DISQUS

Very nice. A question -- how do norms interact with institution design? Does a form of broken windows theory apply? That is, are good institutions (from a public choice perspective) the equivalent of a policy of fixing broken windows and painting over graffiti immediately? Do good institutions with good incentives tend to produce and support good norms?

Or, on the other hand, do clearly defined punishment for transgressions tend to undermine norms by sending the message that cheating is rampant? I'm thinking, in particular, of the Italian laws that require buyers to ask for and retain receipts as a way of forcibly enlisting buyers in the fight against tax evasion via under-the-table sales. These laws do not seem to be turning Italians into Scandinavians -- but do they tend to make norms stronger, weaker, or have no effect?

"Tens of thousands of workers are NOT going to be thrown out of work if GM fails. The factories will be bought up by competitors and turned competitive without the sweetheart union deal, but with still very good salaries."

Well, Chapter 11 doesn't mean GM shutting down. So chances are most of the factories would keep building GM cars for GM. But if GM really did go into liquidation, I really doubt that any other automakers will be buying up GM factories or product lines. There's a lot of over-capacity in the industry, and the Japanese and European automakers have very intentionally avoided setting up production facilities in Michigan to stay away from the UAW. I suspect that no automakers are going to need any new plants at all for a few years, and when Toyota and Honda do find they could use another plant, there'll be plenty of open space and tax breaks to be had in Tennessee, Kentucky, Alabama, etc. Volkswagen recently went through the process of selecting a site for a North American plant. Did they reclaim one of the many shuttered existing auto plants? Of course they didn't -- they choose to build a new one in Chattanooga.

Left Libbers are primarily concerned about social issues and not so much the economic and the Right Libbers are primarily concerned with economic issues and not so much about the social.

I tend to worry more about economic issues than social issues for a couple of reasons. The first is that the effects of bad economic policies are universal -- new trade barriers, regulations, restrictions on corporations, and higher tax rates would effect everybody in the country. By contrast, there is little social conservatives can do to effect the socially liberal culture of Ann Arbor (where I live).

The second reason is that while there are prominent exceptions to that rule, those on the left in the U.S. will do little to promote the socially liberal positions I favor most strongly. If Democrats gain the presidency and both houses of Congress, they will certainly not end the ruinous war on drugs or the militarization of police forces.

As for your statement above, I’m not sure this research speaks to whether the government is more “objective”, but on the question of self interest, the cynical public choice perspective needs to be modified.

Perhaps, but it's going to take a lot more than a single study to be convincing.

Liberals have been in control of our economic future in the past and they arguably did better then when conservatives/libertarians were in charge.

If you mean Bill Clinton, I'll agree his administration did a fine job with the economy (and I voted for him twice). But Bill was a dedicated free-trader who pushed through NAFTA with the support of most Republicans and over the objection of most Democrats. He also pushed through welfare reform with similar overwhelming support from Republicans and strong opposition from Democrats. Despite the economic success of the Clinton administration, the free-traders are gone (or at least gone from the leadership of the Democratic Party).

Free trade is a misnomer and in fact most developing country’s grew strong under a degree of protectionism as did our own country. Ricardo had three requirements for comparative advantage to be bilaterally advantageous none of which are observed in current trade arrangements loosely called free trade.
Hate corporations. Not the principle but the current practice that allows them basically to undermine democracy in favor of their cleptocratic tendencies.

I'm not going to argue with your take on free-trade and corporations -- I doubt it'd do much good. But I will point out that while you claim to support both in some ideal world, you oppose both in the real world. Since I don't expect the ideal conditions you require to be forthcoming, I'll count you as an opponent of free-trade and corporations. And I don't want a party sharing your views in charge of the economy.

Corporate media is the worst form of capitalism of all. It is at once full of conflict with regard to reporting story’s accurately or at all and with its corporate charter of making profits especially when the companies that own the media have larger holding in Entertainment (Disneyland/ABC) or Defense contract ( NBC and GE).
In almost no other area is a publicly run enterprise (CPB/NPR) far superior then a private one then in the media.

My view is that CPB/NPR is as biased and self-interested as any private media company (Fox included). NPR's donors and supporters are left-of-center and so is its viewpoint. In general, I don't want people running the show who think that government agencies are usually objective, fair, and selflessly dedicated to the benefit of the public and are, therefore, superior to private alternatives.

