Economics, Model, Politics

Meditations on Regulation, or the Case of the $10,000 Staircase

[10-minute read]

Breaking news: a retired mechanic spent one afternoon and $550 building a staircase. This is news because the City of Toronto said it would cost $65,000 for them to do it. They’ve since walked back that estimate, claiming it won’t be that expensive (instead, the final cost looks to be a mere $10,000).

Part of this is materials and labour. The city will probably go for something a bit more permeant than wood – probably concrete or metal – and will probably have higher labour costs (the mechanic hired a random guy off the street to help out, which is probably against city procurement policy). But a decent part (perhaps even the majority) of the increased costs will be driven by regulation.

First there’s the obvious compliance activities: site assessment, community consultation, engineering approval, insurance approval. Each of these will take the highly expensive time of highly skilled professionals. There’s also the less obvious (but still expensive and onerous) hoops to jump through. If the city doesn’t have a public works crew who can install the stairs, they’ll have to find a contractor. The search for a contractor would probably be governed by a host of conflict of interest and due diligence regulations; these are the sorts of thing a well-paid city worker would need to sink a significant amount of time into managing. Based on the salary information I could find, half a week of a city bureaucrat’s time already puts us over the $550 price tag.

And when the person in charge of compliance is highly skilled, the loss is worse than simple monetary terms might imply. Not only are we paying someone to waste her time, we are also paying the opportunity cost of her wasting her time. Whenever some bright young lawyer or planner is stuck reading regulatory tomes instead of creating something, we are deprived of the benefits of what they could have created.

When it comes to the stairs, regulations don’t stop with our hypothetical city worker. The construction firm they hire is also governed by regulations. They have to track how much everyone works, make sure the appropriate taxes go to the appropriate parties, ensure compliance with workplace health and safety standards and probably take care of a dozen minor annoyances that I don’t know about. When you aren’t the person doing these things, they just blend into the background and you forget that someone has to spend a decent part of their time filling out incredibly boring government forms – forms that demand accuracy under pain of perjury.

No source needed, because I stole this from a US government form and no documents produced by the US government can be copyrighted
What, you never noticed how fond government documents were of waving the p-word around? This basically says “fill this out right, or one of the state’s armed enforcers will use violence to bring you to a small room that you won’t be allowed to leave for a very long time”.

Hell, the very act of soliciting bids can inflate the cost, because each bid will require a bunch of supporting paperwork (you can’t submit these things on a sticky note). As is becoming the common refrain, this takes time, which costs money. You better bet that whichever firm eventually gets hired will roll the cost of all its failed past bids (either directly or indirectly) into the cost the city ends up paying.

It’s not just government regulations that drive up the price of stairs either. If the city has liability insurance, it will have to comply with a bunch of rules given to it by its insurer (or face higher premiums). If it chooses to self-insure, the city actuaries will come up with all sorts of internal policies designed to lessen the city’s chance of liability – or at least lessen the necessary payout when the city is inevitably sued by some drunk asshole who forgets how to do stairs and breaks a bone.

With all of this regulation (none of which seems unreasonable when taken in isolation!) you can see how the city was expecting to shell out $65,000 (at a minimum) for a simple set of stairs. That they managed to get the cost down to $10,000 in this case ­(to avoid the negative media attention of over-estimating the cost of stairs more than one hundred times over?) is probably indicative of city workers doing unpaid overtime, or other clever cost hiding measures [1].

The point here is that regulation is expensive. It’s expensive everywhere it exists. The United States has over 1,000,000 pages of federal regulation. Canada makes its federal regulation available as a compressed XML dump(!) with a current uncompressed size of 559MB. Considering XML overhead, the sum total of Canadian federal regulation is probably approximately equivalent to that of the United States.

The only thing that hates federal regulation more than libertarians is the bookshelf that has to hold it all. Image Credit: Coolcaesar on Wikimedia Commons

This isn’t it for either country; after federal regulation, there’s provincial/state and local regulations. Then there are the interactions between all three, with things becoming even worse when you want to do anything between different jurisdictions within a country or (and it’s a miracle this can even happen at all) between countries.

People who can hold a significant subset of these regulations in their head and successfully navigate them (without going mad from boredom) are a limited resource. Worse, they’re a limited resource who can be useful in a variety of fields (i.e. there has to be some overlap between the people who’d make good programmers, doctors, or administrators and the people who can parse and memorize reams of regulation). Limited supply and consistent (or increasing) demand drives the excessive cost of buying their time that I mentioned earlier.

This is the part where I’m supposed to talk about how regulation destroys jobs and how we should repeal it all if we care about the economic health of our society. But I’m not going to do that. The idea that regulation kills jobs is based on economic fallacies [2] and not borne out by evidence (although it is surprisingly poorly studied and new evidence could change my mind here).

As best we can currently tell, regulation doesn’t destroy jobs; it shifts them. In a minimally regulated environment, there will be fewer jobs requiring highly educated compliance wizards and more jobs for everyone else. As the amount of regulation increases, we should see more and more labour shift from productive tasks to compliance tasks. Really regulation is one of the best ways that elites can guarantee jobs for other elites.

Viewed through this lens, regulation is similar to a very regressive tax. It might be buying us social goods that we really want, but it does so in a way that transfers wealth from already disadvantaged workers to already advantaged workers. I think (absent offloading regulatory compliance onto specialized AI expert systems) that this might be an inherent feature of regulation.

When I see progressives talking about regulation, the tone is often that companies should whine about it less. I think it’s totally true that many companies push back against regulation that is (on the face of it at least) in the public good – and that companies aren’t pushing back primarily out of concern for their workers. However, rejecting the libertarian position doesn’t mean we should automatically support all regulation. After reading this, I hope you look at regulation as a problematically regressive tax that can have certain other benefits.

Because even taking into account its regressive effects, regulation is often a net good. Emissions standards around nitrous oxide emissions have saved thousands of lives – and Volkswagen cheating on them will lead to the “pre-mature deaths” of over one thousand people.

Corporations have no social duty beyond giving returns to their shareholders. It’s only through regulation that we can channel them away from anti-social behaviour [3]. Individuals are a bit better, motivated as they are by several things beyond money, but regulation is still sometimes needed to help us avoid the tragedy of the commons.

That said, even the best-intentioned regulation can have ruinous second order effects. Take the new French law that requires supermarkets to donate unsold, expiring produce to food banks. The law includes a provision indemnifying supermarkets against any legal action for food poisoning or other problems caused by the donated food. Without that provision, companies would be caught in a terrible bind. They’d face fines if they didn’t donate, but face the risk of huge lawsuits if they did [4][5].

Regulation isn’t just the purview of the government. If all government regulation disappeared overnight, private regulation – overseen primarily by insurance companies – would take its place. The ubiquity of liability insurance in this litigious age has already turned many insurers into surrogate regulators [6].

Insurance companies really hate paying out money. They can only make money if they make more in premiums than they pay out for losses. The loss prevention divisions of major insurers work with their clients, making sure they toe the line of the insurer’s policies and raising their premiums when they don’t.

This task has become especially important for the insurers who provide liability insurance to police departments. Many local governments lack the political will to rein in their police force when they engage in misconduct, but insurance companies have no such compunctions. Insurers have written use of force policies, provided expensive training, furnished use of force simulators, and ordered the firing of chiefs and ordinary officers alike.

When insurers make these demands, they expect to be obeyed. Cross an insurer and they’ll withdraw insurance or make the premiums prohibitively high. It isn’t unheard of for police departments to be disbanded if insurers refuse to cover them. Absent liability insurance, a single lawsuit can literally bankrupt a small municipality, a risk most councillors won’t take.

As the Colombia Law School article linked above suggested, it may be possible to significantly affect the behaviour of insurance purchasers with regulation that is targeted at insurers. I also suspect that you can abstract things even further and affect the behaviour of insurers (and therefore their clients) by making arcane changes to how liability works. This has the dubious advantage of making it possible to achieve political goals without obviously working towards them. It seems likely that it’s harder to get together a big protest when the aim you’re protesting against is hidden behind several layers of abstraction [7].

Regulation isn’t inherently good or bad. It should be able to stand on its own merits and survive a cost-benefit analysis. This will inevitably become a tricky political question, because different people weight costs and benefits differently, but it isn’t an intractable political problem.

(I know that’s what I always say. But it’s a testament to the current political climate that saying “policy should be based on cost-benefit analyses, not ideology” can feel radical [8].)

I would suggest that if you’re the type of person whose knee-jerk response to regulation is to support it, you should look at how it will displace labour from blue-collar to white-collar industries or raise prices and ponder if this is worth its benefits. If instead you oppose regulation by default, I’d suggest looking at its goals and remembering that the cost of reaching them isn’t infinite. You might be surprised at what a true cost benefit analysis returns.

Also, it probably seems true that some things are a touch over-regulated if $65,000 (or even $10,000) is an unsurprising estimate for a set of stairs.

Epistemic Status:  Model

Footnotes:

[1] Of course, even unpaid overtime has a cost. After a lot of it, you might feel justified to a rather longer paid vacation than you might otherwise take. Not to mention that long hours with inadequate breaks can harm productivity in the long run.  ^

[2] It seems to rest on the belief that regulation makes things more expensive, therefore fewer people buy them, therefore fewer people are needed to produce them. What this simple analysis misses (and what’s pointed out in the Pro Publica article I linked) is that regulatory compliance is a job. Jobs lost directly producing things are more or less offset by jobs dealing with regulations, such that increased regulation has an imperceptible effect on employment. This seems related to the lump of labour fallacy, although I’ve yet to figure out how to clearly articulate the connection. ^

[3] In Filthy Lucre, Professor Joseph Heath talks about the failures of state-run companies to create “socially inclusive growth”. Basically, managers in companies care far more about their power within the company than the company being successful (the iron law of institutions). If you give them a single goal, you can align their incentives with yours and get good results. Give them two goals and they’ll focus on building up their own little fief within the company and explaining away any failures (from your perspective) as the necessary results of balancing their dual tasks (“yes, I posted no profits, I was trying to be very socially inclusive this quarter”).

Regulation, if set up so that it seriously affects profits (or if set up so that it has high personal consequences for managers) forces the manager to avoid acting in a ruinously anti-social way without leaving them with the sort of divided loyalties that can cause companies to become semi-feudal. 

[4] The end game would quite possibly involve supermarkets setting up legally separate (with significant board overlap) charitable organizations that would handle the distribution, and compelling these shells (who would carry almost no cash so as to be judgement proof) to sign contracts indemnifying the source supermarket against all lawsuits. This would require lots and lots of lawyer time and money, which means consumers would see higher food prices. ^

[5] Actually, higher food prices are pretty much inevitable, because there’s still a bunch of new logistics that have to be worked out as a result of this law. If the logistics turn out to be more expensive then the fines, supermarkets will continue to throw out food (while passing the costs of the fines on to the consumer). If the fines are more expensive, then food will be donated (but price of donating it will still inevitably be passed on to consumers). Any government program that makes food more expensive is incredibly regressive – it’s this realization that underlies the tax-free status of unprepared food in Canada.

Supplemental nutrition programs (AKA “food stamps”) have the benefit of subsidizing food for those who need it from the general tax pool, which can be based on progressive taxation and mainly paid for by the wealthy.

It’s really easy to see a bunch of food sitting around and realize it could be better used. It’s really hard (and expensive) to actually handle the transport and preparation of that food. ^

[6] Meaning that a government that really wanted to reduce regulation would have to make it rather hard to sue anyone. This seems like an unlikely use of political capital and also probably in conflict with many notions of fundamental justice.

Anyway, you should look at changes to liability the same way you look at regulation. Ultimately, they may amount to the same thing. ^

[7] This is dubious because it’s inherently anti-democratic (the government is taking actions designed to be opaque to the governed) and also incredibly baroque. I’m not talking about simple changes to liability that will be intuitively understood. I’m talking about provisos written in solid legalese that tweak liability in ways that I wouldn’t expect anyone without a law degree and expertise in liability law to understand. If a government was currently doing this, I would expect that I wouldn’t know it and wouldn’t understand it even if it was pointed out to me. ^

[8] Note, crucially, that it feels radical, but isn’t. Most people who read my blog already agree with me here, so I’m not actually risking any consequences by being all liberal/centrist/neo-liberal/whatever we’re calling people who don’t toe the party line this week. ^

Literature, Politics

Book Review: Shattered

[10 minute read]

Foreword: November 8th was one of the worst nights of my life, in a way that might have bled through – just a bit, mind you – into this review. My position will probably mellow as the memories of my fear and disappointment fade.

