Accountability Moral and Economic

The real guilty party.

Reader kenestral passed along this article, which highlights the occasional tension between moral and economic obligations. It seems in Obion County, Tennessee, if you don't want the local fire department to be on call, you don't have to pay for it. This seemed all well and good to resident Gene Cranick until his house caught fire:

I thought they’d come out and put it out, even if you hadn’t paid your $75, but I was wrong.

They did respond to calls from a paying neighbor.

This was a really thought provoking article for me. If I were calling the shots at the fire department, I probably would have put the fire out anyway, thus validating Cranick's attempt to be a free-rider supported by the payments of his neighbors. It's not OK to let people's homes burn.  But if I were in charge of investigating the fire department, as you know had to happen, I'd probably not accuse them of any wrongdoing. They fulfilled their contracted duty.

The author of the article, Daniel Foster, sees this as a pretty good argument for providing fire-fighting services to anyone in the jurisdiction, and just charging them through a tax (that is, nobody gets to opt out).  In one sense I tend to agree, but that left me wondering how this was different from the Obama Health Care plan, which I don't like. After talking it over with my wife (who has better economics instincts than I do, despite never having taken a class on the subject), we concluded that the main difference is that there is nobody else offering to put out fires; if you wanted to use another service to put out fires, too bad, there's nobody.  No amount of money is going to be enough to get someone else to provide fire-fighting services. That's not true when it comes to doctor's office visits, checkups, and prescription drug provision. Now, if Obama had proposed a plan for universal catastrophic health insurance (with correspondingly high deductible), then it would be a lot more like public provision of fire departments. I might be OK with that health insurance system, too.

But what this really got me wondering about was Cranick's homeowner's insurance. Do they have to pay out despite the fact that he could have gotten fire-fighting protection, but didn't?  How can you even get homeowner's insurance on a house that isn't covered by the local fire department?  If I'm the insurance company, I probably wouldn't sell to a guy who won't join the local fire department club, no matter how much he tries to reassure me "oh, they'll come anyway, trust me." They don't make premiums high enough for that kind of nonsense.

On the other hand, might Cranick be able to argue that he offered to pay them the cost of fighting the fire ex post, and they refused?  Could he say it's really their fault everything he had burned to cinders?  I suspect this wouldn't fly, but I really don't know. 

The gist is, I guess, that I don't agree with the fire department's call, but I'm having trouble drumming up sympathy for someone victimized by his own poor choices. Not too much of a surprise, I guess, since we've learned years ago from Yale psychology professor Paul Bloom (via Freakanomics coauthor Stephen Dubner) that economists are evil.

David Henderson offers a libertarian response here. Tyler Cowen is not moved.

Truth Claim of the Day

Japanese politics is less competitive and Japanese rent-seeking is less competitive than in the United States.  Sustained near-zero growth in the United States would mean that interest groups tear apart the social fabric and grab too lustily at the social surplus.  Whether we like it or not, we are "built to grow" and we use the fruits of that growth to buy off interest groups as we go along.  Japan in contrast has greater capacity to stifle these grabs for new redistributions because their politics is more of an insider's game.

In other words, American society is arranged such that we must "grow or die"; other countries might not be. Please, discuss. The context can be found here.

Hail Democracy?

Authoritarian regimes [...] cannot aspire to continued economic innovation or to global economic leadership.

That's the take home message from an article by Harvard economist Dani Rodrik. If that were all he said, I'd say he was playing fast and loose with the facts, since all of the top growing countries over the last fifty years or so have had very little democratic influence in their governments:

Of course, Rodrik knows this better than I do. So, being a good economist, he hedges his claims:

When we look at systematic historical evidence, instead of individual cases, we find that authoritarianism buys little in terms of economic growth. For every authoritarian country that has managed to grow rapidly, there are several that have floundered. For every Lee Kuan Yew of Singapore, there are many like Mobutu Sese Seko of the Congo. [emphasis added]

As a friend working in the sciences once said, "data is not the plural form of anecdote." If what we're interested in is whether or not having a dictator or one-party government helps the country grow, we need to look at all countries, not just the top performers. That data looks something like this:

Low levels of democracy do give us the highest growth rates, but they also give us the lowest. If I were to plot a line on that graph, it would be sloping up, showing that on average, more democracy leads to more growth.

Now, we know that correlation isn't causation, so let's not get too carried away with this relationship. In fact, there's a lot of work suggesting that when you try to get at the real, causal relationship, more or less democracy doesn't seem to make much of a difference for how well a country grows. And further, we have some good reasons to believe dictators should generally hurt economic growth, so the fact that there are any really high growth authoritarian systems means something strange is going on.  So when looking for the economic superpowers of the future, I don't think we should be too quick to, as Rodrik says, "turn instead to countries like Brazil, India, and South Africa, which have already accomplished their democratic transitions and are unlikely to regress."

But Rodrik is right to consider the simple "democracy is related to better growth" position the correct default. As William Easterly (the source of the nice table and graph) notes, we can't just say the graph shows we need to have good dictators (who will lead to better growth) and fewer bad ones (who will lead to stagnation). If we label countries with the best growth "good dictatorships" and those with the worst "bad dictatorships" we're just begging the question. Unless we know in advance what made the top growers grow and what made the bottom ones fail, we can't very well pick out which dictators now will help their people and which will hurt.  On average, they're gonna do more harm than good.

Scholarly Critique Fail

To their minds, little of what takes place on college campuses today can be considered either "higher" or "education." They blame a system that favors research over teaching and vocational training over liberal arts.

