Category: Political Economy

Same-sex marriage legalization linked to a decrease in teen suicide attempts

~ cogiddo

This article in The Guardian discusses in detail a paper just published in JAMA Pediatrics, co-authored by Julia Raifman, Ellen Moscoe, S. Bryn Austin, and Margaret McConnell.

The first link above leads to a nice explanation of the results of the paper, and the second leads to an extended abstract that readers who are adept in econometrics (and other statistics-savvy people) will want to read closely.

It seems to me that the marginal benefit of same-sex marriage legalization includes the saving of many lives. The marginal economic cost is negligible, if it is even positive, compared to such a marginal benefit. Individuals wishing to argue that the moral marginal cost outweighs the marginal benefit will find it very hard to convince me of their case.

UPDATE: I changed “suicides” to “suicide attempts” in the title of this post for higher accuracy.

Difficult problems in mechanism design that are too important to get wrong

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This article by Jonathan Rauch in the Atlantic about the disintegration and paralysis of American politics, got me thinking again about how important and maddeningly difficult the problem of mechanism design is.

Don’t run away! It’s simple enough to explain what mechanism design is, even if it is hard to do it well. Mechanism design is the study of how to create rules for important human interactions that will guide the outcomes of such interactions toward desirable ends, when the people interacting follow their own perceived self-interest.

For situations in which coalition-building is not to be expected, the progress mechanism designers have made over the last few decades is palpable and has achieved results. Auctions for airwaves have raised billions of dollars of revenue; kidney exchanges have saved hundreds of lives; doctors in training are better allocated to hospitals and students to colleges and graduate programs — these are just some of the examples of cases where mechanism design had a big impact.

Politics is a quintessential realm of coalition-building. But the brand of game theory that underlies the very same mechanism design approach that has achieved the great results I just mentioned fails to model coalition-building successfully. It may be that problems like fixing US politics are inherently intractable, but it seems that the US Constitution was an inspired solution that did reasonably well for a long time, even as it is beginning to fail now.

Related to the general problem of designing well-functioning democratic political systems, we have the even harder problem of getting disparate political systems to deal with the mounting disaster of planetary environmental degradation, which threatens the entire human species (and a whole lot of other species). Mechanism design theorists simply seem incapable of modeling well such a huge problem of coalition formation. Lest you think I am just criticizing others, I count myself as one of the theorists incapable of envisioning a good approach at this time.

We have evidence, in the works of Elinor Ostrom and subsequent literature inspired by Ostrom’s work, that local solutions to the problem of the commons often develop over time and such solutions, which take the form of formal and informal rules of the game (mechanisms!), often work well to solve local pollution or resource overuse problems.

The hard problem is to develop such solutions for state-wide problems (US politics is an example) and planet-wide problems (the environment), before they destroy any semblance of civilization and the livability of planet Earth. I know there are many brilliant minds working in mechanism design, much more brilliant than mine. I hope I see progress made in modeling coalition formation and its implication for mechanisms in the coming few years, before it is too late.

Are we any better than Nazis in the face of environmental catastrophe?

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Yesterday I read a long article by the historian Timothy Snyder that is still rumbling around in my head. Granted, the article was published a few months ago, but it was new to me yesterday.

The premise is that we are not so far from living in Hitler’s world as we may think, we in the Western democracies. The environment is getting steadily worse, the economy is getting steadily more unkind to the non-rich, and easy, populist explanations blaming the Other are appealing to more and more people.

I highly recommend the essay by Snyder. Further, it taught me something that surprised me: Hitler accomplished most of his genocidal “achievements” in areas where he managed to destroy state institutions that supported some sort of rule of law. Destroying the center of authority does not create the conditions for a new democracy to flourish; witness what the US has done to Iraq. As I am thinking hard about the importance of social norms and social cooperation as the foundation for any sort of human welfare and prosperity, this struck me hard, especially as the frontrunner of the GOP presidential nomination gives every indication that he would relish smashing democratic institutions that stand in his way, to the extent his popular support allows.

Logician Kurt Gödel, famously, had serious reservations about taking the oath of US citizenship, because he saw how the US constitution does not preclude the establishment of a Hitler-style dictatorship. His buddies Albert Einstein and Oskar Morgenstern convinced him to not make a big fuss about it in front of the judge, so Gödel became a US citizen. Whether this story is correct or a little overblown, it seems to me Gödels’ worry cannot be breezily dismissed, especially in a world in which the threat of environmental catastrophe will tempt people to fight for resources, potentially killing billions, instead of reaching for scientific solutions. Snyder’s discussion poignantly points out that, while Hitler worried about feeding the German Volk, which needed Lebensraum to grow and prosper, he totally missed that the Green Revolution, already partially started with the efforts of German scientists, would in short order feed a growing human population without strain, and without the need for the kind of universal war Hitler started.