The idea that a market, an economy or a society is better left to its own then planned and regulated by intelligent beings is sheer hoccum with not an ounce of factual support.

Again, not going to argue with you here, but the bottom line is that, as a small-l libertarian, I really, really don't want believers in central planning running the show.

"Freed to be full-on social liberals, many libertarians are left sensing a much deeper cultural affinity for the left than the right."

Yeah, I've always sensed a much deeper cultural affinity for the left. I'd rather live around lefties than cultural conservatives, and I do.

But...the left has given up on socialism, I think, only tactically and pragmatically, not philosophically. They think capitalism is, at best, a necessary evil (and would like to see the day that it's no longer necessary). They dislike free trade and hate corporations (well, except for Apple Computer, of course). They think free-enterprises has uniformly noxious effects on the media and politics, and culture.

They believe that wealthy people spend their money mostly on status and 'positional goods' and would, therefore, be just as happy if confiscatory tax levels forced them to compete for status at half their current incomes.

In short--Liberals make fine neighbors, but I sure wouldn't want to see them in control of our economic future.

Eric Barnhill: Slocum and suburban districts, your observation certainly doesn’t hold up in Westchester. Scarsdale, Kisco, Katonah, Tarrytown, Rye — great schools.

Right -- and if Kisco schools are slightly higher status than Katonah, do all parents who can afford to choose Kisco over Katonah? Or do they figure the schools are good enough in any of these towns and make their choice based on other criteria?

Personally, I find the suburban schools with their high test scores and absolute whiteness as much less attractive than the schools in Minneapolis and St. Paul which both have district wide school choice and many different magnet and charter schools to go along with a very diverse student body. But I think I’m a minority thinker on this part.

Which is another chink in Frank's great chain of school status -- different parents have different conceptions of what constitutes 'the best'.

The situation is similar here. The Ann Arbor district has the most funding in the area, and the highest scoring students, but it is also ethnically diverse with some fraction of underperforming minority students. Some of the surrounding districts (Saline, Dexter) have scores that are now quite close to Ann Arbor's, but they are very white and suburban with lots of sprawl developments. My wife and I had no interest at all in those districts and spent a lot of money to live in the middle of the city. But other families have no interest in living here and spent equally large amounts of money for McMansions out in the townships.

But we didn't choose our house only for the school situation. That it's in a quiet, green neighborhood near a park and within walking and biking distance of downtown, is close to work, and has bus service -- these were all factors in addition to the schools.

A valid point. But people may not choose only on schools in the district but they certainly will avoid a district based on a bad school no matter how good the other amenities are. So the effect may not be as large as Frank suggests but it is there nonetheless.

But it's not just a question of a strong or weak effect. Avoiding a few bad districts and then choosing among the many remaining housing options based on other factors is absolutely not the zero-sum status competition that Frank envisions.

If that view is correct (as I think it is), then people are choosing districts for utilitarian reasons rather than for status, and they routinely pass up available opportunities to maximize their 'status scores' once they've avoided schools & districts that would actually be educationally harmful for their children.

Except that this notion that 'good' public schools are in terribly short supply is just reality. The differences in test scores among the many suburban districts in a metropolitan area are not that great and the differences that do exist are better explained by the characteristics of the students than the schools (e.g. the wealthiest districts do better mostly because their students come from wealthier, more educated families).

This being the case, most people don't actually spend every last cent trying to get into the best possible district, but take into account a whole host of factors (amenities, house size, lot size, commuting distance, neighborhood, traffic, freeway access, shopping, etc, etc).

I know it seems tempting to turn Frank's argument into an argument for school choice, but we don't want to tacitly accept the pernicious idea that house-shoppers are all engaged in a knock-down, zero-sum status competition for slots in the 'best' districts they can possibly afford. That's just not the case.

Because we know what Frank's proposed solution to this zero-sum status competition 'problem' is -- confiscating a much larger fraction of incomes with the idea that we'll all be just as well off if we engage in the status competition arms race with fewer arms. Since the cash is confiscated from everybody equally, everybody will presumably end up at the same point in the hierarchy and, since (according to Frank) status is all anyone cares about, everybody will be just as happy or miserable as before.

Nonsense (but potentially dangerous nonsense).

"This isn’t rocket science; men with easy access to prostitution or to promiscuous women have little incentive to marry."

