What Does the Center for Immigration Studies Consider to be “Exploitation”?

David North has a post on his blog at the Center for Immigration Studies titled, “CIS Gets an Offer We Will Refuse from a Bangladeshi Organization”. He explains that a recruiting agency had emailed a foreign recruiting firm, offering to pay his organization for finding employment for a worker sponsored by their agency and arranging for a visa.

He then says that, “In any case, it is highly unattractive, and is an indication of how badly nonimmigrant workers are treated in such cases, and how attractive they can be to exploitative U.S. employers”.

Yet these employers are offering employment to the workers in question, employment which generally pays far better than alternatives. Conversely, the U.S. government prevents workers from offering their labor at higher wages.

If “exploitation” actually has to do with harming workers, then it is clear who is really engaged in it.

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Formalizing “privilege” and exploring its logical conclusions

Recently, a friend of mine (incorrectly) told a new acquaintance of mine that I didn’t “believe in privilege.” As my new acquaintance began explaining how she couldn’t imagine how anyone could deny the existence of privilege, I decided to think more precisely on what privilege is, whether it exists, and who has it. I’ve now decided to write this post to formalize the idea of privilege and see where a consistent application of the logic behind it leads.

A good starting point for defining privilege is to describe it as a condition in your life that you did not pick but that had a benefit for you. For example, white people tend to, on average, have higher salaries than black people. White people usually did not become white of their own merit, yet they reap the benefits of this physical feature. Why? Some reasons are that they have historically been more free to accumulate capital, have not been the subject of race-based oppression by the government, and have been a majority in the US for a long time. These things often lead to higher confidence, higher income, higher levels of education, more positions of political power, etc.

One way of formalizing the idea of privilege, then, is to ask “All else being equal, does having this characteristic mean that I will be more likely to be successful?” Example: Take a person born into a middle-income family in a middle-income neighborhood. If we let the person live his entire life, then went back in a time machine and changed only his race, would this have led to a better/worse life outcome?

The next step to take is to notice that sometimes our characteristics can take on a variety of values, such as race, instead of being a binary “yes/no.” For example, a person can be white, black, Hispanic, Asian, or any number of sub-categories of these and other races, as well as a mix of various categories of races.

Therefore, we begin to see privilege as a relative concept that can be ascertained given two possible values for a specific characteristic: “All else being equal, for a given personal characteristic ci, does value cib create a more favorable outcome than value cia?”

At this point we need to add another refinement. It seems like a good idea to define privilege in relation to a specific goal that an individual has. If a person doesn’t care about total life income, having a value for a personal characteristic that only increases life income relative to alternative values for that characteristic doesn’t matter – the person doesn’t care about life income anyway. Similarly, if a person has a specific underprivilege that would only affect a goal about which he doesn’t care, then this is not a disadvantage to him, and he shouldn’t be considered to be underprivileged [1].

Given the goal-directed nature of privilege, the next step is to realize that since individuals have a variety of goals, some often polar opposites of other people’s goals, a certain value for a characteristic could be

– a privilege for one individual

– an irrelevant characteristic for another

– an underprivilege for a third

Insofar as a set of goals of individuals tends in the same direction (loosely speaking), a given value for a characteristic that is useful will tend to be a privilege for each individual, and hence can be termed a mark of privilege for the group. That is, it makes sense for two individuals in that set to look at each other and judge how privileged each is compared to the others by the values of their numerous characteristics and how they affect the achievement of the goals they all happen to share.

Let’s list some examples of privilege in the US. Each item assumes that all members of the society (the US) have identical preferences. I give some caveats in parenthesis to show examples of when an item would not be a privilege, either because there is a reasonable chance of a preference for a goal not being identical among individuals or because the specific value of the characteristic in question would not be conductive to achieving the shared goal:

– Being white (caveat: your words as a white person might hold less water when trying to convince a group of black people of something in some situations, all else being equal)

– Being male (caveat: if one of your main goals in life is to spend time with your children and you’re going through a divorce, it’s more likely your ex-wife will retain custody, your masculinity here being an underprivilege)

– Being intelligent (caveat: in some circles, intelligence might be viewed with suspicion as a sign of eliteness and superiority)

– Being physically attractive (caveat: beauty is in the eye of the beholder; being attractive to one group in society doesn’t guarantee being attractive to another)

– Higher family income (caveat: you might lead a miserable life [by your own judgment] if your parents only care about money)

This list shouldn’t be too controversial. In very many cases, having one of the above qualities will, all else being equal, make life nicer for you, and should be considered a privilege.

Now, let’s return to the definition of privilege. It’s useful to distinguish between goals you’ve achieved thanks to your privilege and goals you’ve achieved thanks to you merit. Therefore, success can roughly be modeled as a function S=f(P,M) – that is, a function of privilege and merits. The privileges are the environmental variables that made you more successful, all else being equal. Your merits are the efforts that you put in independent of your privilege. Keep these two categories in mind as we dig deeper to see whether this distinction is at all sustainable.

