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May 2013 posts

Throw them Out

Jonathan B. Wight

I am generally not a fan of the Tea Party, but this might be time for an uprising. Vote the politicians out.

Chicago plans to spend $100 million (that's correct—million) to subsidize a stadium for DePaul University.

Meanwhile, Chicago will close 50 schools, largely in poor neighborhoods, for lack of funds.

The deal is justified, according to DePaul, as a way to hold down college tuition: "Any way we can keep the cost down so I don't have to put this on student tuition is a wonderful thing," said Rev. Dennis Holtschneider, president of the university.

A wonderful thing? Using this logic, why don't we tax even more to make tuition zero at this private college? One negative answer is—the select students getting the wonderful education at DePaul will earn hugely higher incomes, on average, than the taxpayers who are footing the bill or the displaced high school and elementary students. Entertainment for students and alums is not the responsibility of government. Most importantly, the economics of sports arenas have been studied to death—they do not promote economic development or generate government revenues anywhere near their costs.

This is public policy gone haywire:

"Taxpayers shouldn't be forced to subsidize a sports arena or any other private entity that they may never step foot in," wrote Brian Costin, director of government reform at the institute, in an email to The Daily Caller News Foundation. "Instead, these sports ventures should be self-sufficient and support their own operations without tax handouts."


Is Religion Needed in the 21st Century?

Jonathan B. Wight

Earlier this year the Cambridge Debate Society provided a wonderful debate on the role of religion in the 21st century. Much of the discussion related to the origins and importance of ethics in society.

Richard Dawkins (biologist of The Selfish Gene fame) and others present sharp arguments against the theology of God, original sin, blood sacrifice, and other religious dogmas that deliberately obscure the search for truth via science. Dawkins notes that the laws of physics somehow gave rise to trees, insects, and humans, and it is a glorious achievement—but it was not the result of a plan, even as we want so much to believe in a designer. Nor can we argue that religion is the basis for morality, which develops and evolves along the lines of moral sentiments not divine commands.

Dawkins says we should not be satisfied with religious supernatural non-explanations. These are a "cop-out" and "phony substitute for an explanation." Religion is a pernicious "charlatan" that gets in the way of truthful explanations. There are gaps in our knowledge, through which many religious would seek to offer their answers, but the gaps are getting increasingly narrower.

On the other side of the debate, Rowan Williams (former Archbishop of Canterbury) and others argue that engagement with religion contributes to the organization of society. Religion is not so much "organized" as "communal." Religion is a matter of community-building, compassion, fellow-feeling, inclusion, and tradition-building.

William's strongest argument is that religion was the basis for the development (and continued support) of the concept of human rights. Religious community, he argues, is based a passionate metaphysical commitment to human equality: the respect and dignity for everyone. How can rights for all be defended without the backdrop of an argument that each is created equally in the sight of the creator?

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

Citizens in some atheistic countries today enjoy rights, by way of tradition. But will such traditions survive without the underlying fabric of belief in a higher power? To Williams it is not wholly self-evident why everyone deserves our respect, except as an object of God's love. By contrast, Dawkins offers no defense of rights in a Darwinian world of survival of the fittest.

Williams notes that that even religious people fall short of perfection and narrow sects sometimes exclude others. However, the basic evolution of religious thought supports a greater concept for the possibility of humanity. A pluralistic discussion leads to improving both the church and society. Critics noted the gender discrimination in many churches such as Catholicism and Islam, and that the fastest growing religions in the world today seek to exclude non-believers.

There was much of interest in this hour-and-a-half debate. On leaving, students at Cambridge took a vote. Williams won the debate, 324 votes to 136, convincing the house that religion has a place in the 21st century.


Political Economy Matters

Jonathan B. Wight

Daron Acemoglu and James A. Robinson argue that politics matters when considering economic reforms ("Economics Versus Politics: Pitfalls of Policy Advice," Journal of Economic Perspectives 27(2)(Spring 2013): 173-192).

This is an idea that only economists would think is novel. No kidding—really?—economic policies play into the political power of vested interests? Who would've thought!

The authors note:

…one should be particularly careful about the political impacts of economic reforms that change the distribution of income or rents in society in a direction benefiting already power groups. In such cases, well-intentioned economic policies might tilt the balance of political power even further in favor of dominant groups, creating significant adverse consequences for future political equilibria.

The authors provide the example of privatization in Russia, which was done in a way to limit outside competition and ultimately led to the concentration of riches in the hands of oligarchs….who then further gamed the system.

