Monthly Archives: January 2014

The robots aren’t the problem, politicians are

A spectre haunts us, the spectre of robots. The Economist writes, “it seems likely that this wave of technological disruption to the job market has only just started. From driverless cars to clever household gadgets, innovations that already exist could destroy swathes of jobs that have hitherto been untouched.”

recent study from the University of Oxford finds that 47% of U.S. jobs could be replaced by computerization (see chart). The study includes a handy table at the bottom where you can see the probability of your job being computerized (most likely to be affected: telemarketing, least likely: recreational therapy). As Tyler Cowen writes in Average is Over, “as intelligent-analysis machines become more powerful and more commonplace, the most obvious and direct beneficiaries will be the humans who are adept at working with computers and with related devices for communications and information processing.” This, he argues will drive inequality.

It’s certainly true that innovation has driven inequality, but it is more complicated than Cowen makes it out to be. Technology has always been disruptive, but how the gains are distributed is the real issue. Oscar Wilde wrote in 1891,

Up to the present, man has been, to a certain extent, the slave of machinery, and there is something tragic in the fact that as soon as man had invented a machine to do his work he began to starve. This, however, is, of course, the result of our property system and our system of competition. One man owns a machine which does the work of five hundred men. Five hundred men are, in consequence, thrown out of employment, and, having no work to do, become hungry and take to thieving. The one man secures the produce of the machine and keeps it, and has five hundred times as much as he should have, and probably, which is of much more importance, a great deal more than he really wants.

His analysis is surprisingly relevant today. The benefits of technology and globalization have been distributed differently in different societies. In countries with strong bonds of social democracy, the benefits have been more widely distributed through a government transfer system.

The conventional wisdom is that skill-biased technological change is driving inequality. The premise is that technological developments have favored college-educated workers over unskilled labor, thereby increasing inequality. Since it was formulated, SBTC has drawn criticism. A 2002 paper by David Card first drew attention to potential holes in the explanation: a short period of stabilization in wage inequality in the 1990s during a technological boom and the failure to explain wage gaps between men and women as well as blacks and whites. A 2012 paper by Daron Acemoglu and David Autor noted other failures in the theory, namely that it could not explain the divergence in incomes that had occurred among skilled workers and why the real median wages could decline during a period of increasing productivity.

New research Larry Mishel, Heidi Shierholz and John Schmitt further vitiates the thesis. Mishel et al. argue that “job polarization,” the premise that more jobs have been created in low-wage sectors and high-wage sectors, thus driving wage inequality, doesn’t actually explain the problem. On the one hand, high-wage occupations have not significantly expanded their share of the workforce since 2000. On the other, low-wage jobs have not increased as a total share of employment since 1979.

They find that changes in the occupation structure do not affect the wage structure, so if technology causes a shift from manufacturing to retail, this doesn’t necessarily entail a shift in the wage structure. They find that inequality is increasing within occupations, not between occupations as the SBTC narrative would predict. The SBTC narrative relies on the idea of an “education premium,” i.e., people with higher education reap the benefits of technological progress. But Mishel et al. find that wage inequality has grown strongly since the mid-1990s while the education wage premium grew little. Wages for college graduates have flattened over the last 10 years, even among science, technology, engineering and mathematics (STEM) and business occupations. He and his colleagues point instead to political choices, not economic inevitability.

In the show Always Sunny In Philadelphia, Charlie Kelly is one of the owners of a bar, but has lost a large portion of his share through Esau-esque trades. Because he no longer owns as much of the bar, he is forced to do the bad jobs around the bar, which become known as “Charlie work.” Charlie is subject to bouts of unemployment and degrading labor. He is trapped in a Catch-22; he would happily give up “Charlie work” in favor of machines, but because he lacks a stake in the bar, it would only leave him unemployed. This is the plight of many Americans, because America has not developed social democracy. John Schmitt of the Center for Economic and Policy Research told me that countries with strong social safety nets view globalization more positively than countries without. That’s because the gains from trade are distributed more equally, so everyone benefits. In America, since the 1970s, these gains have accrued more and more to the richest Americans, while hourly compensation for non-supervisory workers has remains stagnant (see chart).

