Showing posts with label equality/inequality. Show all posts
Showing posts with label equality/inequality. Show all posts

Sunday, May 15, 2022

The (False) Law of Conservation of Effort and Reward

Most people seem to think within the framework of a supposed "law of conservation of effort and reward" (LCER) and its corollary "law of conservation of happiness". One might think of these as a spin on the forever-popular and equally incorrect labor theory of value. 

The thinking goes that somehow there should always be a linear and somewhat direct trade-off between work/life balance--that is, the effort one puts into something should be proportional to what one gets out, and there should be a trade-off between the chosen path and the "obvious" alternative path that together net out. Tightly zero sum. 

People resent the very idea that someone could have it all. The working mother should have delinquent kids who don't love her; the investment banker should long for relaxing weekends and be doomed to an unfulfilling life without meaning. 

The problem with these laws is that they conflict starkly with the magical human ability to tap the power of scale and compounding. The dynamics that these forces bring separate man from nature. Animals cannot coordinate nor plan for the future nor command exponential growth in any meaningful sense the way people can. 

Therefore, it should not be any surprise that some people and organizations can get more out of less and excel along multiple dimensions. In thinking about jobs, sometimes the grass is actually almost always greener

Consider how many people look to sports stars and other icons as “great follows” in social media making them big influencers succeeding in a realm outside of their primary area of success. Many adherents to LCER dismiss this as some obviously irrational behavior on the part of those less enlightened than themselves. The truth is these influencers probably are above average in ways that impact both the direct source of their fame (say basketball skills or acting ability) as well as many other areas. IQ becomes more and more important in sports the higher and higher the level. Dumb athletes don't last long at the pro level. 

Jeff Bezos would probably be an above average gardener. The reason he doesn't mow lawns and trim bushes isn't because he wouldn't be very good at it. He might in fact be better than the people who do the job for him at his own house(s). If you think he doesn't do those jobs himself because he is rich, you're right for the wrong reasons. The reason he doesn't is because of the very real law of comparative advantage

At the same time I think that some of what makes amazing people amazing often has a dark side. This might make them a bit eccentric or frustrating or detestable. It varies and is not always the case. This might sound like a contradiction, but I don’t think so. Rather it is part of the complexity and mystery of it all—what distinguishes elites. This is very much in agreement with point #6 here

Arnold Kling makes related points calling this the "convergence assumption":
What I call the convergence assumption is the assumption that everyone is fundamentally the same, so that it is more natural to expect people to develop the same skills and adopt the same values than for divergence to persist.
... 
We are not all the same. This makes moral issues very complicated. When we acknowledge genetic and cultural differences, what is the meaning of equality? When should we suppress differences and when should we accommodate them?
I think that the great appeal of the convergence assumption is that it allows us to avoid the challenge and complexity posed by these problems. But avoiding complexity is not a good approach if the complexity is an important characteristic of the environment.

Exceptional people are generally and not just specifically exceptional. How this maps onto agreement with you will vary along dimensions of morality as well as taste among others. Those differences are not tradeoffs they are making such that in some cosmic justice sense you and they are on equal footing when all is balanced out.  



Saturday, April 9, 2022

Have Your House And Rent It Too

Partial list of ways my neighbors like so, so many homeowners wish to have it both ways--despite the blatant contradictions. While many of these overlap with each other, they each are distinct.
  • They want high property values, but they also want affordability--just maybe not near them? Affordability for thee but not for me.
  • They want high property values, but they don't want "outside investors" much less "speculators!" to buy properties near them--presumably to rent them to undesirables (see below).
  • They want a thriving rental market, but they don't want anyone to rent near them.
  • They want diversity and inclusion, but they champion restrictions on development and rentals which make surrounding housing unaffordable and unavailable.
  • They want diversity and inclusion, but they wish to make choices for their neighbors thwarting their personal preferences.
  • They want the freedom to make their own choices about remodeling, etc., but they do not want an anything-goes policy for even their dearest neighbors. De gustibus non est disputandum for me; no way in hell for thee!




Saturday, March 19, 2022

Sports Handicapping - The Next Iteration

For over 100 years we have created divisions and categories for athletic competition. The original segregation for purposes of ability matching was by sex. Obviously there were other ones based on prejudices like racial divisions and socioeconomic status. While there were likely strong confounders like desire to keep out of competition from superior athletes who happened to be of a different race, etc., this was not a purely ability-based separation. 

Beyond sex-based categories, there have been many more separations to better group like-to-like competitors. For example, there are designations with the most distinct being professional versus amateur. High schools and colleges normally compete in certain divisions. Within sports there are weight classes (boxing, wrestling, etc.) and tours and qualifiers (golf, tennis, etc.).

It seems to me the next step in this process is to fully segregate sports by proven and expected talent regardless of sex. 