Let’s look again at the S function: S=f(P,M). P is some combined measure of various types of privileges a person possesses, perhaps a vector in Rn. Once again, each privilege value is defined in respect to a goal an individual wants to achieve [2]. M is some measure of how much effort a person is willing to put in to achieving success, and hence the level of merit of the person. I list M here as scalar, although it might very well be a modeled as a vector in Rm. It’s reasonable to say that this function is monotonically increasing in each variable, or that the partial derivative of S is positive with respect to either variable. That is, keeping merit constant, the more privilege you have, the more successful you will be (by the definition of privilege). Also, keeping privilege constant, the more meritorious you are, the more successful you will be as well.

We can now determine your marginal “success-productivity” of privilege (MSPP) and the marginal “success-productivity” of merit (MSPM). The MSPP tells you by how much your success will increase if you keep merit constant and increase privilege by one unit (don’t worry about what these “units” are – we’re discussing general intuition here). The MSPM tells you how much your success will increase if privilege is kept constant and merit increases by one unit.

The key idea to take away from this seemingly over-formalization is that the marginal effectiveness of being more meritorious can depend on your current total privilege. Similarly, the marginal effectiveness of being more privileged can depend on your current total merit. I will give an analogy from economics to explain what I mean:

In economics, the output of a firm is a function of its quantity of capital and its quantity of labor. For example, Q=bKaL1-a, where Q is output, a and b are some constants, K is the amount of capital, and L is the amount of labor. (Note: this specific form of the production function is called a Cobb-Douglas production function). Now, intuitively, say that a person is willing to invest 10 days into making cars. If the capital he has at his disposal is no more advanced than that available in the mid-19th century, he might be able to produce one car in ten days. If, on the other hand, he has very modern capital including various kinds of powerful and versatile machines, in 10 days he might be able to produce 3 cars by himself. We see from this example that the marginal productivity of his labor (in this case the additional cars he can make with each additional 10 days of work he puts in) depends on the capital he has available. The more capital (or, in this case, the higher quality the capital), the higher the productivity. This can be seen if the partial derivatives of Q are taken with respect to K and L – the higher the K, the higher the benefit of adding one more unit of labor. The higher the L, the higher the benefit of adding one more unit of capital.

Moving back to privilege, we can see how this applies: If your environment is very poor, increasing your personal efforts (separate from your success due to privilege) will result in small increases in success. If, on the other hand, you are very privileged, each additional unit of merit has a high impact on your success. Similarly, if you are not very meritorious, adding more privilege won’t help as much as if you’re very meritorious, all else being equal. [3]

Now, let’s try to further refine the definition of privilege. We stated before that factors like family income confer privilege. These are environmental factors external to the choices a person makes that affect his success. Let’s look at the privilege of being attractive. This is a privilege with which you were born, and it exists thanks to the good genes of your parents and also thanks to pure chance. Sure, perhaps you spend a lot of time working out and dressing well, but there is some degree to which your attractiveness is a privilege by birth – that shouldn’t be controversial.

To better explore the limits of privilege, let’s look at the other alleged component of success: merit. How can we nail down merit? Well, merit, which may loosely defined as the effort a person puts in, is (by construction) a variable separate from privilege. But can merit ever actually be separated from privilege? After all, how industrious and hardworking a person is is due in part to their education. Generally speaking, more educated people are probably more willing to put in effort to achieve something, all else being equal. And since education is very much affected by family income, merit becomes entangled in privilege. Furthermore, the effort one puts in also depends on the values instilled in him by his parents. This, too, was out of his control, and is a part of privilege. Successful parents who care about their children will pass on better life lessons. The third big factor affecting one’s effort in life is his genetics – both his propensity toward hard work and the IQ that is conferred by his genes. The person did not choose his genes. In fact, from our discussion of the privilege of being attractive, we saw that genetic traits are a form of privilege.

We see that all the factors that affect merit (“how much effort, work, and sweat a person ‘chooses’ to invest”) are in fact a type of privilege. If merit is a function only of privileges, then there is no real category of “merit” separate from privilege. All the efforts you’ve put into life have been a product of either nature or nurture. In either case, they’re privileges (or underprivileges) that were conferred to you externally.

We arrive to the conclusion that everything is a privilege and no one deserves anything due to “merit.”

Lest you think this conclusion too radical, consider the following thought experiment:

Imagine taking a person who, in 2014, was upstanding, smart, tolerant, respectful, and considerate and instead magically making him be born in a war-torn nation in the ancient world populated by mostly racist and ignorant people. This person would likely not have turned out tolerant, respectful, and smart. If in 2014 he could have learned integral calculus and the intricacies of DNA replication, in the ancient world he would have believed that storms are caused by the gods and that the sun goes around a flat Earth. This thought experiment makes it apparent just how strongly who we turn out to be is influenced by our environment (which, insofar as it is conductive to our goals, can be called our privilege).

