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.
The argument is that, since these states are fiscally dependent upon the federal government, they would be foolish to secede, and, according to Mr. Slattery, engaged in “sanctimonious whining” to even argue for doing so.
The problem with the argument as stated, and a significant problem at that, is that there exist other benefits and costs to secession besides those related to fiscal transfers to and from the central government. Fiscal transfers are only one issue among many, and there is good reason to think that, despite losing fiscal support from the federal government, seceding states could benefit heavily from secession. Some reasons are as follows:
Tax haven status: Free from the United States federal tax system, states could choose to become tax havens for wealthy individuals and corporations. Such could offer substantial benefits to the local populations from revenues on the relatively low taxes imposed on foreigners moving in, increased local investment, and other benefits of immigration (see the item on “immigration policy”).
Regulatory policy: Various businesses might wish to incorporate in the United States due to familiarity with its legal system, language, and business culture, but wish to avoid onerous regulations. States which seceded and proposed more friendly regulatory systems could benefit substanitally from foreign investment. For some, this invokes the image of smog-spewing factories located just outside the US border, but if the secession were on amicable terms, the seceding state could agree to impose some kind of Pigovian tax on pollution and remit funds to the US government as compensation for cross-border emissions.
Immigration policy: Many right-leaning Southern states might impose restrictive immigration laws upon seceding. Indeed, I would not support such policies. However, seceding states could instead decide to expand legal immigration, possibly as part of a strategy to ease their fiscal burdens and repopulate dying cities. Former New York City Mayor Michael Bloomberg actually suggested that the federal government allow increased legal immigration to Detroit to encourage economic development. Seceding states could pursue such policies freely. A variety of benefits to immigrant-receiving areas exist, including windfalls in the value of developed land, increased division of labor, revenues from immigration taxes, and numerous others.
Other economic and non-economic benefits of increased autonomy: The freedom to conduct “policy experiments” is quite valuable. States with residents opposed to the War on Drugs could decriminalize or legalize drugs without the fear of federal intervention. Liberal states in the Northeast could secede and impose all kinds of policies that would otherwise stand no chance against Republican opposition in Congress. Residents of seceding states might appreciate their greater individual influence over issues previously handled by a central government.
It is also worth noting that one of the states with a prominent secession movement is Vermont, which pays a fair amount more in federal taxes than it receives in spending. It would be amusing to see the anti-secessionists accuse Vermonters of greed instead of foolishness for wanting to leave!
Certainly, a host of other issues would arise, such as how to handle federal infrastructure and land, how immigration and trade between seceding states and their mother countries would work, and the possibility of mutual defense agreements, among others. But such issues have been resolved in previous secessions, including the one which created the modern United States. To merely bring up the “fiscal transfers” argument as though it ends all debate on the matter does gross injustice to an important issue.
Horwitz challenges this conclusion, pointing to a video male libertarian friends of his have told him drives them to tears. I watched it and I had the same reaction. I suggest you check it out:
For the zeitgeist videos, the moments that set me off most were the shots of the artificial hand, artificial leg, kid with cerebral palsy walking to greet his father returning from the war, various brief shots of amputees achieving their goals, the Red Bull space jump landing with the man holding up his fists, the US soldier coming home early to his mother, Steve Jobs’s advice to stay hungry, stay foolish, the 29-year-old hearing for first time, and the solider high-fiving a local kid.
From these experiences I can extract what I believe are the moments which affect me most:
– Overcoming conflict with other humans – rejecting war and accepting cooperation
– Spontaneous, unplanned order – voluntary cooperation that builds magnificent things we do not expect but we’re all part of
– Overcoming conflicts with nature – fighting back the scarcity constraints of the world, fighting against the cold, uncaring universe and carving out a place for ourselves
and, maybe most importantly,
– Unchaining of the individual to achieve his or her potential
I say that the last one is perhaps the most important one specifically because of my reaction to the 29-year-old hearing for the first time in her life. I felt that the moment represented the opening of an entire new door for an individual that she thought would be closed forever. The sheer intensity of the feeling of overcoming what you thought would be a handicap for your entire life – and the overwhelming emotions when tasting this entirely new sense – hearing- for the first time in your life is simply astonishing.
Can the bolded points above somehow be connected to libertarianism?
– Overcoming conflict with other humans – replacing coercion with voluntary cooperation (see self-ownership)
– Spontaneous, unplanned order – emergent properties of market systems – in the tradition of Hayek
– Overcoming conflicts with nature – pushing back the limits of scarcity – see the libertarian emphasis on capital accumulation and innovation
– Unchaining of the individual to achieve his or her potential – libertarianism places a strong emphasis on the individual as the centerpiece of society. This point is also a little strange, since libertarianism doesn’t specifically say that individuals must be required to achieve their potential, but could very well choose to do nothing with their life if they so wish. However, it’s possible that people tend to be drawn to libertarianism because they value the individual so much already, and also happen to understand that all rights are individual rights.
I would even argue that the above points can be folded up into two main points. The overcoming of conflict with other humans and nature are both an unshackling of the individual – free from both human coercion and the limits of nature. We are then left with a free individual and the result of this free individual – the spontaneous order of social cooperation through the market.
If I may make the unfounded assumption that I am a decent representative of libertarians, I can see that the elements that set us off most are indeed ones libertarian emphasize – on the moral side, emphasis on the voluntary and on the individual. On the pragmatic side, emphasis on innovation, capital buildup, and emergent order. If we examine the condensed case I made in the previous paragraph, then we have the moral side, the free individual, and the pragmatic side, the result of the free individual.
Perhaps it’s not the case that libertarians aren’t very empathetic, but instead that they can openly make emotional connections when they are presented with situations aligned with the spirit of libertarianism. It is then that the libertarian can place himself in the shoes of the character in the story and appreciate the beauty of the situation as if it were his own. If, on the other hand, we see situations that emerge out of coercive action, we do not emote as easily, because there is something at the back of our minds that reminds us that there’s a zero sum game being played, with hidden losers in the background we’re not being shown.
I also want to point out what I consider to be a fantastic quote from Horwitz’s article – one that I believe is strong competitor for being one of the best that combine practical and moral arguments:
Critics of markets sometimes say “you can’t eat GDP.” What they miss is that you can’t eat, or learn to read, or go to school, or leave a bad marriage, or do pretty much any of the basics that we might see as required for a flourishing life without the wealth and time created by the market economy.
This relates to the washing machine, as the invention and its adoption opened up time for women to both gain more education and educate their children more easily, and education unchains people and allows them to do anything up to… well, we don’t know the limits of our imagination and our creativity yet. Hopefully, we won’t ever know them.
Good job to the BHL for a solid post. Now I need to get some water – I’ve somehow gotten very dehydrated after those videos.
Gains from Trade 