Acemoglu and Robinson on Piketty

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Kevin Bryan posted about a new paper by Daron Acemoglu and James Robinson that is a response to Piketty’s much-ballyhooed book on Capitalism. The post is very well done and I have downloaded the paper from the link supplied there, to read when the rush to get ready for the fall semester is past.

The US News College Rankings Scam

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Henry on Crooked Timber (I just had to repost the whole thing):

The US News College Rankings Scam:

 

Stephen Budiansky, via Cosma Shalizi’s Pinboard feed.

Back in ancient times when I worked at esteemed weekly newsmagazine U.S. News & World Report, I always loathed the annual college rankings report. Like all cash cows, however, the college guide was a sacred cow, so I just shut up about its obvious statistical absurdities and inherent mendacity. As a lesson in the evils of our times, it is perhaps inevitable that the college guide is now the only thing left of U.S. News.

A story in today’s New York Times reports that Claremont McKenna college has now been caught red handed submitting phony data to the college guide to boost its rankings. But the real scandal, as usual, is not the occasional flagrant instance of outright dishonesty but the routine corruption that is shot through the whole thing. … To increase selectivity (one of the statistics that go into U.S. News’s secret mumbo-jumbo formula to produce an overall ranking), many colleges deliberately encourage applications from students who don’t have a prayer of getting in. To increase average SAT scores, colleges offer huge scholarships to un-needy but high scoring applicants to lure them to attend their institution. (The Times story mentioned that other colleges have been offering payments to admitted students to retake the test to increase the school average.)

… One of my favorite bits of absurdity was what a friend on the faculty at Case Law School told me they were doing a few years ago: because one of the U.S. News data points was the percentage of graduates employed in their field, the law school simply hired any recent graduate who could not get a job at a law firm and put him to work in the library. Their other tactic was pure genius: the law school hired as adjunct professors local alumni who already had lucrative careers (thereby increasing the faculty-student ratio, a key U.S. News statistic used in determining ranking), paid them exorbitant salaries they did not need (thereby increasing average faculty salary, another U.S. News data point), then made it understood that since they did not really need all that money they were expected to donate it all back to the school (thereby increasing the alumni giving rate, another U.S. News data point): three birds with one stone! (I gather the new Case law dean has put an end to these shenanigans.)

Worth reading the whole thing (even though Budiansky’s site has one of those annoying and anti-social ‘if you cut and paste text from my site, you will get unasked for cruft about how you ought to click on the original link added to your pasted text’ installations).

 

(Via Crooked Timber)

Fukuyama on Hayek

~ cogiddo ~ 3 Comments

Francis Fukuyama has a review of Hayek’s The Constitution of Liberty in the New York Times. He concludes with this insightful observation:

In the end, there is a deep contradiction in Hayek’s thought. His great insight is that individual human beings muddle along, making progress by planning, experimenting, trying, failing and trying again. They never have as much clarity about the future as they think they do. But Hayek somehow knows with great certainty that when governments, as opposed to individuals, engage in a similar process of innovation and discovery, they will fail. He insists that the dividing line between state and society must be drawn according to a strict abstract principle rather than through empirical adaptation. In so doing, he proves himself to be far more of a hubristic Cartesian than a true Hayekian.

UPDATE (2011-05-09): Although the commenter to this post did not respond to my request to show me who has contradicted Fukuyama online, I did find a whole lot of comments via Easterly’s blog. This one, from beyond the grave, is most entertaining. Do read the comments on Easterly’s blog, too. At the end of the day, Fukuyama’s review, at least the part I quote above, is certainly true about people like Beck and may not be true for Hayek. I stand by my observation in the comment below that Hayek should have looked for the mathematical tools needed to formalize his seminal ideas. (I have almost the same complaint about Keynes’s General Theory, although Keynes was reasonably capable in mathematical modeling. Why did he not try it?)

How history created the perverse incentives that hold back the Greek economy

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In a recent post in opendemocracy.net, Aristos Doxiadis presents a thoughtful and detailed look at the historical and structural features of the Greek economy that make Greek society so ineffective and, at least to people like me, one to be far, far away from. His article deserves thoughtful commentary, which I hope to have time for soon. Meanwhile, as a person who was born in Greece and spent the first 25 years of his life there, I can say with confidence that his observations on the Greek society and economy are on-target. I am really surprised that Doxiadis has chosen to continue living in Greece, given the clarity of his vision about the rottenness that pervades that society. I suppose it is admirable that he is trying to reform it for the better. I am more than a little pessimistic about the prospects of success of any such fundamental reform of a society so diseased.

The degradation of US democracy

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Read this post by Daniel Little and weep. If you care about democracy and the public good, that is. This kind of thing is a main reason that standard economics has done a serious disservice to humanity by emphasizing the private motivations of individuals and not studying public mindedness and the “public good” in general very much. We can still hope to make strides to reverse this inattention to publicness in economics and also in the political sphere. At least, I sincerely hope so.