Our conclusion so far has been that every single part of your life that led you toward success has been a privilege, and that you didn’t really make any choices that made you deserve your success in any moral sense. This discussion about privilege, then, begins to look very much like a discussion about determinism, and I’d argue that privilege could be just a face of determinism – the one that specifically deals with people’s success. Since we saw that success in life is fully determined by privilege, it is natural to make the symmetric argument that failure in life is also determined by privilege – or, in this case, the lack of privilege, or underprivilege. That is, if something very bad happens to a person, it is because they were underprivileged.

Now, let’s analyze privilege under two different scenarios of rape:

1) A perfectly rational man living in a world with no uncertainty one day rapes a woman. He is sentenced to death for this. Question: since his action led to a state of being that any normal person would deem unfavorable (ie, being executed), and since we concluded that failure is just as much the result of privilege (and is due to no merit or dismerit of one’s own), does it make sense to say the rapist is underprivileged? After all, his environment conspired in such a way as to make him end up being convicted. And just like successes are not due to one’s merit, the same goes for failures. The woman who is raped, on the other hand, continues living. Her life is doubtless much worse for having been raped, but at least she is alive. I doubt it’s easy to argue that being raped but alive is worse than being dead (though I suppose, in my ignorance, that it could be possible). Hence, it makes sense to actually ask whether the woman who was raped was more privileged than her rapist, who will go on to be killed. However, in this case, the answer must necessarily be “the fact that he will die is not enough to show he is less privileged, despite death being really bad.” Since the man is perfectly rational (by construction) and there is no uncertainty in the world, his action maximized both his ex-ante and ex-post satisfaction (which I will use as interchangeable with success or utility). Therefore, before he committed the act, he knew perfectly, 100% well what would happen and chose to do it anyway. This tells us something about his preferences: the act was to him more valuable than life itself. Given that he chose an action that he valued more highly than all the possible satisfaction of life, it appears that the criminal may be much more privileged than the woman. Of course, there exists the possibility that this isn’t the case, but it is not easy to show that this would have a high probability a priori.

2) A man with bounded rationality and imperfect information one day rapes a woman. He is sentenced to death for this. In this case, does the same analysis as before apply? Notice we have removed the assumption of perfect rationality. Now, it could very well be that the man was very irrational and couldn’t properly assess the consequences of his actions. Moreover, he had imperfect information, and maybe he had no idea that facing death in an hour would be so awfully terrifying. The rapist goes on to lose his life, which may reasonably be assumed to be very tragic for a person. Once again, the rapists’s actions were due to his environment/privilege. In this case, since his environment conspired to lead to an outcome where one of the worst things that could happen to a person did indeed happen, his environment conferred upon him severe underprivilege. The woman who was raped is, once again, alive but very distressed by the occurrence. Yet she still can go on to have a meaningful life. (Before you disagree with me for being callous, consider what disagreement with that statement would mean: that rape victims can never have meaningful lives after the crime). Hence, the woman is in a better position to achieve success, happiness, and satisfaction than her soon-to-be-dead rapist is. As such, by definition she is more privileged than her rapist. Why? Once again, because the actions of each individual are wholly determined by environment, and privilege exists when the environment is such that the events in one’s life result in success, relative to the alternative. Since the rape victim is able to have more future satisfaction than her rapist (or present discounted value thereof), she is more privileged than he is. Of course, it could be that the rape victim could go on to have a miserable life, in which case it can be argued that no, her rapist was in fact more privileged. This is true – but I am talking about the range of possibilities. And if you object to rape as an example, use another sexual crime that is not commonly considered as heinous – perhaps some more general form of sexual assault. In that case, it’s more and more likely that the criminal is less privileged than the victim, especially if the punishment is very harsh.

We now come to the topic of telling people to check their privilege. When one checks his privilege, this can be described as him exploring the privileges that led to his present (and future) success and seeing their relative contributions toward this success. He also compares his levels of privilege to either those of the person asking him to check his privilege or to those of a group which the person asking him to check his privilege is discussing. I can see a few legitimate reasons for someone being told to check his privilege, which I shall label as Types:

Type 1) “Check your privilege: You’re failing to realize how my/the group’s lack of privilege in some dimensions is leading to my/their lower success. By doing this, you are making me/them feel bad, which is bad for me/them.”

Type 2) “Check your privilege: You’re failing to realize how my/the group’s lack of privilege in some dimensions is leading to my/their lower success. By doing this, you’re failing to understand causal pathways in society, leading to an underdevelopment of your own understanding of how society functions, which is bad for you.”

Type 3) “Check your privilege: You’re failing to realize how your privilege in some dimensions is leading to your higher success. As such, you overestimate the privilege of others, you think that others are undeserving, and hence you do not support efforts (voluntary/coercive) to improve their success.”

