In psychology, the paradox of “depressive realism” refers to the fact that depressives better estimate probabilities than the average subject. Depressives are less encumbered by wishful thinking and tend to see their own chances more clearly. Unfortunately for the depressive, a more realistic view of one’s chances comes with declining motivation and loss of interest in most activities. Depressives are more realistic, but they lack the drive to take advantage of their realism.

I see a similar dynamic in recent commentary on race in the US. For some commentators, the greatest danger is wishful thinking about the scope of racial inequality. Americans need to understand the full breadth and scale of white supremacy, on this view, since it’s all too easy to tell a story of progress and improvement. Wishful thinking is the surest way to pretend racism in America is a thing of the past.

One worry about this analysis is that it’s self-undermining. If white supremacy and racial inequality in America are so deeply woven into the fabric of the nation’s history, then why even bother mobilizing people, passing a law, or running for office? Nothing will make a difference. There’s no hope for improvement or transformation. We’re left, perhaps, with only personal approaches to the problem of living in a racially divided society. Maybe all we can do is learn to live with cognitive dissonance.

Mudbound tries to steer a middle course between these two positions. The films opening with the two white McAllan brothers digging a grave for their father–a vicious bigot–as night falls and a storm front arrives. The younger brother in the grave panics as the muddy water rises around him, but the elder one arrives with a ladder to get him out. For a moment it seems that the next generation might fall into the same pit as the last, but a tool forestalls the tragedy. The next morning the Jacksons, their black tenants, pass by the grave in their wagon, carrying what we will learn is their grievously wounded eldest son. The white brother approaches them tensely, requesting their help to lower the coffin into the grave.

At the end of the film, we return to this of confrontation between the two families. Who will take responsibility for burying the past? The viewer is now fully aware of the multiple forms of physical and emotional dependence and exploitation between the McAllans and the Jacksons. Now comes the most terrible form yet–the McAllans ask Hap Jackson to help bury the man who lynched their own son. As the leader of the local black congregation, Hap offers a cutting graveside “eulogy.” He must not only physically support the McAllans, but also help them address their own racial guilt.

Before this, however, there is a moment when the elder McAllan brother asks Hap to bring his sons to help as well. Hap’s response is immediate and unequivocal: “My sons are not getting down out of that wagon.” This is the first and only moment in the film where a black person directly refuses a white person. Hap does not refuse to help McAllan–he refuses to involve his sons. The moment is ambiguous. Is this a personal act to keep his family’s hands clean? Or is it a political moment, where Hap expresses hope that his children will not inherit an America where black people are asked to solve white people’s problems?

I prefer to think that Hap’s intention is not merely personal. Personal reconciliation to life under injustice (what Isaiah Berlin called “the retreat to the inner citadel“) presents itself as a safer, more robust orientation toward the world. This approach assumes that what we most care about is our own self-understanding. Surely living according to our own conscience under injustice is essential, but personal responses to racial injustice overlook the fact that we do not simply care about self-understanding. Personal responses do not cordon off and protect what we most care about. We care about other people who have their own lives to lead and lives that could be unburdened by racial injustice. It matters to each of us that they shouldn’t get down out of their wagon.


A dilemma for defenders of sex differences

One of my favorite philosophers, Allen Buchanan, makes a great point about the limitations of “human nature” as an explanatory concept for behavior in his writing. Let’s characterize “human nature” as the set of traits and capacities that biological human beings normally acquire in their development, and which set is stable across time and space.

Suppose there is such a thing as “human nature.” Most likely, the capacities and traits that comprise human nature would be highly abstract, something like “a capacity for culture,” or obvious, like “bipedal.” They’d have to be this abstract or obvious to meet the generality requirement that the concept imposes. The problem, however, is that human nature looks pretty uninteresting–specifically, it can’t explain any of the specific behaviors or patterns that excite our interest.

For example, it won’t do to say that part of human nature is a willingness to cooperate with complete strangers, since this will only delay the question of why such willingness is part of our nature at all. It also risks incoherence in the concept, since human beings are not fully altruistic and cooperation frequently breaks down. Any specific, interesting form of human behavior will be so confounded with environmental and cultural factors that an appeal to “human nature” won’t cut much ice.

Buchanan’s basic point is this: “human nature,” as a concept for explaining behavior, is either 1) uninteresting or 2) thoroughly inadequate. If there is such a thing as human nature, it’s not very interesting. And if we try to make human nature interesting, we risk making it incoherent by introducing confounding cultural and environmental factors.

