Nudge comes to shove

by David De La Torre

In Nudge comes to shove, The Economist reports on how policymakers around the world are looking to behavioral economics.

In 2009 Barack Obama appointed Mr Sunstein as head of the White House’s Office of Information and Regulatory Affairs. The following year Mr Thaler advised Britain’s government when it established BIT [Behavioural Insights Team], which quickly became known as the “nudge unit”. If BIT did not save the government at least ten times its running cost (£500,000 a year), it was to be shut down after two years.

Not only did BIT stay open, saving about 20 times its running cost, but it marked the start of a global trend. Now many governments are turning to nudges to save money and do better. In 2014 the White House opened the Social and Behavioural Sciences Team. A report that year by Mark Whitehead of Aberystwyth University counted 51 countries in which “centrally directed policy initiatives” were influenced by behavioural sciences. Non-profit organisations such as Ideas42, set up in 2008 at Harvard University, help run dozens of nudge-style trials and programmes around the world. In 2015 the World Bank set up a group that is now applying behavioural sciences in 52 poor countries. The UN is turning to nudging to help hit the “sustainable development goals”, a list of targets it has set for 2030. [more]

Interview of Peter Singer

by Bill Hayes

The website What Is It Like to Be a Philosopher? interviewed noted philosopher Peter Singer.

As a teen, did you start thinking about what you wanted do for a living, or college? If I asked you back then what you would end up doing, what would have been your best guess?

Early on, my best guess would have been that I would go into my father’s business.  From the age of about 14, I would work in his office for part of the summer holidays.  He had mixed feelings about whether I should be his successor. On the one hand he would have liked the business to stay in the family; on the other, the financial risk caused him a lot of stress, and he often said that there is no future in small business, the big players will push you out.

My sister, my only sibling, is six years older than me, and studied law (which in Australia you do straight after secondary school) so that was the most plausible alternative to going into my father’s business, and when I was in my final year of secondary school, that is what I decided to do.

In college, what were your least favorite classes?

I went to the University of Melbourne to study law.  But an enrolment advisor there looked at my results in the final high school exams, and thought I might find the law degree insufficiently stimulating.  He suggested I do a combined Arts/Law degree — a longer course but one that leads to both a Bachelor of Arts, and a Bachelor of Laws.  That was fateful advice, because without it, I doubt that I would have ever taken a philosophy course.

Favorite classes?

I enjoyed both philosophy and history more than the law subjects.  I got quite engrossed in twentieth-century European history, especially in trying to understand the rise of fascism.

Did you figure it out?

Well, there wasn’t just one factor, but I felt that I understood some of the causes, anyway, and also how Hitler’s rise to power could have been prevented, if only the communists had been willing to work together with the social democrats.

What attracted you to philosophy?

I was attracted to philosophy because I had always enjoyed an argument, and on Friday evenings you could go to the pub across the road from the university and get into an argument over a beer with some of the lecturers and more senior students who would be hanging out there. [more]

The Disappeared

by Bill Hayes

In The Disappeared for California Sunday Magazine, John Gibler tells what happened on September 26, 2014, when 43 Mexican students went missing.

 Although it was neither an isolated event nor the largest massacre in recent years, what occurred in Iguala has struck at the core of Mexican society. Perhaps it was the scale of the violence, or the sheer brutality, or that the victims were college students, or that the perpetrators were mostly municipal police, or that the mayor of Iguala, his wife, and the police chief were probably behind the attack, or that the state and federal governments were deceptive in their investigation and callous in their treatment of the mothers and fathers of the murdered, wounded, and disappeared. Whatever the cause — and it was likely a combination of all these reasons — it is impossible to overstate the effect of the attacks on the country. Mexicans speak of Iguala as shorthand for collective trauma. Mexico is now a nation in mourning, and at the heart of that grief are those 43 families on the Ayotzinapa basketball court and their agonizing demand: Bring them back alive.

Every year, 140 first-year students arrive at the all-male Raúl Isidro Burgos Rural Teachers College from some of the most economically battered places in the hemisphere, where elementary schools are often single-room, adobe structures without electricity, running water, or indoor plumbing. These are among the most committed youth of their communities for whom the system says there is no place: The ones apparently destined to enter the lowest ranks of the drug-warring armies or to scramble across the Arizona desert and pick bell peppers in California or wash dishes in Chicago. The teachers college, known as Ayotzinapa, offers them a different route: a profession. Ayotzinapa says to them, “You belong here.”