What are examples of justified and unjustified instances of asking someone to check their privilege? Take the example from this blog post (caution: language), where the author tells white cis college girls to check their privilege when they complain they don’t get a weekly allowance. Her complaint is of Type 1 – other people’s complaining makes her feel bad because she does not have the privileges others have. Is this a legitimate complaint? Depends on your standpoint. If you’re a third-party person reading her post in America, perhaps this seems reasonable. But if you take a global perspective, the blogger’s own complaint is itself whiny from the perspective of a starving African child. In this case, that child could easily also tell the blogger that she should stop complaining since she is privileged to live in the US. Symmetrically, the girls who complain they don’t have allowances could easily complain about someone even richer than them complaining they aren’t wealthy enough. Taking this global perspective, it becomes difficult to say when asking someone to check their privilege is appropriate. The person doing the asking surely has someone below them on the success scale who has even less privilege. It appears that the solution, then, is either to say that almost everyone should be able to tell everyone else to check their privilege or that very few people (if any) should be telling others to check their privilege when it comes to Type 1.
Another example further muddies the waters: the familiar one of the woman who is raped by a rapist with bounded rationality and imperfect information. Say that she is able to go on and have a very successful life, due to being from a very successful family and having very supportive friends. If it is acceptable to tell people to check their privilege merely because they have otherwise high success, it would not be illegitimate for observers of the rape to tell the woman to “check her privilege.” Since she will go on to have a successful life and her rapist will be killed, her success value (in present discounted value terms) is far higher than that of her rapist. Hence, if you are allowed to tell someone to check their privilege when the gap between your and their success values is high, it would be legitimate in this case to tell the woman who is raped to check her privilege. It appears to me that this is a good reason to reject the “gap” criterion in Type 1 privilege policing as legitimate. Simply because someone is more privileged than you, it is not legitimate, when taking a global standpoint, for you to tell them to check their privilege if they are complaining about something.
Checking your privilege for fun and profit

Is it useful for you to check your own privilege? It can indeed be in cases 1 and 2 – when failing to do so either makes other people feel bad or when it prevents you from understanding your own source of success.

Take the example of a restaurant owner in a middle-class neighborhood that has some percentage of its patrons be poor families. Say this restaurant owner dislikes poor people and takes any chance he has to poke fun at them for not being successful. In this case, he might very well alienate patrons and have them stop coming. If he checked his privilege, he could become more understanding of their troubles and stop poking fun at them. They wouldn’t leave, and he would have more patrons.

Another example is that of the entrepreneur. If he understands that a certain social structure creates a cycle of poverty (which is, presumably, undesirable from the perspective of the individuals in poverty), he could try to start a firm that sells a product that helps people escape poverty (by, say, increasing people’s human capital). By checking his privilege and understanding why the poor people were poor, he is able to create a product to circumvent these social circumstances.

I will have more to say on the topic of why privilege checking can be of utmost importance – even to people who would consider themselves “conservative.”

Conclusion

In summary, we have learned a few things:

– Privilege exists relative to the goals of an individual.

– Since the importance of goals to various people cannot be compared (interpersonal utility comparisons are impossible), subjective privilege cannot in fact be compared.

– If we ignore this important theoretical point, we may say that insofar as people’s goals are the identical, everyone has privilege relative to an alternative value for a given characteristic.

– The social justice discussion on privilege is, at its core, an argument about the deterministic nature of the universe. Privilege is one face of determinism.

– Just as privileges reduces the emphasis on personal merit in achieving success, it similarly reduces the emphasis on personal fault for failures – including crimes against victims.

– As Peggy McIntosh points out in her seminal paper on privilege, privilege is not necessarily bad. In fact, I would argue that the goal should be to increase everyone’s privilege as much as possible.

– Analyzing events in the framework of privilege can give us odd conclusions – such as the fact that in a framework of bounded rationality and imperfect information, a woman who is raped may in fact be more privileged than her rapist. Such language is likely foreign to the discussion of privilege that exists among those interested in social justice, but is one that follows from our careful definitions.

Impact of conclusions

It is not my purpose to tie the arguments presented here into a larger philosophy in order to tell people how they should change their actions. I merely sought to follow the logic of privilege to its conclusion. Whether the framework itself is accepted is another matter. Still, I will note two impacts of my analysis:

– The existence of privilege cannot be denied by any reasonable person. The fact that you are far more successful in 2014 America than 2014 Congo, 1900 America, or 1900 Congo is stark enough evidence. Your place of birth significantly affects your prosperity.

– The importance of privilege analysis will rise and fall with the importance society places on an acceptance of a deterministic view of the world. If society decides that determinism shouldn’t affect how we view the moral positions of various actions and individuals, it logically should also not assign much importance to privilege analysis. On the other hand, if much weight is placed on determinism, much weight should be placed on privilege analysis as well. Conversely, if society decides privilege analysis is important, it should consider all the implications of determinism – for they are part and parcel of privilege analysis.