I think a similar point applies to the debate about sex differences. Suppose their are sex differences between men and women. If there are, they are so abstract or obvious that they can’t explain much anything interesting. And if we try to explain specific behavior by appealing to sex differences, we will confound our analysis with other factors.

Take the recent example of the Google diversity memo that’s been floating around. Even if there are sex-based personality differences between men and women, why think at all that those differences are at all the most important in explaining the gender gap at Google? As the author of the memo himself concedes, we shouldn’t commit the “statistical fallacy” of explaining individual-level differences through population-level differences. But the same point precisely undermines any argument that sex-based differences explain the gender gap at one particular company at one particular time.

How Libertarians Can Deal with Voluntary Slavery

I’ve been reading some left-libertarian stuff recently and had this random thought about voluntary slavery. Briefly, left-libertarianism is the view that people are full self-owners (in the same sense as right-libertarians like N0zick or Rothbard), but the natural world is either equally owned or appropriation of natural resources is subject to a proviso at least as strict as Locke’s.

Left-libertarianism is an interesting view that tries to combine the appeal of libertarian self-ownership while jettisoning the inegalitarian implications of some right-libertarian views. Left-libertarians, like all libertarians who accept full self-ownership, accept that people have a moral power to transfer their rights over their persons to others, which is consistent with voluntary slavery.

A lot of people think a decisive objection to libertarianism is that it permits voluntary slavery. But it seems like there’s a way for libertarians to get around the voluntary slavery problem.

Suppose A is in a relationship with B that’s not going well. A asks C to have sex. Suppose A voluntarily waives her right against nonconsensual sex with C. We’re assuming that A has voluntarily agreed to have sex with C, and that C would not violate A’s rights by having sex with A.

Nevertheless, C could still have a duty not to have sex with A. It could be a duty to B, or maybe an impersonal duty not to undermine relationships. The point is that there are cases where we might have duties *not* to do things people voluntarily allow us to do.

It seems like the libertarian could say this about the voluntary slavery case. People have rights to sell themselves into voluntary slavery, but the new slaveowner has a duty not to enforce or honor the slave contract.

Bad Libertarian Arguments against Sweatshop Regulation

I’m generally pretty skeptical of sweatshop regulation. I buy the argument that for most workers at low-wage factories in developing countries, these jobs are their best option relative to alternatives such as working in agriculture or in the underground economy. I think many Western efforts to regulate or boycott arguments are misguided and harm people who they think they’re helping. But some libertarians make really bad arguments against sweatshop regulation, and intellectual honesty requires  me to call them out. The existence of bad arguments for X, even when there are also good arguments, tends to undermine support for X.

One prominent recent book that defends sweatshop jobs is Out of Poverty: Sweatshops in the 21st Century by Ben Powell. It’s an interesting book with lots to think about, but I want to focus on one excerpt where Powell discusses workplace harassment. Powell objects to criticisms by anti-sweatshop groups of sexual harassment on the job:

If the risk of sexual harassment is part of the working conditions at a factory, then firms have to offer higher wages to attract workers…. In short, the analysis of sexual harassment on the job is much the same as the analysis of other working conditions. Laws that effectively eliminate sexual harassment would lower wages. If employees desired this, then market forces would remix the compensation package to minimize harassment and lower wages. (p. 184)


The mechanism here is the idea of “compensating differentials” for labor. If a job is unattractive in some dimension, such in the level of abuse workers endure, in a competitive market the employer will have to pay higher wages to compensate for that unattractive feature. Powell cites as evidence for this mechanism a 2010 study of U.S. markets by Joni Hersch, which finds that women do in fact enjoy a compensating differential of about $0.25.

The first thing to note, though, is that Hersch’s analysis cannot simply be applied uncritically to markets outside the US. There are at least two reasons for this. First, markets for sweatshop labor may be much less competitive than US labor markets. This is an important condition for the positive effect of compensating differentials on wages

Second, even if the compensating differentials mechanism has an effect, sexual harassment may have other negative effects on wages such as higher turnover, lower employee morale, or inefficient efforts to avoid harassment, which leads to lower productivity. Because we cannot decide from the armchair which effect dominates (the productivity effect or the effect of compensating differentials), we need to do careful empirical analysis of the labor markets in sweatshop countries before we conclude that workers are paid higher wages as compensation for harassment.

But let’s assume that workers are, in fact, paid higher wages as compensation for harassment. Powell argues that we should infer from the fact that workers take these sweatshop jobs that workers prefer the money to a harassment-free workplace, since if workers had different preferences, the employer would pay a lower wage and reduce the level of harassment. Because workers agree to jobs where they sexual harassment, anti-sweatshop activists shouldn’t oppose it.

