Tuesday, October 31, 2006

Church-State Hinterlands: II

In a previous post, I investigated a current area of friction between church and state, the refusal, on religious grounds, of some cabdrivers at the Minneapolis airport to transport passengers who were carrying alcohol. There is another issue along these lines that is not controversial yet, although The New York Times is certainly trying to make it so. In a recent four-part series, they document in meticulous detail how religious groups often are exempted from the laws that other groups must obey – zoning laws, anti-discrimination laws and other restrictions on the freedom to contract, etc. We know they think it’s important because in the print edition it ran on the front page above the fold every single day and because they don’t require you to pay to access it through the TimesSelect feature; instead it is available free. The gist of the argument is found in this article:

An analysis by The New York Times of laws passed since 1989 shows that more than 200 special arrangements, protections or exemptions for religious groups or their adherents were tucked into Congressional legislation, covering topics ranging from pensions to immigration to land use. New breaks have also been provided by a host of pivotal court decisions at the state and federal level, and by numerous rule changes in almost every department and agency of the executive branch.
The special breaks amount to “a sort of religious affirmative action program,” said John Witte Jr., director of the Center for the Study of Law and Religion at the Emory University law school.

Professor Witte added: “Separation of church and state was certainly part of American law when many of today’s public opinion makers were in school. But separation of church and state is no longer the law of the land.”

Professor Witte clearly adheres to the standard received wisdom about “separation of church and state,” misplaced though it is. The primary purpose of the establishment clause of the First Amendment, in his judgment, is to prevent any state subsidy of religion. However, it is clearly important both as a matter of justice and of efficiency to prevent the state from impeding religious ideas, just as with any other. If some people believe in God and that He has manifested His moral instructions to humanity through this or that human messenger, while others believe that there is no God, then the state must be neutral with respect to all of these beliefs. Any public service and, in the modern age of the big welfare state, any public program must be made available on nondiscriminatory grounds, regardless of religious belief. Religiously motivated charity groups clearly have the same rights to participate in federal programs designed to aid the poor as nonreligious ones do. The only qualifier is that all religious groups must be eligible to compete, and the selection must not use religious criteria. A government that disproportionately directs funds to evangelical Christian groups because of their theology, for example, is violating equality before the law.

However, when thinking from the premise of equality before the law it is a mistake to reason from the starting point that these programs exist. The reason the problems that the Times series describes arise is not because religious groups are privileged, but that they are not as discriminated against as some other types of groups. All of the problems the Times describes involve interference in the freedom of association and freedom to contract. These interferences are themselves violations of equality before the law; anti-discrimination laws, for example, prohibit employers from refusing to hire people on the grounds of race or sex, but allow employees to refuse to work for particular employers on the grounds of race or sex.

That religious groups can discharge employees on grounds that for-profit corporations cannot does not mean that religion should be regulated more, but that for-profit corporations should be regulated less. The freedom to contract is a fundamental right that puts you in a position to be in charge of your own life – to associate on the grounds that you wish to, and not on the grounds that a temporary majority of Congress in some prior decade decided that you must. Religious groups are fortunate in that the First Amendment exempts them from the massive violations of the freedom to contract that other groups have become subject to since the late 1930s. The fact that Congress may not interfere with the freedom of religion, which is parallel to the prohibition on state establishment of religion, gives religions an extra layer of protection that properly belongs to all private associations.

The implied remedy that the Times series suggests (and, keep repeating often enough to make sure you believe it, it's not an editorial series, it's a news series) is that religious groups should be brought under the umbrella of the regulatory state to the same extent that other private associations have been. But this would be a catastrophe for religious freedom. If the government is given the power to decide whom religious groups can hire and on what grounds they can fire, or to regulate the contents of their schools and day-care centers, then religious freedom will be destroyed. Pressure groups motivated by bias either against a particular religion or all religions will take just a few months to begin bringing the hammer of the state to bear on the groups that they don’t like. The ultimate solution to the problem that so vexes the reporters of the Times is to make non-religious groups as free as religious ones; in other words, to restore the freedom of association and freedom of contract that we used to take for granted.

Wednesday, October 25, 2006

Two Election-Season Propositions

As the election nears, two state ballot propositions have caught my attention. Not the one that is helping itself to most of the attention of the press – the referendum to appeal the law recently enacted by the South Dakota Legislature that would ban essentially all abortions, an attempt to avoid the law being used as bait to get the Supreme Court to overturn Roe v. Wade. I am interested rather in a minimum-wage proposition in Ohio and an eminent-domain proposition in California. Five other states have minimum-wage propositions, designed to increase turnout in the same way that the gay-marriage amendments of 2004 did for social conservatives. But it is the passage below from the Ohio proposal that most concerns me:

An employer shall maintain a record of the name, address, occupation, pay rate, hours worked for each day worked and each amount paid an employee for a period of not less than three years following the last date the employee was employed. Such information shall be provided without charge to an employee or person acting on behalf of an employee upon request. An employee, person acting on behalf of one or more employees and/or any other interested party may file a complaint with the state for a violation of any provision of this section or any law or regulation implementing its provisions. (My emphasis.)

This will naturally lead to such "persons acting on behalf" engaging in fishing expeditions, in which they rifle through private business records on the basis of one complaint, in search of as many candidates for litigation as they can find. This is an extraordinary expansion of the power of private citizens to harass business owners; of the power, for example, to blackmail through agreement not to engage in such information shakedowns in exchange for donations to the favorite pressure groups or slush funds of the "persons acting on behalf.” (This is already a common tactic used against the backdrop of threats to sue banks over "redlining" or discriminatory lending.) One can imagine the outcry if a state that prohibited abortions conducted in ways likely to damage women's mental health authorized "any person acting on behalf of a damaged abortion patient” to run riot through the clinic's records, or the symmetrical example (critical for equality before the law) of business owners being given the power to rummage through labor union records in search of violations of federal or state labor law. I suspect this initiative will lose, because in general more people than not understand the inefficiencies of the minimum wage, a feature it shares with all price controls. But its setting (as far as I know) of a precedent authorizing anti-business pressure groups to intimidate businesses on the flimsiest of grounds is potentially its most damaging effect, not just to economic efficiency but to basic liberties. (Read the whole Issue 2 proposal here.

Proposition 90 in California was lodged opportunistically in reaction to the outrage over the Supreme Court's Kelo decision, which allowed states and cities (unless their laws prohibited it) to seize private property and transfer it to another private party, nominally for economic development purposes, but almost surely primarily to increase the tax revenue flowing to, and hence the power possessed by, elected officials. It not only prohibits such private-to-private transfers, but requires that when land-use regulation lowers property value taxpayers (the most underused noun in the English-language, which people transform into the magical money machine known as “the government”) compensate the landowner accordingly. The San Francisco Chronicle has a criticism of this provision. It is long on ad hominem and non sequitur, devoting an extensive and obsessive amount of time to the people supporting the law, which is of course irrelevant to its merits. But this is the primary criticism:
This may sound like a good idea, on the face of it. But here's how regulatory takings work: If you could fit 20 houses on your land, plus a junkyard and a gravel mine, and government regulations limit you to six houses, then the government would have to pay you whatever profit you would have made on the unbuilt houses, junkyard and mine. Of course, the government can't afford to pay you, so it would have to drop its regulations, allowing the maximum development, no matter what your neighbors think.

