey or closer to Detroit after a decadelong career in skilled manufacturing periodically left him unemployed. But student debt and a divorce damaged his finances, and he says his best option ended up being renting his mom’s house outside West Branch. “If anything happened there, I’d be right back out on my own,” Mr. Zimmer says of these other places. ...

Many West Branch residents say that the town’s economic woes aren’t enough to make them leave. They point to the safety net the community provides—a helping hand to pay bills, or the way people come together when a neighbor is diagnosed with cancer.

It is not impossible to have non-governmental aid that is not tied to a locality. Mormons can move anywhere and immediately have the kind of social support and practical aid from their new congregation that others feel they can only get in their hometown. Every Mormon is effectively assigned several social workers from the congregation, called "home teachers" and "visiting teachers," who come into the home and try to identify if they need help as well as giving a religious lesson. You can read about this system and other aspects of Mormon social support in Megan McArdle's Bloomberg essay "How Utah Keeps the American Dream Alive" (discussed in the storify "Taking Care of the Poor and Troubled Without Getting Tied Up in Knots About Race") and these posts:

 

Besides practical aid, Mormon congregations buffer culture shock when people move from one place to another. More than one observer has described a Mormon congregation as an ersatz small town. Mormons themselves are not ashamed to glory in the relatively high degree of standardization of Mormonism from place to place, even sometimes comparing it to McDonald's in that regard. 

4. Cultural Divides

For those who do not belong to a religion that provides an ersatz small-town and a degree of cultural homogeneity wherever they go, awareness of the cultural differences between rural areas and the big city can be a powerful force reducing the willingness to move. Janet and Paul write:

Beyond the practical difficulties, rural residents and experts say there is another impediment to mobility that is often more difficult to overcome—the growing cultural divide.

Tom W. Smith, who runs the University of Chicago’s General Social Survey, says that cities’ welcoming attitudes toward immigrants from abroad, same-sex marriage and secularism heighten distrust among small-town residents with different values. ...

“One of the big cultural divides when people move from small towns to cities is this feeling that you can’t be involved in your community,” says David J. Peters, associate professor of sociology at Iowa State University. “You feel powerless to change large cities.”

Europe has understandably low mobility between different countries that have different languages and cultures. America is becoming more like Europe in that regard. 

Politics itself has become a bigger and bigger cultural divide. I was surprised and disheartened by the pushback I got online when I decried political prejudice. Here is my opening salvo criticizing "politicism" and then the tweeted defenses of political prejudice that I received:

I wish people would make a bigger effort to understand the political views of their fellow Americans instead of demonizing those who think differently. Even views that deserve to be fought vigorously need to be understood first in order to fight them effectively. My single most popular post, "John Stuart Mill's Brief for Freedom of Speech," has a useful set of resources for thinking about that. 

Conclusion

Each of these four factors that reduces mobility is a problem in its own right. Trying to remove these obstacles to mobility would also reduce obstacles to opportunity and comity more generally. If you want to see me wrestling with these kinds of issues, try "Restoring American Growth: The Video." 

 

 

 

 

 

 

The Unmaking

Link to the video above on Youtube

Link to the full lyrics

Although I am a Nonsupernaturalist, I like listening to Contemporary Christian Music because it covers a wide range of themes in human life that go beyond the important and moving, but not-wide-ranging-enough themes of the ups and downs of romantic relationships that animate the bulk of popular music. Growing up, I liked the political songs of the 60s for a similar reason: they added political themes to the romantic themes of most popular music. (You can tell that I pay a lot of attention to lyrics; I know many people focus almost entirely on the music itself in what they listen to, apart from lyrics.)  

A common human experience is to have something one has worked hard for fall apart. Nichole Nordeman's song "The Unmaking," (see the videos and links above) points to the deep truth that rebuilding after everything seems to have fallen down sometimes leads to something better than what fell. This has certainly been the case in many instances in my own life. For example, the professional disappointment I wrote about in "Believe in Yourself" led me through a long road to even better research projects. And the crumbling of my belief in Mormonism led me to a better place, religiously. 

To explain why "Demolition Day" can lead to something even better than what came crashing down, Nichole Nordeman suggests that the new creation was God's doing, while what came crashing down was one's own doing, even if done while invoking God's name. Even if no God currently exists, there is a lot of truth to this view. 