This argument is, to put it charitably, not very good. In the first place, it doesn’t at all follow from the fact that workers accept jobs with sexual harassment that we shouldn’t object to those terms of employment. Sometimes we shouldn’t make offers to people even though they accept it, particularly the offer reflects some objectionable preference (such as the desire to grope and physically violate women). We should do what we can to change those preferences (or at least the behavior associated with them) rather than take them as a fixed cost, which is the position of most anti-sweatshop activists. Even if workers accept those terms of employment, for example, they may prefer that employers didn’t have the desire to sexually harass them. They may prefer not be part of a collective enterprise where anyone’s harassed. This possibility, raised by Amartya Sen in a critique of the revealed preference concept, means we cannot necessarily infer welfare from choice or behavior.

There are good arguments against some regulations of sweatshop labor, but those arguments are generally sensitive to the costs and benefits of different regulations or the voluntary nature of the worker’s choice. In this case of Powell’s argument against sweatshop regulation, unfortunately, neither of these desirable conditions obtain.



Two things the new administration may get right

The GOP’s corporate tax reform proposal. Republicans have proposed replacing the corporate income tax with a destination-based cash flow tax (DBCTF). This is an idea that’s received support across the partisan aisle. Economists generally object to the corporate income tax because corporations ultimately don’t may much of the tax–the real burden of the tax generally falls on workers, consumers, and owners of stock. In addition, the corporate income tax represents a falling share of government revenue and an increasingly inefficient means of revenue generation. The DBCTF proposed by the GOP would significantly reduce the corporate income tax from 35 to 20% and modify several common deductions. These are quite significant: the elimination of depreciation means that companies can write off an investment in a single year rather than pay tax on a depreciated basis every year. This eliminates a tremendous disincentive to capital investments by essentially making them tax free. The elimination of the interest deduction eliminates the distortionary treatment of debt and equity, but some worry the elimination would impose a serious burden on the financial industry given that most of that industry’s cash flow comes from borrowing to lend.

A “destination-based” tax is good because it taxes corporations based on where they spend money, not where they produce goods. This eliminates US companies’ incentive to move profit-making activities off-shore to avoid high US rates. Such a tax may appear to subsidize exporters over importers, since importers will bear taxes on their purchases while exporters will not bear any tax on their overseas sales. While this might have a nominal effect, the real effect would be offset by changes in the exchange rate. A tax on imports and a subsidy to exports both lead to dollar appreciation–there are fewer dollars out there to buy imported goods so they’re worth more, and foreign buyers bid up the price of dollars to buy exported goods. The net appreciation of the dollar would mean no change in the US trade balance. One possibly distortionary effect, however, would be that dollar appreciation would reduce the value of foreign-denominated assets held by US citizens overseas. It’s likely that financial interests will object to this proposal as a result.

The reduction in the statutory tax rates from 35% to 20% would also put the US below the OECD statutory average of 24.7%. However, the effective tax rate faced by companies would depend on the details of the final bill.

Another prospect that excites me is the prospect of FDA reform. If you think that improved health is one of the most, maybe the most important improvement in well-being we’ve had over the last 200 years, reforming the process by which we develop new pharmaceuticals is really important. The new FDA commissioner could do important things like implement reciprocal recognition of drugs and devices with other licensing boards in advanced economies. Another policy change would eliminate the application procedure where companies have to apply to the FDA to start producing a generic drug, which is the regulatory barrier that makes it possible for entrepreneurs to implement monopoly pricing on generic drugs.



How biased advice can be good advice

Confirmation hearings for Donald Trump’s cabinet nominees are getting underway, and many commentators have expressed concern over the lack of ideological and political diversity among Trump’s cabinet nominees and advisors. I don’t want to get in to the specifics of these individuals’ qualifications, but I do want to examine an underlying assumption behind worries about ideological homogeneity in the incoming administration.

There is an idea, summarized by the expression “team of rivals,” that great leaders surround themselves with advisors with very different views of the world. Great leaders, according to this idea, incorporate a diversity of perspectives among their advisors to counteract their own biases rather than surround themselves with an echo chamber of like-minded individuals.

The team of rivals idea is only half-true, however. It’s true that good advisors should not falsify or misrepresent their beliefs to leaders. Good advisors need to have integrity and honesty, and flatterers generally make poor advisors as Machiavelli emphasized.