Disclaimer

Much of this article makes arguments of the form “if X is accepted as valid, Y follows.” This is not meant to be interpreted as “X is valid, and therefore Y is true.” Furthermore, I have not passed moral judgment on almost any topic related to privilege. For example, saying that privilege analysis in the case of bounded rationality points to the possibility of a woman who is raped being, overall, more privileged than her rapist does *not* imply that I think that her rapist is a more moral person than she is because he is less privileged. I simply state he might be less privileged, whatever the moral implications of that are. This stems from the definition of privilege. In fact, the hypothetical rape scenario I discuss and its conclusions on privilege are one of the reasons I find privilege analysis to not be a very good framework of normative analysis (normative specifically – it is still useful for positive analysis).

I’d like to thank my co-blogger for taking the time to slog through this post and offering constructive advice. Any hatemail you have should be directed to me, for the ideas presented stand behind my name.

Notes:

[1] Once we see privilege as being evaluated within the means-ends framework, we need to take into account the fact from economics that interpersonal utility comparisons are not possible. That is, even if a person has a privilege that objectively allows him to achieve a certain goal more easily than a person without that privilege, and even if the two people have an identical rank of their goals, it cannot strictly be said that the first is more privileged, since utility cannot be compared among people. Therefore, it is necessarily correct to say that privilege is actually *unable* to be compared across people when privileged is couched in terms of subjective valuations of ends. In the remainder of this article, I will ignore this and pretend that this utility among individuals can in fact be compared, despite believing that this is not possible even in theory and that it doesn’t make very much sense. I do this because most people do this subconsciously, and I will play along, ignoring the majority of the economics profession.

[2] The implications of the functional form and of the form of the variables P and M allow the model to generalize to intersectionality of privileges and interlocking hierarchies. For an intuition, see the economic analogy to capital and labor in an economy.

[3] I will add here that it is possible for the function f() to have a negative second derivative – that is, for your success to increase with both P and M, but more and more slowly over time. That is, the marginal benefits of increases in P and M go down as you have more of both P and M. An example would be increasing your merit in a very capital-poor society. No matter how meritorious, you likely will never be able to send a spaceship to the moon.

Could Zoning Laws Affect Political Outcomes and Marriage Rates?

From a Nathan Smith post on windfalls in land value from immigration (which I recommend), I found an interesting paper by George Hawley entitled “Home affordability, female marriage rates and vote choice in the 2000 US presidential election: Evidence from US counties”. Abstract:

This article tests the hypothesis that differences in the housing market can partially explain why some American counties are strongly Republican and others strongly Democratic, and that this phenomenon can be largely attributed to the relationship between home values and marriage rates within counties. Specifically, I test the hypothesis that, in the 2000 election, George W. Bush did comparatively better in counties with relatively affordable single-family homes, even when controlling for other economic, demographic and regional variables. Using county-level data, I test this hypothesis using spatial-lag regression models, and provide further evidence using individual-level survey data. My results indicate a statistically significant relationship between Bush’s percentage of the vote at the county level and the median value of owner-occupied homes, and that at least part of this is explained by the relationship between home values and marriage rates among young women.

The author finds that a $10,000 decrease in the median home price yielded an additional 0.3 percentage points for Bush in the 2000 election (so, a 0.6 point swing per $10,000). Although I have not reviewed the paper enough to determine whether I agree with its conclusion, it is at least interesting.

Given that zoning is often considered a factor in higher housing costs (see, for instance, Glaeser and Gyourko 2002), I wonder if restrictive zoning laws could have the impact of lowering marriage rates and making voters more leftist. Housing cost wedges can be quite large (in the hundreds of thousands of dollars sometimes), so the impact could be sizable. The difference between median owner-occupied housing prices in California and Texas, for instance, is $295,200 ($421,600 – $126,400). If California’s housing prices fell to those of Texas and the effect identified in the paper took place over time, there could be a 17.7 point swing in presidential elections in the favor of the Republican candidate (0.6 times 29.52)! Rough extrapolations are what they are, and certainly not all of the housing price gap is due to zoning, but the effect could be large.

Some types of zoning encourage rather than discourage sprawl (such as free parking mandates), and eliminating those might have contrary effects if they induce more people to live in cities. Nevertheless, zoning could still be a significant factor in political outcomes.

Empirical Problems with the Hobbesian Account

In two recent posts, my co-blogger Michael Tontchev has been criticizing some of the theoretical underpinnings of Hobbes’ “state of nature”. I would also note the empirical evidence against the notion that property and organization is impossible without a centralized State.

In “The First Property Rights Revolution”, Samuel Bowles and Jung-Kyoo Choi claim that individual property rights emerged thousands of years before States did (p. 1):
Hobbes’ state of nature is a valuable thought experiment, but taken as history (which Hobbes did not) it is deficient…. First, individually-held property rights in land, its produce, and other sources of people’s livelihood emerged with the domestication of plants and animals starting around 11,000 years ago, while in most cases states developed many millennia afterwards. Recognizably modern property rights existed in these newly agrarian societies without the assistance of states. Among fishing people and other sedentary foragers, individual or family-based property rights appear to have existed even before the advent of domestication.