But that is no criticism; that is the law's primary benefit. Land has value, which differs depending on how it is used. When preserved in its undeveloped state it has value to a certain number of people who want to see it used that way, when used for housing it has other value for different people who happen to live in a state that desperately needs more of it. Which value is greater? Environmentalists constantly suppose that only real-estate developers and private businesses have "private interests"; their interests are public ones. But some people care about trees, and some people care about having a roof over their heads. The best, most value-creating, least conflict-ridden way to resolve these conflicting interests is to let the landowner do as he wishes. Homeowners will pay some amount for houses (perhaps mediated by real-estate developers) in proportion to what the houses are worth to them. Environmental groups will pay for land preservation in proportion to how much preserved land is worth to them. The Audubon Society allows oil to be drilled and natural gas to be pumped on land it owns in Louisiana. The primary reason is because what the oil companies offer is good enough for them. Landowners deserve the same rights, not just for reasons of equality before the law (which are important ones), but because this makes it more likely that property will go to the uses that create the most value for all the members of society whose interests are not synonymous.

California has some of the most extensive land-use planning in the nation, and also some of the most expensive housing. This is no coincidence. Most of this planning is done at the local level, and those who already own houses can increase their value by persuading local zoning authorities to prevent competition from new houses through land-use restrictions. The proper test for whether development should be allowed is not whether homeowners are politically powerful enough, but whether the value destroyed is less than the value created. Since less housing is intact loss of value, if the value to taxpayers of land preservation justifies that loss, then they should pay.

Tuesday, October 24, 2006

America, Alone, Again

I have now finished America, Alone, which I plugged last week without having read it. I now have, and not having read it turns out not to have been much of a handicap, in that the arguments in the book itself are already familiar to fans of Mr. Steyn, of whom I am certainly one. Stylistically, it was a bit of a disappointment in that many of the best lines and anecdotes have already been used in his various columns, but if you’re not familiar with that work it is certainly a compelling read. I also thought it unfortunate but, given his writing style, history and audience, not surprising that nothing in the book was referenced. In particular the catastrophic demographics he posits for many European countries are unsourced – on page 53, for example, he argues that in France, “all of the evidence suggests a third of the all births there are already Muslim.” What that evidence is left to the reader to go find out. Given the inflammatory nature of the topic, the reluctance of governments to release official data, and the contradictory nature of the data contained in the scholarship, this has always been frustrating for me. The true demographic situation in Western Europe is, I think, still largely mysterious.

But the writing is compelling, often hilarious, and the book moves incredibly quickly. Its prime assertion – that the combination of immigration and low indigenous fertility means that large portions of Europe will be Islamic through and through by mid-century – is obviously a critical one. Is it true? The interpretation of the demographic data generated some interesting debate in the comments section of the previous post. The data problems being as bad as they are I don't know for sure, and I'm certainly reluctant to accept the catastrophic Steyn thesis as is, given what a complete transformation in population profiles in Europe it will require, and given that it depends on current demographic trends continuing without alteration – indigenous fertility staying low or continuing to deteriorate, non-indigenous fertility staying much higher than the indigenous levels.

And yet some back-of-the-envelope calculations give one pause. Suppose that there are n indigenous French and a non-indigenous ones. Suppose that each generation t of the non-indigenous ones assimilate into the mainstream culture. Some of the more sanguine commentary emphasizes relatively high rates of assimilation and rapid fertility convergence. But the rate of assimilation is an open question, and this analysis leaves out the immigration issue.

In this framework, at a moment in time the assimilated and unassimilated populations are (n + ta) and (1-t)a respectively. The growth rate of the assimilated population is dn/dt + tda/dt, and the growth rate of the unassimilated population is (1-t)da/dt + i, where dn/dt and da/dt are the fertility rates for the indigenous and non-indigenous but native-born populations, and i is the immigration of new non-indigenous, who are all assumed to be initially unassimilated. In plain English, the relative growth of the non-assimilated population depends on what fraction of the non-indigenous population is assimilated as well as the number of non-indigenous who are coming into the country.

Like any model it is a simple one, but still revealing. Even if non-indigenous fertility converges toward indigenous fertility, high levels of immigration can still promote the growing dominance of the non-assimilated population as long as immigration is high enough and the rate of assimilation is low enough. I suspect rates of immigration will grow over time because things are so grim in the societies surrounding Europe, especially the Arab and Muslim ones. The lack of economic opportunity (worse in France than in Holland and Denmark), the ability of modern technology to propagate a sense of ethnic cohesion (which need not require extensive religious devotion -- a thoroughly secularized youth in a banlieue can get just as much inspiration from a video of beheaded Westerners as someone who spends every day at the mosque), and the ability of global transportation technology to enable the migration of the ambitious and the fearful among the indigenous may make differential fertility the least of the contributing factors.

But it is obviously all an empirical question. Demography has driven history before. Sometime the decline of the Western Roman Empire is attributed to these considerations – desperately needed barbarians overwhelming the locals. In Guns, Germs, and Steel Jared Diamond cites the Bantus of West Africa and the northern Chinese who ultimately came to dominate modern China and Southeast Asia as examples of peoples who demographically overwhelmed the aboriginals. Some of this was due to superior technology, but globalization means that nowadays anyone can use much militarily useful technology or methods, even if not everyone can invent it.

This website keeps track of data from the CIA publication The World Factbook going back over a decade. If you plow through it long enough you find that the CIA estimated that the Muslim percentage of the population in France was 1% in 1995, 3% in 2001, and five to 10% in 2005. A big part of this is undoubtedly an attempt to make the count more accurate, but a big part of it is also surely quite rapid transformation of French demographics. I judge the extremely pessimistic Steyn predictions to be less likely than not at this point. But if they are correct, it would not be the first time.

Monday, October 23, 2006

Is the Marginal Product of College Negative?

Once upon a time, the primary role of colleges and universities in the United States was to prepare a narrow slice of the elite for leadership. This was the purpose that motivated the creation of many of the older private schools in the United States, many of which have become major research universities. In a second wave, states began to establish flagship campuses not just to train leaders, but to prepare citizens to function in an ever more complex society, especially commercial society. This gave us the major campuses in public university systems in almost every state in the country. Again, some of them – the entire system in California, and flagship campuses in places like Michigan, Virginia, and North Carolina – became global leaders in scholarship, even as their educational mission arguably began to lag with the introduction of gigantic classes and the sloughing off of many teaching responsibilities in core undergraduate classes to graduate students. And in the third wave, more explicitly vocational campuses arose, where the research mission was real but not central, where such research as was done tended toward the applied, and where vocational training was easily the most important component of the mission – where, in other words, the accounting and nursing departments were far more prestigious and substantial than the philosophy and history departments.