The recent case of swimmer Lia Thomas brings this to the forefront, but it is something that has been around for a long time. It would come as no surprise that many historic female athletes we know of were somewhere on a spectrum of male-female that did not cut neatly between the traditional sex categories. It would further come as no surprise that there are a much larger number we never were given a chance to know of because they were not allowed/encouraged to compete. 

Two recent pieces on the topic of Lia Thomas are instructive: The first by Megan McArdle asks the question whether women’s sports should exist at all. The second by Suzy Weiss prods the awkward juxtaposition that this situation has created whereby those who would/"should" be expected to support a trans athlete are now those arguably harmed by it.

These are undoubtedly rare cases, but we cannot dismiss them unless we are willing to blatantly exclude a meaningful group of potential competitors from participation for sake of forcing clear, hard lines where shades of grey actually prevail. Keep in mind that these edge cases are critical because those in question are generally vying for first place in the female category. If we want a world where we have two definitions of greatness, the actual fastest, strongest, best (almost always males) and the next group excluding the first, then we need to figure out where and how to draw that line between the two. 

Trying to draw the line on the basis of a single metric like testosterone won't get us there as this is multi-causal--there is no more a single athlete gene as there is an intelligence gene. Hence, sex phenotype works almost always until it doesn't either because of genetic edge cases or the more controversial transition cases. The latter is the news of the day and the very interesting dilemma we now face where reconciling two forms of inclusionary fairness have come into conflict. The former is how we know this isn't so easy as to say you can be a member of the club if you have always been a member of the club.

So I propose the thought experiment of self determination (set and test and rethink rules and norms at the most local level practicable) and separation by capability regardless of sex/gender (consider eligibility based purely on ability in the specific sport or event). 

Obviously this is change, which to sports fans specifically like humans in general is bad, very, very bad. But before you reject the proposal out of hand consider two points: For one, are we sure we want to have female-only competitions? Keep in mind this excludes a lot of males from enjoying a competitive forum with status. For another, are we sure males will want to compete with females? The stronger you think the answer to the first question is or should be "yes", the weaker is the concern implied by the second.  

Would there be complications as well as manipulations including out-right fraud? In sports?!? Of course there will be. This is nothing new. But while it creates an opportunity for scheming, it forces a harder look at the processes we use to sort and match competitions. This should result in better outcomes in the long term. Letting a hundred flowers bloom via open-minded exploration is the key to figuring out a new, stable equilibrium. If you doubt we can be open-minded about this exploration, you are totally ignoring why this is now an issue in the first place.

Beyond the risk of bad actors poisoning the pool of competition, the much bigger potential downside is that the disruptions will end women’s sports and perhaps even some men's divisions as we know them. This could be an outcome that means many kids and even adults don’t have a forum in which to play the sport they love and otherwise excel at even as it grants new opportunities to others in those forums (a point raised above). 

Yet again we are faced with the tough reality of tradeoffs. 


Monday, May 17, 2021

Two Methods of Improvement

Let's compare two general methods of improvement: 
  1. Truncating the left tail so as to eliminate the undesired portion of the distribution
  2. Increasing the distribution so as to grow (fatten) the right tail and therefore increase the desired portion of the distribution. 


Both methods have the effect of shifting the mean rightward. But the first is artificial.

Let's explore the first method. People paid primarily for their looks are an example of truncating the left tail. (One might be tempted to say “supermodels”, but that is a particular, specialized subclass of this universe. It is like saying basketball players when we are actually talking about athletes.) They exist within a distribution of attractiveness (subjectively considered as that is the only way) that simply has lopped off most or all of the left side. Some are gorgeous to you; others are gorgeous to me. Some are not so attractive to you while others, perhaps ones you really like, are not so attractive to me. Anyone in particular within this group might be just okay to any random observer. Taking everyone's opinions together as a whole, though, on average gives us an ordered distribution [similar to the theoretical and problematic Keynesian Beauty Contest]. 

When considered from the average observer’s viewpoint, the only thing missing in the distribution are all those who would be below some threshold. In other words the “lowest” (most left) person paid for looks is just an average looking person compared to all of humanity. Because we can’t manufacture attractive people yet, we are forced to use the truncate strategy. 



So the only way to bring about beauty improvement is by leaving out those who are less than some level of beauty (I used eliminated everyone below the average beauty score in the example). So we can get there, but it is artificial--we just left out the less than "beautiful", whatever that actually means in this hypothetical.

Now think about wealth. How do you increase average societal wealth? This is problem from a different realm because unlike beauty where we are currently limited to some degree of diet control, physical fitness training, and plastic surgery we can move wealth around. 

In the case of wealth what is the better path: Minimizing the impact of bad ideas (truncating the left tail via redistribution) or increasing the rewards for good ideas (fattening the right tail)? 