My latest non-fiction read was Shattered: Inside Hillary Clinton’s Doomed Campaign. In addition to making me consider a career in political consultancy, it gave me a welcome insight into some of the fascinating choices the Clinton campaign made during the election.

I really do believe this book was going to rip on the campaign no matter the outcome. Had Clinton won, the thesis would have been “the race was closer than it needed to be”, not “Clinton’s campaign was brilliant”.

Despite that, I should give the classic disclaimer: I could be wrong about the authors; it’s entirely possible that they’d have extolled the brilliance of Clinton had she won. It’s also true that Clinton almost won and if she had, she would have captured the presidency in an extremely cost-effective way.

But almost only counts in horseshoes and hand grenades and an election is neither. Clinton lost. The 11th hour letter from Comey to congress and Russian hacking may have tipped her over, but ultimately it was the decisions of her campaign that allowed Donald Trump to be within spitting distance of her at all.

Shattered lays a lot of blame for those bad decisions in the lap of Robby Mook, Clinton’s campaign manager. Throughout the book, he’s portrayed as dogmatically obsessed with data, refusing to do anything that doesn’t come up as optimal in his models. It was Mook who refused to do polling (because he thought his analytics provided almost the same information at a fraction of the cost), Mook who refused to condone any attempts at persuading undecided or weak Trump voters to back Clinton, Mook who consistently denied resources to swing state team leads, and Mook who responded to Bill Clinton’s worries about anti-establishment sentiment and white anger with “the data run counter to your anecdotes”.

We now have a bit more context in which to view Mook’s “data” and Bill’s “anecdotes”.

I’m a committed empiricist, but Mook’s “data driven” approach made me repeatedly wince. Anything that couldn’t be measured was discounted as unimportant. Anything that wasn’t optimal was forbidden. And any external validation of models – say via polls – was vetoed because Mook didn’t want to “waste” money validating models he was so confident in.

Mook treated the election as a simple optimization problem – he thought he knew how many votes or how much turnout was associated with every decision he could make, and he assumed that if he fed all this into computers, he’d get the definitive solution to the election.

The problem here is that elections remain unsolved. There doesn’t exist an equation that lets you win an election. There’s too many factors and too many unknowns and you aren’t acting in a vacuum. You have an opponent who is actively countering you. And it should go almost without saying that an optimal solution to an election is only possible if the solution can be kept secret. If your opponent knows your solution, they will find a way to counter it.

Given that elections are intractable as simple optimization problems, a smart campaign will rely on experienced humans to make major decisions. Certainly, these humans should be armed with the best algorithms, projections, data, and cost-benefit analyses that a campaign can supply. But to my (outsider) eyes, it seems absolutely unconscionable to cut out the human element and ignore all of the accumulated experience a campaign brain trust can bring to bear on an election. Clinton didn’t lack for a brain trust, but her brain trust certainly lacked for opportunities to make decisions.

Not all the blame can rest on Mook though. The campaign ultimately comes down to a candidate and quite frankly, there were myriad ways in which Clinton wasn’t that great of a candidate.

First: vision. She didn’t have one. Clinton felt at home in policy, so her campaign had a lot of it. She treated the election like a contest to create policy that would apply to the rational self-interest of a winning coalition of voters. Trump tried to create a story that would appeal to the self-conception of a winning coalition of voters.

I don’t think one is necessarily superior to the other, but I’ve noticed that charismatic and generally liked leaders (Trudeau, Macron, Obama if we count his relatively high approval ratings at the end of his presidency) manage to combine both. Clinton was the “establishment” candidate, the candidate that was supposed to be good at elections. She had every opportunity to learn to use both tools. But she only ever used one, depriving her of a critical weapon against her opponent. In this way, she was a lot like Romney.

(Can you imagine Clinton vs. Romney? That would have been high comedy right there.)

After vision comes baggage. Clinton had a whole mule train of it. Her emails, her speeches, her work for the Clinton foundation – there were plenty of time bombs there. I know the standard progressive talking point is that Clinton had baggage because a woman had to be in politics as long as she did before she would be allowed to run for the presidency. And if her baggage was back room deals with foreign despots or senate subcommittees (the two generally differ only in the lavishness of the receptions they throw, not their moral character) that explanation would be all well and good.

But Clinton used a private email server because she didn’t want the laws on communication disclosures apply to her. She gave paid speeches and hid the transcripts because she felt entitled to hundreds of thousands of dollars and (apparently) thought she could take the money and then remain impartial.

Both of these unforced errors showed poor judgement and entitlement. They weren’t banal expressions of the compromises people need to make to govern. They showed real contempt for the electorate, in that they sought to deny voters a chance to hold Clinton accountable for what she said, both as the nation’s top diplomat and as (perhaps only briefly) its most exorbitantly compensated public speaker.

As she was hiding things, I doubt Clinton explicitly thought “fuck the voters, I don’t care what they think”, it was instead probably “damned if I’m giving everyone more ammunition to get really angry about”. Unfortunately, the second isn’t benign in a democracy, where responsible government first and foremost requires politicians to be responsible to voters for all of their beliefs and actions, even the ones they’d rather keep out of the public eye. To allow any excuse at all to be used to escape from responsible government undermines the very idea of it.

As a personal note, I think it was stupid of Clinton to be so contemptuous because it made her long-term goals more difficult, but I also think her contempt was understandable in light of the fact that she’s waded through more bullshit in the service of her country than any five other politicians combined. Politicians are humans and make mistakes and it’s possible to understand and sympathize with the ways those mistakes come from human frailty while also condemning the near-term effects (lost elections) and long-term effects (decreased trust in democratic institutions) of bad decisions.

The final factor that Clinton deserves blame for is her terrible management style. When talking about management, Peter Thiel opined that only a sociopath would give two people the same job. If this is true – I’m inclined to trust him under the principle that it takes one to know one – Clinton is a sociopath. There was no clear chain of command for the campaign. At every turn, people could see their work undone by well-connected “Clinton World” insiders. The biggest miracle is that the members of the campaign managed to largely keep this on the down-low.

Clinton made much of Obama’s 2008 “drama free” campaign. She wanted her 2016 campaign to run the same way. But instead of adopting the management habits that Obama used to engender loyalty, she decided that the differences lay everywhere but in the candidates; if only she had better, more loyal people working for her, she’d have the drama free campaign she desired. And so, she cleaned house, started fresh, and demanded that there would be no drama. As far as the media was concerned, there wasn’t. But under the surface, things were brutal.

Mook hid information from pretty much everyone because his position felt precarious. No one told Abedin anything because they knew she’d tell it right to Clinton, especially if it wasn’t complementary. Everyone was scared that their colleagues would stab them in the back to prove their loyalty to Clinton. Employees who failed were stripped of almost all responsibilities, but never fired. In 2008, fired employees ‘took the axes they had to grind, sharpened them, and jammed them in Clinton’s back during media interviews’. Clinton learned lessons from that, but I’m not sure if they were the right ones.

I’m not sure how much of this was text and how much was subtext, but I emerged from Shattered feeling that the blame for losing the election can’t stop with the Clinton camp. There’s also Bernie Sanders. I don’t think anyone can blame him for talking about emails and speeches, but I’ve come to believe that the chip on his shoulder about the unfairness of the primary was way out of line; if anyone in the Democratic Party beat Clinton on a sense of entitlement, it was Sanders.

Politics is a team sport. You can’t accomplish anything alone, so you have to rely on other people. Clinton (whatever her flaws) was reliable. She fought and she bled and she suffered for the Democratic Party. Insofar as anyone has ever been owed a nomination, Clinton was owed this one.

Sanders hadn’t even fundraised for the party. And he expected them not to do whatever they could for Clinton? Why? He was an outsider trying to hijack their institution. His complaints would have been fair from a Democrat, but from an independent socialist?

On the Republican side, Trump had the same thing going on (and presumably would have been equally damaging to another nominee had he lost). In both cases, the party owed them nothing. It was childish of Bernie to go on like the party was supposed to be impartial.

(Also, in what meaningful ways vis a vis ability to hire staff and coordinate policy would you expect a Sanders White House to be different from the Trump White House? If you didn’t answer “none”, then you have some serious thinking to do.)

You’d think the effect of all of this would be for me to feel contempt for the Democratic Party in general and Clinton in particular. But aside from Sanders, I came out of it feeling really sorry for everyone involved.

I felt sorry for Debbie Wasserman Schultz. Sanders’ inflammatory rhetoric necessitated throwing her under the bus right before the convention. She didn’t take it gracefully, but then, how could she? She’d flown her whole family from Florida to Philadelphia to see her moment of triumph as Chairwoman of the DNC speaking at the Democratic National Convention and had it all taken away from her so that Sanders’ supporters wouldn’t riot (and apparently it was still a near thing). She spent the better part of the day negotiating her exit with the Clinton campaign’s COO, instead of appearing on the stage like she’d hoped to. The DNC ended up footing the bill for flying her family home.

I felt sorry for Mook. He had a hard job and less power and budget than were necessary to do it well. He trusted his models too much, but this is partially because he was really good with them. Mook’s math made it almost impossible for Sanders to win. Clinton had been terrible at delegate math in 2008. Mook redeemed that. To give just one example of his brilliance, he prioritized media spending in districts with an odd number of delegates, which meant that Clinton won an outside number of delegates from her wins and losses [1].

I felt sorry for the whole Clinton campaign. Things went so wrong, so often that they had a saying: “we don’t get to have nice things”. Media ignores four Clinton victories to focus on one of Sanders’? “We don’t get to have nice things”. Trump goes off the rails, but it gets overshadowed by the ancient story about emails? “We don’t get to have nice things.”

Several members of the campaign had their emails hacked (probably by the Russians). Instead of reporting on the Russian interference and Russian ties to the Trump campaign, the media talked about those emails over and over again in the last month of the election [2]. That must have been maddening for the candidate and her team.

Even despite that, I felt sorry for the press, who by and large didn’t want Trump to win, but were forced by a string of terrible incentives to consistently cover Clinton in an exceedingly damning way. If you want to see Moloch‘s hand at work, look no further than reporting on the 2016 election.

But most of all, I felt sorry for Clinton. Here was a woman who had spent her whole adult life in politics, largely motivated by a desire to help women and children (causes she’d been largely successful at). As Secretary of State, she flew 956,733 miles (equivalent to two round trips to the moon) and visited 112 countries. She lost two races for the presidency. And it must have been so crushing to have bled and fought and given so much, to think she’d finally succeeded, then to have it all taken away from her by Donald Trump.

Yet, she conceded anyway. She was crushed, but she ensured that America’s legacy of peaceful transfers of power would continue.

November 8th may have been one of the worst nights of my life. But I’m not self-absorbed enough to think my night was even remotely as bad as Clinton’s. Clinton survived the worst the world could do to her and is still breathing and still trying to figure out what to do next. If her campaign gave me little to admire, that makes up a good bit of the gap.

I really recommend Shattered for anyone who wants to see just how off the rails a political campaign can go when it’s buffeted by a combination of candidate ineptitude, unclear chains of command, and persistent attacks from a foreign adversary. It’s a bit repetitious at times, which was sometimes annoying and sometimes helpful (especially when I’d forgotten who was who), but otherwise grippingly and accessibly written. The fascinating subject matter more than makes up for any small burrs in the delivery.

Footnotes:

[1] In a district that has an odd number of delegates, winning by a single vote meant an extra delegate. In a district with 6 delegates, you’d get 3 delegates if you won between 50% and 67% of the votes. In a district with 7, you’d get 4 if you won by even a single vote, and five once you surpassed 71%. If a state has ten counties, four with seven delegates and six with six delegates, you can win the state by four delegates if you squeak to a win in the four districts with seven delegates and win at least 34% of the vote in each of the others. In practice, statewide delegates prevent such wonky scenarios except when the vote is really close, but this sort of math remains vital to winning a close race.  ^

[2] WikiLeaks released the hacked emails a few hundred a day for the last month of the election, starting right after the release of Trump’s “grab her by the pussy” video. This steady drip-drip-drip of bad press was very damaging for the Clinton campaign, especially because many people didn’t differentiate this from the other Clinton-email story.