They continue, describing the alternative mechanisms usually employed to secure property rights by pre-State humans (p. 1-2):

The second historical shortcoming of the Hobbesian account is that it is quite unlikely
that Hobbes’ state of nature ever existed. For most of our history as biologically modern humans – roughly the 100,000 years prior to the advent of agriculture – social interactions were organized without the aid of institutions even remotely resembling contemporary states or private property in land or the other sources of people’s livelihoods. They apparently did not, however, suffer the chaos of the Hobbesean [sic] state of nature. Rather, in all likelihood, beginning as early as 100,000 years ago in Africa and later in other parts of the world, these groups were organized in a manner similar to a subset of the modern mobile hunter-gatherers described in historical and ethnographic accounts, their lives regulated by social norms enforced by collective punishment of miscreants.
Indeed, much of the motivation for recognizing property norms is likely genetic, as Jeffrey Evans Stake argues in “The Property ‘Instinct’ “:
Evolutionary theory and empirical studies suggest that many animals, including humans, have a genetic predisposition to acquire and retain property. This is hardly surprising because survival is closely bound up with the acquisition of things: food, shelter, tools and territory. But the root of these general urges may also run to quite specific and detailed rules about property acquisition, retention and disposition. The great variation in property-related behaviours across species may mask some important commonalities grounded in adaptive utility. Experiments and observations in the field and laboratory suggest that the legal rules of temporal priority and possession are grounded in what were evolutionarily stable strategies in the ancestral environment. Moreover, the preferences that humans exhibit in disposing of their property on their deaths, both by dispositions made in wills and by the laws of intestacy, tend to advance reproductive success as a result of inclusive fitness pay-offs.
 
Of course, evolutionary behaviors also guide the State’s legal rules, but it is still significant that humans (and other species, for that matter) possess instincts leading them to behave with greater ingrained respect for property ownership than Hobbes might suppose they would.
 
On a similar note to Stake’s arguments, Bryan Caplan discusses Herbert Gintis’ “The Evolution of Private Property”, and notes that black markets are a significant example of property rights existing not only without government enforcement, but with active government opposition.
 
Finally, it is worth noting that Bowles is a neo-Marxian, and Gintis has Marxist leanings. One need not be a classical liberal to observe problems with the usefulness of Hobbes’ model in the real world.

Reading notes on Hobbes’s Leviathan – Pt. 1

Throughout my schooling, I have encountered numerous times Thomas Hobbes’s claim that life in the state of nature would be “solitary, poor, nasty, brutish, and short.” This has been casually thrown around both by

– teachers giving a cursory justification for the existence of government

– students offhandedly waving away libertarianism by remarking wryly that they, too, want to live in the Hobbesian Jungle (maybe it’s not as bad as we thought?).

Given that I am fairly outspoken in my arguments on economics and political theory, I decided I should pay due respect to Hobbes and his work, so I’m reading Leviathan.

Leviathan

The book is organized into four sections. If I understand correctly, the last two sections are exclusively on religion and the church, so I will not be reading them – plus, my Missner edition doesn’t have them.

The first section explains Hobbes’s views on the nature of human experience – including what is sense, imagination, science, reasoning, understanding, etc. The second is more specifically focused on government.

I’ve made notes to myself in the margin, which I will share here if they are of interest. They will be as coherent as possible without spending too much time making sure they flow perfectly. I will then combine them all into one post to give my response to Hobbes.

Quotes and analysis that are actually related to economics or political theory will be navy blue.

Notes and Thoughts

So far, I find Hobbes to be much more agreeable than expected – perhaps because I have not yet gotten very far into his discussion of government.

Introduction

“great ‘Leviathan’ called a ‘Commonwealth’ or ‘State,’ in Latin civitas, […] is but an artificial man”

I am unsure whether Hobbes is only making a grand introduction or really believes it, but he sets the stage by equating the state to an artificial man. To say that the state is a being of its own is not only frightening, but also misleading – since only individuals can act, and the actions of the state are determined endogenously by the sum of the actions of the individuals over whom it rules.

“To describe the nature of this artificial man, I will consider: First, the ‘matter’ thereof, and the ‘artificer,’ both which is ‘man.’”

Hobbes appears to redeem himself by noting that the state is both made up of people and is created by people.

“there is [a] saying that is not lately understood, […] nosce teipsum – ‘read thyself’ [… it serves to] teach us that for the similarity of the thoughts and passions of one man to the thoughts and passions of another, whoever looks into himself and considers what he does, when he ‘thinks,’ ‘opines,’ ‘reasons,’ ‘hopes,’ ‘fears,’ etc., and upon what grounds, he shall thereby read and know what are the thoughts and passions of all other men upon like occasions.”

It appears that this is a call for introspection – an argument made by many economists in justifying their theoretical foundations. We’ll see whether Hobbes consistently employs introspection when discussing the ruled and the rulers.