Oscar Wilde proposes to eliminate “Charlie work” through machines:

And as I have mentioned the word labour, I cannot help saying that a great deal of nonsense is being written and talked nowadays about the dignity of manual labour. There is nothing necessarily dignified about manual labour at all, and most of it is absolutely degrading. It is mentally and morally injurious to man to do anything in which he does not find pleasure, and many forms of labour are quite pleasureless activities, and should be regarded as such. To sweep a slushy crossing for eight hours, on a day when the east wind is blowing is a disgusting occupation. To sweep it with mental, moral, or physical dignity seems to me to be impossible. To sweep it with joy would be appalling. Man is made for something better than disturbing dirt. All work of that kind should be done by a machine.

In the near future, such work will be done by robots, a welcome development. The question is how we distribute these gains. Since the 1970s, we’ve allowed most of them to accrue to the top 1%. That is not practical, nor was it inevitable. We need the productivity growth that comes from machines to be distributed equitably, so that everyone benefits.

Focus on inequality, not upward mobility

A new “bipartisan consensus” is brewing: 2014 will be the year in which Very Serious People argue that America’s primary economic goal should be increasing social mobility, not decreasing inequality. “Shame on Obama and De Blasio for talking about class, and trying to divide us,” they’ll smarm. “Let’s focus on something everyone can agree on: upward mobility.”

It’s already happening. At the Brookings Institution, Richard Reeves argues that while inequality is important, the defining issue of our era is “the shocking, illiberal, immoral transmission of poverty and affluence from one generation to the next.” Social mobility is the new deficit reduction, and luminaries from the left (Kirsten Gillibrand) and right (Paul Ryan) can both agree it’s a problem. Even David Brooks is concerned. Marco Rubio has already sketched out the battle lines: “It is this lack of mobility, not just income inequality, that we should be focused on.” At the core, the question about whether our society should focus on inequality or mobility gets to a significant schism built around one central question: Is inequality fundamentally immoral?

Economics, by textbook definition, is the study of how to distribute scarce goods in a world of unlimited desires. When we use markets to distribute goods in an unequal society, two important failures appear. First, there are people who are denied the right to have a say in the distribution of those goods, and second, some goods that are not marketable are distributed poorly.

If we imagine markets as a type of democracy in which we “vote” through our dollars about how to distribute goods, we can immediately see the problem. Those without income, or with only a little of it, cannot make their “votes” heard in the marketplace. In a 2004 comedy bit, Louis C.K. exposes an absurd example of this dilemma by proposing that with Bill Gates’ wealth, the Microsoft founder could “buy all the baseball teams and make all the players wear dresses.” Other, less benign examples of the disconnect between capital distribution and need present themselves in everyday life. For example, Jeffrey Sachs recently wondered on Twitter why the world can’t come up with $5 billion each year to fight AIDS, TB and malaria. He could just as easily have wondered why 90 percent of the world’s health research budget is spent on combating conditions that account for 10 percent of disease (i.e., diseases that affect wealthy Westerners).

In a society that accepts high mobility without equality, one accepts that whoever reaches the highest income bracket (as decided by the ephemeral concept of a “market”) should have an outsize influence in determining the distribution of resources. Thus, we have both Prada shoes and extreme poverty. Hermès and homelessness. We have Elon Musk working on private space flight and a hyper loop while starving children die for want of medicine protected by intellectual-property law. And that’s even before we consider how millionaires and billionaires have used their wealth in an attempt to distort democracy: Sheldon Adelson and his wife spent more money on the 2012 election than the combined contributions of citizens from 12 states.

In “The Spirit Level, Richard Wilkinson and Kate Pickett show how inequality negatively affects societies. They find that many of the negative phenomena that are generally attributed to culture — high levels of teenage pregnancy, obesity and criminality, for example — are not the causes of inequality, but rather the effects of it. I have made the case elsewhere that there are empirical reasons to believe that this is the case. But to take a simple example, research shows that it is poverty and inequality that make the working class more likely to bear children out of wedlock, which in turn further stifles upward mobility.

Inequality is inherently degrading. Adam Smith writes: “A linen shirt, for example, is, strictly speaking, not a necessary of life … But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty.” Likewise, Wilkinson and Pickett find that, “There are now numerous studies that show the same thing … low social status has a clear impact on physical health.” That is: Simply having a low-wage, low-social status job can lead to depression, anxiety and obesity. The problem is not only poverty, it’s also inequality.

While Very Serious People worry about mobility, the problem remains: Even if we achieve it, “the poor will always be with you,” as one Jesus Christ said. There will always be those who cannot develop the skills or talents to make their efforts marketable. Because of this, some people will never be able to enjoy the new opportunities provided by upward mobility or the new jobs provided by growth.