Bailing out bad ideas has moral hazard risks--we are subsidizing bad ideas. When you subsidize something, you get more of it. Taken to the extreme income redistribution is not sustainable. The system collapses in on itself through actual complete resignation (a dead-end Nash equilibrium) or deliberate exit (John Galt). Because of this, we are forced to use the grow the distribution strategy. 


Notice how this distribution is truncated and non normal (there is a minimum at 70 and the distribution has a right skew). No one is below some level of actual wealth (even debtors and prisoners get a meal and a place to sleep). So in some sense I am assuming some of the first strategy--a social safety net of some kind. I wanted to make it more realistically skewed, but time didn't permit. However, we should be careful how easily we succumb to the notion that there are people with true wealth at the far, far reaches of the distribution. Just how rich is Jeff Bezos compared to you or me really, seriously

Growing the distribution has a side benefit of minimizing the impact of bad ideas--a kind of resistance to bad ideas having meaningful, lasting impact. Subsequently the opportunities for good ideas are increased since this method is positive sum (it grows the pie) while the former strategy is zero sum and eventually negative sum if taken too far.

Am I assuming too much? I really don't think so. 

Unfortunately, advocacy for method two is unpopular because of social desirability bias. People don't want to admit that they want the rich to get richer. Or worse yet, they think letting the rich get richer somehow makes us all worse off. 

Sunday, September 6, 2020

It’s More Than Qualified Immunity


To truly help those suffering from poverty (poverty of justice, poverty of spirit, poverty of options, poverty of opportunity, poverty of consumption, etc.), we have to address all of the constraints and forces that are keeping people from being all that they can be. 
The police state abuses in general are an important aspect of this, but they are just a single portion of this plague. We must look deeper than these very important issues as they are themselves just symptoms of bigger problems. 

Qualified immunity is one particular, nuanced element in a much larger set of problems. The list of police and policing and prosecution reforms is deep:

  1. End qualified immunity
  2. End mandatory police unions
  3. Require police to obtain individual liability insurance
  4. Require body cams
  5. End no-knock raids
  6. Stop militarizing police
  7. Implement substantial bail reform
  8. End civil asset forfeiture
  9. Reform plea bargaining to limit prosecutorial power
  10. Strengthen the public defender process
But these alone are neither exhaustive nor completely sufficient. Broadly there are three additional major areas of reform that would start to help heal and to eventually enable tremendous growth in the communities that are suffering the most: 

1) Occupational licensure - Make no mistake about it. These are very simply anti-competitive policies to protect incumbents. They hide under the pretext of consumer protection yet operationally they are clearly a producer protection. The result is two groups of victims: the consumer generally and the weakest producers (competitors to the powerful vested interests). There is slow progress on this area, but much more is needed. 

2) Zoning and other forms of development restriction especially in housing - Zoning has racism at its origin. No, that does not imply it is still a racist policy in fact or in law, but it should give us pause in accepting it as innocuous. Zoning is still largely about keeping "them" out. Who "they" are varies. While a charitable reading leaves zoning as a plan to make the best decisions, it rests on a dubious logic that we can plan the future and government knows best. Housing unaffordability is a major obstacle to upward mobility for those in poverty (of all kinds). Barriers to opportunity are not a solution.

3) Most importantly the senseless, unjustifiable, and evil drug war - The drug war's biggest victims are those in the weakest position to fight back. Leave aside whether we have the right to punish people for doing things we wish they wouldn't but that otherwise only harm themselves. Leave aside the intentions of those who have promoted it. Prohibition does not work . . . no, it is worse than that. It very greatly harms. It must end if we are to build a world of justice and opportunity.

Sunday, June 28, 2020

Well, We're Movin' On Up

What’s great about this country is that America started the tradition where the richest consumers buy essentially the same things as the poorest. You can be watching TV and see Coca Cola, and you know that the President drinks Coca Cola, Liz Taylor drinks Coca Cola, and just think, you can drink Coca Cola, too. A coke is a coke and no amount of money can get you a better coke than the one the bum on the corner is drinking. All the cokes are the same and all the cokes are good. Liz Taylor knows it, the President knows it, the bum knows it, and you know it.  Andy Warhol
Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort. [...] [T]he capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.  –Joseph Schumpeter*
Partial list of goods and services that the Forbes 400 cannot have a better version of today than can the middle class in the U.S.—measured by quality, effectiveness, or status:
  • Mobile phones
  • Umbrellas
  • Personal computers
  • Toilet paper (notice how it required a pandemic and government intervention to make this temporarily drop off the list)
  • Cloud storage
  • Fast food and fast casual
  • Casual clothing
  • Payment processing
  • Individual consumer-level tools (but not tool collections)
  • Basic plumbing
  • Video and music entertainment content
  • Online shopping (especially important in quarantines)
  • Corrective eye surgery such as LASIK
  • Small package shipping speed
  • Email
  • All but the most exotic of beverages from bottled water to soft drinks to tea to coffee to beer to wine to liquor
  • ... I could go on and on, but Qwern already has done so for me...
This shouldn't be surprising given that I am, as most of us so fortunately are, richer than Rockefeller