“Individually, every thought is a representation or appearance of some quality or other accident of a body outside of us, which is commonly called an object.”

Just a bit of background for Hobbes’s understanding of how people work. Thoughts are representations of outside objects. The origin of thoughts is sense, which is caused by outside objects pressing on sensory organs, which propagate the pressure inwards and cause various motions inside the body. Hobbes often talks of motions in the body causing much of human experience.

“No man doubts that it is a truth that when a thing lies still, unless somewhat else stirs it, it will lie still forever. But when a thing is in motion it will eternally be in motion, unless somewhat else stays it.”

This sounds a lot like Newton’s first law of motion! – and it essentially is (if we add “with constant velocity” to the second sentence). But wasn’t Leviathan published in 1951, when Newton was just about 9 years old and hadn’t come up with his laws of motion? It turns out that Galileo had also described the law of inertia before Newton, and Wikipedia says that “[p]hilosophical ideas relating to inertia had been proposed by John Philoponus centuries earlier, as had Jean Buridan, and according to Joseph Needham, Mo Tzu had proposed it centuries before either of them.” And now we know!

“Imagination […] is decaying sense.”

Just a quote.

“When I am awake I often observe the absurdity of dreams, but never dream of the absurdity of my waking thoughts. Thus, I am well satisfied, that being awake, I know I do not dream, even though when I dream I think myself awake.”

This made me laugh. The logic isn’t necessarily sound, but it certainly is intuitive!

“Some say the senses receive the species of things and deliver them to the common sense, and the common sense delivers them to the fancy, and the fancy to the memory, and the memory to the judgment, like handing of things from one to another, and with many words they make nothing understood.”

Hobbes misses no chance to poke fun at other thinkers. It keeps Leviathan a nice and pleasant read.

“In a discourse about our present civil war, what could seem more unrelated than to ask, as one did, what was the value of a Roman penny? Yet the coherence was manifest enough to me. For the thought of the war introduced the thought of delivering up the king to his enemies; the thought of that brought in the thought of delivering up of Christ; and that again brought the thought of the thirty pence, which was the price of that treason.”

This is interesting. It appears in the section where Hobbes discusses trains of unguided thought and uses this as an example to point out that even in the wild world of the wandering mind explanation for a train of thought could be found. The other type of trains of thoughts is regulated ones.

“in all of your actions consider what you are aiming at as the thing that directs all of your thoughts in the way to attain it.”

This is the essence of human action and using means to achieve ends.

“Sometimes a man desires to know the [effect] of an action. He thinks of some similar past action and the effects that followed it, supposing that like effects will follow like actions. […] Because of the difficulty of observing all of the circumstances, this kind of thinking can be very fallacious. […] The future is but a fiction of the mind, which applies the sequels of past actions to the actions that are present.”

I think this is a good description of empiricism and the scientific method. In predicting the future, we look at the past when the conditions of the object in question were the same as the current ones (controlling variables – ceteris paribus) and we say that the same consequences will follow. Of course, as Hobbes notes, not making sure to look at past circumstances that were the same as the current ones in all regards can lead one to make false conclusions (since there could be other, unobserved factors causing the result we saw in the past).

“Sometimes a man desires to know the [effect] of an action. […] This train of thoughts is called […] prudence.”

“it is not prudence that distinguishes man from beast”

“imagining any thing whatever, we seek all the possible effects that it can produce. […] This second only seems to occur in man”

Hobbes appears to contradict himself. He claims that it is not imagining the consequences of an action that separates man from animal. Yet earlier, he had said that precisely this is what is the difference between the two. Is the difference that his earlier claim included “all possible effects?” I doubt that the “all” is what makes the difference – or what should make the difference. It appears Hobbes is merely contradicting himself.

“Without speech among men there would be no more commonwealth, society, contract or peace than there is among lions, bears, and wolves.”

I’m happy that Hobbes agrees with part of my assessment in my first post on the possibility of cooperation in the Hobbesian Jungle. I note that

“Going back to the importance of a shared language, we can see why cooperation among 1) animals and other animals, and 2) humans and animals is difficult. They have no way to make the case to each other for why they shouldn’t kill each other. Animals cannot make pacts for mutual protection unless it is genetically instilled in them. Humans also cannot face a bear reared on its hind legs and argue for why no, Mr. Bear, you shouldn’t kill me because then you will lose the benefits I can offer you.”

In the post, I propose that cooperation can arise even without the division of labor when there is uncertainty about the future structure of society and when people can mitigate such uncertainty by discussing the future and making the case for cooperative defense. However, without the capacity for discussion, there is no way for people to establish cooperative agreements.

Sloppy Economics and Part-Time Austrians

The economy must have been hit harder than expected, given that so many Austrian Economists have switched to being only part-time Austrians, and otherwise thoughtful economists (whether Austrian or not) have shirked their duties.