Most of us, in our first attempts to build follow the lead of society's current notions of how to proceed. Often that means engaging in "tournaments" in the broad sense in which economists use the word: competitions in which, by design, only a few can reach the top. It is only after failing in a tournament or several tournaments that one begins to question whether the things all the many other people also engaged in tournaments are after are really the most important things. 

In my own belief, asking the question of what is most important and what is really worth doing is the first step toward God—even if God does not yet exist. This is the message of my sermon "Teleotheism and the Purpose of Life." This past year, I have tried to dig into how to begin answering that question in a series of posts that are often framed as advice to young economists, but I hope are helpful to others as well. These three are about not getting caught in the rat race, aiming to do good, and thinking big: 

And these three are about questioning the narrow views other people might have about how one should proceed (here the translation from my attacks on narrow views in economics and academia to attacks on narrow views in other fields may take some extra work): 

Finally,

 

talks about the importance of love in getting to where we want to go. 

Despite all that I have written so far, I feel there are other deep insights in Nichole Nordeman's lyrics about the experience of seeing things one has built fall down and then rebuilding that I can't fully articulate. There is much that we Nonsupernaturalists can learn from Supernaturalists, even without giving up our disbelief.

 

 

When the Output Gap is Zero, But Inflation is Below Target

More and more central banks are facing a situation in which the output gap they are looking at looks close to zero, but inflation is below their target. This is arguably the case for Japan, Sweden and the US, for example. Even the eurozone is getting close to this situation. Sometimes journalists discuss a zero output gap combined with too-low inflation as if such a situation were strange, but a range of different macroeconomic theories all have the property that a zero output gap is consistent with any constant inflation rate. (This is an aspect of "monetary superneutrality.")

Older "sacrifice ratio" models predict that a positive output gap will tend to make inflation gradually rise, while a negative output gap will tend to make inflation gradually fall. Newer models that have a simple Calvo pricing mechanism predict that that an increase in expected future output gaps will make inflation jump up, while a current positive output gap is associated with inflation gradually falling, with the direction reversed for negative output gaps.

I think recent history is easiest to understand by thinking in terms of one of the older "sacrifice ratio" models combined with the idea that the output gap has some immediate effect on inflation has some immediate effect on inflation. I don't have a good microfoundation, but suppose that

gap = log(GDP) - log(natural GDP)

d inflation/dt = a d(gap)/dt + b gap

where both a and b are positive. With this equation, if the output gap is constant at zero, inflation remains unchanged. So the economy can be completely recovered in terms of the output gap without any tendency at all for inflation to go back to target. The term "b gap" that relates the level of the gap to the rate of change of inflation would have dragged down inflation during persistent negative output gaps during the Great Recession and the slow recovery from the great recession. To bring inflation back up to target would require a period of time with a positive output gap. 

Since positive output gaps are pleasant given all the distortions that make the natural level of output lower than the level at which (other than the effects on inflation) the marginal benefit of output equals the marginal cost, why don't central banks shoot for a positive output gap until inflation returns to the target of 2% per year? I think the answer is:

  1. Central bankers are not used to trying to have positive output gaps. The low unemployment rates associated with positive output gaps seem dangerous.
  2. Central bankers don't really like having an inflation target above zero. They feel in their bones that their job is to keep inflation down, close to zero, not to push it up. 

When there is a clear need to raise inflation (say in a situation where inflation is negative), I don't have much sympathy for an aversion to temporarily positive output gaps. But I have a lot of sympathy for the idea that a 2% inflation target is too high. As I argued in "The Costs and Benefits of Repealing the Zero Lower Bound...and Then Lowering the Long-Run Inflation Target," in the absence of any lower bound on interest rates, the inflation target can be lower than if there is a lower bound on interest rates. 

Any central bank that is genuinely committed to eliminating lower bounds on interest rates should reevaluate its inflation target accordingly. Even a willingness to use mildly negative rates should bring down the appropriate inflation target. Both the Bank of Canada and Ben Bernanke have taken the position that planning to use negative interest rates when necessary is better than raising the inflation target above 2%. (See "Bank of Canada would consider setting interest rate below zero: Poloz," "Renewing Canada’s Inflation-Control Agreement," and "Ben Bernanke: Negative Interest Rates are Better than a Higher Inflation Target.") To the extent that position envisions only mildly negative rates, a commitment to use deep negative rates when called for might well reduce the optimal inflation target below 2%. If the optimal inflation target fell, say, as far as 1.5%, the current concern for raising the inflation rate—a goal central bankers feel half-hearted about—would go away. 