To accept that upward mobility alone can cure society ill’s, to accept meritocracy as the ultimate goal, is to accept markets as the means of determining merit. When we talk about “upward mobility” and “meritocracy,” we implicitly assume that those who succeed have “merit,” while other do not. However, it was Friedrich Hayek, a free-market champion, who noted that capitalism should not be considered a “meritocracy,” because markets don’t distribute based on merit, but rather demand. Jamie Dimon and Lloyd Blankfein, markets have decided, deserve more than Hannah Gay, Katherine Luzuriaga and Deborah Persaud — the scientists who cured a newborn of HIV this year. Thus, when we accept upward mobility as a goal we must also be willing to accept that markets determine who goes up and who falls down, rightly or not. And when we accept “growth” as a goal, we assume that GDP is a useful metric to determine social progress (which it is not).

This illusion of  “meritocracy” poisons the way we talk about inequality, and how to fix it. In discussing “redistribution,” my colleague Matt Bruenig points to Murphy and Nagel’s work on “everyday libertarianism,” or what Marx might call “false consciousness”: People who live in capitalist societies make assumptions like the idea that a market distribution is inherently legitimate, and therefore that a government involved in economic matters is “re-distributing” resources. In the same way, we talk about “upward mobility” in terms of “merit,” assuming that markets determine rewards justly, according to some abstract notion of what “merit” means. The first right in a capitalist society appears to be “thou art entitled to the market’s distribution.”

Markets are here to stay, but we can at least help ensure somewhat equitable access to them. Equality is freeing because it liberates people from the demands of markets, gives them more autonomy to determine their own destiny. As Oscar Wilde warned, “In a community like ours, where property confers immense distinction, social position, honour, respect, titles, and other pleasant things of the kind, man, being naturally ambitious, makes it his aim to accumulate this property, and goes on wearily and tediously accumulating it long after he has got far more than he wants, or can use, or enjoy, or perhaps even know of.” More equality means more freedom.

In his book “Left and Right: The Significance of a Political Distinction,” Norberto Bobbio argues that equality is the defining distinction between left and right. The left, he argues, believes that inequality is fundamentally immoral, while the right believes it natural and beneficial to society. The right should actually desire high levels of inequality, attended with high levels of mobility. That is: Upward mobility as an imperative is a right-wing idea.

In truth, while the right does indeed pay rhetorical lip service to the idea of mobility, its policies do little to actually encourage it. However, that fact alone does not mean the left must. Rather, the left must maintain that humans deserve equal rights to equal treatments, which demands more parity of market share.

Social mobility is a sort of Rorschach blot, upon which the left and right can project their proposals: universal daycare, pre-K, charter schools, free college, etc. But these policies do little to correct the structures that prevent mobility, primarily parental investment, opportunity hoarding and control of the political system. We can hardly be expected to drag the rich down, and we therefore struggle with minor steps to pull the poor up. Certainly the possibility of moving out of poverty is good, but too many people will still be left behind. Social mobility aids a subsection of the poor that can take advantage of opportunities. But what of the minimum wage worker, who at 35 has only a high-school education? She will struggle to take advantage of pre-K education or free college. An agenda aimed squarely at inequality — and poverty specifically — will better serve the poor and middle class.

The easiest method to eliminate poverty and alleviate inequality, and one that will have little effect on mobility, would be a large universal basic income. The UBI would have other positive results; it could end poverty, would certainly increase upward mobility and would increase stagnant middle-class wages. This is another key advantage of reducing inequality — it touches many salient issues and passes the Frank Luntz test: Americans are really worried about it (one suspects that its populist nature is what makes Very Serious People so slow to adopt it; they prefer to speak harsh, unpopular truths).

Throughout this argument, the ultimate dynamic has been clear: If one believes that humans should be treated with equal dignity and that market power will be used for harm, inequality must be opposed. If one believes that inequality among humans is natural and beneficial, and that the true fear is democracy, the great equalizer, equality must be opposed. This is not a caricature of the libertarian position. It was H.L. Mencken who worried that democracy was a peculiar system in which the weak ruled the powerful. But it is rather Rousseau who is correct: “the destruction of equality was attended by the most terrible disorders. Usurpations by the rich, robbery by the poor, and the unbridled passions of both, suppressed the cries of natural compassion and the still feeble voice of justice, and filled men with avarice, ambition and vice.”

