Efficiency Rules, mostly

I've been posting quite a bit on economics lately, and was engaged in yet another heated economics debates on Ed Brayton's blog. I left my email address on one comment there, inviting people to contact me that way if they had more questions. Two did, and one of them asked where I stood on various regulations to keep corporations from abusing people. That's a good question, although I don't love the way it's phrased, because that's still a question I struggle with.

Economics is primarily about efficiency, and efficiency is a damn good thing because it allows us to maximize the ratio of benefits to costs, thus maximizing wealth. And wealth, particularly having a wealthy society, is a great thing. We in the western world are wealthier than people in the developing countries, so we can afford clean safe water, good food, medical care, better housing, books, travel, and all the other things that make our lives good.

But efficiency is just one value, and contra Plato, not all values are commensurate. It's not just that efficiency doesn't necessarily distribute wealth evenly (as long as we all continue to become wealthier, it's little harm to me that others are wealthier yet--absolute, rather than comparative, well-being, is the proper standard), it's that efficiency may at times place much too little value on individual humans.

So given that all regulations are market-distorting, yet markets may not respect humans as much as I like, when is regulation ok? It's not always easy to answer.

For example, if there is an oversupply of labor, workers become dispensable, and subject to very abusive treatment. This is the real story behind Sinclair's The Jungle, not that he realized it. Massive levels of immigration resulted in a tremendous oversupply of unskilled labor looking for factory jobs, with the consequence that none of them had much market value. Although it's guaranteed that the government regulation will be inefficient, I don't mind regulations about workplace safety and treatment of employees in such a case.

And as much as I am skeptical of nationalized health care, it does seem to me that government can be an effective insurer of last resort in cases of traumatic health care problems. Should the fact that no one's devised an economically efficient way of providing health insurance for someone who's never going to work again but will have have mounting medical bills throughout their life mean they should be left to die?

Although I'm a staunch free marketer, I do recognize that efficiency is not the only meaningful value we should try to achieve in our society. So I do support some regulation not justified by efficiency, particularly to support those who really do have no hope of supporting themselves anymore. But I also think that efficiency as a value is under-rated by too many people--after all, it's what provides the wealth that allows us to set efficiency aside and "waste" it on people who need it but can't earn it.

How Much Did the Founders Quote the Bible?

[Much of this is a repost of my comment on Ed Brayton's blog.]

Ed Brayton recently wrote yet another post on the claim the Bible had a large political influence on the Founders of the United States, in response to a Worldnet Daily article by a Tom Flannery. Jon Rowe at Positive Liberty also posted a rebuttal of Flannery's column.

I'd seen this claim about the majority of Founding era citations being to the Bible before, of course, and at one time had seen the claim that the source was research by the American Political Science Association (APSA). A claim like that demonstrates, before any other analysis is done, the speaker's foolishness, as the APSA is just an organization of political scientists that hosts meetings and publishes journals--it is not itself a research organization.

But that led me to wonder what American Political Science Review (APSR) article was the source of the claim. I put about half an hour into figuring it out, didn't, then forgot about it. But a commentor on Brayton's blog, a helpful chap posting as "Somerville," gave the full citation, which is a 1984 article by Donald S. Lutz (Thank you, S!), and I immediately downloaded the paper from JStor and took a close look at it.

First, here's Flannery's claim, verbatim:

Indeed, of the 15,000 political writings of the men who crafted the Constitution, the source they quoted most frequently in expressing their political beliefs was the Bible. A whopping 34 percent of their political quotes came straight out of the Book they hailed as the inspired Word of God.

Like many others, Flannery doesn't have the decency to provide even a hint of a source. Perhaps he is no more aware of it than I was, and is just repeating words he heard from somewhere else. But there is no doubt that the APSR article by Lutz is the source, because both the "15,000 writings" and the "34% of quotes were from the Bible" are found in that article. So Flannery is right, no? No.

To begin, the actual topic of the article is not biblical influence on the Founders, but, as the title says with admirable clarity, "The Relative Influence of European Writers on Late Eighteenth-Century American Political Thought." I recognized the subject immediately, having had to endure a dreadful American Politics seminar in grad school where we were forced to endure Louis Hartz's The Liberal Tradition in America, as well as writings by Bernard Bailyln, J.G.A. Pocock, Joyce Appleby and other historians of the founding era, all of which hastened my shift of focii to political economy and evolutionary theory. In a nutshell, the debate is about whether the Founders were classical liberals, influenced primarily by Locke, or republicans, influenced more by Michael Harrington and others. And that is what Lutz is writing about. Unless we want to take the highly dubious step of calling the author (or authors) of the Bible "European writers," his primary interest is explicitly not the Bible.