At this point, I want to know whether WikiLeaks is an organ of the Russian state, or just manipulated by them. Personally, I gravitate towards the first. Chelsea Manning is a hero, but everyone else aligned with WikiLeaks seems to hate the West so much that they’ll happily climb into Putin’s pocket if it means they get to take a shot at it. ^

Economics, Model, Politics

Minimum Standards or Broad Access?

[5-minute read]

There are two sides to every story. Zoning and maximum occupancy regulations are exclusionary and drive up the price of housing. They are also necessary to prevent exploitative landlords from leaving their tenants in squalor. Catastrophic health insurance plans leave patients uncovered for many of the services they might need. They’re also often the only plans that are rational for younger people to buy.

Where you come down on either of these – or any similar cases where there’s a clear trade-off between maximum access and minimum standards – is probably heavily dependent on your situation. If you’re an American millennial without an employer-provided or parental health care plan, you’re probably quite incensed about the lack of catastrophic health care insurance. For healthy young adults, those plans were an excellent deal.

Similarly, workaholics in the Bay Area sometimes want to be able to stuff a house full to the bursting to save on rent. If you’re never going to be home, regulations around the number of square feet per bed feel incredibly onerous.

I like to point out that regulation is a trade-off. Unfortunately (or perhaps fortunately), it’s a trade-off made at the middle. People in the long probability tails – those who are far from the median when it comes to income or risk-tolerance often feel left out by any of the trade-offs made by the majority. This is an almost inevitable side-effect of trade-offs that I rarely see mentioned.

If you have health problems for which Obamacare didn’t mandate coverage, then you might find yourself wishing that the coverage requirements were even more expansive. If you find yourself really hating the illegal AirBnB you’re living in with twelve other programmers, you might wish that the city’s rental enforcement unit was a bit more on their game.

Most articles about people on the extremes leave out the context and leave out the satisfied middle. They don’t say “this is the best trade-off we could get, but it’s still imperfect and it still hurts people”. They say breathlessly “look at this one person hurt by a policy, the policy hurts people and is bad; the people who advocate for it are evil.”

It’s understandable to leave out the middle in the search of a better story. The problem arises when you leave out the middle and then claim all advocates are evil for failing to care about the fringes. Because most of the time, no one is being evil.

The young people skipping out on coverage because it’s not worth it for them aren’t shirking a duty. They’re making the best of their limited finances, ravaged by a tough entry-level job market and expensive university education. The NIMBYs who fight against any change to local building codes that might make housing more affordable are over-leveraged on their houses and might end up underwater if prices fall at all.

Even appeals to principles don’t do much good in situations like this. You can say “no one should live in squalor”, but that might run right up against “everyone should be able to afford a place to live”. It can be that there simply isn’t enough housing supply in desirable cities to comfortably accommodate everyone who wants to live there – and the only way to change that involves higher direct or indirect taxes (here an indirect tax might be something like requiring 15% of new rental stock to be “affordable”, which raises the price of other rental stock to compensate), taxes that will exclude yet another group of people.

When it comes to healthcare in America, you can say “young people shouldn’t be priced out of the market”, but this really does compete with “old people shouldn’t be priced out of the market” or “pre-existing conditions shouldn’t be grounds for coverage to be denied”.

The non-American way of doing healthcare comes with its own country specific trade-offs. In Germany, if you switch from the public plan to a private plan it is very hard to get back on the public plan. This prevents people from gaming the system – holding cheaper private insurance while they’re young, healthy and earning money, then trying to switch back during their retirement, but it also can leave people out in the cold with no insurance.

In Canada, each province has a single, government-run insurance provider that charges non-actuarial premiums (premiums based on how much you make, not how likely you are to use healthcare services). This guarantees universal coverage, but also results in some services (especially those without empirical backing, or where the cost-benefit is too low) remaining uncovered. Canada also prohibits mixing of public and private funds, making private healthcare much more expensive.

Canadians aren’t spared hard choices, we just have to make different trade-offs than Americans. Here we must pick (and did pick) between “the government shouldn’t decide who lives and who dies” and “care should be universal”. This choice was no less wrenching then any of those faced by Obamacare’s drafters.

Municipalities face similar challenges around housing policy. San Francisco is trying to retain the character of the city and protect existing residents with rent control and strict zoning regulations. The Region of Waterloo, where I live, has gone the other way. Despite a much lower population and much less density, it has almost as much construction as San Francisco (16 cranes for Waterloo vs. 22 for SF).

This comes at a cost. Waterloo mandated that houses converted into rental properties cannot hold more than three unrelated tenants per unit, thereby producing guaranteed renters for all the new construction (and alleviating concerns about students living in squalid conditions). The region hopes that affordability will come through densification, but this cuts down on the options student renters have (and can make it more expensive for them to rent).

Toronto is going all out building (it has about as many cranes on its skyline as Seattle, Los Angeles, New York, San Francisco, Boston, Chicago, and Phoenix combined), at the cost of displacing residents in rooming houses. There’s the hope that eventually supply will bring down Toronto’s soaring house costs, but it might be that more formal monthly arrangements are out of the reach of current rooming house residents (especially given that rent control rules have resulted in a 35-year drought on new purpose-built rental units).

In all of these cases, it’s possible to carve out a sacred principle and defend it. But you’re going to run into two problems with your advocacy. First, there’s going to be resistance from the middle of society, who have probably settled on the current trade-off because it’s the least offensive to them. Second, you’re going to find people on the other underserved extreme, convinced all the problems they have with the trade-off can be alleviated by the exact opposite of what you’re advocating.

Obamacare looked like it would be impossible to defend without Democrats controlling at least one lever of government. Republicans voted more than 50 times to repeal Obamacare. Now that they control everything, there is serious doubt that they’ll be able to change it at all. Republicans got drunk on the complaints of people on the long tails, the people worst served by Obamacare. They didn’t realize it really was the best compromise that could be obtained under the circumstances, or just how unpopular any attempt to change that compromise would be.

(To be entirely fair to Republicans, it seems like many Americans, including many of those who opposed Obamacare up until Obama left office, also just realized it was the best possible compromise.)

This is going to be another one of those posts where I don’t have a clear prescription for fixing anything (except perhaps axing rent control aka “the best way to destroy a city’s rental stock short of bombing it”). I don’t actually want to convince people – especially people left out of major compromises – not to advocate for something different. It’s only through broad input that we get workable compromises at all. Pluralistic society is built on many legitimate competing interests. People are motivated by different terminal values and different moral foundations.

Somehow, despite it all, we manage to mostly not kill each other. Maybe my prescription is simply that we should keep trying to find workable compromises and keep trying not to kill each other. Perhaps we could stand to put more effort into understanding why people ask for what they do. And we could try and be kind to each other. I feel comfortable recommending that.

Epistemic Status: Model

Biology, Model, Politics

To have lobbyists on your side

There is perennial debate in Canada about whether we should allow a “two-tiered” healthcare system. The debate is a bit confusing – by many measures we already have a two-tiered system, with private clinics and private insurance – but ultimately hinges on the ability of doctors to mix fees. Currently it is illegal for a doctor to charge anything on top of the provincially mandated fee structure. If the province is willing to pay $3,000 for a procedure, you cannot charge $5,000 and ask your patients (or their insurance) to make up the difference.

Supporters of a mixed system argue that it will alleviate wait times for everyone. Detractors argue that it will create a cumbersome, unfair system and paradoxically increase wait times. It’s enough to convince me that I don’t know what the fuck a two-tier healthcare system would have as its first order effects.

But I oppose it because I’m pretty sure I know what the second order effects would be.

It is a truth universally acknowledged that an industry, temporarily in possession of good fortune, must be in want of a really good lobbyist to make that possession permeant.

This is how we end up with incredibly detailed tax and regulatory law. There are a whole bunch of exceptions and special cases, vigourously lobbied for by special interest groups. These make us all a bit worse off, but each exception makes a certain person or small group of people very much better off. They care far more about preserving their loophole or unfair advantage than we do about getting rid of it, so each petty annoyance persists. Except, the annoyances aren’t so petty anymore when there are hundreds or thousands of them.

I dearly don’t want to add any more “petty” annoyances to healthcare.

As soon as we allow doctors to mix public funding with direct payments from patients or insurance, we’ll unleash a storm of lobbying. Everything from favourable tax treatment for clinics (we don’t charge HST on provincial care, it’s unfair to charge it on their added fees!) to tax breaks for insurance, to inflated fees for private clinics to handle some public cases will be on the table.

If the lobbyists do their job well, the private system will perch like a mosquito on the public system, sucking tax dollars from the public purse and using them to subsidize private care. This offends me on a visceral level, sure. But it’s also bad policy. Healthcare costs are already outpacing general inflation; we should not risk throwing fuel on that fire. We might end up with having the same sort of cost disease as America.

If we can keep healthcare relatively simple, we can keep it relatively cheap. One of the most pernicious things about cost disease is that it mainly affects things the government pays for. Because of this, the government has to collect more and more tax dollars just to provide the same level of service. As long as healthcare, education, and real estate are getting more expensive in real (inflation adjusted terms), we have to choose between raising taxes or making do with less service. When there are two systems, it’s clear that the users of the private system (and their lobbyists) would prefer decreased public services to increased taxes.

When there is only the public system, we force the lion’s share of those who plan to lobby for better care to lobby for better care in the public system [1]. This is true not just in healthcare; private schools are uncommon in most Canadian provinces. Want better school for your children? Try and improve the public schools.

There is always option to lobby for subsidies for private systems, but this has generally been unproductive when the public system is effective and entrenched. Two-tiered healthcare is back in the news because of a court case, not because any provincial government is committing political suicide by suggesting it. When it comes to schools, offering to subsidize private schools may have played a role in dooming John Tory’s bid for the premiership of Ontario in 2007.

I wonder if there isn’t some sort of critical mass thing that can happen. When the public system (be it healthcare, education, or anything else) is generally good, all but the wealthiest will use it. The few who use private systems won’t have the lobbying clout to bring about any specific advantages for their system, so there will be a stable equilibrium. Most people will use the public system and oppose changes to it, while the few who don’t won’t waste their time lobbying for changes (given the lack of any appetite for changes among the broader public).

If the public system gets substantially worse, those with the means to will leave the public system for the private. This would explain why generally liberal B.C. (with its decade of nasty labour disputes between the government and teachers) has much higher enrollment in private schools than in conservative and free-market-worshipping Alberta (which has poured decades of oil money largesse into its schools) [2].

Of course, the more people that use the private system, the more lobbying clout it gains. This model would predict that B.C. will begin to see substantial government concessions to private schools (although this could be confounded if the recent regime change proves durable). This model would also predict that if we open even a small crack in the unified public healthcare system, we’ll quickly see a private system emerge which will immediately lobby to be underwritten with public dollars.

From this point of view, one of the best things about public systems is that they force the best off to lobby for the worst off. Catch-all public systems yoke the interests of broad parts of society together, increasing access to important services.

If this model is true, then getting healthcare and education right are just the table stakes. It is vitally important that the provinces institute uniform rules and subsidies for embryo selection and future genetic engineering technologies. Because if they don’t, then in the words of Professor Jennifer Doudna, we will “transcribe our societies’ financial inequality into our genetic code”.

Both IVF and genetic screening are becoming easier and quicker. According to Gwern, it’s already likely a net positive to screen embryos for traits associated with higher later earnings (he lists seven currently screenable traits: IQ, height, BMI, and lack of diabetes, ADHD, bipolar disorder, and schizophrenia), with a net lifetime payoff estimated at $14,653 [3]. Unfortunately, this payoff is only available to parents who can afford the IVF and the screening.

Recently, Ontario began covering one round of IVF for couples unable to conceive. This specifically doesn’t include any genetic testing or pre-implantation diagnosis, which means that if we see a drop in heritable genetic diseases in the next generation, that drop will only be among the better off. Hell, even though Ontario already “covers” one round of IVF, they don’t cover any of the necessary fertility drugs, which means that IVF costs about $5,000 out of pocket. This is already outside the reach of many Ontarians.

Not a lot of people are running analyses like Gwern’s. Yet. We still have time to fix the coverage gap for IVF and put in place a publicly funded embryo selection program. If we wait too long here, we’ll be caught flat footed. The most effective way for rich people to get the reproductive services they will want wouldl be by lobbying for tax breaks and help for their private system, not for the improvement of a good-enough public system.