Many critics of modern American higher education assert that along the way something critical was lost – in particular, the ability of the American university system to provide its students with such foundations for citizenship as an awareness of our common heritage, a cultivation for critical reflection, and so on. A recent report suggests that at least on the first score, there is something to be concerned about. A group called the Intercollegiate Studies Institute measured the historical and cultural knowledge of college freshmen and seniors at 50 American colleges and universities of all sorts, and what they found is none too encouraging. In particular, at 16 of the surveyed school seniors know less then freshmen about economics, history, and major works of American and Western culture. In the language of economics, the marginal product of four years of often incredibly expensive education with respect to these educational outputs in these schools is actually negative — students leave knowing less than when they got there. Most of the top performers are actually relatively pedestrian schools; the first university that can be truly categorized as elite is Princeton, which comes in at number 18 and adds 2.8% to what their students know on these matters while they are there.

The methodology of the study is not perfect – it would be better to compare incoming freshmen with themselves on the day they graduate, and freshman at elite schools come in knowing much more than freshman at more ordinary universities. (The study investigates only improvement at each school rather than comparing the knowledge of seniors across schools.) Perhaps the relatively dismal performance of such schools as MIT, Yale and Cornell, all of which have negative marginal products, is primarily a function of diminishing returns – the fact that their incoming freshmen already know so much anyway.

But I will be surprised if that is the whole story. It seems incredible that someone could spend four years and tens of thousands of dollars at such schools and not show any improvement. And another of the supplementary tables indicates that while Yale freshmen know 69.8% of what, in the Institute’s judgment, constitutes an adequate education, Yale seniors know only 69.3%. At Central Connecticut State University, freshman and seniors know 39.1 and 44.1% respectively. So while Yale students and CCSU students are vastly different from each other when they get there and are still very different when they leave, the sense you get is out of a tremendously missed opportunity in both places, especially Yale.

I speculate, based primarily on personal experience rather than hard numbers, both that this pattern is worse than it used to be and that is a direct result of trends on campus for the past 40 years. Harvard University, historically the pacesetter in undergraduate curriculum despite its emphasis on research and graduate education, issued a report in the late 1940s that set the table for the modern general education curriculum – classes that all students must take, typically before they become immersed into their major. In a recent preliminary report on the ongoing reform of general education there, the Harvard committee in charge of this reassessment spoke in a condescending tone toward the old pattern of general education, built as it was around the idea of a common core of knowledge that all college graduates should know:

Conant's vision went beyond Harvard. General Education in a Free Society is a Cold War document, and its conclusions are in many respects parallel to those reached by President Truman’s commission on higher education, headed by George Zook, which released its report in 1947. Conant saw two dangers in postwar America. One was increasing socio-economic diversity, which carried the risk of class stratification and resentment—fertile ground for subversives. The other was intellectual relativism, a lack of commitment to a common set of beliefs, which was exacerbated by increased mobility, and the declining authority of traditional institutions, such as church and family, which made Americans susceptible to indoctrination and fanaticism. Conant, and his committee, which consulted widely inside and outside the academy, believed that the educational system needed to provide a common culture that would serve as a unifying agent in a diversified society (a hope inherited from Matthew Arnold) and as a kind of benign national ideology in a nation wary of ideology. They wanted Harvard students to be aware of and to identify with the Western liberal and democratic traditions: hence an emphasis on canonical texts.

That even in 1947 there was concern about "lack of commitment to common beliefs" is striking in that in 2006 America the sources of competing identities are not simply mobility and “declining authority of traditional institutions,” but the new (largely manufactured in my estimation on more than one occasion) identity anchors of race, religion, gender sex and the other usual suspects. If anything, the pressures of disintegration are greater now than then. The new general-education program at Harvard will emphasize several things that now deserve emphasizing more than in 1947 – better knowledge of science and technology, a more internationalized curriculum and undergraduate experience, and an understanding that cultural beliefs come out of the social hardwiring contained in common historical and cultural experience. But, alas, the expected stance of the Harvard faculty toward these competing cultural frameworks will not be to cultivate loyalty to the liberal idea, but that you simply understand how it is that everyone is coming from his own cultural predispositions, according to this separate report:

First, it makes less sense today than ever to speak of a single list of works as constituting "what every educated person should know." Cultural traditions—strings of interlocking styles and themes and forms—are multiple and multiplying. It is not that there is no canon; there are many canons, products of diverse combinations of backgrounds, tastes, and experiences.

Second, the practice of categorizing literature and the arts by nationality, region, and ethnicity is increasingly recognized as problematic. The more we become aware of the degree to which cultural traditions feed off one another across national, regional, and ethnic boundaries, the more we realize that it has always been this way. Culture is fluid; traditions are mobile. At the same time, it is often in the name of their culture that national and ethnic groups engage in conflict with other groups. The role of culture in shaping identities and communities is not simple. Giving students a "sense of the past" is crucial to achieving the goals in this area. Students need to know that the culture they have grown up with is a product of long histories of influence, exchange, and conflict.

Courses in this category expose students to important works from one or more cultural traditions; teach them why these works once mattered and why they continue to matter; and to introduce them to the complexities of culture's role in identities and communities.

To some extent this is almost self-parodying gibberish; the nature of a "canon" is that there can only be one. To say that there are "many canons" is just a fancy way of dodging the fundamental questions – whether we in the West are distinct in, for example, a devotion to free inquiry that is resented by many (how many scholars at Middle Eastern universities feel comfortable criticizing the most retrograde interpretations of the Koran as the primary basis for society's laws?) and, if so, whether that sense of commonality should be cultivated in our students so that they may be prepared to defend it if need be.

In that sense, Harvard is arguably behind the times. Many universities, including mine, have long since altered general education to include the Western cultural experience as one of several cultural cups that students must partake of, a forced equality between the liberal culture that generated multiculturalism and the illiberal cultures that use it to keep the virus of liberalism from penetrating their own closed societies.

And so is not surprising that when the distinct history and culture of the US and the West are not seen as particularly ennobling or important, they receive relatively scant attention by university faculties devoted to both training in highly specific disciplines they admire and a not-first-among-equals approach to Western culture in particular. So scant, in fact, that students apparently emerge from their undergraduate years knowing not much more or even less about this heritage than when they got there. Something must be filling those four years, and one supposes that it is some combination of vocational training and learning about other important cultures, about the weaknesses of our own, or about the baleful influence of the idea of cultural superiority to begin with. Does it matter? That depends, I suppose, on whether the Western heritage of liberal inquiry is an objectively valuable end in and of itself or a cultural singularity, no better or worse than any other “combination of background, tastes, and experiences.”

Friday, October 20, 2006

The Biggest Slave Plantation in the World

The Pittsburgh Tribune-Review has a story about two young lovers separated by what it incompletely calls "geopolitics." An American professional cyclist, Joe Papp, met a shamateur professional Cuban cyclist named Yuliet Rodriguez. Quickly the two fell in love. Ms Rodriguez having the misfortune to have been born in a country that she cannot leave without permission from her government, she was only able to secretly see her new lover several times a year at major international cycling events. Ultimately they married, but the glacial pace of the American immigration bureaucracy combined with the slave-like status of Cubans within their own country meant that by this year she had still not been able to come to the US. She had decided to quit the Cuban cycling team, and knew that once the government learned of this officials would take their revenge, which would probably prevent her from ever leaving the country again. So she decided to leave without telling them.