Tuition and board are free. The state government provides a meal budget that amounts to $3.70 per student per day, which usually means a diet of eggs, rice, and beans. The students do all the cleaning, tending, and a large part of the cooking. The first-year dorm rooms are windowless concrete boxes with no furniture. As many as eight sleep to a room, laying out cardboard and blankets for bedding. Some fasten empty milk crates to the walls to use as dressers.

Rural teachers colleges were created after the Mexican Revolution to promote literacy in the countryside. By the mid-1900s, they numbered as many as 36. In 1969, the federal government closed numerous schools, and now only 14 remain. Ayotzinapa was founded in 1926, and, like all the colleges, has a long tradition of left-wing student organizing. Murals on school buildings depict not only internationally renowned revolutionary figures like Che Guevara and Zapatista rebel Subcomandante Marcos but also ’70s-era guerrilla leaders Lucio Cabañas and Genaro Vázquez, both Ayotzinapa graduates. Several murals memorialize two students who were killed by police in 2011 during a protest demanding an increase in the school’s enrollment and meal budget.

One of the most common “activities,” as the students call their actions, is commandeering buses. Traveling to observe teachers in rural areas is an essential part of the curricula, but the school has never owned many vehicles or had a budget to rent or acquire them. (In early September, the college had only two buses, two vans, and a pickup truck at its disposal.) The students have long secured transportation by heading to nearby bus stations or setting up a highway blockade, boarding a stopped bus, and informing its driver and passengers that the vehicle would be used for “the educational purposes of the Ayotzinapa Teachers College.”

Government officials decry the students’ actions as outright robbery. The students insist they are not thieves and that they always “reach an agreement” that includes payment. The bus drivers don’t abandon the vehicles; sometimes they camp out at the college, with meals provided, for weeks and occasionally months. When the students block highways, they typically do so at tollbooths. [more]

How America’s Thinking Changed Under Obama

by Bill Hayes

In How America’s Thinking Changed Under Obama, Five Thirty Eight, a polling site, looks at various opinion polls and how public opinion changed, and remained the same, during the Obama years.l

When the (Empty) Apartment Next Door Is Owned by an Oligarch

by Bill Hayes

Writing in When the (Empty) Apartment Next Door Is Owned by an Oligarch for The Upshot section of the New York Times, Emily Badger looks at the problem of questionable foreign money distorting housing markets.

In Miami and New York, new luxury apartments are rising rapidly, often sold to anonymous buyers, sight unseen. In Melbourne and London, housing shortages have worsened even as recently purchased homes appear to be sitting vacant.

In each of these cities there are at least some indications that what is troubling the housing market can be traced elsewhere — to Russian oligarchs, Brazilian bank accounts, Chinese businessmen. It’s possible that foreign money isn’t just driving up prices for penthouses; it may also be distorting the market, to the detriment of lifelong residents.

But the true extent of the phenomenon is maddeningly hard to measure. [more]

July’s Harper’s Index

by Bill Hayes

Each issue of Harper’s contains Harper’s Index, a collection of interesting statistics. Excerpts from July’s Harper’s Index:

Value of food stamps used at U.S. military commissaries last year:  $66,978,704

Chances a child in school on a U.S. military base is eligible for free or reduced-cost meals:  2 in 5

Percentage of Mississippi families applying for welfare in 2016 who were accepted:  1.4 [more]

Capitalism Did Not Win the Cold War

by Bill Hayes

In Capitalism Did Not Win the Cold War for Foreign Affairs magazine, Sami J. Karam argues that “cronyism was the real victor.”

When the Soviet Union collapsed 26 years ago, it was generally agreed that the West had won the Cold War. This was affirmed by the prosperity and possibilities awaiting citizens of Western countries, as opposed to the political and economic stagnation experienced by those in Communist states. A natural conclusion, much repeated at the time, was that capitalism had finally defeated communism.

This sweeping statement was only partially true. If one took capitalism and communism as the only two protagonists in the post–World War II struggle, it was easy to see that the latter had suffered a mortal blow. But there was a third, stealthier protagonist situated between them. This was a system best identified today as cronyism. For if capitalism did win over the other two contenders in 1991, its victory was short-lived. And in the years that have followed, it is cronyism that has captured an ever-increasing share of economic activity. A survey of the distribution of power and money around the world makes it clear: cronyism, not capitalism, has ultimately prevailed.