Why I’m a Belieber

I would like to announce my membership in the ever-expanding club that boasts among its members the likes of Anne Frank. I am a Belieber. Through and through. I’ve paid about as much attention to Bieber’s career as most American’s have to what is happening in Ukraine right now (on review I spelled his last name correctly once in the first draft of this piece), but what I know makes me believe he is someone I should support. Let me run through the only five facts about Justin Bieber stored in my cranium:

1. Justin Bieber desecrated a photo of Bill Clinton and shouted “Fuck Bill Clinton!”

2. Justin Bieber egged a millionaire’s house

3. Justin Bieber recently got arrested for a DUI

4. Justin Bieber was born to a single mother, grew up in low income housing, taught himself four instruments, created Youtube videos of him playing those instruments, was discovered by a marketing agent and became, in short time, one most successful male artists currently working

5. Justin Bieber is now hated by a broad swath of the American public

For me, fact #1 is a great reason to support Bieber. Having grow up in low-income housing, he’s certainly aware of how disastrous the Clinton presidency was to the American poor. Having lived in Canada, he is stunned at just how illiberal Clinton is and how cruel American society has become. The symbolic act of urinating in a mop bucket and denouncing Clinton was his first step in the direction of high-level performance art. If anything, we should encourage more artists to follow his lead of aggressive political art. As to the fact #2, I can’t hate anyone who eggs rich people’s houses.

Fact #3 is sad and personal; it strikes me as evidence that America is a nation of dicks. We are lead by the “journalists” at TMZ whose entire goal in life is too feed off of misery and insecurity. These writers are so incredibly dumb that even touching a book causes aneurysms so violent they require hospitalization. Instead of actually investigating, reporting or thinking, they make their money leeching off of actually talented and successful people. Like ringworms, they have embedded themselves in Bieber’s bowels and can only survive if he does, but constantly work to emaciate their host.

Bieber has done a lot of douchey things. I’ve done a lot of douchey things. All of my friends have done a lot of douchey things. You’ve done a lot of douchey things. The difference is, your douchey things and my douchey things aren’t national stories, because you and I don’t have voices like a fucking angel. A recent The Daily Beast story (perfectly shaped to by an atomic bomb of click-bait) compared Richard Sherman and Justin Bieber and declared Bieber a “thug.” The evidence:

In case of Justin Bieber, does any one [sic] doubt hat [sic] he would love to be called a thug? He clearly has been trying be seen as a bad boy for the past few years. He has reportedly threatened paparazzi and his neighbor with physical violence. Bieber is being sued by a photographer who claims Bieber beat him up. (Why anyone would admit to being beaten up by Bieber is beyond me?) And Bieber has done his best to convey the image on social media that he smokes marijuana.Earlier this week Bieber was again seen trying to cultivate his “thug” image. Bieber was reportedly in a Miami Strip club, “making it rain”—translation: throwing money at strippers as often depicted in rap videos.

 

Compare these misdemeanors (he smokes weed and goes to strip clubs! *gasp*) to say, Mark Wahlberg regularly beating the shit out of people in his youth, all the Woody Allen stuff or Eminem’s drug use. We don’t actually know Bieber, or what he’s like, instead we’re fed a narrative by TMZ and Hollywood Reporter that is meticulously shaped to create interest. TMZ’s article on him egging his neighbor’s house is an exercise in this Huxleyian game. After describing the egging, the author writes, “And, in a shamefully obvious ploy to make himself look good, he posted these pictures of himself with his little brother and sister.” Isn’t it possible that Justin Bieber made the dumb decision to egg his neighbor’s house and also very much loves his sister and brother? Must everything be black and white for the simpletons at TMZ?

Earlier this year I discovered that I was supposed to hate Anne Hathaway because she is a theatre girl or something. Right now, I’m supposed to love J-Law. It’s all narrative and all spin. When I hear these benign doings of celebrities, I’m reminded of the apocryphal quote of Christ, “he who is without sin, let him throw the first stone.”