There’s a risk here of course. IVF isn’t particularly fun. It might be that the people with the longest time horizons (who are perhaps likely to be advantaged in other ways) will be the only ones who would use a public embryo selection system. This would have the effect of subsidizing embryo selection for whichever groups have the longest time horizons and the most ability to endure short-term discomfort for long term payoff.

But anything less than a public option on embryo selection makes entrenching social divides as genetic divides almost inevitable. We could ban all non-medical embryo selection, which, as Gwern points out, would just move it to China. Or Singapore [4]. Or even America. This would shrink the problem, in that fewer people would have access to embryo selection, but wouldn’t stop it altogether.

Embryo selection is just the beginning here too. Soon enough, we’ll see treatments for genetic diseases using CRISPR. Hot on the heels of that, we’ll see enhancements. Well, we ostensibly won’t in Canada, at least without some amendments to the Assisted Human Reproduction Act [5], which bans changes to the DNA of germline cells. I say “ostensibly” because it’s the height of naivety to assume that you can end demand simply by banning something, but then, that’s Canada for you.

The advent of CRISPR should usher in a sudden surge in genetically engineered humans. Parents will optimize for intelligence, height, and lower disease risk/load. It will be legal somewhere and therefore some Canadians will do it. If we have a legal, public system in Canada, then it will be available to anyone who wants it. If we don’t, then it will become very hard for the children of normal Canadians to compete with the children of our elites.

Throughout this post, I’ve assumed cost is no object. That’s probably a bad assumption. We’re talking about horrendously expensive voluntary medical procedures here. Gwern gives the cost of an IVF cycle with embryo selection at $22,000. There are 393,000 babies born in Canada every year. If this technology was both subsidized and adopted by 10% of all parents seeking to conceive, the total cost would be something like $864 million, or an increase in total healthcare spending of about 0.4%. Given that healthcare spending is allowed to grow by 3% per year, this would eat up more than 10% of the total yearly increase.

I’m not holding my breath for that sort of new spending on reproductive medicine. A more practical system would probably be a lottery, with enough spots for 1% of prospective parents. That has a more reasonable price tag of $86.4 million. While they’re at it, the government could start paying surrogates, egg donors, and sperm donors and institute a similar lottery there. I can dream about Canada having a functional fertility services industry, right?

A lottery isn’t my preferred solutions. Wealthy people who put their name in and aren’t drawn will still go elsewhere. But it could help with the lobbying problem. A lottery establishes a plausible path towards a broader system, which people would at least consider lobbying to expand. It won’t capture everyone. It might not even capture a majority. But if an expanded public system is the most palatable system politically, it might just win in the long run.

If you take just one thing from this post, I want it to be “it’s really important to have good public systems, so that lobbying effort is focused on improving those systems”. If you have room in your mind for another, it should be “having a public embryo selection and genetic engineering program in place is very important if we don’t want to social stratification to become much more permanent”.

Epistemic Status: Model

Footnotes

[1] In this post, I’m talking about industries where there is either a clear need to serve the public good, a market failure, or both. In these cases, “use markets to lower prices and increase services” is an unappealing alternative. ^

[2] This would also predict that America, with its cluster-fuck of a public school system would have generally higher rates of private schooling than neighbouring (and better performing on standardized tests) Canada. This is true – ten percent of American children are in private schools, compared to eight percent of Canadians. I think there is a smaller gap between the two then there otherwise might be, due to the extreme heterogeneity of American schooling. That is to say that Canadian public schools might be better than American public schools on average, but everything I’ve heard suggests that the standard deviation is much higher in America. Well off students going to good public schools may account for why America’s private school enrollment isn’t higher. ^

[3] This number will get higher and higher as we better understand the genetic determinants of IQ. ^

[4] Singapore has a history of hosting the biotech advances the west finds distasteful^

[5] This bill could perhaps be more truthfully be called the No Assisted Human Reproduction Act. In addition to banning germline genetic engineering, it also bans any paid surrogacy, egg donation, or sperm donation. This had the predictable effect of inconveniencing the wealthy not at all, while making it impossible for anyone else to find any surrogates, egg donors, or anonymous sperm donors. With a side-helping of encouraging surrogacy in countries where surrogates have the fewest legal protection (remember, my whole thesis here is that if you don’t give people a good pro-social option, they often optimize for maximum personal gain). ^

Economics, Politics

Whose Minimum Wage?

[Epistemic Status: I am not an economist, but…]

There’s something missing from the discussion about the $15/hour minimum wage in Ontario, something basically every news organization has failed to pick up on. I’d have missed it too, except that a chance connection to a recent blog post I’d read sent me down the right rabbit hole. I’ve climbed out on the back of a mound of government statistics and I really want to share what I’ve found.

I

Reading through the coverage of the proposed $15/hour minimum wage, I was reminded that the Ontario minimum wage is currently indexed to inflation. Before #FightFor15 really took off, indexing the minimum wage to inflation was the standard progressive minimum wage platform (as evidenced by Obama calling for it in 2013). Ontario is actually aiming for the best of both worlds; the new $15/hour minimum wage will be indexed to inflation. The hope is that it will continue to have the same purchasing power long into the future.

In Canada, inflation is also called the “consumer price index” or CPI. The CPI is based on a standard basket of goods (i.e. a list that includes such things as “children’s sneakers” and “French fries, curly”), which Statistics Canada assesses the price of every few months. These prices are averaged, weighted, and compared to the previous year’s prices to get a single number. This number is periodically reset to 100 (most recently in 2002). The CPI for 2016 is 128.4; in 2016, it cost $128.40 to buy a basket of goods that cost $100.00 in 2002.

The problem with the CPI is that it’s just an average; when you look at what goes into it category by category, it becomes clear that “inflation” isn’t really a single number.

Here’s the last few years of the CPI, with some of the categories broken out:

Table Source: The Canadian Consumer Price Index Reference Paper > Summary Tables; click the table to view the data in Google Sheets.

Every row in this table that is shaded green has decreased in price since 2002. Rows that are shaded blue have increased in price, but have increased slower than the rate of inflation. Economists would say that they’ve increased in price in nominal (unadjusted for inflation) terms, but they’ve decreased in price in real (adjusted for inflation) terms. Real prices are important, because they show how prices are changing relative to other goods on the market. As the real value of goods and services change, so too does the fraction of each paycheque that people spend on them.

The red, yellow, and orange rows represent categories that have increased in price faster than the general rate of inflation. These categories of goods and services are becoming more expensive in both real and nominal terms.

There’s no other way to look at the CPI that shows variation as large as that between categories. When you break it down by major city, the CPI for 2016 varies from 120.7 (Victoria, BC) to 135.6 (Calgary, AB). When you break it down by province, you see basically the same thing, with the CPI varying from 122.4 in BC to 135.2 in Alberta.

Looking at this chart, you can see that electronics (“Home Entertainment”) have become 45% cheaper in nominal (unadjusted for inflation) terms and a whopping 58% cheaper in real (adjusted for inflation) terms. Basically, electronics have never been less expensive.

On the other hand, you have education, which has become 60.8% more expensive in nominal terms and 25% more expensive in real terms. It costing more and more to get an education, in a way that can’t just be explained by “inflation”.

Three of the four categories with the biggest increases in prices rely on the labour of responsible people. The fourth is tobacco; prices increases there are probably driven by increased taxation and its position is a bit of a red herring. It’s potentially worrying that the categories where things are getting cheaper (e.g. electronics, clothes) are in the industries that are most amenable to automation. This might imply that tasks that cannot be automated are doomed to become increasingly expensive [1].

II

I’m certainly not the first person to make the observation that “inflation” isn’t a single number. Economists have presumably known this forever, related as it is to the important economics concept of “cost disease“. More recently, you can see this point made from two different directions in Scott Alexander’s “Considerations on Cost Disease” (which tries to get to the bottom of the price increases in healthcare and education) and Andrew Potter’s “The age of anti-consumerism has passed” (which looks at the societal changes wrought by many consumer goods becoming much cheaper). As far as I know, no one has yet tied this observation to the discussion surrounding the new Ontario minimum wage.

Like I said above, the new minimum wage will still be indexed to inflation; the “$15/hour” minimum wage won’t stay at $15/hour. If inflation follows current trends (this is a terrible assumption but it’s all I’ve got), it will rise by about 1.5% per year. In 2020 it will be (again, bad extrapolation alert) $15.25 and in 2021 it will be $15.50.

Extrapolating backwards, the current Ontario minimum wage ($11.40/hour) was equivalent to $8.88/hour in 2002 (when the CPI was last reset). If instead of tracking inflation generally, the minimum wage had tracked electronics, it would be $4.84 today. If it tracked education, it would be $14.28. Next year, the minimum wage will be $14/hour (it will take until 2019 for the $15/hour wage to be fully phased in), which will make 2018 the first time that students working minimum wage are getting paychecks that will have increased as much as the cost of education.

This won’t last of course. The divergence in prices shows no signs of decreasing. The CPI will continue to climb upwards at a steady rate (the target is 2%, last year it only rose 1.4%), buoyed up by large increases in education costs (2.8% last year) and held down by steady decreases in the price of electronics (-1.6% last year). Imagine that the $15/hour minimum wage allows a student to pay a year’s tuition with a summer’s worth of work. If current trends continue, in 15 years, it would only cover 75% of tuition. Fifteen years after that it would cover about 60%.

III

There’s a funny thing about these numbers. The stuff that’s getting more expensive more quickly is largely stuff that younger people have to pay for. If you’re 50, have more or less raised your kids, and own a house, then you’re golden even if you’re working a minimum wage job (although by this point, you probably aren’t). Assuming your wage has increased with inflation over your working lifetime, a lot of the things you’re looking to buy (travel, electronics, medical devices) will be getting cheaper relative to what you make. Healthcare service costs (e.g. the cost of seeing a doctor) might be increasing for you in theory, but in practice OHIP has you covered for all your doctor’s visits [2].

It’s younger people who are really shafted. First, they’re more likely to be earning minimum wage, with nearly 60% of minimum wage earners in Canada in the 15 to 24 age bracket. Second, the sorts of things that younger people need or aspire to (education, childcare, home ownership) are big ticket items that are increasing in cost above the rate of inflation. Like with the tuition example above, childcare and home ownership are going to slip out of the grasp of young workers even if you index their wage to inflation.

I happen to like the idea of a $15/hour minimum wage. There’s a lot of disagreement among economists as to whether they’ll be ill effects, but this meta-analysis (complete with funnel plot!) has me more or less convinced that the economy will do just fine [3]. Given that Ontario will still have an economy post wage-hike, I think increasing the minimum wage will be good for workers.

But a minimum wage increase leaves the larger problem of differing rates of inflation unsolved. Even with a minimum wage indexed to inflation, we’re going to have people waking up twenty-five years from now, realizing that their minimum wage job doesn’t pay for university/food/utilities/childcare/transit the same way their parents’ minimum wage job did. This will be a problem.

I’m game to kick the can down the road for a bit if it means we can make the lives of minimum wage workers better right now. But until we’ve solved this problem for good, it will keep coming back [4].

Footnotes:

[1] I’m not sure this is exactly a bad thing, per se. Money is a means of signalling that you’d like your preferences satisfied. It becoming more expensive to pay actual humans to do things could mean that actual humans have so many good options that they’re only going to waste their time satisfying your preferences if you really make it worth their while. Looked at this way, this means we’re steadily freeing ourselves from work.