After a tortuous series of flights, she ended up in Spain. Now Spain is a country that hands out political asylum (before they get in) and amnesty (after they sneak in) to immigrants from Africa like candy. But having found that she was in the country illegally, and the Spanish government (especially under the current administration) having no belief that Cuba is the sort of place that people might ask for asylum from, allowed her two choices – to go back to Cuba (which would have ended her future) or to Venezuela, which is now Cuba the second time as farce. She chose the latter option, and the day before she was scheduled to fly to the US she was arrested and scheduled to be deported to Cuba posthaste. Almost surely the Venezuelan secret services were doing the bidding of their compadres in Cuba, who were surely enraged by the fact that Ms Rodriguez was one of Cuba's most elite athletes, and that she was the very flower of Cuban womanhood who wanted to marry an American. (The old Lonely Planet guide to China used to warn of the occasional foreigner who was dating but not married to a Chinese woman finding police breaking into their hotel room in the middle of the night on the grounds that some or another Chinese law is being violated, when in reality it was the interracial relationship that motivated the break-in. This kind of insecurity over tainting of the genetic pool is another hallmark of highly controlled societies. (B.R. Meyers, an academic in South Korea, recently claimed (subscription only) that one of North Korea's greatest criticisms of the South is its legalization of interracial marriage, with a North Korean official saying at one meeting that "Not a single drop of ink must be allowed to fall into the Han River.")

The reaction of Mr. Papp is telling. He properly (in that Americans should have the right to travel as they wish) aims his ire at the US government for prohibiting him from seeing her in Cuba, but that is all he says. The true lesson here is that Ms Rodriguez wants to leave, which in a society like Cuba, where each citizen is the personal property of the Communist Party in general and the Maximum Leader in particular, is the greatest crime of all. It must be made so, because too many would refuse to stay in such a society voluntarily. It has been this way since shortly after Castro took power, as it is in all totalitarian societies.

The turning of citizens into branded cattle confined to the land of their birth is one of the quietest yet one of the greatest crimes of the Cuban state. That the Western and especially the American left has always so romanticized Fidel Castro – because the health care is free, don'cha know – is one of its greatest disgraces. Cuba is a giant plantation, pure and simple. If it were not its people could, like most of those in the world, come and go at will. That despite these restrictions, people routinely risk their lives and the lives of their children to escape is perhaps the most telling damnation of that society, one of a dwindling number of absolute tyrannies left on the planet.

Thursday, October 19, 2006

Church-State Hinterlands: I

Two recent church-state events are in the news. (One of them, in fact, was the news.) Both got me thinking about this invariably complex class of problems.

One involves the refusal of some Muslim cab drivers at the Minneapolis-St. Paul airport to transport passengers who are carrying alcohol. This is apparently a completely misplaced interpretation of Islamic law, but in recounting the episode the anti-Islamist campaigner (and son of the Harvard historian, whom I quoted in this article, Richard Pipes) Daniel Pipes argues that it is another sign of creeping sharia, a refusal of Muslims to accommodate themselves to the beliefs and practices of the larger non-Muslim society around them. The normally sensible Dennis Prager somewhat more hysterically takes the same tack.

Critics of the behavior of the cabdrivers argued that passengerswill with alcohol were being discriminated against. This is misplaced; there is no right to ride in a particular cab in a free society. People of all religious beliefs, even very unusual ones, have a right to try to solicit business at a publicly operated cab stand. But the operative word is "try." The question is the terms under which the cab driver should be required to solicit for business.

The airport authority proposed that there be two lines – one for passengers with no alcohol and one for passengers with. This was acceptable to the drivers, but is unacceptable from an economic point of view. Presumably the line for drivers with alcohol will be shorter, and so they are being subsidized. Some drivers might even choose to buy alcohol when they otherwise would not do so to take advantage of the shorter line, which is an inefficient outcome resulting from a price distortion. If in fact the alcohol-free line will be shorter, the same effect occurs, only from the opposite direction; now people forgo buying wine or Jack Daniels at the duty-free shop when otherwise they would wish to.

Each cab driver with an unusual taste is imposing a negative externality by not only refusing to pick up a particular passenger, but by making everybody else in line wait longer while he disposes of the passenger. Suppose there are n people in line, k of whom are carrying alcohol. Each one waits whether he is carrying alcohol or not because of the cabdriver’s refusal. If each exchange between a customer and a passenger costs t in time expenses to both driver and every passenger in line, the cost of this decision when an alcohol-toting passengers at the front of the line is turned down is nt. Since we cannot set up separate lines so as not to subsidize particular tastes, either the driver’s or the passenger's (each driver carrying alcohol would pay kt instead of nt in economic costs for reasons having nothing to do with the social costs of that choice), another possibility is that the driver be sent to the back of the line. If he does so, there are n people in line and t in costs he faces for each driver in front of him in line, and so his total costs for indulging his preference are nt, which is exactly the cost we wish him to internalize. And so the efficient solution is probably the just solution – having all drivers compete on the same terms – as well. He is allowed to compete for business just like a driver without such preferences, but the costs of that preference are borne by him, as they should be.

I leave the second recent church-state dispute for another post.

Tuesday, October 17, 2006

2005 Medicines Forever

I have just come across a fascinating study that confirms a central prediction made in one of my favorite articles on state versus private health-care systems. That article is by Ronald Bailey, is called “2005 Medical Care Forever”(hence the tribute title of this piece) and appears in Reason magazine. In it the author contends that the primary fault of single-payer healthcare is that it divorces contending consumer health-care desires from the signals given to health-care producers. As with everything else, consumers of market-based health care are given a channel to reveal their willingness to pay that most effectively induces producers to produce the greatest quantity of health care at the lowest available cost. Other things equal, a higher willingness to pay translates into higher prices for producers, as does lower cost of provision, giving them the incentive to devote more resources to that activity. In a market-based system, for example, nurses might be substituted for doctors if they're able to deliver care as effectively for considerably lower cost, and drugs might be substituted for surgical procedures for the same reason. Provided manufacturers get to keep some of the surplus, they have an incentive to develop drugs that do just that.

When government officials make the call on what kinds of health care get provided and what kinds do not, some mechanism other than the bidding of money must be found. Resources might go to those with the most political influence – those able to vote in the largest numbers, those able to generate political pressure through means other than voting most effectively, etc. (It should be noted that the US has a system in which the state is already heavily entangled in these decisions, so we are no saints. The recent Medicare prescription-drug benefit is Exhibit A in this regard.)

What Mr. Bailey contends is that the absence of market incentives will dull, perhaps completely, the incentive to try to come up with ways to lower health-care costs and increase the value of the health-care services provided. The new study finds evidence in favor of a similar proposition – that pharmaceutical manufacturers respond to the incentives they are given, and when their property rights (including patent protection) are eroded, they devote fewer resources to the creation of value in those areas. In particular, it finds that the United States almost entirely drives pharmaceutical production. If a condition has a big impact on Americans, pharmaceutical companies get busy trying to address it, measured by the number of drug they have in the research pipeline at various stages of development. If it affects Europeans or residents of developing countries, there is no money in treating it, and so pharmaceutical companies ignore it.