Facts #4 and #5 are the most interesting. America holds two entirely contradictory ideas about itself. First, it believes it is a society of opportunity, and therefore inequality, where every man or woman can, through force of will, make themselves a fortune doing what they love. Second, we believe that all men are equal, and hold fiercely egalitarian sentiments. Thus, the “middle class” runs from roughly $30,000 a year to whatever you earn and truck drivers in El Paso vote for tax breaks on Park Avenue. Even the richest American pretends to be middle class just like you (see: Warren Buffett’s persona) and even the poorest among us is, as John Steinbeck noted, are “temporarily embarrassed millionaires.”

This dialectic means that we first build up a celebrity, often far beyond their merits and then, once they’ve reached the apogee of their success, begin violently tearing them down. We’ve all seen this cycle happen — Woods, Spears, Sheen — to name a few instances. But what is odd about the Bieber story is how perfectly he embodies the American Dream. He’s not a Ben Stiller or Frank Ocean or Jayden Smith or Luke Russert (or come on, let’s face it, basically every successful musician or actor) who was born to famous parents and managed to not totally fuck it up. Because masscult music and acting are so easy to do that almost anyone can do it passably, it helps to have a parent in the business. In contrast, Justin Bieber became successful from pure talent, drive and luck alone. He owes no one anything. How many actors, singers and bankers can say that these days? Not many. Justin Bieber may be the only shred of evidence that something like the American Dream exists. He is a self-made man, the epitome of meritocracy and democracy. Like Nietzsche’s overman, he has transformed the world to his will, re-valued all values and he did it through sheer talent and drive. So call me a Belieber.

Dispatches from reader-land

The Spearhead has a new post about an old article of mine on hate speech, in which I argue that private companies should regulate speech on their forums. It’s because I come from a tradition of debate where saying things like, “you’re a dumb c***” generally don’t end up getting us any closer to the truth. Most of the post is just an attack on me, but I write about it because a large portion of the people who read the article just saw “censor hate speech” and rushed to send me hate mail. Here’s a sentence from my piece:

Again, this isn’t an argument for government intervention. The goal is for companies to adopt a European-model hate speech policy, one not aimed at expunging offense, but rather hate. Such a system would be subject to outside scrutiny by users.

And here is a quote from the response:

Although they’ve played an important role, especially in universities, it isn’t solely because of feminists that “liberals” have become authoritarian; it is the nature of power to seek to preserve itself. If you’re at the top of the heap, it’s mighty tempting to try to decide which thoughts are acceptable and which are off-limits. I suspect the Internet has given even more urgency to this impulse, as the mainstream media seeks to preserve its place as the font of respectable opinion. But you’d think that they would at least continue to defend – if not embrace – the concept of a free press. Unfortunately, that is no longer the case.

Today, as young McElwee demonstrates, denouncing the free press is the sort of thing that identifies a “good young man” — a right-thinker. When I was Sean’s age, I realized that I’d never make the cut under the new rules – I’m constitutionally incapable of toeing their line – so I gave up on trying to join them. I could already see the writing on the wall around the year 2000, so I abandoned the idea of getting involved in mainstream media, choosing instead to lead a humble life. However, ironically, rejecting the constraints of contemporary political correctness has been a blessing and has given me many more opportunities to express myself. When you subordinate your own opinions and speak only within collectively-defined parameters, it feels like you’ve sold your soul.

Most of the response is Mr. Price reminiscing about his past days or denouncing me. He never really engages the argument, other than to call me an “authoritarian.” It would be interesting to see what an intelligent response to this piece would look like. Sadly, we’ve all been robbed the chance.

 

Income inequality should be the left’s first priority

A new “bipartisan consensus” is brewing: 2014 will be the year in which Very Serious People argue that America’s primary economic goal should be increasing social mobility, not decreasing inequality. “Shame on Obama and De Blasio for talking about class, and trying to divide us,” they’ll smarm. “Let’s focus on something everyone can agree on: upward mobility.”

It’s already happening. At the Brookings Institution, Richard Reeves argues that while inequality is important, the defining issue of our era is “the shocking, illiberal, immoral transmission of poverty and affluence from one generation to the next.” Social mobility is the new deficit reduction, and luminaries from the left (Kirsten Gillibrand) and right (Paul Ryan) can both agreeit’s a problem. Even David Brooks is concerned. Marco Rubio has already sketched out the battle lines: “It is this lack of mobility, not just income inequality, that we should be focused on.” At the core, the question about whether our society should focus on inequality or mobility gets to a significant schism built around one central question: Is inequality fundamentally immoral?