But of course it's possible that in writing about X, the author dropped a juicy little reference to Y in the article, so let's explore Flannery's claim more closely. In a nutshell, his claim is that 34% of the references found in 15,000 political documents of the founding era were biblical references. But here's how Lutz describes his research methods.

Approximately ten years ago this author set out...to read comprehensively the political writings of Americans published between 1760 and 1805...Reviewing an estimated 15,000 items, and reading closely some 2,200 items with explicitly political content, we identified and rated those with the most significant and coherent theoretical content. Included were all books, pamphlets, newspaper articles, and monographs printed for public consumption...The resulting sample has 916 items...

So Flannery's claim begins with a serious inaccuracy--Lutz only reviewed 15,000 items, he didn't actually count the citations from 15,000 items. Then he read a sample of 2,200 of those items closely, and further reduced his sample. The sample he actually used comprised 916 document--quite a long way from 15,000. In fact Flannery is off by more than an order of magnitude, a pretty serious methodological error.

The claim that "34%" of citations were to the Bible is correct. But it is also incomplete. It was not 34% of citations from 15,000 documents, but 34% from 916 documents. Lutz does not give us any clues about the citations in the other 14,000 documents he left out of his sample, because he didn't count the citations in them. They could have had more biblical citations, the same, or fewer, but we don't have enough information to make any such extrapolations.

However it is clear what was in those 916 documents, and we can make reasonable extrapolations about the way the citations were distributed among them. Here, again, is Lutz:

From Table 1 we can see that the biblical tradition is most prominent among the citations. Anyone familiar with the literature will know that most of these citations came from sermons reprinted as pamphlets; hundreds of sermons were reprinted during the era, amounting to at least 10% of all pamphlets published. These reprinted sermons accounted for almost 3/4 of the biblical citations...

Before we dig into actual numbers, consider those percentages--only about 10% of the pamphlets published in that era were religious pamphlets, yet they contained roughly 75% of all the biblical citations, meaning around 90% of the pamphlets contained only 25% of the biblical citations. Evidently these sermons had "explicitly political content," as that was the primary standard by which Lutz did his first winnowing of the sample from 15,000 to 2,200. Neverthless they were sermons, which implies they were predominantly written by preachers, whereas most (not all, but most) of the Founders were not clergy. Consequently, the remaining 90% of the documents were likely written predominantly by non-clergy--and that vast majority of the documents contained a a clear minority of the biblical references, suggesting that most of the authors of the founding era did not use the Bible as a primary source of inspiration.

Fortunately, Lutz gives actual numbers of citations, so we can do a rough calculation of average biblical citations per sermon/non-sermon.

1. In 916 publications he counted 3,154 citations.

2. 34% of those citations were biblical, so there were 1,072 biblical citations (3,154 * .34).

3. There were approximately 92 sermons in the sample (916 * .1). (Note: Here I am making an assumption that 10% of Lutz sample were sermons, based on his statement that 10% of publications of the era were sermons. Lutz does not explicitly say so, but his statement about the percentage of publications that were sermons is placed within his discussion of the sample, so the extrapolation is reasonable. If his sample had been widly disproportionate, he would presumably have said so.)

4. Approximately 804 biblical citations came from the approximately 92 sermons (1,072 biblication citations * .75).

5. From that we can estimate the mean number of biblical citations per sermon at 8.7 (804 biblical citations/92 sermons).

5. Approximately 268 biblical citations came from non-sermon writings (1,072 - 804, or 1072 * .25)

6. The sample contained approximately 824 non-sermon publications (916 * .9)

7. Finally, we can estimate that the non-sermon writings had a mean of .3 biblical citations (268 biblical citations/916 non-sermon publications).

In summary, sermons contained more than 8 biblical citations each (on average), which is not too surprising for sermons, whether they contain political content or not. But the non-sermon publications contained less than 1 citation each, on average. In fact because the mean number of citations per non-sermon is less than .5, the liklihood of a non-sermon political publication from the founding era containing a biblical citation is not even random! The political writings were more likely than not to have no biblical references at all.

