What I think I am nearly certain about

Over a decade ago, Tyler Cowen penned a post simply titled, “What I think I am nearly certain about.” I thought a similar exercise would be helpful, so here are the things with which I have strong confidence.

• Lexically prioritized, prosperity/wealth should be maximized. Innovation doesn’t make the world smaller. It makes the individual’s world bigger. No one should be held back by where they are born. Making this my number one choice precludes democracy and inequality from being the first goal and thus puts me out of step with my generation. 

  • Rich societies can do a lot more for their citizens. They have more fiscal capacity.
  • Prosperity almost always means more choice for the individual. 
  • The social benefits to innovation are massive.
  • The US has been a leader of innovation and it is imperative that we continue. There is an important durability to adopting technology. We’ve stagnated since the 1970s. To get out of this rut, we need innovation in four areas: energy, housing, transportation and health.  

• Climate change is real and a pressing issue. Societies will likely bear increasing costs over time. But it is difficult to de-carbonize the industrial sector. Bill Gates: “Whenever I hear an idea for what we can do to keep global warming in check, I always ask this question: “What’s your plan for steel?” I know it sounds like an odd thing to say, but it opens the door to a very important subject.” 

  • To solve the problem of climate change, we need some form of carbon capture tech.
  • More broadly, we need to drive up energy density, but there’s no easy way to do it. 
  • There is an important connection to innovation: “The productivity slowdown [since the 1970s] was primarily centered in those sectors that were most energy-intensive,” according to Nordhaus.
  • Carbon taxes will be difficult to implement: “Surveys show majority U.S. support for a carbon tax. Yet none has been adopted. Why? We study two failed carbon tax initiatives in Washington State in 2016 and 2018. Using a difference-in-differences approach, we show that Washington’s real-world campaigns reduced support by 20 percentage points. Resistance to higher energy prices explains opposition to these policies in the average precinct, while ideology explains 90% of the variation in votes across precincts. Conservatives preferred the 2016 revenue-neutral policy, while liberals preferred the 2018 green-spending policy. Yet we forecast both initiatives would fail in other states, demonstrating that surveys are overly optimistic.” [link]

• Rhetoric is fundamental and its analysis should be central to more political and economic discussions. The rhetorical turn, which is sometimes misunderstood as postmodernism, is a humanistic study that deepens our understanding of our own argumentation. (I credit this appreciation to Professor Deirdre McCloskey and Professor Patricia Harkin.)

  • Conflicts in rhetoric are powerful driving forces for politics and for understanding the world. One example: Capitalism is a reference without a referent. Capitalism here is an essentially contested concept.
  • Democracy is another essentially contested concept. Sometimes it is used as a stand in for enfranchisement, but other times, it is understood as a more broad concept of equality. Before discussing democracy or capitalism, rectify names. Reform is needed, but it isn’t all in one direction. 
  • Socialism isn’t a bad word, but those who claim the mantle of socialism often have very wrong opinions and ideas about the world. Yet, I tend to find the discussions fascinating.
  • Economics and especially econometrics are powerful rhetorical tools. They can illuminate and in doing so, obfuscate. Models should be understood as useful in explaining some aspects of life. Modeling in all sorts requires attendance to the rhetoric, but it is an incredibly powerful method of inquiry. 
  • The duality of illumination and obfuscation forms the basis of rhetoric with Protagoras. Michael Billig called it the Protagoran spirit of contradiction. Remember, Plato began the search for transcendent forms of knowledge to anchor moral judgment in direct response to Protagoras.

• Equality of wealth generation is an important goal, but inequality dominates the conversation, especially issues of relative status. As Cowen mentioned in his post, don’t conflate concern for the poor with the goal of comparative egalitarian intuitions. 

  • Flemming’s work suggests that employees with lower commuting costs have much lower switching costs and climb the job ladder more effectively. Disparities in commuting costs can create big changes in outcomes. More evidence. 
  • What causes inequality? Kids mostly: “[W]e document that close to two-thirds of the overall gender earnings gap can be accounted for by the differential impacts of children on women and men.”
  • There are a striking number of wage gaps in the workforce, including smokers (20%) [link], drinkers (15%) [link], and short people (5%). “Lefties' median earnings are about 10 percent lower than those of righties, which is the same magnitude as the salary hit that comes with spending one fewer year in school.”
  • I am hopeful for the future: “Young women in New York and several of the nation’s other largest cities who work full time have forged ahead of men in wages, according to an analysis of recent census data.” [link]

• Institutions are path dependent and hard to change. Importing institutions is difficult. For example, codetermination won’t likely work in the US as it does in Germany.

  • Consumption taxes would be better for households but the transition would nullify any benefit. [link]  

• Most people have conditional values/morals/ethics that depend almost entirely on the community that they seek to belong to. I’m not sure where this quote is from, but it captures my views exactly: “People think they pick communities based on their values, but it’s the other way around, and you can usually tell the people with actual values because they don’t fully align with the community.”

  • Partisanship is a kind of heuristic. It simplifies the world and makes it understandable.
  • At the same time, I tend to think most people are sincere in their views.
  • Glenn Loury: “I hold people responsible to live in good faith, that’s a high bar. A lot of people are going to fail. They have not lived worthy lives in my view, to the extent that they don’t try [and] simply succumb to the forces. To allow oneself to be moved on is to abdicate from our most essential responsibility, which is a living faith, to strive, to reflect, to try to take responsibility, to envision, to plant, to raise your children, to work.” 

• Despite all of its flaws, the narrative that the United States embodies, the liberty and the equality of the individual, is an important ideal and a through line for good in the world. In contrast, there has been a rise of negative American exceptionalism.

• If we are to have a litigious society, we need to have broader access to law. The bar is atrocious. As I once heard someone say, “Law school is an academic program that produces academics. It only produces lawyers in that some students insist on becoming lawyers instead of academics. What’s lacking is a law-related tech school that teaches anagogy without the expectation of scholarliness. Less profitable.” There is no reason that I shouldn’t be a lawyer. 

• Knowledge and reason are precious, but they can get you in trouble. The most admirable trait is being able to change with new information.

  • Useful information is and will always be scarce.
  • Governments/agencies/institutions are a lot less informed about on the ground conditions than is typically thought.