Economics, by textbook definition, is the study of how to distribute scarce goods in a world of unlimited desires. When we use markets to distribute goods in an unequal society, two important failures appear. First, there are people who are denied the right to have a say in the distribution of those goods, and second, some goods that are not marketable are distributed poorly.

In a society that accepts high mobility without equality, one accepts that whoever reaches the highest income bracket (as decided by the ephemeral concept of a “market”) should have an outsize influence in determining the distribution of resources. Thus, we have both Prada shoes and extreme poverty. Hermès and homelessness. We have Elon Musk working on private space flight and a hyper loop while starving children die for want of medicine protected by intellectual-property law. And that’s even before we consider how millionaires and billionaires have used their wealth in an attempt to distort democracy: Sheldon Adelson and his wife spent more moneyon the 2012 election than the combined contributions of citizens from 12 states.

In “The Spirit Level, Richard Wilkinson and Kate Pickett show how inequality negatively affects societies. They find that many of the negative phenomena that are generally attributed to culture — high levels of teenage pregnancy, obesity and criminality, for example — are not the causes of inequality, but rather the effects of it. I have made the case elsewhere that there are empirical reasons to believe that this is the case. But to take a simple example, research showsthat it is poverty and inequality that make the working class more likely to bear children out of wedlock, which in turn further stifles upward mobility.

Inequality is inherently degrading. Adam Smith writes: “A linen shirt, for example, is, strictly speaking, not a necessary of life … But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty.” Likewise, Wilkinson and Pickett find that, “There are now numerous studies that show the same thing … low social status has a clear impact on physical health.” That is: Simply having a low-wage, low-social status job can lead to depression, anxiety and obesity. The problem is not only poverty, it’s also inequality.

While Very Serious People worry about mobility, the problem remains: Even if we achieve it, “the poor will always be with you,” as one Jesus Christ said. There will always be those who cannot develop the skills or talents to make their efforts marketable. Because of this, some people will never be able to enjoy the new opportunities provided by upward mobility or the new jobs provided by growth.

To accept that upward mobility alone can cure society ill’s, to accept meritocracy as the ultimate goal, is to accept markets as the means of determining merit. When we talk about “upward mobility” and “meritocracy,” we implicitly assume that those who succeed have “merit,” while other do not. However, it was Friedrich Hayek, a free-market champion, who noted that capitalism should not be considered a “meritocracy,” because markets don’t distribute based on merit, but rather demand. Jamie Dimon and Lloyd Blankfein, markets have decided, deserve more than Hannah Gay, Katherine Luzuriaga and Deborah Persaud — the scientists who cureda newborn of HIV this year. Thus, when we accept upward mobility as a goal we must also be willing to accept that markets determine who goes up and who falls down, rightly or not. And when we accept “growth” as a goal, we assume that GDP is a useful metric to determine social progress (which it is not).

This illusion of  “meritocracy” poisons the way we talk about inequality, and how to fix it. In discussing “redistribution,” my colleague Matt Bruenig points to Murphy and Nagel’s work on “everyday libertarianism,” or what Marx might call “false consciousness”: People who live in capitalist societies make assumptions like the idea that a market distribution is inherently legitimate, and therefore that a government involved in economic matters is “re-distributing” resources. In the same way, we talk about “upward mobility” in terms of “merit,” assuming that markets determine rewards justly, according to some abstract notion of what “merit” means. The first right in a capitalist society appears to be “thou art entitled to the market’s distribution.”

Markets are here to stay, but we can at least help ensure somewhat equitable access to them. Equality is freeing because it liberates people from the demands of markets, gives them more autonomy to determine their own destiny. As Oscar Wilde warned, “In a community like ours, where property confers immense distinction, social position, honour, respect, titles, and other pleasant things of the kind, man, being naturally ambitious, makes it his aim to accumulate this property, and goes on wearily and tediously accumulating it long after he has got far more than he wants, or can use, or enjoy, or perhaps even know of.” More equality means more freedom.

In his book “Left and Right: The Significance of a Political Distinction,” Norberto Bobbio argues that equality is the defining distinction between left and right. The left, he argues, believes that inequality is fundamentally immoral, while the right believes it natural and beneficial to society. The right should actually desire high levels of inequality, attended with high levels of mobility. That is: Upward mobility as an imperative is a right-wing idea.

In truth, while the right does indeed pay rhetorical lip service to the idea of mobility, its policiesdo little to actually encourage it. However, that fact alone does not mean the left must. Rather, the left must maintain that humans deserve equal rights to equal treatments, which demands more parity of market share.