If monetary policy were being designed from scratch, I doubt that central bankers would design in a lower bound on interest rates. The tradition of a lower bound on interest rates is simply a bad historical carryover, much like the gold standard was. (Good riddance!) At the moment, that tradition of a lower bound on interest rates is pushing inflation higher than it would otherwise have to be. Or maybe the tradition of a lower bound on interest rates is simply making central bankers who can't bear to have a higher inflation rate feel guilty about not being willing to raise inflation, without actually getting them to raise inflation. 

Further Reading: "How and Why to Eliminate the Zero Lower Bound: A Reader’s Guide." 

Binyamin Applebaum: Fewer Immigrants Mean More Jobs? Not So, Economists Say

The consequences of immigration and the morality of restricting it are contested. You can see my views in these posts, among others:

Below are the views of the President of the United States, three economists and journalist Binyamin Applebaum, summarizing other views of the economists he interviewed about immigration, all taken from Binyamin Applebaum's article shown above. 

Donald Trump: 

  • This legislation demonstrates our compassion for struggling American families who deserve an immigration system that puts their needs first.

Giovanni Peri: 

  • The average American worker is more likely to lose than to gain from immigration restrictions.
  • People have an outdated image [of legal immigration] ... It’s mostly Asian, Indian, Chinese people who are coming to do mid- and high-level professional jobs.

George J. Borjas

  • [On reducing skilled immigration:] That is a political decision. That is not an economic decision.
  • [On reducing low-skilled immigration:] If all you care about is economics, then it’s really clear. But do you want to live in a country that only cares about money, or do you want to live in a country that has a legacy of being generous to immigrants? Maybe you want a compromise.

Michael A. Clemens

  • The story that ‘when labor supplies go down, wages go up’ is a cartoon.
  • It’s a political myth that the principal need is for high-skilled workers.

Binyamin Applebaum

  • One key reason is that immigrants often work in jobs that exist only because of the availability of cheap labor. Picking tomatoes is a good example. California farmers in the 1950s and early ’60s relied on Mexican workers even though machines were already available. In 1964, 97 percent of California tomatoes were picked by hand. ... By 1966 [after immigrant worker restrictions], 90 percent of California tomatoes were being picked by machines.

  • A 2011 study found that high-skilled women were more likely to work in cities with high levels of immigrants, because families could pay for child care or elder care.

  • The National Academy of Sciences made an ambitious effort to assess the bottom line in 2016. It concluded that the average immigrant cost state and local governments about $1,600 a year from 2011 to 2013 — but the children and grandchildren of immigrants paid far more in taxes than they consumed in public services.

In addition to annoyance at newcomers being different than what people are used to, immigrants are blamed for the fundamental truth that many people in the United States do not see their lives and their children's lives improving. The reasons behind the stagnation of life chances are complex. I wrestle with trying to understand them in "Restoring American Growth: The Video."

If I were to blame a group for this stagnation of life chances of many Americans, it would be the upper middle class, not the rich (who are a sideshow) and certainly not immigrants. In other words, I wish my own social class would engage in more self-criticism. A few modest sacrifices by us, the upper middle class, could make things much better for other Americans. For the short version of this argument, see "Steve Durlauf on Legally Encouraged Residential Segregation as a Perpetuator of Inequality" and "Keep the Riffraff Out!" We, the upper middle class, are good at articulately pointing the finger at others, but unfortunately find it hard not to see ourselves as innocent. 

John Locke Treats the Bible as an Authority on Slavery

John Locke insists in section 24 of his 2d Treatise on Government: “On Civil Government” (in Chapter IV "Of Slavery") that true slavery is a state of war against the slave. But in doing so, he insists that much of historical slavery was not true slavery, because there were limits on what a master could do to a slave:

This is the perfect condition of slavery, which is nothing else, but the state of war continued, between a lawful conqueror and a captive: for, if once compact enter between them, and make an agreement for a limited power on the one side, and obedience on the other, the state of war and slavery ceases, as long as the compact endures: for, as has been said, no man can, by agreement, pass over to another that which he hath not in himself, a power over his own life.