In the developing-country case this is in part because these countries are so poor, and there is a clear moral quandary here. Should a disease like schistosomiasis receive relatively little attention because it affects mostly people who can't pay much for new treatments? Clearly not, by most moral criteria, as long as the tradeoffs required to devote more attention to it are acceptable, as they might be if drug treatments for this disease are already available or the research is straightforward. And yet, even in these circumstances it is surprising how little per capita income is required to motivate drug companies. GlaxoSmithKline has just announced second-stage trials in Ghana of a partially effective malaria vaccine, for example. (Malaria is almost entirely a disease of the world’s poorest countries.) The operative question is whether or not bringing drug development under the public sector will work better. Economic theory suggests that basic research may be more likely to be a purely public good, which is the economic justification for the National Institutes of Health and the National Academy of Sciences. And given the impoverishment of those whom they afflict, one could plausibly justify public investment in research designed to develop drugs for diseases that kill significant but not gigantic numbers of people in very poor countries. (Although even in that case, there is an argument to be made for private charity funding such research – think of the Bill and Melinda Gates foundation, which is devoting vastly more to vaccine research than any government on the planet, perhaps than all governments combined.)

The most striking findings are that property rights matter. In this particular study, diseases that occur mostly in poor countries, adjusted for the level of property-rights protection in those countries, actually have a negative effect on drug development. The authors interpret this as suggesting that when property rights are weak, so that governments will allow either the importation of patented medicine or duplication of it by local manufacturers, the citizens of those governments find that their ailments actually deter pharmaceutical manufacturers from addressing them.

The authors finally suggest that policies that allow reimportation of drugs purchased by governments in other countries deter drug development. Why develop an expensive medicine to be sold at high prices to American consumers, when immediately after introduction those consumers will be able to buy it at much cheaper prices from Canadian pharmacies? I don't think I buy this from a long-term perspective. If Canadian importation is allowed, ultimately Canadians will pay prices for their medicines that are much closer to their full social value, which is as it should be. They get away with paying much less now not simply because the government uses its size to negotiate a better rate (which some suggest the American government should do for Medicare), but because once the drug goes on sale in the US, the drug manufacturer is at a disadvantage with respect to Canada or other developed single-payer countries. Once the drug has made its way through the byzantine and extraordinarily costly regulatory process (only one out of 20 drugs that make it into the human-trial process ends up being sold to consumers), its marginal manufacturing cost is very small. And so if it says yes to Canada, and Canadian drugs cannot be reimported into the US, it makes a modest profit on each pill sold in Canada, though far less than in the U.S., which is where it covers the development costs for drugs that succeed and drugs that fail. But if such drugs can be reimported the US, its US prices collapse, and so the drug is never developed to begin with. However, I think in the medium run drug companies faced with the prospect of an open drug border would simply refuse to sell in Canada. In the long run then, the Canadian government would agree to pay more.

But this is just speculation. What is clear is that weak intellectual-property protection in other societies makes pharmaceutical companies less willing to address their most problematic health conditions. And the research equally strongly suggests that when Americans are or get sick, pharmaceutical companies address these conditions very aggressively. Thus, if the US pharmaceutical market were brought under state control (by having the state make decisions about which medicines get made, what price it will pay for them, etc.), the divorce of consumers and producers would be complete, and drug innovation would be brought to a crashing halt. If one wishes to reduce it to numbers, as economists are wont to do, it has been estimated that between 1970 and 1990 pharmaceutical innovation created value for the US economy to the tune of $2.8 trillion per year, or over $12,000 per person. Imagine the emotional disappearance of all medicines you or a loved one have used that has been created in the last, say, thirty years, and you have a more compelling picture of what might await us.

The study, if you’re interested, is Abdulkadir Civan and Michael T. Maloney, “The Determinants of Pharmaceutical Research and Development Investments,” Contributions to Economic Analysis and Policy, 5 (1), 2006.

Monday, October 16, 2006

America, Alone?

Today is a day I have been looking forward to for some time. It is the day that Mark Steyn's new book, America Alone: the End of the World As We Know It (Amazon link here), becomes available in bookstores. I have not read it yet (I will pick up my copy today), but press accounts and Mr. Steyn's own interviews indicate that the book is an apocalyptic foretelling of what is about to happen to Western Europe, and thus potentially to all of Western society.

Mr. Steyn believes that Western Europe has already signed its own civilizational suicide note. The welfare state, economic decline (itself intimately related to the welfare state), and the civilizational self-loathing cultivated by modern multiculturalism have made Europeans unwilling to reproduce. But empty spaces tend to fill up, particularly when they come with such generous cash benefits, and so Europe will be populated, only not by Europeans but by non-Europeans from the collapsing civilizations around it. And these immigrants, in his view, will be mostly Muslim, and they will bring Muslim civilization with them. Europe, within a few decades, will be Islamic territory.

Mr. Steyn has been singing this calamitous tune for several years – since at least shortly after September 11. So is he Cassandra or are the enthusiasts of the ongoing European dream-building project (fun for kids, too!) Pollyannas? His predictions seem so catastrophic, and yet the observations he makes about life in modern Europe seem so strikingly informative. He claims, for instance, that appeals by politicians to do things “for the children” (which Mrs. Clinton has picked up so enthusiastically from her husband’s greatest-hits catalogue) are much rarer in Europe then in the U.S., because children do not interest Europeans. (Elisabeth Rosenthal has a hauntingly vivid portrayal in The International Herald Tribune of what life in Genoa, Italy without children already looks like.) But so much of this conversation is crippled by the lack of available data, and of the natural tendency of the media to overplay trouble when it occurs. Mr. Steyn, among very many others, cites trends in Europe in which Muslim youths apparently are a much larger proportion of new births than they are of the overall population, which in combination with rapid levels of immigration will mean Muslim majorities far sooner than people think, and yet many societies are reluctant to even keep this kind of data. And yet some others (go here for a terrific example) claim that if one actually looks at the limited data and exist in that historical precedent, the European-caliphate prediction is nonsense.

This matters because if the pessimists are right, it does not follow that Europe will go quietly into the night. Rather, Europeans may believe the pessimistic forecast and alter their voting patterns accordingly. It is equally possible that “native Europeans” (to alter a phrase from the American lexicon of political correctness) maybe begin to vote for harshly anti-immigrant parties, which in Europe are often closely mixed with classic fascist strains of thought. Sometimes – France or Austria– this linkage is obvious, and sometimes, as in Denmark, it does not appear to exist. There has been a harsh taboo against nationalist politics in Europe since the end of the war, for obvious historical reasons, but that taboo has been breaking down in the last 15 years. Since the reaction of EU defeats has only made the anger worse by, for example, sanctioning the people of Austria for voting several years ago for the nationalist Freedom Party (led then by the Nazi sympathizer Jörg Haider), one can easily imagine Europe becoming far more nationalistic in the very near future, even if the demographic scare stories are overblown. Fear of them, combined with anger at EU indifference and even hostility to cultural preservation, may make things worse, long before they get better. As I wrote a year ago in the post linked above, “more likely is that continuing immigration will steadily erode the cohesiveness of European societies and the moderation of their politics.” Whether it takes the peaceful form of the Danish and Dutch assertion of their own cultural primacy to the newcomers among them (Holland now makes all immigrants watch a videotape before arrival in which they see, among other things, men kissing and topless women on the beach), or whether it takes a more dangerous direction of the Jean-Marie Le Pen type is a very open question.