Social mobility is a sort of Rorschach blot, upon which the left and right can project their proposals: universal daycare, pre-K, charter schools, free college, etc. But these policies do little to correct the structures that prevent mobility, primarily parental investment, opportunity hoarding and control of the political system. We can hardly be expected to drag the rich down, and we therefore struggle with minor steps to pull the poor up. Certainly the possibility of moving out of poverty is good, but too many people will still be left behind. Social mobility aids a subsection of the poor that can take advantage of opportunities. But what of the minimum wage worker, who at 35 has only a high-school education? She will struggle to take advantage of pre-K education or free college. An agenda aimed squarely at inequality — and poverty specifically — will better serve the poor and middle class.

The easiest method to eliminate poverty and alleviate inequality, and one that will have little effect on mobility, would be a large universal basic income. The UBI would have other positive results; it could end poverty, would certainly increase upward mobility and would increase stagnant middle-class wages. This is another key advantage of reducing inequality — it touches many salient issues and passes the Frank Luntz test: Americans are really worried about it (one suspects that its populist nature is what makes Very Serious People so slow to adopt it; they prefer to speak harsh, unpopular truths).

Throughout this argument, the ultimate dynamic has been clear: If one believes that humans should be treated with equal dignity and that market power will be used for harm, inequality must be opposed. If one believes that inequality among humans is natural and beneficial, and that the true fear is democracy, the great equalizer, equality must be opposed. This is not a caricature of the libertarian position. It was H.L. Mencken who worried that democracy was a peculiar system in which the weak ruled the powerful. But it is rather Rousseau who is correct: “the destruction of equality was attended by the most terrible disorders. Usurpations by the rich, robbery by the poor, and the unbridled passions of both, suppressed the cries of natural compassion and the still feeble voice of justice, and filled men with avarice, ambition and vice.”

What would an international carbon tax look like?

There are two market ways to reduce C02 emissions (the other options, like “command and control” would involve more overt government intervention). The first is cap and trade. The U.S. tried, and failed to pass a cap and trade bill in 2009 (Waxman-Markey). In a cap and trade system, the government puts a “cap” on the amount of carbon that can be emitted and allows companies to trade permits that allow them to emit, say a ton of CO2, on a market. The idea is that companies that can cheaply reduce emissions will do so, and then sell their permits to those who can’t do so cheaply. It also allows the government to set a hard limit on emissions.

The second option is a “carbon tax,” where the government sets a price on carbon emissions and taxes companies based on how much they emit. The advantage with this system is simplicity.

A new column by John Hassler and Per Krusell adds new insights to the debate. The authors use current GDP, the expected economic costs of carbon dioxide and an estimate of how long carbon dioxide lingers in the atmosphere to come up with an optimal international carbon tax and find that the tax would be less than the tax rate currently imposed in Sweden ($150/T USD).

The chart shows what the carbon tax would be in both USD and Euros based on what is called the “discount rate.” Discounting is an economics concept that takes into account the fact that future generations will be wealthier than we are. If they are far wealthier (high discount rate) it makes sense to spend less mitigating climate change (so the tax is low). If they will be just about as wealthy (low discount rate) then the tax should be very high (the far left of the chart). Later in the column the authors use a 1% discount rate, so I’ve noted it.

They argue that a carbon tax is preferable because carbon trading markets are prone to wild fluctuations when new technologies are developed. The E.U. market crashed last year, partially because of new technological developments. International disparities between mitigation costs would make an international market even more difficult.

The column takes up another question as well: how much do rich countries owe for the massive emissions they’ve used to “get rich quick”? Fossil fuels cause global warming, which will disproportionately hurt poor countries. In one of the cruelest ironies known to man, the U.S. gets to burn cheap fossil fuels, and the Philippines gets hit by typhoon Haiyan. It’s like if you got to eat Twinkies all day and your neighbor got fat. Because of this, the authors argue that the global carbon debt is a whopping 40% of annual world GDP. It’s unlikely, however, that developing countries will ever see the money.

I would add that the insatiable demand for resources and growth is partially driven by our reliance on an increasingly out of date and incredibly flawed metric: GDP. If we had already adopted an alternative measure, we would have known long ago how profoundly unsustainable our growth was. Part of mitigating climate change is adopting measures that accurately show how sustainable current patterns of development are. Without such measures we trod forward, foresaking our future for the illusion of progress. Yogi Berra had it right, “If you don’t know where you are going, you’ll end up somewhere else.”