But there is yet more to the story. Keep in mind that Lutz was just counting citations, not analyzing them for substance. As he explained:

Another advantage is that a citation count need not distinguish between positive and negative citations;

So Lutz was not making any claim that the Founders used the Bible to support any particular political view, a point that becomes relevant when we look at the pattern of citations by Federalists and Anti-Federalist in 1787 and 1788, the years the Constitution was being debated (Lutz's Table 4). The Federalists--the founders of our actual political system, the suporters of the Constitution, so often said to have a biblical basis--never quoted the Bible! Lutz counts zero Federalist citations to the Bible. Conversely, 9% of the Anti-Federalists' citations were to the Bible, far less than the 38% of their references to enlightenment authors (and note that the enlightenment challenged the idea of God as the source of knowledge), but obviously far more than the Federalists. So the conclusion here, if we were to follow Flannery's method, is that God opposed the Constitution. A silly conclusion, of course, but the natural outgrowth of the "they cited it" school of historical analysis.

Also significant here is that the percentage of biblical references dropped dramatically in these two years (thanks to Ed Brayton for bringing that to my attention). The average for the 1780s, as it was for the whole period of the study (1760-1805) was 34%, but in 1787/88, it dropped to 0% for Federalists and 9% for Anti-Federalists (and for those two years, there was precious little political writing that was not one or the other, so there is no great residual of biblically based political writings that is being ignored). Here is Lutz's comment on the findings for these two years:

The Bible's prominence disappears, which is not surprising since the debate centered upon specific institutions about which the Bible had little to say. The Anti-Federalists do drag it in with respect to basic principles of government, but the Federalists' inclination to Enlightenment rationalism is most evident here in their failure to consider the Bible relevant.

Assuming my extrapolations from Lutz, and my math, are correct (and, at the least, I have tried to do a real analysis of the issue, rather than merely repeating platitudes), there clearly is no justification for arguing that the Founders, except for the handful of clergy, made substantial use of the Bible at all as a source of political inspiration.

To be fair, Lutz did think the number of biblical citations was of interest, saying:

It is relevant, nonetheless, to note the prominence of biblical sources for American political thought, since it was highly influential in our political tradition, and is not always given the attention it deserves.

Nonetheless, this rough analysis of the data shows that this influence was most prominent where we would expect it to be, among the clergy, and least prominent among the non-clergy political leaders, who predominantly cited the enlightenment rationalists.

****
Note: I have emailed Dr. Lutz asking him to comment on this issue. As it is summer, and as he has certainly never heard of me, I may or may not receive a timely reply. When, or if, I do, I will post it.

Full Citation: Lutz, Donald S. 1984. "The Relative Influence of European Writers on Late Eighteenth-Century American Political Thought," The American Political Science Review 78:189-197. One can see also Lutz further analysis in his book, The Origins of American Constitutionalism, which I have not read.

I Didn't Vote for the Guy, Really

Not only is my U.S. Representative backing a wildly dishonest resolution that essentially claims the U.S. was created to be a Christian nation, but my state senator is sponsoring a bill in the state legislature to ban "partial birth abortion." What's wrong with banning this procedure? The fact that it's already outlawed by federal law--a federal law that has already been upheld by the U.S. Supreme Court. I heard about this from Ed Brayton, who asked me to comment on it for a Michigan Messenger article.

The background is that the Michigan legislature passed a ban previously, in 2004, which was vetoed by the governor (a Democrat), then passed in a petition initiative by the state's citizens, but then declared unconstitutional by the 6th Circuit Court of Appeals in 2005. In 2007, the U.S. Supreme Court upheld the federal government's partial-birth abortion ban.

Since it's already illegal, Ed suggested that it's a Republican plan to put Michigan Democrats in a pinch this fall, by making them either go against their base or go against the clearly expressed wish of the majority. But I'm not sure it's that strategic a move. I think it's a case that the supporters are true believers, for whom a federal law is necessary but not sufficient--there can never be too many laws restricting abortion, even if they're redundant. And also it allows the individual supporters to go to their constituents, many of whom are at best vaguely aware of the federal ban, and take the high ground as the candidate of moral values.