What am I talking about? I’m talking about two recent waves of libertarian appeals to poor minimum wage empiricism that would not pass the sniff test in an introductory econometrics class.

The first round:

Kevin Erdmann blog post on the effects of minimum wage on teen employment. Erdmann originally regressed teen employment over time before and after the minimum wage was increased at different times in US history, concluding that there is strong evidence that the minimum wage caused the decrease in the employment trend.

This article was shared by (at least) Steve Horwitz, Peter Boettke, Don Boudreaux, and Mark Perry.

Horwitz introduces the article with

Evidence about the minimum wage harming teen employment you say? Evidence you shall have.

Boudreaux says

These data and these estimates combine with the compelling nature of – and with the central role in economic science of – the law of demand to make an empirically persuasive case that, as employers’ costs of employing low-skilled workers rises, fewer such workers will be hired than otherwise. [emphasis in original]

And Perry tosses in some snarky strikethrough formatting to note that

Marginal RevolutionCafe Hayek and the Coyote Blog are all featuring the chart above and the blog post about the minimum wage law government-mandated wage that guarantees reduced employment opportunities for teenagers by Kevin Erdmann on his Idiosyncratic Whisk blog.

The problem with all of these authors sharing the blog post and praising its conclusion is that the evidence provided is simply useless. One of the most fundamental aspects of science is the idea of controlling for external variables. The original post by Erdmann simply regressed teen employment over time – before and after the minimum wage was increased – without including any controls. However, it is notable that at least some of the periods with minimum wage increases overlap with recessions. And when the two competing theories about why employment has fallen are a minimum wage increase and a recession, my bet is always with the recession.

This is not to say, of course, that I believe minimum wages do not have teen disemployment effects. Rather, my point is that the evidence presented provides no backing for the claim, given the naive data processing performed. Not only can recessions help to explain the trends in employment, but they can also help to explain minimum wage hikes (or at the very least there is a plausible pathway): the economy goes south, so politicians argue for a higher minimum wage to help out struggling families (and win the left-liberal vote). As such, recessions are a classic example of a confounding variable in the analysis.

Yet even if the analysis somehow included the effects of recessions, there would still be too many variables uncontrolled that could be causing the observable effect (Dube also mentions that state-level variation in minimum wages could have an important effect). This is fairly standard Austrian Economics 101 mantra – you can’t control the necessary variables to claim causation (at least in most situations – I believe Imbens et al (1999) to be a tantalizing attempt at empiricism Austrians wouldn’t dislike).  I do not use the word “mantra” disparagingly, as I am strongly influenced by the Austrian position on empiricism and I approach all econometric studies with extreme caution. This case is no different – especially when so little work was done to rule out confounding factors.

The second round:

A Steve Hanke blog post at the Cato blog arguing that data from across European countries shows that minimum wages increase unemployment. Hanke shows a graph of unemployment for countries with and countries without minimum wages. Those without minimum wages have lower unemployment:

This is another piece of fairly useless empiricism. Once again, there are no controls for confounding factors. Is it so strange to think that countries that are more likely to enact minimum wages are also more likely to enact other labor market regulations that weaken the job market? If this is the case, then what we are seeing in the graph could very well be the effect of those other regulations – and we learn absolutely nothing new about the effect of minimum wages. I am not sure whether Dr. Hanke considers himself to be an Austrian, but in either case, the argument is unworthy of being published.

Sadly, the post has been propagated across at least a few websites already (including Boudreaux’s Cafe Hayek).

What could have been said

Once again, I am not disagreeing with the ultimate conclusions of the two posts discussed above. I believe that, if not in the unemployment rate, minimum wage hikes would have impacts in other variables, some seen, some unseen – perhaps job training, perhaps the intensity of the work environment, and so on.

Here’s what the articles could have said, which I would have found not only acceptable but a fantastic argument for their side:

Suppose the correlations in the two analyses ran in the completely opposite direction. That is, minimum wages tended to correspond with higher teen employment in the US over time, and minimum wage countries in Europe tended to correlate with a lower unemployment rate. What would the left-liberals do? They would parade this fact around in victory. Yet the facts are not like that, but the complete opposite. We do not see a corresponding pensiveness and pause on their side as to why the facts might not be so.

In this case, this argument wouldn’t be a critique of the minimum wage policy, but of the opposition itself. This doesn’t make it bad – it points out the dishonesty of loudly parading when the data superficially supports their side, but crickets when it doesn’t.

Conclusion

Austrians should be consistent Austrians: Do not reject empiricism when it disagrees with your policy stances and accept it when it agrees. If an analysis cannot possibly control all relevant variables, the analysis cannot be used to make a causal claim. If an analysis doesn’t even begin to attempt to control variables, then this is not science but toying with numbers.

And if you don’t want to be an Austrian, then at least don’t be a sloppy economist.

Update (2/1/2014): Jonathan Catalán takes on the same study, though he appears more mild-mannered than I am here: http://www.economicthought.net/blog/?p=5633