What is cronyism? In a previous article, I objected to the term “crony capitalism” on the grounds that cronyism is itself antithetical to the principles of capitalism and ought not be viewed as a derivative of it. Cronyism is, rather, a separate system that falls between capitalism and state-controlled socialism. When a country drifts from capitalism toward socialism, the transitional period is one in which cronies rule the land. [more]

The New Deportation Threat

by Bill Hayes

In The New Deportation Threat for the New York Review of Books, Julia Preston discusses these books: Forgotten Citizens: Deportation, Children, and the Making of American Exiles and Orphans by Luis H. Zayas and Lives in Limbo: Undocumented and Coming of Age in America by Roberto G. Gonzales.

During a visit to Detroit in March, John Kelly, the secretary of homeland security, took some time to explain President Trump’s deportation plans to wary community leaders and immigrant advocates. After several tense meetings, he came out to speak to the press. “We’ve got to do something,” Kelly said, with a note of frustration. “We’re almost at a crisis right now because you have 11 million people in America that are below the radar. Most of them are not bad people to say the least. Some of them are. We’re after the ones, the worst of the worst, if you will. But I can’t ignore the law.”

Kelly was giving a tempered version of statements Trump had made in the first weeks of his administration, which were significantly revised from his campaign promise that, starting on “day one,” he would deport millions of immigrants who were in the country illegally. Once he was in the White House, Trump narrowed his aim, at least in his rhetoric, to “criminal aliens.” In his speech to Congress on February 28, the president said, “As we speak tonight, we are removing gang members, drug dealers, and criminals that threaten our communities and prey on our very innocent citizens. Bad ones are going out as I speak.”

But what has this meant in practice? Since the first days of the Trump administration, US Immigration and Customs Enforcement, known as ICE, has been conducting what it calls targeted enforcement operations around the country. About 680 people were picked up during five days in February in coordinated actions in five cities. In March ICE announced at least 729 arrests in operations ranging from Virginia and Delaware to Oklahoma, Nevada, and the Pacific Northwest. Local news reports of smaller actions appear daily. The agency said that those detained included many immigrants convicted of serious crimes, such as aggravated assault, spousal battery, and sex offenses with minors. ICE does not publish the names, citing privacy restrictions, so its claims about criminal histories cannot be easily verified. [more]

Are Liberals on the Wrong Side of History?

by Bill Hayes

In Are Liberals on the Wrong Side of History? for the New Yorker, Adam Gopnik reviews three new books that question Enlightenment ideas: Age of Anger: A History of the Present by Pankaj Mishra, A Culture of Growth: The Origins of the Modern Economy by Joel Mokyr, and Homo Deus: A Brief History of Tomorrow by Yuval Noah Harari.

Mishra’s thesis is that our contemporary misery and revanchist nationalism can be traced to Jean-Jacques Rousseau’s romantic reaction to Voltaire’s Enlightenment — with the Enlightenment itself entirely to blame in letting high-minded disdain for actual human experience leave it open to a romantic reaction. In Mishra’s view, Voltaire — whose long life stretched from 1694 to 1778 — was the hyper-rationalist philosophe who brought hostility to religion out into the open in eighteenth-century France, and practiced a callow élitist progressivism that produced Rousseau’s romantic search for old-fashioned community. Rousseau, who, though eighteen years younger, died in that same fateful year of 1778, was the father of the Romantic movement, of both the intimate nature-loving side and the more sinister political side, with its mystification of a “general will” that dictators could vibrate to, independent of mere elections. The back-and-forth of cold Utopianism and hot Volk-worship continues to this day. The Davos men are Voltaire’s children, a transnational and fatuously progressive élite; Trump and Brexit voters are Rousseau’s new peasant hordes, terrified of losing cultural continuity and clan comfort.

Piling blame on Voltaire as an apostle of top-down neoliberalism is familiar from John Ralston Saul’s 1992 “Voltaire’s Bastards,” and the idea of Rousseau, the Genevan autodidact, as the key figure in the romantic political reaction against modernity, even as the godfather of Nazism, was present in Bertrand Russell’s “A History of Western Philosophy,” back in the nineteen-forties. A fan of Voltaire will object that Mishra offers a comically partial picture of him, neglecting his brave championing of the fight against torture and religious persecution. Mishra’s Voltaire is a self-seeking capitalist entrepreneur, because, among other things, he established a watch factory at Ferney — as a refuge and asylum for persecuted Protestants. Casting Voltaire as the apostle of fatuous utopian progressivism, Mishra curiously fails to note that he also wrote what remains the most famous of all attacks on fatuous utopian progressivism, “Candide.”