In America, would-be oligarchs underwrite reform efforts with academic grants or buy think tanks and media outlets with the astute understanding that the long run is won by ideas.

In pushing the concept of efficiency, economists often misunderstand (or ignore) the ethical and the political contexts and consequences. This is bad for policy making because it turns economists into pawns in a larger chess game.


“There’s More to Life than Being Happy”

Jonathan B. Wight

Last January The Atlantic ran an interesting article with that title, and it's worth reading.

Modern economists who study utility are careful not to equate maximizing utility with any mental state, such as happiness. But others have gone overboard in trying to study self-reported measures of happiness. I am a skeptic of happiness research, not because alternative measures of well-being are not important: I am a skeptic because I think it is a seriously incomplete measure of well-being.

The Atlantic article properly notes that happiness is a transient mental state. Like all animals, humans need food and shelter and sex. When we satisfy these "needs" we feel satisfied or happy—for the moment—as long as someone else doesn't get conspicuously more than do we. Being happy is largely about the self, getting our needs met.

Having "meaning" to one's life is entirely different. Acquiring meaning may necessitate tackling challenges that will produce pain and unhappiness, as in Victor Frankl's decision to stay with his parents when they were taken to a concentration camp. Meaning is long-lasting and generally connects with giving in relationship with others.

Economists have much to learn about this distinction between happiness and meaning.

[Thanks to Alba Mercado for bringing this article to my attention.]


Indie Rock Bands

Jonathan B. Wight

The new economy is one of massive unemployment in youth age groups. Rather than sit around and complain, many are doing something, creating their own opportunities outside the mega-corporate channel. Along the way, they are developing a new culture of consumer engagement with the products produced.

Young people are learning perseverance and commitment and hard work, which comes from not having life handed to you on a platter. This is the new normal and represents the ethical silver lining of the current economic calamity.

Thankfully, the Internet has lowered the barriers to starting-up. The support of neighborly multitudes around the planet can launch a new franchise using Indiegogo, the crowd-sourcing funding site.

Such is the hope of Vela Eyes, a talented indie rock band from San Francisco.

They send out announcements electronically, and you the potential customer, can launch the new vinyl in June by contributing here. Help produce the next generation of musical culture. You the consumer can do more than simply buy—you can belong. Listen and join up!

Jules Johari with Vela Eyes (disclosure: Jules is my sister-in-law).


Two book reviews in economics and ethics from the Erasmus Journal for Philosophy and Economics

Mark D. White

Thanks to the indispensable Heterodox Economics Newsletter (latest issue here), here are two recent book reviews that may interest our readers, both from the latest issue of the Erasmus Journal for Philosophy and Economics (6/1, Spring 2013). [In the interest of full disclosure I must note that I blurbed the first book and the second was published in my "Perspectives in Social Economics" series from Palgrave Macmillan.]

Economics_as_applied_ethicsEconomics as Applied Ethics: Value Judgements in Welfare Economics, by Wilfred Beckerman (Palgrave Macmillan, 2011), was reviewed by our own Jonathan B. Wight, who finds it "a well-written textbook geared to advanced undergraduate or graduate students of economics, many of whom are largely and regrettably innocent of the ethical problems inherent in conventional economic analysis." After a detailed critical breakdown by chapter, Wight concludes that:

Overall, this book is highly recommended. It covers the selected topics with depth and sensitivity. The writing is generally excellent, but there are occasions of repetition and unevenness, as if the chapters were compiled separately and merged later. A student reader who is not already familiar with basic ethical theories could benefit from a primer in some places. For example, the book discusses Amartya Sen’s theory of commitment, however it does not dig very deeply to explain or defend that notion, whether from a deontological or virtue ethics approach.

The book devotes a lot of attention to questions of equality and justice, particularly on the work of economist philosophers such as John Broome, Partha Dasgupta, Ian Little, and Amartya Sen. This is
appropriate, interesting, and relevant. However, the book does not appear to address research in experimental economics, biology, and psychology that might be relevant to some of these questions, such as the work in neuroeconomics by Paul Zak, experimental work by Vernon Smith, or recent philosophical work on virtue ethics by Deirdre McCloskey. This is the normal limitation of any text that strives to be concise, yet students should understand there is much more to ethics and economics than can be conveyed in this book.