Related question: As a proportion of all goods and services available, are there more or fewer things like this today than there were 50, 100, 500, 1000, etc. years ago? I would submit that there are considerably more even with all the abundance and variety that we enjoy today. In the past the inequality separation between the super rich and the middle class (or closest approximation) was vastly larger. Add to that the fact that movement between classes was virtually impossible. It is telling that only in a modern fairy tale are lyrics like this conceivable. Today we enjoy the hockey stick of human progress.

Understanding what is going on here takes more nuance than the typical person allows. Russ Roberts has a good, short video series that explores this nuance. 


*The paper at this link, Manifesto for a Humane True Libertarianism by Deirdre McCloskey, is well worth reading. It is where I most recently read the Schumpeter quote.

Saturday, May 4, 2019

Help Me Find a Difference


What is the logical difference in the following statements. In other words, why should I agree with some but not all or disagree with some but not all? 

To my children’s teachers: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my garbage manI really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my dentist: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my favorite restaurant’s cooking and waitstaff: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my favorite college team’s athletes: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To my favorite college team’s coaches: I really appreciate the service you provide, but your pay should be limited to a figure well below the result of the competitive market.

To tease this out explicitly - being consistent would require either market-based wages for coaches and athletes or highly-restricted wages for both. Perhaps Dabo Swinney should make as much (and only as much) as the lowest-paid college football coach.


Also, arguments about the "competitive market" being an unrealistic ideal compared the "real world" are not relevant for the point I am making here. Yes, there are all kinds of problems with wages being less than optimal from an idealized competitive market perspective. So one could easily use this same implied argument to rally against the state's monopolistic control of education, cronyistic contracts for municipal sanitation, medical and other occupational licensing laws, minimum wages, etc.

Thursday, June 5, 2014

Highly Linkable

I want to go to then.

Don Boudreaux on Piketty. Steve Landsburg on Piketty. Garrett Jones on Piketty.

Sugar bad, but fat good. I think this lady got the message.

The tide may be turning in the fight against those who want to spend OPM on the bright and shiny things. And the World Cup brings us fresh fuel to our well argued fire.

Sticking with sports, the game makers have settled with current and former college athletes. And Scott Sumner offers some critical thoughts about how anti-trust should be applied to sports leagues and organizations.

As a student of logic, I found these fallacies that don't but should exist to be quite interesting.

Detroit rapidly deteriorating as seen from Google Street View. Maybe if the just had some strong zoning laws, they could have avoided all this mess . . . No. When broad economic forces are working against you, you cannot reverse the decline by legislation or good intentions. D.C. offers a case in point.

Arnold Kling will not be invited to give a high school graduation speech any time soon, but he should be.

How to think and how to learn--including acing exams with hardly any studying. Sounds like good advice. Too much time is spent on worthless rote memorization. After all, life moves pretty fast. If you don't stop and look around once in a while, you could miss it.

These ants are nuts!

I'm going on vacation shortly. L.A. La-La land. In my mind, I'm already there. To that end, here are some great travel tools. Especially don't miss Rome2rio.

Saturday, May 31, 2014

Nobody Puts A Rich Man In The Corner

You may remember that I claim to be wealthier than the richest man in the world from 100 years past. I came across an anecdote to support this thesis and provide a little evidence contra Piketty.

A few weeks ago I was eating lunch at a new, moderately priced restaurant in downtown OKC, Park House. While enjoying a conversation with my lunch companions, I noticed that a familiar face was being seated at a nearby table. The man did not standout in any particular way from the other patrons, but I recognized him as Harold Hamm.  While only one table separated our dinning experience, about $12.4 billion separates our net worth.

Around us was a broad cross section of folks some in suits and ties, some in shorts and flip flops. Undoubtedly, Mr. Hamm has a lot of opportunities I and the other customers don't have. He could have ordered everything on the menu without breaking a sweat and the charge would be a rounding error in his life. A second entree would have a very expensive luxury for me that day. Regardless, the fact remains he couldn't have eaten or enjoyed the meal more than me in any practical sense. Heck, I was even seated at a slightly better table.

We are not economic equals, but you wouldn't have known it from observing us at lunch that day. There are roughly two types of realistic egalitarian societies: those that are so poor that no one is able to become unequally wealthy and those that are so rich that fortunately only few are not able to live alongside the technically wealthy.