Meanwhile, they ignore the state's failing infrastructure, ongoing problems of its tax-base, subpar educational system, etc. They're engaging in symbolic politics because it's a lot easier, and more emotionally satisfying, than solving real problems that are really happening.

And these are the same people who talk about small government, about getting government off the backs of the people. They're the ones who talk about reducing the cost of government. And yet they continue to pass more criminal laws regulating people's private lives, and pretending that these things don't add to the size, cost, and intrusiveness of government.

To hell with all of them.

Support for Same-Sex Marriage, by Age Cohort

Ed Brayton claims

A generation from now, we'll look back in bewilderment that anyone could possibly care whether a gay couple wants to get married or not,

I'd say he's right. Here's a graph I produced recently from data from the 2004 American National Election Study.

Source: University of Michigan, Center for Political Studies (2004)

Some people like to claim that young people just support it because they don't know any better yet. But that wouldn't explain why my cohort--low 40s--is more accepting than my mom's cohort (late 70s). It's pretty clear, a multi-generational shift is occuring. I predict same-sex marriage is here to stay in Massachusetts, and will exist in several more states before I retire.

In Which I Challenge Ed Brayton to a Friendly Wager

In a post about James Dobson's claim that he'll sit out the election if John McCain is the Republican nominee., Ed Brayton calls Dobson a liar (true enough, I think), and makes the following prediction.

...he's pretending that he'll sit out the election in order to gain maximum leverage in cutting a deal with McCain in exchange for his support...And the deal will be that when there is a Supreme Court opening, McCain picks from their short list.

I could be a fool, but I agree with the Republicans who claim McCain isn't that conservative. I also think McCain knows damn well that his support is coming from the middle. So I don't think he'd commit to such a deal to get Dobson's endorsement, and I don't think he'll appoint an ultra-conservative to the Supreme Court.

So I challenged Ed to a friendly wager.

If Dobson endorses McCain,, and if McCain is elected, and if McCain gets a Supreme Court appointment, I bet he chooses a moderate. I prefer beer, scotch, or bourbon as the wager, but I don't know if Ed's a drinker--I guess I could stoop to wearing a Duke shirt if I lose.

I think the odds of McCain winning are slim, so this bet would probably be a safe one for both parties.

And this isn't intended as a slam at Ed, who runs what I think is the best political blog on the web. Mostly I just want to put myself on record, so if I'm wrong I can't deny it (you know, like those pathetic creationists and IDiots constantly do).

Are there non-natural economic opportunities?

This is the first of two posts responding to stupid arguments on another blog.

On Ed Brayton's blog a commenter argued

This is what happens where there is no more natural room for an economy to grow: companies have to start extorting "growth" from areas that were never considered before.

 The rest of the comment was intelligent enough, but I called this comment "nincompoopery."  I'm right and s/he's wrong.  Most people who know anything about economics would say that finding growth opportunities in areas never considered before is entrepreneurialism.  In fact the growth of economies--always and forever, from the ancient past to the far future--depends on people finding economic opportunities that weren't previously considered.  If they were previously considered, they wouldn't be opportunities for growth!

For example: the richest woman in China, Zhang Yin, made her fortune by recycling scrap paper from the U.S.   She imported the waste paper cheaply, because container ships regularly head from the U.S. to Asia empty, meaning you can get a really good price on cargo going west.  She then used that waste paper to make cardboard boxes and packaging material for goods being shipped right back to the U.S.  How rich can a Chinese woman be?  Try $3.4 billion worth of richness--more than twice what Oprey Winfrey is worth.

Here's the funny part; countless people around the world, including a non-businessman like myself, knew each of the pieces to this puzzle.  

1. There's a surplus of waste paper in the United States--there's not enough demand in the national market to purchase it all.

2.  Waste paper can be used to make packaging for shipping goods (heck, I've done that myself just by wadding up old newspapers).

3. Lots of things are shipped to the U.S. from Asia, creating demand for packaging material.

4. The surplus of container capacity heading from the U.S. to Asia means cheap shipping.

And yet this was an area "never considered before," because even those of us who knew all the pieces didn't realize we should put them together to solve the puzzle.  Consequenlty it was wide open for Zhang Yin to step into and make a fortune.  Was this an "unnatural" economic opportunity?  Or just a case of someone else being more clever than I was?