On the other hand, this seems to apply mainly to responsible/competent/intelligent people and not everyone is responsible/competent/intelligent, so this could also imply that we have a looming crisis, with a huge number of people simply becoming economically unnecessary. This is really bad, because high-quality life should be possible for everyone, not just those who’ve lucked into economically valuable traits and under capitalism it is really hard to have a high-quality life if you aren’t economically valuable. ^

[2] For readers outside of Ontario, OHIP is the Ontario Health Insurance Plan. It covers all hospital and clinic care for all legal residents of Ontario, as well as dental and ophthalmological care for minors. OHIP is a non-actuarial insurance program; premiums come from provincial income tax and payroll tax revenues, as well as transfer payments of federal tax revenues. All Ontarians enrolled in OHIP (i.e. basically all of us) have a health card which allows us to access all covered services free of charge (beyond the taxes we’ve already paid) any time we want to. ^

[3] No effect on the unemployment rate does not mean no effect on the employment of individual people. A $15/hour minimum wage will probably tempt some people back into the labour force (I’m thinking here that this will mostly be women), while excluding others whose labour would not be valued that highly (unfortunately this will probably hit people with certain mental illnesses or disabilities the hardest). ^

[4] I think it’s especially pernicious how the difference in inflation rates between types of goods is kind of by default a source of inter-generational strife. First, it makes it more difficult for each succeeding generation to hit the same landmarks that defined adulthood and independence for the previous generation (e.g. home ownership, education, having children), with all the terrible think-pieces, conflict-ridden Thanksgiving dinners, and crushed dreams this implies. Second, it can pit the economic interests of generations against each other; healthcare for older people is subsidized by premiums from younger ones, while the increase in the cost of homes benefit existing players (who skew older) to the determinant of new market entrants (who skew younger). ^

All About Me, Politics

Political Views for May 2017

Like many others who are a bit, um, obsessive when it comes to politics, I’ve long been a fan of the Political Compass. Most people are familiar with the differences between left wing redistributive and right wing capitalist politics. The observation underlying the Political Compass is that these aren’t the only salient axes of political disagreement.

In addition to the standard left-right economic disagreement, the Political Compass looks at the disagreements between libertarians and authoritarians. This second axis deals with the amount of social restrictions (or, from the other point of view, mandated social cohesiveness) a government imposes on its citizens.

The Political Compass breaks political parties (and the political views of individuals) into four quadrants: the authoritarian left (think centralized communism, e.g. Mao, Stalin), the authoritarian right (think socially conservative capitalism, e.g. Reagan, Thatcher), the libertarian right (think socially permissive capitalism e.g. Macron, Gary Johnson), and the libertarian left (socially permissive welfare states or regional collectivism, e.g. Corbyn, Stein).

It is common to see authoritarian policies coupled with deregulated capitalism and socially liberal policies coupled with more redistributive economic systems, a trend which causes many people to associate the economic left with libertarian social attitudes and the economic right with authoritarian social attitudes. One of the goals of the Political Compass is to allow people to disentangle these common correlations.

The categorization provided by the Political Compass is perhaps most useful when discussing less common political views, like nationalism and (economic) libertarianism. Many nationalists are actually very economically centrist – the nationalist and racist British National Party is economically to the left of the UK Labour Party. This makes it inappropriate to simply label these groups as “far-right”. They aren’t far right in the economic sense. They are instead very authoritarian, a characteristic most people associate with the economic right.

Libertarians are also occasionally referred to as extremely right. In this case, it is correct to make a comparison with other economically right parties, but important to remember that libertarians lack the social conservativism that defines most right-wing parties. The Libertarian Party in the United States might agree with the GOP on economics, but they’re more likely even than Democrats to oppose the militarization of police forces, the expansion of national security powers, or the war on drugs.

I’ve been a fan of the Political Compass for a long time. Recently I wondered how my political views (as measured by a political compass score) have changed over the past few years. Unfortunately, I don’t have any good records of where exactly the political compass put me in the past. All of I have to go on are my somewhat fuzzy memories, which I think put me on the extreme left-libertarian side of things (I believe the score was approximately -7/-7, far into the left-libertarian quadrant).

One of my great joys this past year has been reading year-old journal entries; this is the first time I’ve kept a regular journal, so having a written record of what exactly I did a year ago is still novel to me. Because of my journal, I’ve gained a lot of insight into how the past year has (and hasn’t) changed me. When I retook the Political Compass test recently, I was sad that I didn’t know for sure how I’d done in the past. With this in mind, I’ve decided to publish my results (and just as importantly, why I think I got them) yearly.

 

The Results

 

I scored -3.25 on the economic axis (this puts me firmly left of centre) and -6.56 on the authority axis (putting me deep in the social libertarian camp). Here’s how I stack up against the Canadian political parties (as assessed in 2015 by the Political Compass).

These results put me to the left of all Canadian political parties economically and very, very far from all of the Canadian political parties on civil liberties. The new score is in the same quadrant as my previous score, but is somewhat less extreme (especially economically).

Much more interesting (to my imagined version of a future me at least) than the fact of my score is the political reasoning that caused me to receive it.

Economics

I’m not surprised that the Political Compass put me more or less in the centre-left, because centre-left policies feel very much like part of my identity. Drawing on Joseph Heath’s definition, I would say that the centre-left is united by a belief that the government should primarily focus its economic interventions on solving collective action problems and fixing market failures and that the government should do this in a redistributive manner.

Adjacent to the centre-left on one side is the centre-right, which agrees with the centre-left on the purpose of government, but doesn’t advocate for redistributive solutions. One of the best examples of how this difference actually plays out is in healthcare.

The centre-left solution to the well-known market failures of health insurance is to mandate a national insurance scheme with non-actuarial premiums (premiums based on income, rather than on risk of requiring health care). The centre-right uses something like Obamacare’s individual mandate, which requires everyone to hold health insurance or pay an extra tax. In both cases market failure is corrected through government policy and the average consumer is better off. The main difference is in who picks up most of the price tag.

In general, it’s my utilitarian ethics that make me favour the centre-left over the centre-right, not a belief that one approach (or the other) leads to better economic outcomes. The utilitarian argument for progressive taxation is simple. Money has decreasing marginal utility – the more you have of it, the less each individual dollar matters to you. When dealing with essential services, I think it is most ethical to pay for them in the way that causes the least dissatisfaction, which in practice means progressive taxation.

The centre-left isn’t entirely opposed to regressive taxation though. I support regressive taxation if that’s what it takes to price an externality (e.g. carbon taxes are regressive, but another cost structure wouldn’t correctly price the externality) or if the tax leads to better outcomes (e.g. cigarette taxes are regressive, but reduce the incidence of smoking).

My disagreements with the hard-left are rarely about morality. In general, I am liable to agree with your average communist, anarcho-communist, anarcho-syndicalist, socialist, etc. about the moral necessity of reducing poverty. I disagree with the hard-left merely about what is practical or expedient. I oppose setting prices (whether it’s for rent, pharmaceuticals, or fossil fuels) because the “cure” of setting prices is so often worse than the disease the price-setting is supposed to fix. I do genuinely believe that a rising tide can lift all boats and worry that hard-left policies would sabotage the engine of growth that has lifted over billion people out of absolute poverty in the past few decades.

The main role I see for the government is offering insurance. There are a variety of insurance products that suffer from adverse selection – the tendency for only the highest risk individuals or companies to purchase insurance against for certain risks. We see adverse selection in deposit insurance [1], health insurance, unemployment insurance, welfare (which is basically poverty insurance), and pensions (which are best modelled as insurance against outliving your savings). In these areas, the government can easily address a market failure by mandating that everyone must buy insurance against the risk. This lowers prices the average price considerably, making it feasable for the average person to protect against rare events in a way that isn’t possible in a market with adverse selection.

I also believe that the government should be involved in correcting for negative externalities. Without some central body forcing market participants to pay for negative externalities, we see them become distressingly common. If companies and individuals had always had to pay for the carbon they dumped into the atmosphere, we would expect global warming to be far less advanced by now. Where the externality doesn’t compete too strongly with human health and flourishing (e.g. small amounts of pollution, carbon dioxide, etc.), I think it makes sense to price it rather than ban it completely.

I absolutely loath systems like cap and trade, where a negative externality is dealt with through a complicated bureaucratic process that incentivizes people to game the system wherever possible. Just one concrete example of how this sort of thing can go wrong: a lot of the carbon credits in the European exchange came from the destruction of a potent greenhouse gas, HFC-23, at refrigerant plants in India and China. Destroying this gas became such a lucrative market that more refrigerant plants opened to get in on the action. The refrigerants were just an afterthought and were dumped on the market, making air-conditioning cheaper (which wasn’t good for global warming in its own right). When European regulators realized the scope of the mess they had caused, they banned the sale of HFC-23 carbon credits. Now former producers are threatening to release their stockpiles of HFC-23 (equivalent to two billion tonnes of CO2 emissions, 2.7 times the yearly CO2 emissions of all of Canada) unless Europe pays them off. [EDIT: An earlier version of this post said “27 times” instead of 2.7 times. I messed up the math.]

There are other reasons for my rejection of the European model of government meddling. European safety regulations do make it genuinely harder to bring new products to market in Europe (compared to the US and Canada). Here I’m happy to make a trade off that favours more innovation. Europe generously subsidizes post-secondary education. I’d prefer if we instead made post-secondary education much less mandatory.

I care about dynamism, not out of a belief in trickle-down economics, but because I’ve become (almost against my will) something of a techno-utopian. While I don’t want to diminish the role that social change plays in building a more ethical society (for example, there seems to be no technological solution to racism), I’m increasingly convinced that we won’t be able to solve poverty and disease except with radically improved technology. It’s uncontroversial to claim better technology is necessary to eradicate disease, but I think it is a bit more of an ask to get people to believe that technology offers a solution to poverty, so let me explain.

Capitalism offers an excellent solution to the problem of resource distribution: give more to people who create value for others, encouraging positive-sum interactions. But the moral case for capitalism breaks down in the presence of wealth. When people can hoard vast amounts of value or pass it on to their children (regardless of what value those children create for anyone), the argument that this method of resource allocation is ethical falls apart.

I don’t know if we can convince many people to make do with less. I know that revolutions almost always seem to go poorly and that socialism has an atrocious record of allocating even the simplest resources to people who need them – for all that there are ways global capitalism fails developing countries, global communism seemed to do no better. Given a choice between socialism and capitalism, I’ll take capitalism. It at least has the good graces to only lead to famines when they’re caused by external conditions, rather than as a matter of course [pdf link].

Given my skepticism about radical redistribution, I’ve become convinced that the only way to eradicate poverty is to create such a plenty that everyone can be guaranteed a decent living. This is why I worry about the slow and steady European approach to growth. Extreme poverty is the greatest stain on our collective morality I can see, an unconscionable and despicable ender of lives. We can’t afford to wait a single extra day to destroy it.

(In the absence of the eschaton, there is a community of people dedicated to doing what they can to reduce the impact of poverty. I encourage everyone to check out the moral case for Giving What We Can, an initiative that encourages those who can afford it to donate 10% of their income to the charities that are able to use that money to most effectively save lives).

Authority

I view the government as having little business legislating morality. I’m happy to accept economic legislation. I’m happy for the government to make activities associated with poor outcomes (e.g. alcohol consumption) more expensive via taxes. I’m even happy to pay taxes, both of the regular and “vice” varieties. I accept that taxes are a coercive use of government violence and I don’t care. I’m not a deontologist. I view violence as likely to be wrong, but I’m actually fine with the threat of violence being used to force society wide cooperation on the sorts of things that we’d mostly agree to from behind a Rawlsian veil of ignorance.

On the other hand, when we’re dealing with private, consensual behaviour (between people able to meaningfully consent), I can’t see any good that can come out of enforcing particular people’s versions of morality. I oppose most all blanket restrictions on the right of people to choose what to do with their bodies and oppose most especially restrictions on the ability of women to control their fertility. I oppose tighter restrictions on euthanasia. I oppose prohibitory drug laws (both out of a philosophical belief that people should be free to make their own decisions about their health, even bad ones, and out of a belief that prohibition increases crime and decreases access to treatment).

I even break with many other skeptics with my opposition to banning homeopathy or other widely accepted but empirically useless forms of placebo treatment. A friend has convinced me we’d likely see worse outcomes if we forced alternative medicines and their practitioners underground.

I think Canada’s free speech protections are inadequate and that we’re at risk of becoming a forum for libel shopping. I’ve become increasingly convinced that the only proper response to most speech is more speech, not violence (even state sanctioned violence, like arrest and imprisonment). I make an exception here only for credible threats (in the context of internet discussion, a credible threat is something like: “I will be waiting at ______, the place you work tomorrow and I’ll have a bullet with your name on it”, not “fuck you, I’m going to kill you”).

I think violent or hateful speech clearly marks someone as an unpleasant person to be around. Freedom of speech is inextricably tied to freedom of association; free speech rights can’t protect you from the social or reputational consequences of your speech. If you stop being invited to anything because of odious things you’ve said, you deserve it. No one has to offer you a platform for your speech. I see no responsibility to invite controversial speakers to events; doing so doesn’t “stand up for free speech”. Standing up for free speech merely requires we oppose violent responses to speech (including credible threats in response to speech) made by any actors, even the state.