And one of Europe’s biggest problems, which I’ve never seen anyone comment on, is that in some of these countries single immigrant groups dominate the overall immigrant profile. Very many of the immigrants in Holland are Moroccan, very many of the immigrants in Germany are Turkish, very many of the immigrants in France are from North and West Africa. This is in stark contrast to New York or Los Angeles (and in fairness, to London) where the variety is much greater. This means that it is harder for any particular group to feel either uniquely discriminated against or uniquely empowered by their numbers. It is well known in the economic literature on ethnic conflict that societies with very small minorities (think China) have relatively little ethnic conflict (and in China where it exists, it is mostly a function of concentration of groups, as in the Uighur west or in Tibet). But it is also generally true that societies with many ethnic groups, in other words an extraordinarily high level of diversity, also tend to have less conflict. It is those societies in the middle, where a small number of groups makes up a large minority of people, that conflict tends to be the greatest. Economic freedom, which makes it easier for the minority and the majority to be bound together cooperatively, alleviates this problem, but many European societies are noticeably short of economic freedom at this point.

And so Mr. Steyn is probably excessively pessimistic when he argues that Europe will collapse in a heap of sharia, but is probably right that bitter times lie ahead. If he does so (I don’t know yet), he is wrong to treat Europe as an undifferentiated mass, because some societies – Denmark, Holland, perhaps even Germany – have recognized the problem earlier while others – Belgium, France, and Spain – have not. But given his genius with the language (he is the single wittiest political writer on the scene today) and the seriousness of the issues he raises, anyone who cares about the West would be well-advised to read the book.

Friday, October 13, 2006

Commerce as Peace

An economist has won the Nobel Peace Prize. In particular, Mohammed Yunus, the founder of Bangladesh's Grameen Bank, is splitting the prize with the bank itself. Mr. Yunus was an economics professor at an obscure university when he got the idea for microcredit, the idea that financial institutions can make money by lending to very poor people who have no collateral to pay money by conventional means, and are stuck either with borrowing nothing or borrowing at an essentially loan-shark rates. His belief, which was subsequently borne out, was that many of these people would in fact pay their loans back. As the International Herald Tribune reports, the selection of Grameen and Mr. Yunus means that the people who give out such prizes are catching up to something that some of us have known for a long time:

The prize lends heft to an idea already gaining ground in antipoverty circles: that capitalist methods can be more effective in curbing poverty than traditional grant-giving by governments and bodies like the World Bank.

The award "is fitting acknowledgment that the ways of the market are not necessarily evil, that markets can be harnessed as forces of good if done properly," said Nachiket Mor, executive director of Icici Bank, India's largest private-sector lender. Mor manages about $550 million in microcredit, the small loans modeled on the Grameen model.

This has been a theme of this blog for a while. (See here for an example.) If someone else has something you want, there are two ways to get it – to persuade him to give it to you by giving him something that you have and he wants, or to take it from him by force. The first way is commerce, the second is conflict. The greater the relative returns to peaceful commerce, the less conflict there is likely to be. Anything that promotes the merging of people into a larger commercial economy (and in the case of poor Bangladeshi women, who were the main clients in the early days of Grameen, out of the household) is thus to be applauded. The more women, or minority ethnic groups, or any other vulnerable groups can be knitted into commercial ties with the dominant group, the lower social conflict will be. There are no guarantees of course come as the Jews of 1930s Germany found out. But a large body of work finds that nations that trade more fight less, and a lot of my current research focuses on the impact of free commerce within a country on the amount of ethnoreligious strife there.

Most of the research on Grameen that I have been able to find looks at the performance of the bank itself, rather than what subsequently happens to the people who borrow money from it. And it does make money, despite its clients being undesirable by conventional lending criteria. But there is some research on the individual borrowers. It suggests that people who participate get better health care, suggesting an overall higher standard of living. But it also suggests that the main beneficiaries are people who already have assets (mostly entitlements to crop income, presumably) that yield a relatively stable, if low, income flow. Those who are the most vulnerable – those afflicted with tremendous poverty and income instability – do not appear to benefit much. So there are still problems to be solved – people who have trouble getting credit often have trouble for a reason, and even a bank like Grameen whose objective is to help the poorest and which is subsidized to some degree cannot completely overcome this problem.

One of the most compelling problems is state predation. Bangladesh is,
according to the anti-corruption group Transparency International tied as of 2005
with Chad as the most corrupt country on the planet. All of Mr. Yunus' efforts would be for naught if all of these newly empowered women had most of their rewards taken from them by some thuggish bureaucrat. It would be interesting to follow the progress of these micro-entrepreneurs to see whether any work their way up into higher strata of the Bangladeshi economy and, if they do, how they interact with the state once they become a noticeable target. One can accept that culture freezes out some demographic groups from the opportunities that others have, even while insisting, as I do, that competition can break these forces down if the state does not excessively restrict it. And so Mr. Yunus can be a hero even as his solution is necessary but not sufficient for helping the people who live in places like Bangladesh take charge of their own fate.

Still, that the Nobel committee recognizes that commerce is a force for peace has made my day. Some of the “statesmen” who got the prize in the past were clearly pursuing various selfish interests rather than peace itself; that Yasser Arafat got one looks absurd in hindsight. There is a place for diplomats and ministers in this world, but it is the businessman (or, in the Grameen case, the businesswoman) who actually wants, because he benefits from it, people to work together peacefully.

Thursday, October 12, 2006

China's Unlikely Tycoon

The richest man in China is a woman. The achievements of Zhang Yin are suggestive in several ways. First, unlike many of China's nouveau riche, as best I have been able to ascertain she made her money without relying on the close government connections that are the secret to many of China's greatest fortunes. Indeed, she made her money entirely through trade between China and the US, in particular, by taking wastepaper in the US and shipping it to China to be turned into packaging, which would then carry exports back out of China.

Second, she has achieved her dreams through business rather than politics. The Chinese Communists have always talked a good game about equality of the genders sexes. I have met many Chinese, male and female, who are completely convinced that women and men are as equal in China as in any country in the West. (On one occasion I heard this assertion by participants in an overseas MBA program that was overwhelmingly male, at the same time that the American classes down the hall were split roughly 50-50.) They are also fond of comparing themselves favorably, not entirely without reason, to Japan, where women are substantially hampered in business (although less than they used to be).

But when push comes to shove, I suspect that this equality is exaggerated, particularly in politics. While there are a fair number of women in the ornamental positions in the Communist leadership that hang decoratively below the highest levels where the decisions are really made, the only woman in China I am aware of who has had meaningful power during the communist era was Jiang Qing, and she achieved it only because (like Hillary Clinton) she piggybacked on her powerful husband – Mao Zedong.

But as I have argued elsewhere, equality in politics is done mostly for show, while equality in business, depending as it does not on its symbolic value but on the ability to make money, is much more profound. And when businesses compete freely, it is much more thorough too. (Not just with respect to sex but all forms of tribal equality.) Economic liberalization in China will be a far greater tool for achieving greater equality of the sexes and dignity for women than could be achieved in a thousand years of “progressive” or socialist governance. (For all their talk of equality, I cannot think of a single communist government that ever had a female leader. While some societies that tilt left have –in Scandinavia, in particular – had female leaders, equality in commerce, which is how you gain more control over your own life, is a different matter.)