Nonsense. Even considering humans only as 'biological types', this is nonsense. The children of prostitutes, or even the children of promiscuous, single mothers are not notably successful in modern society, nor have they been historically. Men have a strong incentive to marry a high-quality woman and invest in both her and their children. And, BTW, the investment in families is driven by love -- loving spouses and children is something we're 'designed' to do, not something we do in spite of our biology.

But, of course, that does not necessarily mean monogamy -- in addition to the above, there is also a biological incentive for additional sex on the side. And that is the Eliot Spitzer pattern.

"Maybe if there was a special “tax patriot” armband you got to wear around for paying extra taxes that allowed people to signal, and take public credit for, an otherwise invisible act — a Prius of taxation — we’d see more of it."

This already exists in several forms and people do contribute to government in this way. The best examples are the contributions people make to state universities -- for which people receive recognition of various kinds, including buildings and even entire schools named after them if the contributions are large enough:

http://www.bus.umich.edu/RossB-SchoolGift/

Hey, ho, restrictions on labor mobility have to go!

The problem is numbers -- immigrants would swamp and destroy the economies and social orders of the rich countries. And the continuing success of those wealthy countries is critical to the ultimate lifting out of poverty of those in the developing world. And by ultimate, I don't mean in the sense of 'in the long run we are all dead' since Japan, Korea, China and the smaller 'Asian tigers' have made stunning progress in periods of time shorter than a generation let alone a human lifespan.

I think industrialized countries could take many more immigrants than they do and that this would be a good thing, but unlimited mobility would be a disaster, I'm afraid.

Yes, I think you're right -- it is begging the question to claim that happiness does not keep rising with income while using a scale that guarantees it cannot possibly keep rising with income.

What would happen if, instead, you asked people to rate their happiness on a scale of 0 to 100 billion where:

0 = the most miserable person in the world
100 billion = the happiest person in the world

"As for eating out of the root cellar, it’s true that most of the human race went through lean times and times of plenty every year. It’s what we’re used to, evolutionarily speaking, and it’s what we’re designed for. I suspect having less to eat every once in a while would make the obesity problem in this country disappear rather quickly."

Pick up a copy of this:

http://www.amazon.com/Gallery-Regrettable-Food-...

And see if you can make the case that we used to eat better, healthier foods. Not only did we eat worse, we were much less healthy. You might have run across this story, for example:

http://www.nytimes.com/2006/07/30/health/30age....






But

"I think part of the problem is that nominal inequality is confused with material inequality—differences in material living conditions. But while nominal inequality is increasing, material inequality continues to decrease. As market competition pushes prices down, goods at the bottom of the price range more and more closely approximate goods at the top of the price range."

Yes -- exactly. It's frustrating that people half know this to be true intuitively, but don't quite realize it unless it's pointed out and, at the same time, it seems to play almost no part in the inequality debate. Very odd.

"In other words, the quality of food eaten by most people in this country has DROPPED SIGNIFICANTLY over the past century. Can anyone explain that to me?"

Sure, I can explain it -- it's nonsense. My mother-in- law was a farm girl in the 20s and 30s. When spring rolled around they ate whatever was left in the cellar (last year's marginally edible apples, potatoes, rutabagas, etc, etc). The fresh produce may have been better for the very brief time it was in season, but most of the time, they simply had no fresh fruits and vegetables (and didn't eat much meat either). I remember reading my daughter the 'Little House' books in which, on Christmas, they had -- I'm not joking -- 'fried mush with codfish gravy'. As a special treat. And my mother in law piped up that they'd eaten that too when she was a little girl -- well into the 20th century. Yes, people certainly ate well back then:

http://www.bartbeck.com/page193.html

"It would be lovely if we could all be the best at something without making other people feel like 'losers' on that dimension, but is this realistic? Something tells me that in order for a particular status dimension to carry any importance, there must be losers."

No, I don't think that there have to be losers. There are things I'm good at that people I know ask me to help them with. In almost none of these areas am I anywhere near 'the best', but often I am the best option available on a Thursday night for the price of a couple beers. And there's a bit of status involved in having these abilities even though, in a highly competitive environment, I wouldn't win a lot of blue ribbons. The people I help aren't diminished as 'losers' because these aren't areas they've focused on.

Similarly, Will's status is enhanced by being skillful enough to have flirted with careers in musical theater and art (just as the guy in the next office's status is enhanced by, say, having played minor league baseball for a couple years). Status doesn't have to derive from being 'world class' in one specialized area--status can also come from being a local expert and being pretty good a number of things.