Free speech is just one example of a right that is constantly under threat. Fair trials, access to housing without discrimination, and equal treatment under the law are arguably more important. I do support a central government enshrining rights and protecting people’s ability to enjoy these rights. The best quick heuristic I have for telling the difference between rights and legislated morality is that rights enumerate activities you should always be allowed to do, while legislated morality enumerates activities you will never be allowed to do.

I wish it was easier to tell when one person’s right becomes another person’s restriction. For me this feels intuitively simple, but maddeningly difficult to systematize. If you have a system, please share it with me. It will probably end up in my post next year.

My social libertarian streak comes from my belief in precedent utilitarianism. Precedent utilitarianism is basically a hybrid of rule and act utilitarianism. It acknowledges that many actions, especially those by taken by our government and leaders, set precedents that other people follow. Precedents you set are always transformed to the axioms of the people who witness them being set. If Prime Minister Trudeau were to remove a Supreme Court justice for being too conservative, the precedent he would be setting for future for conservative prime ministers wouldn’t be “it is okay to remove judges that are dangerously behind the times” (even if that was Trudeau’s explicit intention), it would be “it is okay to remove judges I disagree with”. I feel like the only way to avoid a horrible yo-yo of morality laws is to leave private morality as a private matter and respect that people have a variety of different beliefs and values.

I think that precedent utilitarianism looks favourable on human rights laws and I think Canada has an unusually good set of protected characteristics. I disagree with libertarians who find the human rights codes an unacceptable check on freedoms. I’m glad we have a set of protected characteristics that both protect vulnerable people from direct harm and protect society from tit-for-tat retaliation as various in-groups are threatened.

I do sometimes find my support for protected characteristics hard to square with my firm belief that the government shouldn’t enforce morality. I think that the precedent utilitarian argument for a government that doesn’t legislate morality but does vigourously enforce rights, including protection from discrimination, is probably best summed up by Scott Alexander in the essay In Favour of Niceness, Community, and Civilization. When the government stands up for rights, it is reminding people that they will be much better off if they avoid negative sum exchanges (like reciprocal discrimination) and instead focus on positive sum exchanges.

Delta

The change since I last took this test (2-3 years ago) is about +4 on the economic axis and +0.5 on the libertarian axis.

I think the change on the authoritarian/libertarian axis is driven by my increasing patriotism. All government is composed of trade-offs. I am such a product of the Canadian trade-offs that I could not countenance living long term (or raising children) in a country other than Canada.

Changes on the economic axis were driven by my changing opinions about socialism. A few years ago my thoughts were: “maybe this could work”. My current thoughts are more: “socialism: the correct answer for the post-scarcity future, where its propensity for famines will no longer be a problem”. A combination of In Due Course and Slate Star Codex convinced me that capitalism is our best bet for getting to that post-scarcity future.

Predictions

Looking directly at my current positions themselves, I don’t expect them to change much over the next year. Given that I recall feeling that way last time I took this test, I’m inherently skeptical of that intuition.

Taking just the past into account, I should expect my positions to change regardless of how I feel about them. Taking everything into account, here’s where I think I will be at the end of May 2018:

  1. I will have an economic score > -2.25: 50%
  2. I will have an economic score > -4.25: 80%
  3. My top level economic identity will still be “capitalist”: 80%
  4. I will have an authority score > -7.56: 70%
  5. I will have an authority score < -5.56: 90%
  6. My top level social identity will still be “libertarian”: 90%

Footnotes:

[1] Bank runs used to be a fact of life. Whenever anyone got hint of any trouble at a bank, they’d rush to it and pull all of their money out, to protect against losing it in the event the bank failed. Unfortunately, this often caused banks to fail, because everyone had an incentive to try and pull all their money out at the slightest hint of insecurity. If they didn’t, they’d risk losing it when other people ran to the bank to do the same. Old banks are imposing to give people a sense that their money is safe there. Ever wondered why bank runs just stopped happening in developed countries? Turns out it’s because the government started to insure deposits. Once you know that your money will be safe no matter what, you no longer have any incentive to withdraw it at the first sign of trouble. ^

Model, Politics, Quick Fix

Some thoughts on Canadian “family values” conservatives

I’d like to expand on one of the points I raised yesterday about Canadian social conservatives and the sorts of things they can expect from Andrew Scheer, because I think the Canadian approach to “family values” conservatism is desperately under-theorized.

Yesterday I claimed that the main way that Harper pushed so-called family values was through economic incentives to have a 1950s-style nuclear family. Both income splitting and the Universal Child Care Benefit were designed to make it more feasible to have a single income family.

This is a radically different tack than taken by American family values candidates, who primarily exercise their beliefs by banning sex education, fighting against gay marriage and adoption, and restricting access to abortion [1]. The American approach attempts to close off all alternatives but a heterosexual, monogamous, child-producing marriage. The Canadian approach is to bribe people into this (and to drop the heterosexual part).

The cynical explanation for the policies pushed by Harper is that they represent a tax break for the favoured constituencies of the Conservatives. But this strikes me both as deeply uncharitable and uncorroborated by statements made by members of the Conservative Party.

At the Conservative Leadership Convention, the party devoted as much time to thanking J.P. Veitch (Rona Ambrose’s fiancé) as they did to thanking Rona Ambrose. They thanked J.P. for putting Rona’s career aspirations above his own and for his tireless support of her in her role as interim party leader.

Can you imagine the Liberals taking the time to thank Sophie Grégoire Trudeau for her work supporting her husband? The liberal individualistic notion of liberation tends to gloss over and thereby systemically devalue the work that supportive spouses do. To liberals (even many socialist liberals), work is where people go for self-actualization. Self-actualization can’t exist in the home.

There are sound reasons for this emphasis. While the Conservative tax breaks are gender neutral (and apply even to gay marriages), no one believes that the majority of stay at home spouses will be men. There certainly won’t be no men staying home – I consider myself generally more likely to stay home with kids than any partner I’m plausibly going to have – but they’ll be a minority.

As a free choice, the home is a reasonable option for many people. But as a prescribed social role, being stay-at-home mothers made many women incredibly miserable. Emancipation through work as the default seems to me as a not-unreasonable reaction to this trauma. But conservatives have ideological reasons to oppose the social structures that make dual-income families possible.

In Rona Ambrose’s farewell speech, she clearly articulated the core disagreement between Canadian liberals and conservatives. “Liberals believe in government”, she said, “but we believe in people”. I’d rephrase this slightly – liberals believe in institutions, while conservatives believe in individuals.

Viewed through this lens, it makes sense that Conservatives wish to return child-rearing to the sphere of the domestic. Key policies planks of Canadian leftists – like all day Kindergarten and $15 a day daycare – instead seek to further remove child-rearing from individual parents and move it into a formalized institutional system.

Both of these approaches have their strengths and weaknesses. It is beginning to look like starting school early may lead to inattention and hyperactivity. If daycare is like school, then proposals like $15 a day daycare have the potential to be incredibly damaging. With income splitting and child tax benefits, we could be encouraging parents to delay formal schooling, thereby avoiding the negative consequences associated with an early school start.

On the other hand, it’s uncommon, even with income splitting and child tax benefits, for one spouse to have an income that could plausibly support their entire family. $15 dollar a day daycare would be a boon to low-income families that are caught in the dual-income trap.

There’s no prescription here. I think some parts of the family values platform threaten to turn back important progress. I think other parts hint at a potential for better outcomes than we currently have. I will point out that it seems almost as if Canadian conservatives listened to liberals who pointed out that if they really cared about reducing abortion rates, they’d cover prenatal healthcare, maternity leave, and make it less expensive to raise a child.

I’d much rather have a political conversation about the amount of tax benefits we should give to people with children than I would about women’s right to choose, so I can’t help but be thankful that the Canadian Overton window is what it is. With Andrew Scheer elected as conservative leader and signalling no intention to wade into the debate over abortion, I think we really can call the Overton Window settled in its current configuration [2]. This leaves all Canadians with a question. How much do you think the government should subsidize nuclear families?

I’m not yet sure of the answer myself.

Footnotes

[1] I want to be clear that I’m talking about execution here, not beliefs. Canadian social conservatives believe many of the same things as American so-cons and vote remarkably similarly to their American counterparts when they’re in opposition. The key difference is how they behave when they’re in power. Nine years of Conservative governments (four of which saw the Conservatives as the majority party) brought no change in the legal status of gay rights or abortion in Canada. That would be unprecedented in America.  ^

[2] On Facebook, I said: “If the trend is that Liberals/NDP push [our] social policies of choice and the Cons don’t roll them back, then we still win in the long run.” I stand by that statement. I would prefer that Conservatives were as enthusiastic about pushing for positive social change as I am. Given that I don’t live in that world, I’ll settle for one where conservative politicians don’t to push back.  ^

Politics

Five Things I Learned from the Conservative Leadership Race (that all Canadians should take note of)

Yesterday generic conservative Andrew Scheer was crowned leader of the Conservative Party of Canada in a nail-biting 14 ballot process. His margin of victory over the libertarian Maxime Bernier was less than 2%.

Reuters managed to get pretty much everything about this story subtly wrong, from the number of votes political observers expected – by the final week, most of us remembered that there were so many low support candidates that it would probably go to the very final ballot – to Scheer’s position in the party. Reuters has Scheer pegged as a social conservative, whereas people watching the race were much more likely to describe him as the compromise candidate.

The Conservative Leadership race was one of the high points of my engagement in Canadian politics. I haven’t been this engaged since the 2011 election (I was out of country for the 2015 election which limited my involvement to mailing in a ballot). Focusing so closely on this leadership race, I’ve was surprised (although I probably shouldn’t have been) by just how much politics goes on under the surface and just how little actually filters up through the media.

Sometimes the things that don’t filter up are silly. The media never really mentioned that Steven Blaney sent out an email with the subject line: “Should Allah kill all the Jews?”. This is understandable; Blaney never was a serious contender for the leadership and his ridiculous emails would have been a distraction. Many in the media also underestimated the number of votes for Erin O’Toole that would transfer to Andrew Scheer once O’Toole was eliminated. This was a harder mistake to make when you were getting emails from every candidate; from the emails that O’Toole and Scheer were sending me, it was obvious that their internal polling had picked up on this correlation. Paying attention to things like this are what let me correctly predict Andrew Scheer would win.

With this in mind, I’d like to report some the things I learned watching this race and this convention. These are things that may or may not be reported, but I think they are deeply important for understanding Canadian politics going forward.

1. No one knows what to do with ranked ballots

In my last post on the leadership, I guessed that the race would last a few ballots. This was a very silly prediction to make, because it was obvious who the first six candidates to be eliminated would be. It was also obvious that together they had less than 5% of the total support. For the convention to be over after that few ballots, the front runner would have to have more than 45% support. Polling clearly showed Bernier (the front-runner for most of the race) at only 30%, so there was no way that the thing could have been decided that quickly.

I wasn’t the only one who made this error. The Conservative Party forecasted we’d have final results around 6:00PM. Final results weren’t available until around 8:15PM. Some of this was attributable to a forty-five-minute delay caused by technical issues, but most of this was because the thing went to the very last ballot.

The intuition that the leadership race should be decided in a few rounds comes from party conventions that use delegates. The last two contested Canadian conventions with delegates both went to four ballots. But a mail in instant run-off system is very different from delegate convention. There is little opportunity to gather momentum and no opportunity for politicians to blink. In a delegate convention, Scheer could have panicked in the 11th round and conceded to Bernier in exchange for some cabinet position. The mail in ranked ballots gave him no such option.

Ranked ballots differ even more significantly from the American system of sequential primary elections. Primaries suffer from the standard problem of first past the post systems; you often only need a plurality to win. This benefits the front runner, especially when “the establishment” can’t coalesce around a single candidate. Ranked ballots give the establishment no choice but to eventually coalesce. If the Republican primary had been decided by mail-in ranked ballots, it seems very likely that Jeb Bush, Marco Rubio, or Ted Cruz would have won instead of Trump.