I'm also struck by the fact that she and her family live not in China but in Los Angeles. While it is always a mistake to read too much into one particular life story, it speaks well of us that she could come here and achieve what she has given her background and demographic profile.

Tuesday, October 10, 2006

Compelling Nonsense

Carl Cohen, a professor of philosophy to the University of Michigan, has sent a letter to the president at his university that harshly criticizes its defense of "affirmative action" (meaning, in this context, the assignment of credit for tribal background to some applicants on grounds of "diversity"). He also approvingly mentions an initiative on this fall’s ballot in Michigan that would ban state racial preferences (similar to measures that have been passed in several other states). Here are some excerpts:

Justice Powell, alone among the nine justices of the Supreme Court, had suggested (in Regents v. Bakke, 1978) that diversity in enrollment might serve as constitutional support for race preference. A Supreme Court majority of five (in Grutter v. Bollinger, 2003) followed him, registering its acceptance of some race preferences because they met an alleged "compelling need" for a "critical mass" of students in each of three ethnic minorities.

That the diversity defense is no more than a stratagem is made manifest by the history of this controversy. Diversity was hardly ever mentioned until the compensatory justification was thrown out by the courts. The evidence in the Michigan cases (Grutter and Gratz) exposes and highlights the ruse. If a "critical mass" of minority students (what was claimed to be a compelling need) in the black minority requires, let us say, 50 blacks among the incoming law school class, how can it be that only 25 are needed for a critical mass of Hispanics? And only five for a critical mass of Native Americans! Candor compels the admission that all our talk about using preference to achieve a "critical mass" of students in each minority for the sake of educational excellence is - in the words of four members of our Supreme Court - a "sham." It is a device, the only device available with which we can continue to satisfy the inner compulsions of white guilt.

I ask you to reflect. Can an increase in the number of certain racial minorities in the Law School entering class be a truly "compelling" need for the state of Michigan? Think about that claim. It is nothing short of preposterous. Some states in our country, Massachusetts and others, do not even have a state-supported law school. Can the racial makeup of the entering law school class at the University be compelling while in other healthy states such a class does not even exist?

The judicial framework for every type of race-based preferential treatment by the state – in university admissions, particularly – is astonishingly fragile. Contrary to popular belief, "diversity" has never been unanimously accepted as a justification for such treatment. The most important Supreme Court precedent on affirmative action (outright quotas in that case, which the Court threw out) is University of California Regents v. Bakke. In that case, four justices were willing to grant substantial deference to the University in using "race" as a factor in determining who gets into medical school and who doesn't. They argued essentially that our racial history was so bad that some whites would have to suffer in the attempt to make up for it. Justice Lewis Powell was unwilling to go that far, but was the only justice to even argue that "diversity" was a compelling interest that justified violating constitutional guarantees of equal protection of the laws. The word "diversity" appears neither in the dissent (by four justices of the left) nor in the concurrence (which agreed that the petitioner Mr. Bakke should be admitted but argued that any use of race violated the civil rights laws). Because Justice Powell's opinion was intermediate between the concurrence and in the dissent, it became the controlling one, despite diversity's utter unimportance in the views of the other eight justices.

The whole legal justification of "diversity" as a ground for discrimination in admissions thus hangs on the opinion of one man. Putting even more weight on this already fragile foundation, Sandra Day O’Connor was forced in her controlling opinion in Grutter v. Bollinger in 2003 (which upheld the use of race in law school admissions on the same day that a separate opinion invalidated a similar plan for undergraduates at the same university) to assert that "[w]e expect that 25 years from now, the use of racial preferences will no longer be necessary to further the interest approved today."

The Constitution, needless to say, says nothing about whether unequal treatment on racial grounds is okay for a certain period of time until certain objectives have been achieved. Either affirmative action is constitutional or is not. But because the jurisprudence is so arbitrary (with a constant majority of the court clearly wanting to uphold affirmative action, and yet having such a hard time reconciling it with the Constitution), and so obviously impinges on the prerogatives of the legislature, that we are now well into a period in which the nine justices must constantly arbitrate the increasingly arcane boundaries between constitutionally permissible and impermissible use of race in handing out government advantage.

Professor Cohen has advanced the discussion by (unavoidably) accepting the abstract proposition that diversity is a compelling state interest ("compelling" interests justifying more constitutional shenanigans than mere "rational-basis" ones), but that law school diversity per se is not such an interest. Justice Powell forces him to take that route, but implicit in his argument is the question of whether any educational diversity is really "compelling" in the same sense that, for example, preventing the press from reporting on troop movements during wartime despite the existence of the First Amendment is. This is the kind of thing that "compelling" is supposed to mean, but the increasing torture of the word to justify affirmative action in the increasingly constitutionally narrow space that it has to roam in is becoming more and more untenable. Professor Cohen should be commended for advancing the discussion in this way. Everyone concerned about the increasing incoherence of the interpretation of the Constitution on this issue should read the whole thing.

The Chronicle of Higher Education reports that many higher-education pressure groups are filing briefs with the Supreme Court in support of the efforts of several public schools (at the pre-college level) to maintain their ability to use race in admissions decisions. So this is far from a purely Michigan problem.

Friday, October 06, 2006

America at 300,000,000

Any day now the Bureau of the Census front page will show the U.S. achieving a milestone as its population passes 300,000,000. It passed 200 million circa 1970, and it is interesting to see the way in which the country and its people have changed since then.

First, as the picture below suggests, the population is older but not that much older.

The median age of the population was 27.9 in 1960, and 33.4 in 2000. The baby boom is visible in both curves, but a noticeable baby boom echo is also present in the 2000 curve, bolstered by a significant amount of immigration.

Other data of interest:

Married families as percentage of all families45 (1960)23.5
Children in single-parent homes9% (1960)27%
Household median income (in 2000 dollars)*35,850 (1980)40,816
Foreign-born as a percentage of total population4.711.1
Percentage of people living in poverty13.9 (1965)8.7
Lawyers/1000 population1.25**3.5 (1998)
Doctors/1000 population1.24**7.7 (1998)
Union percentage of labor force25**12 (1998)
Cohabiting couples (percentage of all couples)1.2**7.1
Weekly religious attendance40%40% (1998)

* Households have changed significantly during this period.
** Estimated from graph in book The First Measured Century

Another tidbit which can be gleaned from census data include that "black" females have for some time earned upwards of 98% of what "white”females do. ("Black" males still earn significantly less than "white” males, but this, like all figures here, is before standardizing for such things as education and experience.) Overall, median real "non-Hispanic white" male income has increased 8.8% between 1970 and 2004, "non-Hispanic white" female income has increased 77.9%, "black" male income has increased 29.7%, "black" female income has increased 99.8%, "Hispanic" male income has increased 49.5%, and "Hispanic" female income has increased 113.8%. The Census Bureau has only had a designation for "Hispanic" since 1972, so that is the base year for all categories with the word "Hispanic" in them. For whatever reason, the bureau changed "Asian/Pacific Islander" to simply "Asian" in 2002. It has only been keeping track of even that category since 1988. From 1988-2004, male income for this group has increased 16.1%, and female income 44.8%. I confess I am totally shocked by the weak performance of median income for "non-Hispanic white" males. There is much talk of a crisis among boys in the educational system, for which the book The War against Boys: How Misguided Feminism Is Harming Our Young Men is the most common reference. It is obviously a complicated question, but the income data here at leased to provide something in need of explanation.