I confess we find among the Jews, as well as other nations, that men did sell themselves; but it is plain, this was only to drudgery, not to slavery: for, it is evident, the person sold was not under an absolute, arbitrary, despotical power: for the master could not have power to kill him, at any time, whom, at a certain time, he was obliged to let go free out of his service; and the master of such a servant was so far from having an arbitrary power over his life, that he could not, at pleasure, so much as maim him, but the loss of an eye, or tooth, set him free, Exod. xxi.

To modern sensibilities, the limitations set out in the passage Exodus 21: 26,27 that John Locke alludes to leave it a horribly reprehensible form of bondage:

“An owner who hits a male or female slave in the eye and destroys it must let the slave go free to compensate for the eye. And an owner who knocks out the tooth of a male or female slave must let the slave go free to compensate for the tooth.

In the images at the top, you can see other passages in which the Bible gives some relatively unrestrictive regulations on slave-holding and slave-buying and selling into slavery, and tells those in bondage to accept their status. There are many other images about slavery in the Bible that I could have chosen from:

Some of the results from googling "slavery in the Bible," images

Some of the results from googling "slavery in the Bible," images

There are several remarkable things about 21st century Western culture's relationship to slavery in the Bible:

  1. Even most of those who consider themselves Biblical literalists have managed to reject or interpret their way out of the Bible's seeming endorsement of slavery. This is a wonderful thing.
  2. In the aggregate, every day a large number of people read or listen to Bible stories involving slavery without recoiling at the slavery, and often even unconsciously seeing the slavery with a rosy glow given the narratively declared goodness and righteousness of the slave-holder in the story.
  3. The putative author of the Bible has by and large escaped the majority cultural opprobrium that has fallen on other cultural heroes—such as many of the framers of the US Constitution—for insufficient opposition to slavery. Instead, much greater opposition to slavery has been read back into the views of the God of the Bible than He clearly expressed. To the extent this is a prerequisite in many cases for rejecting the Bible's seeming endorsement of slavery, this is a very good thing. But it is unclear that it is historically accurate. To make the case that the God of the Bible was against slavery all along, one needs to argue that He chose to speak subtly against slavery, while speaking with a voice of thunder against other sins. This seems an odd prioritization for speaking against sins. 

Let me compare the lack of condemnation of slavery in the Bible to something within my own lifetime of much smaller consequence. From the time of Brigham Young until 1978, the Mormon Church did not allow those of black African descent to be priests or to receive important rites in Mormon temples. I wrote about this in "Flexible Dogmatism: The Mormon Position on Infallibility" and about a related issue in "Will Women Ever Get the Mormon Priesthood? Speaking as a nonsupernaturalist, I have wondered why the Mormon Church did not change this policy sooner. There is a complex and detailed history, but I think it has something to do with the Mormon Church being governed in modern times by relatively old leaders.

Being governed by old leaders is likely to be a plus when the general culture moves in a bad direction; old leaders with a long life of experiences are better able to resist bad innovations. I view the greater cultural acceptance of casual sex as such a bad innovation. And Mormonism has had a salutary influence on its adherents in resisting the casual acceptance of casual sex. But when the general culture moves in a good direction, as it did in embracing the full equality of people of all races, old leaders may be more apt to fear change and resist a genuine cultural advance. 

How is it possible to get the good effects of the accumulated wisdom of age without the bad effects of the rigidity and risk aversion that sometimes come with age? A good answer could help avoid many tragedies. Perhaps the best we can do is to try to have a very long, honest, argument among those of all ages and beliefs that gives those who are in the right the chance to convince those who are in the wrong. I am honored to have friends with whom I can have such long, honest arguments, at least on lesser topics, and occasionally on topics of great moment. I hope we all nurture the capacity for such extended, heartfelt arguments with those who have dramatically different views than our own.  

Don't miss other John Locke posts. Links at "John Locke's State of Nature and State of War."

  

On When the Private Sector Being Smarter than the Government Is a Problem

Link to Sarah Rawlins's CEPR blog post above from which the quotation below is taken:

We have all heard the argument from conservatives about the benefits of relying on the private sector rather than the government. Private companies are fast moving and can respond more quickly to changing conditions and technology. By contrast, the government is slow and bureaucratic. There is more than a bit of truth to this story.

So what happens when we have the slow-moving bureaucratic government making payments to fast moving dynamic insurers in a program like Medicare. Well, all good believers in the superiority of the private sector will expect the insurers to rob the government blind. And this seems to be the case.