In addition to talking heads used to other systems, ranked ballots also present a challenge to pollsters, who are used to asking people merely for the name of the candidate they most support. Even the polls that asked for multiple preferences rarely asked for preferences beyond third place. This can fall apart at the end of the convention when votes may have been transferred four or five times (e.g. from Raitt, to Chong, to O’Toole, to Scheer) or have skipped over some of the preferences (e.g. votes from Chong supporters who put Raitt second, O’Toole third, and Scheer fourth and saw their votes ultimately transferred to Scheer).

Kevin O’Leary claimed in the live convention coverage that he and Bernier had polled all the way down to the 10th choice (at ruinous expense). If this is true (and with Kevin, who knows), it’s likely that some of the other top fundraisers did this as well. That’s why I highlighted candidate’s emails as a vital tool for understanding the race. From their exhortations, I could often get an idea of the information they were going on.

If public polling can’t adapt to ranked ballots, then it will probably become necessary (for anyone who wants to correctly predict an election outcome) to spend more time reading the messages campaigns send to supporters to try and indirectly get high quality proprietary polling numbers. Unfortunately, reading emails and trying to figure out the information that went into them is much more of a black art than polling and it’s much harder to justify the information that comes out of it.

2. Canadian Conservatives aren’t Republicans

In Rona Ambrose’s farewell speech, she presented a narrative of Conservatives as defenders of the rights of women and girls. She pointed out that that first woman to serve in a cabinet was a member of the Conservative Party. She pointed out that the first (and only) female prime minister of Canada was a Conservative. She also talked about her work at the UN pushing for an International Day of the Girl and her work pressuring the government to admit Yazidi refugees fleeing religious persecution and sexual slavery at the hands of ISIL. When she mentioned that she’d forced the government to admit more refugees, she was given a rousing round of applause.

The stigma that sexual assault survivors face and the disgustingly high rate of sexual assault cases that are labelled unfounded were the focus of one section of one of the campaign debates. Luckily, there was basically no debate among the candidates on this issue. All of them pledged to improve police education and work to reduce the “unfounded rate”.

If you follow American politics, you might be surprised by things like this from a conservative party.

Canada and America are geographically and culturally proximate. It’s easy to pretend that the differences between the two countries are largely cosmetic. But when you do, you’re liable to get bitten in the ass by the iceberg of hidden differences.

Canadian conservatism is different than American conservatism. In the Conservative Party of Canada, you’ll get more votes calling for a carbon tax than you will if you call for increased screening of immigrants. Can you imagine that being true in America?

I don’t mean to claim that xenophobia and racism don’t exist in the Conservative Party of Canada. Kellie Leitch did get 9% of the vote. But for now, the xenophobic wing of the party is perhaps the least powerful part of the Canadian conservative coalition.

3. Social Conservatism is (kind of) alive and well

Unlike the xenophobic candidates, who did much worse than anyone feared, the social conservative candidates ran significantly ahead of expectations. Pierre Lemieux and Brad Trost had combined polling numbers of 9.5% right before the election. In the first round of voting, many of us were surprised to see that their actual support was a combined 15.7%. When Trost was eliminated in the 11th ballot, he had 14.3% of the remaining support (evidence that almost all of Lemieux’s voters went to him).

A year ago, the Conservatives voted to remove any policy on the definition of marriage from their platform. Social conservatives were outraged but impotent. Their higher than expected support for Trost and Lemieux was their way of reminding the party that they exist.

Unfortunately for those members, social conservative policies are a delicate topic in Canadian politics. The Harper doctrine was to avoid the risky issues (like gay marriage and abortion) that risked undermining his chances of winning elections, while cautiously advancing policies that supported two-parent nuclear families (even the gay ones).

At the start of this leadership race, when Andrew Scheer was asked about his views on gay marriage, his answer was all pragmatism. While he is personally against gay marriage, he said “I don’t think you’d find any legitimate Conservative leadership aspirant who would revisit that issue”. His position on abortion is similar.

In his victory speech, Scheer obliquely referenced these views. “There’s… some issues that will divide our caucus and divide our movement and that [don’t] enjoy widespread support in the general public, but there are other areas… that the entire conservative movement can get behind.”

Taken together, all of this signals that the Harper doctrine is alive and well. Social conservatives won’t be getting action on abortion or gay marriage but they can expect Scheer to do his best to strengthen what they consider a traditional family structure. If Scheer is prime minister, expect to see policies like income splitting that blatantly favour married couples, especially couples where one parents stays home with children.

Bernier wasn’t willing to provide even this, which is probably why social conservatives broke for Scheer in the end, giving him the victory. Social conservatives ultimately didn’t get everything they wanted, but it seems like they managed to get the best of their realistic options.

4. Caucus Support

Had Bernier won, I think his leadership would have looked a lot like Jeremy Corbyn’s leadership of the UK Labour Party. Both men have excessive amounts of ideological purity and a limited amount of support among the MPs of their party. This has made trying to control his party difficult for Corbyn and I see no reason why Bernier would have had an easier time of it.

Andrew Scheer is much more in the mold of Teresa May or Steven Harper. He has very strong support in the caucus; he was second only to Erin O’Toole in endorsements and is so similar to O’Toole on most issues that he should have no problem picking up O’Toole’s support.

The line “there’s been a rising tide of anti-establishment sentiment in recent elections” has become cliché. Everyone has heard a dozen times about how Brexit, Trump, and the French election prove that people are fed up with the political establishment.

Well, just as Canada was supposedly immune to the “rising tide of illiberalism”, we appear to be immune (for now) to the “rising tide of anti-establishment sentiment”. Andrew Scheer was very much of the political establishment. None of his policies represent a break with the policies of the Harper years.

This bodes well for Scheer’s ability to actually get shit done (and therefore poorly for the Liberals). Scheer understands how parliament works. He understands how the conservative caucus thinks. He’s young and energetic. He will hit the ground running and won’t complain to the media in six months that the job was much harder than he thought it would be.

Some of the above would have been true for Leitch or Bernier. None of it would have been true for O’Leary. Only time will tell if is better to be effective at managing a political party than it is to be “not a politician” or to have a clear ideology.

5. The Conservative Party of Canada is still Harper’s party

Steven Harper has been almost entirely absent from Canadian politics since his election defeat in 2015. It’s a startling change for the man who was the Conservative Party of Canada. For all of his flaws (and he has many), Harper was an ambitious and driven leader who decided on a goal and then moved heaven and earth to make it happen. He engineered the merger between the Progressive Conservative Party of Canada and the Reform Party, won control of the resulting party, and then led it into five elections. In four of those elections, the party came out better than it went in.

In the Harper years, even cabinet seemed to be a mere extension of the Prime Minister’s will. The discipline with which cabinet ministers stuck to their script was occasionally farcical, like when Paul Calandra answered a question about Iraq with prepared remarks about an NDP fundraiser’s statements about Israel.

Maxime Bernier would have represented a break with the Harper legacy. He’s a committed libertarian with many policy proposals that differ from the sort of thing Harper would endorse, chief among them his pledge to scrap the Canada Health Act and end transfer payments to the provinces for healthcare.

Ideologically, Harper probably agrees with scrapping the CHA. But Harper was ever the ruthless pragmatist, always subordinating his personal ideology to the demands of getting elected. He wouldn’t have touched the widely popular CHA with a ten-foot poll.

Based on Scheer’s responses to questions about abortion and gay marriage, I can’t see him governing substantially differently than Harper. The Conservative party will continue Harper’s legacy of slowly and incrementally dismantling the Canadian welfare state, while avoiding nearly all contentious topics. With Scheer, Harper is effectively controlling the party from beyond the political grave.

I think I narrowly prefer Scheer to Bernier. Bernier seems unelectable, but if he were to win it would be an absolute disaster for the Canadians and provinces who rely on the Federal government for assistance. Scheer is probably more electable, but much more incrementalist. He represents a creeping threat to the welfare state, rather than an immediately existential threat.

I joined the Conservative Party to influence their leadership race away from high variance candidates, even those candidates who I thought would be safely defeated in the general election. Last year’s election in America taught me I couldn’t put my faith in certain candidates being “doomed outside the primaries”.

I’d have preferred Chong. But I think I can live with Harper era policies repackaged with a smile.

Literature, Politics

Book Review: Strangers in Their Own Land

I just finished Professor Arlie Hochschild’s latest book, “Strangers in Their Own Land: Anger and Mourning on the American Right”, a book some people are trumpeting as the one that explains Trump.

That wasn’t exactly how I read the book. I think Trump’s win is well explained by some combination of the “fundamentals” and the Comey Letter just before the election. I’m also wary of falling into the trap of drawing conclusions about America because Trump won. The result of the election could have been changed by dozens of random events. I’m following Scott Alexander’s advice and not basing my narratives off of which potential events happened to actually happen.

Besides, Trump is barely even in this book. He only appears in any substantive way in the last chapter and Prof. Hochschild doesn’t devote much ink to him. If you’re using this book to explain Trump, you’re going to have to do a lot of the work yourself.

At its core, Strangers in Their Own Land is an ethnography about a specific group of people with all of the advantages and perils that entails. We get to learn a lot about its subjects, but we have to be careful whenever applying any of its conclusions beyond the small group of people actually profiled.

Like any ethnography, Strangers in Their Own Land lives or dies by the interest the author can evoke in her subjects. Here, the subjects are a small group of Louisiana Tea Party members. Prof. Hochschild certainly managed to make me interested in them by using them as a lens through which to peer at the “Great Paradox” of American Politics: why do many of those who could most benefit from the government hate it so much?

I’ve forayed into discussions of the Great Paradox before. Like Prof. Hochschild, I’m skeptical of the purported “two rungs up” explanation of the paradox. It goes like this: yes, lower income counties tend to vote against government programs, but it is not actually the people on those programs (or their loved ones) voting against them. People relying on government programs rarely actually vote. Actual voters in Republican-leaning counties are better off and are voting solely for lower taxes.

By focusing Strangers in Their Own Land on pollution, Prof. Hochschild was able to sidestep this explanation. Pollution doesn’t care if you’re rich or poor – one of the more heartbreaking stories in the book is about a nine-year-old who died from a rare neuroblastoma, which everyone suspects was caused by pollution. Despite this, his well-off parents and well-off family friends continued to oppose the EPA.

A focus on pollution made Louisiana the obvious setting for this book. It’s one of the most polluted states in America and has some of the weakest and most ineffectually enforced environmental laws. Louisiana also has a very high rate of welfare use, which let Prof. Hochschild compare the two rungs up theory with alternatives (as she could count on finding people who were or knew someone on welfare).

In Louisiana, Prof. Hochschild found no one who was happy about pollution. The Tea Party voters she interviewed loved the outdoors. Many of them grew up hunting and fishing and almost all of them continued to cherish those outdoor pastimes in adulthood. It hurt them deeply to have no game to hunt or to be unable to eat the fish they caught. Yet still they opposed more regulations on pollution.

Reasons for this varied. Some believed that regulating pollution would hurt the oil and gas industry and lead to unemployment. They were saddened by the effects of pollutions on the environment, but they refused to put the environment ahead of other people.

Others believed that the government was (indirectly) responsible for pollution. They saw the government as protecting the worst polluters while coming down hard on any “little guy” who leaked even a tiny amount of gas from his boat. They believed that any additional regulations would be applied to them and their friends, not to the big companies responsible for the real pollution. They figured that the free market would disincentivize pollution well enough if the government could just leave everything alone and let it work.

Yet others were religious and figured that the world would not be around for much longer. They saw God’s commandment in Genesis 1:28 (“fill the earth, and subdue it”) as justification for any pollution in the interim. Even justifying pollution wasn’t very important for the faithful though; they cared far more about a rapture they saw as close to hand than they did about any worldly concerns.

No one that Prof. Hochschild talked to said: “yes, the government could fix this, but we don’t want them to”. Instead, she got responses like “the EPA would just use whatever power we gave it to take away our freedoms”, or “the government can’t help, it’s in the pockets of the polluters and hates the little guys like us”; none of the Tea Party voters trusted the government.

Prof. Hochschild was used to people distrusting certain government figures or departments, while still believing that good government was possible, necessary, and worth fight for. Here Prof. Hochschild saw people so used to incompetent, hostile, or distant government that they had given up hope that good government could ever exist for them. Prof. Hochschild immediately wanted to know how this could happen.