The flow of legal permanent residents was 373,326 1970 and 1,120,273 in 2005 – a 200.7% increase at a time when the population overall increased, obviously, by 50%. (All immigration data come from the US government's Yearbook of Immigration Statistics.) From 1970-1979, 19.4% of permanent residents came from Europe, 33.1% from Asia, 40.6% from Latin America, and 1.7% from Africa. In 2005, these figures were Europe 16.1%, Asia 34.1%, Latin America 35.9%, and Africa 7.1%. Africa aside, these are not big changes; the biggest ethnic change in American legal immigration was spurred in 1965, by changes that year to immigration quotas. The biggest surge in permanent resident flow came from 1989-1991, shortly after the Simpson-Mazzoli law gave extensive amnesty to those who were here illegally; although permanent residents are obviously here legally, the signaling function of that law suggests that incentives do indeed matter. (Indeed, much of this may have been the legalization of previously a legal aliens given amnesty by that law.) Immigration has been permanently higher since that law, but faded in 2003, presumably because of some combination of anxiety among would-be immigrants generated by the September 11 attacks and the collapse of the tech bubble. But it has since resumed, and so the country will inevitably become more ethnoreligiously scrambled and complex, suggesting that we give long, hard thought to the question of how we can all get along.

Is 300,000,000 Americans, let alone 400,000,000, too many? Only to environmental hysterics, who bemoan the allegedly overconsumptive tendencies of Americans while ignoring their disproportionate contributions to global innovation. If you think the country is apart from that too crowded, simply look down the next time you are on a plane. You will see then how underpopulated a country it really is.

Wednesday, October 04, 2006

Global Warming

I have never written about the extent to which humans are causing the Earth’s temperature to warm, for the simple reason that I don’t know much about it. I know essentially nothing about how particular human activities will affect the temperature at particular times, in particular places in the future. This is not just because I am not an expert in climatology, although that is an important reason for me to stay quiet (a reason many commenters on the subject ignore), but because predicting the specifics of future climate is next to impossible in any event because of the complexity of the problem. At this point, scientists can give us a date yet urgent pronouncements about how "the temperature worldwide" will rise, but by how much in various places around the world they can at this point say little.

However, over the years I have learned a little and very imprecise bit about how human societies work, how humans react to various incentives, and the trade-offs they are and are not willing to make to achieve various goals. The pure science of global warming may ultimately prove to be nothing more than a series of wild-ass guesses. In a famous speech, the science novelist Michael Crichton argued that the science of global warming is not science at all, relying as it does mostly on computer modeling fitted to the past rather than making testable predictions and then testing them. He has argued that for us to take the human-caused climate change hypothesis seriously, and to be asked to make tremendous sacrifices on its account, its advocates first must do something as elementary as predicting what global temperatures will be over the next 20 years.

But for purposes of this discussion I am willing to stipulate that the globe is getting warmer, and that human activity is a big part of the reason why. I'm far more concerned in the question that comes next: what do we do about it? Both the environmental movement and many scientists who specialize in the promotion of human-induced global warming as a hypothesis that is almost certainly true are confident of the fact that the consequences will be extraordinarily severe, and that we must take dramatic action to halt the problem now. (As an aside, I have never understood why these advocates have accepted the term "climate change," which I have heard was originally promoted by industrial interests, as a substitute for the seemingly more threatening term "global warming.")

Scientists and environmentalists reveal little understanding in these arguments about how humans best adjust to change. People generally don't do it by willing, unquestioning obedience to a master plan developed by experts. (On some occasions in the past they have done it up to a point – gunpoint, that is – in reaction to the demands of a police state.) Instead, the way that humans solve problems most effectively is in a decentralized way, where property owners individually respond to the incentives they face. If the climate warms, certain areas of the planet will become more hospitable to some kinds of human activity (living, farming, etc.) and less hospitable to others, and other areas will do the opposite. Will Canada become warmer and more hospitable to the warm weather crops? Will coastal areas in many countries become uninhabitable because of repeated flooding? No one knows. But entrepreneurs will respond to whatever changed environments they discover and will move land (and other resources) from previous uses to new ones. Coastal housing and business property that finds itself more under siege from the tides will move inland; it will be replaced by businesses more appropriate to that sort of environment – recreation, e.g. And some clever entrepreneurs will figure out ways to accommodate the change without dramatically overhauling resource use – figuring out new technologies to continue to make farmland productive in areas where the changing climate might otherwise make it less so, figuring out how to defend coastal land from the encroaching sea. If the Dutch could do the latter in previous centuries by reclaiming coastal lands and turning it into farmland, surely that will not be beyond the capacity of profit-seeking businessmen responding to the wishes of those who inhabit coastal areas.

In an article published in a PR magazine put out by Tufts University, several professors of engineering there describe the dramatic impact that global warming will have on the Boston area. Almost lost in the details is a note that in the last century much of Boston has already sunk by six inches. Somehow, Boston still stands. Despite the absence of any grand, heroic, government-directed efforts to accommodate this change, people dealt with it. They did it one economic decision at a time – one decision to use this acre of land for this purpose instead of that, one decision not to fund this project and fund that one instead. And ultimately this will be the best way to react to whatever changes we bring about, even if they are severe ones. The alternative – a grand effort directed by scientists and other experts to "do something" – will be as ineffective (and downright harmful, in both the economic and the broader human-rights sense) as anything ever dreamed up by a Soviet planner.

This point is important because of another basic truth about the global-warming problem – that dealing with it by substantially constraining human possibilities to live better is simply out of the question. That Canada and many European nations have failed thus far to adhere to even the modest constraints imposed by the Kyoto agreement is a sign that the costs of dealing with global warming by radically redoing the way we live are simply unacceptable even in rich countries. The idea that hundreds of millions of desperately poor people in places like China, India, and elsewhere in the developing world would willingly forego the miracles of industrialization to deal with a problem that is (a) of uncertain size, (b) perhaps far in the future, by which time clever, self-interested people will have figured out ways to deal with it, and (c) substantially caused at this point by Westerners in any event is preposterous on its face. One can certainly lament the unfairness of it – the idea that the millions of people on the desperately crowded coasts of Bangladesh or who live on Pacific islands in danger of being eliminated by rising seas bear much of the burden of changes to which they contribute very little. But ultimately that gets us nowhere. The most important thing we in the West can do to minimize the consequences is not to hector one another for our excesses and dream up grand UN-led schemes to bring the personal lives of all of humanity under greater and greater collective scrutiny, but to provide everyone potentially damaged by global warming with more options to cope with it – in other words, by promoting economic growth, the very thing so demonized by many environmental activists concerned about global warming to begin with.