Approx_prudenceApproximating Prudence: Aristotelian Practical Wisdom and Economic Models of Choice, by Andrew Yuengert (Palgrave Macmillan, 2012), was reviewed by Ricardo F. Crespo. According to Crespo, 

Yuengert shows in this book that economic modeling undertakes only a partial analysis of economic action, because it ‘puts away’ interesting features of its subject that deserve to be taken into account. He proposes adopting the Aristotelian account of human action—more specifically, of practical wisdom—as the benchmark against which to consider economic modeling. He maintains that “economics can learn much about its limits from Aristotle, who describes aspects of choice behavior that cannot be precisely modeled” (p. 3). Thus, the aim of the book is to determine what aspects of human behavior cannot be captured by the economists’ models.

After a careful analysis of the book's structure and arguments, Crespo concludes that it

provides the useful service of identifying the characteristics of human action that economic models cannot take into account. It is useful because it explains the challenge to positive economists of trying to incorporate these characteristics into their approach, and because it highlights the features that economists must consider in their normative work. The contribution of the book lies in its originality. Economics books are not usually about what economics cannot do.

Both the author and the reviewer are Aristotelian economists, and readers benefit greatly from Crespo's detailed analysis of Yuengert's use of concepts such as eudaimonia  and contingency (the latter is comparison to Knightian uncertainty). (See Crespo's Academia.edu page for his own work on Aristotle and economics.)


Some Good News – Pt II: Health Care

Jonathan B. Wight

Another good news story came out this week, this one about health care.

Obamacare apparently creates incentives for treating the whole person, not just giving tests or scheduling visits.

Hospital emergency rooms typically cover a lot of uninsured people. They provide treatment, but do not provide care in the holistic sense. Emergency rooms deal with acute symptoms, but may not deal well with chronic problems.

St. Francis Family Medicine, a practice in Richmond, Virginia, was highlighted on NPR for providing an example of how money can be saved by providing the indigent with access to regular medical check-ups and care outside of the emergency room setting. Doctors and nurses develop relationships with patients, who are then more likely to adhere to the treatment regimen and come to regular follow-up visits. Regular access to treatment saves a lot of health care money and improves health indicators, compared to the present situation.

Back in the 1980s Jack Fiedler and I investigated health care data on several hundred thousand Medicaid patients. The data showed that providing patients with a minimal number of mental health visits more than paid for itself in terms of lowering overall medical costs. The reason is that mental health visits do two things: they are cheaper substitutes for regular medical visits (and people may suffer from physical problems that arise from psychological origins); and second, they complement regular medical care because psychological problems some have physical health origins (for example, a mastectomy creates anxiety and depression). It makes sense to treat the whole person. For details, see Fiedler and Wight, The Medical Offset Effect and Public Health Policy: Mental Health Industry in Transition (1989).

The bottom line: Getting every American access to health insurance could potentially save money and improve health indicators.


Some Good News – Pt 1: Prisons

Jonathan B. Wight

Too rarely do we read good-news stories. My next two posts seek to change that.

First up is a cover story by Jim Bacon in this week's Style Weekly about the impact of a prison ministry program that saved Virginia's government millions of dollars through lowered recidivism and violence in the justice system. Jim writes:

"Jails aren't what they were 30 or 40 years ago," [a drug rehabilitator] says. "They're not full of criminals. They're full of addicts who do criminal things. ..."

"The criminal justice system is focused on the war on drugs. The war on drugs is not the solution. When you treat addicts and alcoholics like they have a disease, you'll get a better outcome than if you treat them like a bad guy."

Kingdom Life Ministries has been addressing the human person: "I don't want to know how bad you are," [the organizing director] says to a rapt audience. "I want to know if you want to change."

Kingdom Life Ministries short-circuits [the change] process by helping inmates develop re-entry plans — preparing for the job search, getting a driver's license, finding a place to live and reconnecting with family members. The program also provides basic life skills, emphasizing anger management, communicating emotions and accepting the obligations of fatherhood. "Drugs and alcohol are only 10 percent of the problem," [the rehab director] says. "It's the anger and character flaws that lead to destructive behavior."

"What sets the ministry apart is its peer-based model…. Rather than relying upon credentialed substance-abuse professionals, few of whom have had any personal experience with, say, heroin or cocaine addiction, the program recruits former inmates who know firsthand the pain and temptation that substance abusers experience. When someone suffers withdrawal symptoms… they would rather talk to someone who has walked in their shoes."

Does it all get back to empathy? Certainly Adam Smith would agree with the idea that one's peers with good stories are better teachers of ethics than philosophers with abstract theories. In any event, this approach has lowered recidivism, saving the state many millions. One small program does not make a dent in the war on drugs. But experiments like this may hold a clue to solutions that work.

Tyrone Fleming, currently a resident at the Kingdom Life Ministries transition house, spends a quiet moment prior to Sunday's service.