The truth is that no thinker worth remembering has some monolithic “project” to undertake; all express a personality inevitably double, and full of the tensions and contradictions that touch any real life. Voltaire was greedy, entrepreneurial, self-advancing; he was also altruistic, courageous, and generous. He spread Enlightenment ideas to the farthest outposts of Europe — and he sold them out to the autocrats who lived there. A persistent oddity of intellectuals is that when they’re talking about someone they actually know they offer a mixed accounting of bad stuff and good stuff: he’ll drive you crazy with this, but he’s terrific in that. The moment someone becomes a feature of the past, however, he is reduced to a vector with a single transit and historical purpose. If we treated our friends the way we treat our subjects, we wouldn’t have any. (Mishra himself is a voice against the neoliberal consensus who also writes a column for Bloomberg View. This does not make him a hypocrite. It makes him, like Voltaire, one more writer who works for a living.)

Mishra’s Rousseau, infatuated with a dream of ancient Spartan order and inflamed with resentment at the condescension of the Enlightenment élite, is more recognizable. [more]

CRF’s Bill of Rights in Action Archive has two lessons on Enlightenment ideas:

1. Hobbes, Locke, Montesquieu, and Rousseau on Government.

2. “Tolerance: Voltaire and the Spirit of the Enlightenment.” This lesson is currently available from  CRF’s Bill of Rights in Action Archive only in PDF and you will have to register (if you haven’t already), which is free.

The New Face of Hunger

by Bill Hayes

In The New Face of Hunger, National Geographic looks at the problem of hunger in world’s richest nation.

In the United States more than half of hungry households are white, and two-thirds of those with children have at least one working adult — typically in a full-time job. With this new image comes a new lexicon: In 2006 the U.S. government replaced “hunger” with the term “food insecure” to describe any household where, sometime during the previous year, people didn’t have enough food to eat. By whatever name, the number of people going hungry has grown dramatically in the U.S., increasing to 48 million by 2012 — a fivefold jump since the late 1960s, including an increase of 57 percent since the late 1990s. Privately run programs like food pantries and soup kitchens have mushroomed too. In 1980 there were a few hundred emergency food programs across the country; today there are 50,000. Finding food has become a central worry for millions of Americans. One in six reports running out of food at least once a year. In many European countries, by contrast, the number is closer to one in 20.

To witness hunger in America today is to enter a twilight zone where refrigerators are so frequently bare of all but mustard and ketchup that it provokes no remark, inspires no embarrassment. Here dinners are cooked using macaroni-and-cheese mixes and other processed ingredients from food pantries, and fresh fruits and vegetables are eaten only in the first days after the SNAP payment arrives. Here you’ll meet hungry farmhands and retired schoolteachers, hungry families who are in the U.S. without papers and hungry families whose histories stretch back to the Mayflower. Here pocketing food from work and skipping meals to make food stretch are so common that such practices barely register as a way of coping with hunger and are simply a way of life.

It can be tempting to ask families receiving food assistance, If you’re really hungry, then how can you be — as many of them are — overweight? [more]

On Grit

by David De La Torre

For TED Talks Education, Angela Lee Duckworth explains her theory of “grit” as a predictor of success.

The Greatest Person then Living

by Bill Hayes

In The Greatest Person then Living for the London Review of Books, Andrew Bracevich reviews The General v. the President: MacArthur and Truman at the Brink of Nuclear War by H.W. Brands.

War on the Korean peninsula, formally divided by the Allies into two states in 1945, erupted unexpectedly in June 1950 when North Korean forces attacked across the 38th Parallel, providing the setting for the confrontation between Truman and MacArthur. Brands focuses on their personalities, but the larger context complicated matters and ratcheted up the stakes. For Americans these were unsettled and unsettling times. Victory in World War Two had almost immediately given way to an ominous Cold War, with freedom itself seemingly beset by an insidious form of totalitarianism. Expectations that the UN, created with great fanfare in 1945, would pave the way for world peace were already falling victim to East-West divisions. The US monopoly in nuclear weapons, the ultimate guarantor of American security, had ended after just four years, when the Soviet Union successfully tested a weapon in August 1949. A month or so later China ‘fell’ to communism. At home, the Second Red Scare, commonly known as McCarthyism, fuelled partisanship and sowed paranoia, especially among left liberals or progressives who were vulnerable to the charge of fellow-travelling. The Korean War compounded these issues.

Truman responded to North Korean aggression with alacrity. Promising to assist South Korea’s overmatched army, he secured authorisation from the UN Security Council to ‘repel the armed attack’ and designated MacArthur, a hero of both world wars, to command the coalition assembled to do so.