However, good advisors should not necessarily be unbiased or have very different biases* from the leader they advise. It is often optimal for leaders to solicit advisors with biases similar to the leader’s, or simply advisors with a bias rather than unbiased ones. The advantage of biased advisors is even stronger when there is urgency or information is costly (as all interesting decisions are). The optimal level of bias is not zero–instead, the optimal level of bias is that level most likely to shift the leader’s decision from what the leader would choose in the absence of advice.

In his 1985 paper “The Value of Biased Information: A Rational Choice Model of Political Advice,” Randall Calvert explains this counter-intuitive claim. The intuition here is that advice from someone who has a very different bias from you is a less credible source of information and less likely to change your own views. It is hard to tell with such an advisor how much of the recommendation reflects the true probability of the action’s success, and how much it reflects the advisor’s own bias. However, if someone with a similar bias to you recommends against the action toward which you’re both biased, or in favor of the action you’re biased against, that sends a very credible message.

An advisor with the same biases as a leader is more likely to advise actions consistent with the leader’s bias, which is a cost. But when the advisor recommends against his bias, that recommendation is much more credible. Put differently, suppose the advice in question concerns whether to stick with the status quo or adopt an alternative. Suppose the advisor and the leader are both biased in favor of the status quo. If the advisor recommends accepting the alternative, this is far more valuable to the leader a recommendation to accept the alternative from a neutral advisor or an advisor biased in favor of the alternative. The value of this information–a recommendation against one’s own bias–outweighs the cost of the advisor’s own status quo bias. Such a recommendation may eliminate the need for the leader to seek out further advisors and the cost of gathering further information.

Of course, there are also other dangers to advisors who share a leader’s own biases as explained above. But as Calvert showed, the optimal level of bias in an advisor is not zero for rational decision-makers. We are often better off receiving advice from people who share our own biases when information is costly and time is scarce.

*I should note that “bias” here refers to different things in the case of the leader and the advisor. In the leader’s case, a bias represents a prior belief that a particular action will be good or bad. In the advisor’s case, the advisor makes recommendations about an action that’s imperfectly based on the true probability of the action’s success. The advisor’s bias is how much the advisor discounts the true probability of success before recommending the action.



Your Epistemic Neighborhood is Really Important

One of the most important concepts in social psychology is the Fundamental Attribution Error (FAE). The FAE leads us to mistakenly attribute the effects of circumstance or environment to the inherent qualities of individual people. For example, I might think the person who cuts me off on the highway is just a jerk or a poor driver, when he might have instead simply been distracted or in a hurry. One corollary of this that we also take credit for features of ourselves that are in fact reflections of circumstance, and that we ignore the role of background circumstances explaining individual decisions.

On the face of it, the problem with the FAE seems simple enough. It’s obviously a mistake to confuse people with their circumstances–a confusion we’re taught to avoid as young children. But the FAE is a surprisingly supple concept.

Many people who vaccinate their children believe that vaccine refusers (people who either partially or wholly refuse to vaccinate their children) are irrational and ignorant. This view is partly true, since many vaccine refusers do have false beliefs about vaccine science. But the problem with the view is that it tries to explain vaccine refusal with the concept of individual irrationality. Vaccine refusers are generally neither more or less irrational than vaccine compliers. For example, one bias at play in the decision to vaccinate is the affect heuristic, where reasoners mistake how a belief makes them feel with whether the belief is true. Vaccine refusers may refuse on the basis of bad experiences with their pediatricians or other medical professionals on grounds that the belief that vaccination is dangerous would be consistent with their negative affect toward medical professionals. The affect heuristic clearly can lead us astray. However, vaccine compliers are also susceptible to the affect heuristic. A positive relationship with your pediatrician is the most important predictor of whether you will vaccinate your children. Fortuitously, the affect heuristic leads vaccine compliers to act in accordance with accurate medical science, but not because vaccine compliers are more individually rational than vaccine refusers.

The problem with vaccine refusers is not that they are individually irrational, but that they are a part of an irrational environment. Refusers form (often online) communities that are closed to outside voices and fail to give appropriate weight to scientific expertise. The FAE, however, leads us to mistake a defective epistemic environment for defective individual reasoners. Competent individual reasoners in an uncritical or closed environment will not reason competently.

One personal implication from this application is not to take too much credit for one’s good beliefs. Good beliefs reflect a good “epistemic neighborhood” as much as one’s own individual competence, and bad “epistemic neighborhoods” more than bad individual reasoning explain perverse practices like vaccine refusal.