 This is the main thrust of an interview at the Atlantic with the authors of the book Higher Education? (and yes, the question mark is part of the title). The authors do not like faculty who care about research to the point of avoiding teaching, an attitude I can sympathize with. Here is an excerpt on the perils of the Publish of Perish mentality:

The problem is that there are just too many publications and too many people publishing. This is true even in the hard sciences. If there's a research project on genetics in a lab, they will take certain findings and break them into eight different articles just so each researcher can get more stuff on his or her resume.

And many of the publications are too long. A book on Virginia Woolf could be a 30-page article. Somebody did a count of how many publications had been written on Virginia Woolf in the past 15 years. The answer is several thousand. Really? Who needs this? But it's awfully difficult to say, "Here's knowledge we don't need!" It sounds like book burning, doesn't it? What we'd say is that on the scale of priorities, we find undergraduate teaching to be more important than all the research being done. 

So far, so good. But they also have some very particular ideas about what constitutes good vs. bad ways to pick a college to attend. The bad way, in their view, is to go to college for signaling purposes:

[...] go to a prestigious college, and when you graduate the world will know you went to Princeton or Stanford. It doesn't matter what happened in the classroom as long as you have that brand behind you. Claudia and I were up at Harvard talking to students, and they said they get nothing from their classes, but that doesn't matter. They're smart already—they can breeze through college. The point is that they're going to be Harvard people when they come out.

So what do the authors advocate instead?

The second reason to go to college is get a good liberal arts education.

Wait, really? Liberal Arts? I thought having people write volume upon volume about Virginia Woolf was a bad thing. So why would we train students to do the same thing by having them read those very volumes? Or is this not what the authors mean by a liberal arts education?

There are two ways to look at it. First of all, freshmen come in at age 18. Let's suppose they've decided to major in sports management. What's an 18-year-old going to do in a freshman course in sports management? I've attended some undergraduate business courses. The students are young; they don't have business experience. Really very little is imparted.

To me this sounds more like an argument for skipping college and going into the workforce than anything else. Is that what they mean?

In our economy, they're not really ready for you until you're 28 or so. They want you to have a number of years behind you. [...] Besides, young people today are going to live to be 90. There's no rush.

The economy wasn't ready.

Oh. Nope, apparently the modern economy can't handle young people. Their labors aren't going to get them anywhere when they're young no matter what they do. So what should young people be doing with their time?

The second way to look at it is that liberal arts, properly conceived, means wrestling with issues and ideas, putting the mind to work in a way these young people will only be able to do for these four years. And we'd like this for everyone. They can always learn vocational things later, on the job. They can even get an engineering degree later—by the way, in two years rather than four.

This sounds like a good plan... for high school. But I don't quite see how it's an effective plan for college unless we are planning to greatly multiply the volumes of Virginia Woolf for these students to wrestle with, assuming they have any interest in doing so. Even if college were much cheaper than it is now (they do have a nice comment on massive borrowing for college, which at least for non-vocational, non-investment schooling is a pretty poor idea), many students would rather work at low wages than hang out wrestling with books they don't care about. Are they wrong to feel this way?

Good teaching is not just imparting knowledge, like pouring milk into a jug. It's the job of the teacher to get students interested and turned on no matter what the subject is. Every student can be turned on if teachers really engage in this way. [...] Some people say to me, "Your students at Queens, are they any good?" I say, "I make them good." Every student is capable of college.

No. I have to stop you there. Not every student is capable of college. I went to the local Vo-Tech in high school, and met some people who would not have been able to keep up with college level coursework at the local state college. Period. And they knew it. They knew they'd be frustrated and tired and hate every minute of it no matter how enthusiastic or capable the teachers. And you know what? It was OK.

They were studying something they found somewhat appealing, like computer repair or auto mechanic work or graphic design or what-have-you. They were learning something they could understand and appreciate and be good at that would also pay the bills, and possibly even leave them some free time to explore their side interests. And that's fabulous. I've had a fair number of students who I think would live happier, healthier, and possibly even wealthier lives if they stopped trying to finish college because everybody-who's-anybody-has-a-college-degree, and instead learned a trade. Mike Rowe of Dirty Jobs fame made a similar point here (second video), and there are some interesting links on the subject here.

Do I think liberal arts education can serve the consumption and productivity goals of students? Absolutely, given the right students (and there are a lot of them). I think we could do even better to have capable, demanding, well-trained, and enthusiastic teachers of these topics starting in high school and continuing into liberal arts schools for those so inclined. But I think we would do a lot better at promoting real higher education if we stopped pretending that "higher" means "top of the line but somehow still accessible to everybody." That's a waste of the students' time, creativity, and enthusiasm in too many cases. Those are resources we should take more care in managing.

(Craig Newmark comments briefly and to the point on the same article)

PS- Here's hoping the economy is finally ready for this:

Your Opinion

I'm leading a discussion for a graduate student discussion group next Sunday, and I need to decide what topic to present. Since my own research is not particularly general interest, I thought I'd get some thoughts on what my blog readers think would spark an interesting discussion. Therefore, I present Metadoxy's first ever Reader Poll:

For a look at possible reading material for mechanics and mystics, click here; for the purposes of education, click here. The How to Deceive with Statistics would focus on statistics education, such as in the video here (third video) from Arthur Benjamin. I've actually presented on The End of Civilization before, talking about William Burrows and the Alliance to Rescue Civilization; I'd probably take a more general "how should Christians think about and react to risks of global economic meltdowns / meteor strikes / climate disasters / (genetically engineered?) plagues / nuclear war" approach this time. Economic Growth vs. Human Progress would be a new topic, but would give us a chance to talk about the pros and cons of the modern age, as well as what our social and political goals should be in areas like foreign aid / immigration policy / national economic policy.

Please vote, the more feedback I get here the better decision I can make. Is there anything not in the poll that should be? Why did you vote the way you did? Please let me know in the comments!

Which Topic is Best for a Christian Grad Student Discussion?