She found that religious people tended to see the government as usurping the traditional role of the church. They thought that ensuring the welfare of members of a community should be the responsibility of that community. With welfare, the government was destroying the bonds that held communities together. They viewed the liberal tendency to leave the care of the poor to a central bureaucracy as evidence of a terrible culture of neglect and moral bankruptcy.

Some adherents of capitalism saw the government as the enemy. To them, job creation and economic dynamism came from private enterprise, which the government stifled through bureaucracy, regulation, and taxes.

Other interview subjects saw the government as taking their money and giving it to people who were unlike them, people outside of their communities. They thought they’d done everything right, played by the book, suffered, yet still found prosperity elusive. They worked long hours for scant compensation, while not far away, the government was just giving away money to single mothers – who they viewed as hedonistic sinners who had far more children than was reasonable. Factually incorrect beliefs about the number of children people on welfare had or the percentage of the population that was on welfare were rampant in this group.

This isn’t to say that everyone fell into one of these categories. Many people combined beliefs. It actually reminded me of a point Joseph Heath made in light of the sex education controversy in Ontario – when social conservatives realize they can’t get the regressive solution they want (everyone forced to live by their values), they tend to swing to the other extreme and ask for ultra-liberal solutions. They may most prefer the government forcing everyone to have their values, but absent that, they’d rather the government force no one to do anything, so that it can’t force them to give up their values.

I should also mention that not all Tea Partiers ignored the consequences of pollution. Strangers in Their Own Land also profiles Tea Partiers who cared about pollution, viewed it as a pressing issue, and advocated for the Tea Party to make pollution one of its core principles. They echoed something I heard in some of the Conservative Party of Canada leadership debates: “conservation is a conservative principle.”

Still, it was hard to take the anti-pollution Tea Party activists too seriously. They want to solve a collective action problem with the free market. Solving collective action problems with the free market is a bit like doing surgery with a pizza cutter. It’s not that it’s impossible, strictly speaking. It’s just that there are ways of doing it (in this case, via government) that are far less messy and far more likely to give the desired outcome.

It’s hard not to feel like the conservatives in this book are being betrayed by the industries they stand up for. One of the Tea Partiers who actually cared about pollution cared because his house was ruined in the Bayou Corne Sinkhole. Even as he stood up against pollution, he continued to advocate for a freer market, fear the EPA, and vote Republican. All of this has counted for nothing with Texas Brine, the company responsible for the disaster. It continues to drag its feet on the class action lawsuit launched by residents.

Further to this point, Prof. Hochschild dug up a damning report, prepared at the behest of the California Waste Management Board by some very fancy (and expensive!) consultants. The report identifies communities that won’t complain about “locally undesirable land use” (LULU), with the goal of identifying these communities so polluting (and property value lowering) activities can be more easily sited. Protests are very inconvenient for construction, after all.

Communities identified as ill-suited to resist LULU are:

  • Composed of long-time residents (who are unlikely to want to move away)
  • Small
  • High school educated
  • Catholic
  • Without a culture or history of activism
  • Involved in “nature exploitative occupations” (e.g. farming, ranching, and mining)
  • Conservative
  • Republican
  • Primarily peopled by advocates of the free market

The communities where Prof. Hochschild did her research hit basically every single one of these criteria. This prompted some introspection on her part, as realized that one of the ways that her home of Berkeley is able to avoid substantial pollution is by foisting the negative externalities of modern life (like pollution) off onto communities like those in poor, rural Louisiana.

The back of the book purports to contain an analysis that shows that communities where people are more conservative (and more likely to believe that pollution isn’t a problem) are more polluted. I’m cautious of adopting the conclusions from it though, because conclusions are all it contains. From those, it’s clear that multiple hypothesis could have been easily tested [1] but unclear whether or not this was specifically controlled for. Without being able to look at the raw data or see the analysis methodology, I can’t tell if the correlation is likely real or a statistical artifact.

I will beg the question for a bit though, because Prof. Hochschild treats the correlation as real and spends some time explaining it. I think her explanations are interesting enough to talk about, even if they may be based on a flawed analysis.

Prof. Hochschild doesn’t put willingness to endure pollution down to the poor ignorant workers being deceived by the big dastardly corporations, a change from leftist discourse that I found refreshing. Instead she focuses on stories and teams.

Prof. Hochschild believes that the people of the south are (in general) conditioned to look forward, towards what were historically the planter elite and are now the resource extraction executives. They want to be like the most fortunate people in their communities and so support the same things they do. When liberals tell them they should be looking backwards and trying to help people less fortunate than them, this feels like an attempt to enforce foreign feeling rules. They feel like they are being told that to be respectable or good, they must perform concern or other emotions that don’t feel genuine [2].

I’m using forward and back deliberately here. This is the book that coined the “standing in line” metaphor for the anger of white working class Americans. In this metaphor (called by Prof. Hochschild a “deep story”; a story that feels emotionally true), there is a long line stretching to the top of a hill. Just beyond the brow of it lies the American dream. The line is moving slowly (or perhaps not moving at all) and the people in it are weary from their waiting.

Despite this, they stand there, patiently waiting their turn. But something terrible happens. There are people cutting in line! From the interviews she used to construct this metaphor, Prof. Hochschild identified the line cutters as African-Americans using affirmative action, women taking traditionally male jobs, immigrants working more cheaply than American whites are willing to, and (somewhat amusingly) pelicans, protected by environmental laws that were killing jobs. While the people standing in line expected the government (personified by Barack Obama) to do something about the line cutters, they were horrified to instead see President Obama helping and supporting them.

I want to make it clear that this isn’t something that either Professor Hochschild or I believe is literally happening. When it comes to the actual suffering of the people interviewed in this book, Professor Hochschild is inclined to blame big business interests, while I think the blame belongs more to a changing economy and automation (there is of course significant overlap between these two causes). When it comes to pollution, we’re in agreement that Louisiana would really benefit from tougher environmental laws coupled with more rigorous enforcement of its existing regulations.

Even though I believe there is no real displacement, no cutting in line, this metaphor seemed to resonate with many of the Tea Partiers interviewed in this book. To those people, the government is betraying them, working against them for another team. This makes them utterly incapable of trusting the government (with the exception of the military) and makes them incredibly defensive of people they do feel are on their team, like Louisiana’s petrochemical industry, one of the few sources of jobs that feel ennobling for them in the state.

Like I mentioned earlier, the communities where Prof. Hochschild conducted her research also relied heavily on the government. Nearly everyone Prof. Hochschild interviewed was on some form of welfare, had been on some form of welfare, or had a family member who was currently or had in the past been on some form of welfare. No one was particularly happy about this though. People did what they had to survive, but there was much more honour in going it alone. They viewed work as inherently ennobling and accepting anonymous charity as shameful, the sort of Calvinist curse that seems to be common on the American psyche.

This actually reminded me of a topic that frequently popped up on Freddie de Boer’s now deleted blog [3]. Freddie was constantly worried that conspicuous consumerism was ruining the left. Freddie was apt to point out that there is a class of modern leftist that acts as if the important political projects of the left can be accomplished if they only signal their “woke” views hard enough, signalling primarily accomplished by consuming the correct media. Imagine, as an example, someone who is enthusiastic about Hamilton as if it were a meaningful political or institutional blow for leftist interests.

For both “woke” consumerist leftist cliques and Tea Party libertarians, the best off are able to buy virtue (or at least status), while the less fortunate have the misery of want compounded with the misery of failing to live up to an ideal that is predicated on a certain amount of disposable income (Hamilton tickets aren’t cheap, after all).

As much as the standing in line narrative has gotten air time, I want to caution against believing it as a universal motivating factor in Trump’s voters or working class whites more generally. Because this book is more an ethnography than anything else, it would be improper to take its conclusions, conclusions made about very small group of Tea Party activists and apply those conclusions across a country as varied and vast as the United States.

Strangers in Their Own Land doesn’t include polling data; it’s unclear how many of the people who supported Trump share the “deep story” presented by Prof. Hochschild. Remember, many of Trump’s voters decided at the last-minute and many of those last-minute voters voted more against Clinton than for Trump (due to Comey’s letter).

One hint that the views expressed by Prof. Hochschild’s subjects are niche comes from their near complete abhorrence of government programs. Polls of the American public mark this view as an anomaly, even in a country that voted ~46% Republican. In 2015, 83% of Americans said Social Security was very important. 77% said the same thing about Medicare, and 75% said it about federal aid to public schools. A “mere” 73% said the military was very important. It would probably be incorrect to take the views of the Tea Partiers who want to cut these programs and represent them as common.

It’s also important to remember just how much of Trump’s victory came from evangelicals voting solely (or mostly) out of the belief that Republicans stand against abortion. 81% of evangelicals (who comprise a full quarter of the US electorate) voted for Trump. We don’t need some new narrative to explain why groups like this voted for the Republican nominee; they’ve voted reliably for Republicans in every election that Pew has stats for.

Despite my quibbles, Strangers in Their Own Land was a fascinating portrait of the deep divisions in America and Prof. Hochschild was an excellent narrator. She consistently fought to react with empathy, even to people she disagreed with on virtually everything. When a woman named Madonna told her that she loved Rush Limbaugh because he stood up to Femi-Nazis, Prof. Hochschild (the feminist writer who coined the terms “emotional labour” and “the second shift”) invited her out to lunch because “it seemed like it would be interesting”. Nowhere in this book did Prof. Hochschild exhibit scorn or a sense of superiority.

I think it’s important to note that Professor Hochschild hasn’t sold this book as a complete explanation for Trump. That’s on a media that desperately wants a single easy story to hold on to. Strangers in Their Own Land doesn’t contain that singular story, but it does hold one fascinating piece of it.

One thing that may have helped Prof. Hochschild connect with the Tea Party members she interviewed was her own rootedness. The clash between cosmopolitan (multicultural, migratory, and individualist) and local (homogenous, traditional, and community-oriented) values was every bit as on display as the clash between right and left. Reading the acknowledgments section, I was struck by just how rooted in Berkeley Prof. Hochschild is. She has a small legion of friends and acquaintances and (one assumes) a deep web of interdependency with them.

Prof. Hochschild seems to be neither migratory, nor caught up in the atomization of society. Several of the people she interviewed directly critique this atomization and its corresponding effect on the breakdown of systems of mutual aid and support. Prof. Hochschild, by virtue of her position in a vibrant community (as well as her previous work that has touched on atomization) was well positioned to understand these critiques of the contemporary cosmopolitan.

I know that myself (and many other cosmopolitan-leaning liberals) have begun to feel the pain that can come with our migratory impulses. I abandoned a graduate degree, in part because it took me away from a community I had grown to love. For all that I often found myself completely disagreeing with the Tea Party members profiled in this book, I was glad to find that I might be able to talk with them about the benefits of community. I’m not sure if that would be enough of a starting point to convince them of anything substantial – rootedness and community are just one axis of (dis)agreement, just one part of the story – but it’s where I would start if I ever had to build a bridge to these strangers in their own land.

Footnotes

[1] Specifically, Prof. Hochschild looked for correlations between agreement with the statements “people worry too much about progress harming the environment”, “industrial air pollution is dangerous to the environment”, “the U.S. does enough to protect the environment”, and “Some people think that the government in Washington is trying to do too many things that should be left to individuals and private businesses”, political affiliation (Democrat/Republican), and pollution rates. Her analysis found that agreement with the statement “people worry too much about progress harming the environment” (as well as membership in the Republican party) was correlated with relative risk of being exposed to toxic chemical release. Because I don’t even have the P values these were significant at, let alone knowledge of how they corrected for multiple comparisons and how many comparisons were attempted, I have to treat the correlation as liable to be caused by chance. ^

[2] I think Prof. Hochschild could have done a bit more analysis around feelings rules, because in my experience, they cut both ways. As far as I can tell, there seem to be one set of local feelings rules and another set of cosmopolitan feeling rules. Cosmopolitan feelings rules emphasize charity and welcoming the stranger, while local feelings rules emphasize responsibility to family and community. In both cases, it is grating to feel compelled to pretend to emotions that aren’t genuine. ^

[3] I can’t find any remnants of Freddie’s blog that make the point I’m ascribing to him, but if you want to get an idea of the tone of it, I’ve found an excerpt from the post “Our Nightmare”, which talks about a different way he feels the left is under threat. Freddie is an excellent writer, and I do recommend checking out his current blog, The ANOVA. ^