The appointment met with widespread approval. In a Gallup poll, Americans had dubbed MacArthur the ‘greatest person then living’. Asked ‘to name the greatest figure in world history’, they had ranked him fifth, after Roosevelt, Lincoln, Jesus Christ and Washington. [more]

For a free related classroom lesson, see Truman, MacArthur, and the Korean War from  CRF’s Bill of Rights in Action Archive.

Fiscal stimulus

Fiscal stimulus

by David De La Torre

The Economist is publishing a series of six articles on seminal ideas in economics. The fourth article is on fiscal stimulus, an idea promulgated by John Maynard Keynes.

AT THE height of the euro crisis, with government-bond yields soaring in several southern European countries and defaults looming, the European Central Bank and the healthier members of the currency club fended off disaster by offering bail-outs. But these came with conditions, most notably strict fiscal discipline, intended to put government finances back on a sustainable footing. Some economists argued that painful budget cuts were an unfortunate necessity. Others said that the cuts might well prove counterproductive, by lowering growth and therefore government revenues, leaving the affected countries even poorer and more indebted.

In 2013 economists at the IMF rendered their verdict on these austerity programmes: they had done far more economic damage than had been initially predicted, including by the fund itself. What had the IMF got wrong when it made its earlier, more sanguine forecasts? It had dramatically underestimated the fiscal multiplier.

The multiplier is a simple, powerful and hotly debated idea. It is a critical element of Keynesian macroeconomics. Over the past 80 years the significance it has been accorded has fluctuated wildly. It was once seen as a matter of fundamental importance, then as a discredited notion. It is now back in vogue again. [more]

The previous three articles can be found here:

George Akerlof’s 1970 paper, “The Market for Lemons”

Minsky’s moment

The Stolper-Samuelson theorem

For a free classroom lesson on economist John Maynard Keynes, see John Maynard Keynes and the Revolution in Economic Thought from  CRF’s Bill of Rights in Action Archive.

Nine Lessons About Criminal Justice Reform

by Bill Hayes

Writing for the Marshall Project, Bill Keller explains Nine Lessons About Criminal Justice Reform.

Lesson 1: It is possible to reduce incarceration and crime at the same time.

Between 2010 and 2015, 31 states reduced both crime and imprisonment. In the 10 states with the largest declines in imprisonment, the crime rate fell an average of more than 14 percent.

This obviously does not mean that reducing incarceration necessarily leads to a drop in crime. Correlation is not causation. The question of why the crime rate declined is a subject of heated debate among social scientists. One of my colleagues at The Marshall Project wrote a piece we called “10 Not Entirely Crazy Theories Explaining the Great Crime Decline.” One thesis our writer examined is that after Roe v. Wade the legalization of abortion meant fewer unwanted children who were more likely to become delinquents. Other researchers have surmised that removing lead from paint and fuel has made for a less criminogenic environment. Another theory credits technology: anti-theft devices in cars and the spread of online banking made it harder for criminals to profit. Most experts give some credit to the increased deployment and improved equipping of police. And, of course, some of the decline is a result of the fact that more bad guys were locked up — though that is an expensive way to keep communities safe.

Whatever the factors responsible for the relatively low crime rate, the evidence from the states is that reducing incarceration is compatible with reducing crime. Obviously, a lot depends on how you reduce prison populations, which is where the states have much to teach us. [more]

Venezuela’s Crisis Has Professionals Scrubbing Toilets in Miami

by Bill Hayes

In Venezuela’s Crisis Has Professionals Scrubbing Toilets in Miami, Bloomberg Businessweek reports on the Venezuelan exodus.

Once upon a time, people didn’t flee Venezuela; they flocked to it. “Venezuela has always been a country of immigrants, not emigrants,” says Tomás Páez, a Venezuelan sociologist and author of the 2015 book The Voice of the Venezuelan Diaspora. From the 1960s on, he says, the country was a “big magnet,” attracting Europeans, particularly Spaniards, and South Americans. Among its draws were a temperate climate, an oil-fueled economy, and a history of democratic rule. The Concorde flew to Caracas from Paris. Venezuelans would hop over to Miami for a little shopping. “That’s cheap; I’ll take two” was their trademark phrase.

Then in 1999, Hugo Chávez swept into power and instituted a program of petroleum-funded socialism and strongman rule. Before his death in 2013, Chávez annointed a successor, Nicolás Maduro, to lead the Bolivarian Revolution. By then the price of oil was falling, plunging the economy into a recession made more painful by rigid price and currency controls that have caused critical shortages of everything from basic food staples to cancer drugs. The International Monetary Fund estimates gross domestic product contracted 18 percent last year and will shrink an additional 7 percent in 2017. Inflation this year is expected to average 720 percent a month. [more]