Absolute mobility and relative mobility

The economics blogosphere as well as mainstream publications are alight with new researchfrom Raj Chetty, Nathaniel Hendren, Patrick Kline, Emmanuel Saez and Nicholas Turner on upward mobility. It’s a key topic, especially here at Demos, where we want an equal chance for all. I haven’t finished reading the paper and related commentary, which I plan to do over the weekend, so I don’t want to comment on it, other than to note a very important distinction between absolute mobility and relative mobility that may get lost in the fray.

Chetty, et. al., are looking at what is called “relative mobility.” Relative mobility measures how a child’s ranking in the income distribution compares to her parents’. If we use the old cliche of a ladder, it’s how far up, or down, the ladder you move compared to the quintile you were born into. If your parents were in the bottom quintile and you move into the second quintile, you have experienced relative mobility.

But what does that mean? Well, nothing really to you, unless you know what quintile you are born into and pay incredibly close attention to it. Relative mobility is a zero-sum game, if you move from the first quintile to the second, that means someone else has dropped downward. The numbers have to add up in the end. “Absolute mobility” measures something entirely different. It measures how your income compares with your parent’s income. So let’s say your parents make $10,000 a year and you are in the bottom quintile. If you stay in the bottom quintile, but make $20,000 a year, you’ve experienced absolute mobility.

Relative mobility is important, but the big question is absolute mobility. Imagine a society where relative mobility looks like this:

That is, no matter where you are born, you have a 20% chance of landing in any income bracket. But with an income distribution looks like this:

That society is perfectly mobile, but certainly one we don’t want to live in. To give everyone a decent shot at life means not just making sure they can move into another quintile, but that no matter what quintile they end up in, they can live a fulfilling life. Upward relative mobility for me means downward relative mobility for thee. Far better would be a society where all boats are rising together, rather than just a couple of yachts.

The problem is that in the last few decades, relative mobility has stayed pretty much the same (although, lower than most developed countries), but absolute mobility hasn’t been doing quite as well, mainly because of rising inequality. Josh Bivens calculates that if incomes had risen proportionately, the median income would be $19,000 higher.

The story of the past forty years has been an increasing share of the national income going to the top one percent, and little “trickling down” to the bottom. Because of this increase in inequality, it matters far more where you are born into on the income ladder. That’s a problem.

Nietzsche has some harsh words for me (AKA the right thinks you’re “jelly”)

So, it’s not in my most recent Salon article, but this is one of my favorite Nietzsche quotes, not because I agree with him, but because it’s a far more potent formulation of what the right talks about today:

Ye preachers of equality, the tyrant- frenzy of impotence crieth thus in you for “equality”: your most secret tyrant-longings disguise themselves thus in virtue-words! Fretted conceit and suppressed envy—perhaps your fathers’ conceit and envy: in you break they forth as flame and frenzy of vengeance.

Basically, the right thinks we’re just jelly. As if to prove my point, the Wall Street Journal published this letter:

Regarding your editorial “Censors on Campus” (Jan. 18): Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its “one percent,” namely its Jews, to the progressive war on the American one percent, namely the “rich.”

From the Occupy movement to the demonization of the rich embedded in virtually every word of our local newspaper, the San Francisco Chronicle, I perceive a rising tide of hatred of the successful one percent. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them. We have outrage over the rising real-estate prices which these “techno geeks” can pay. We have, for example, libelous and cruel attacks in the Chronicle on our number-one celebrity, the author Danielle Steel, alleging that she is a “snob” despite the millions she has spent on our city’s homeless and mentally ill over the past decades.

This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent “progressive” radicalism unthinkable now?

Tom Perkins

San Francisco

Mr. Perkins is a founder of Kleiner Perkins Caufield & Byers.

 

King’s should rename some houses

King’s should replace the Houses of Reagan, Thatcher and Churchill. The case for replacing them as namesakes rests on a simple proposition: none of these leaders grappled with the Christian tradition in any significant way.

The namesakes, after all, are supposed to “embod[y] the ideals of The King’s College.” During his administration in Nicaragua, the left-leaning Sandinista government (a mix of Marxist socialism, anti-imperialism and liberation theology) was gaining international praise for its literacy campaign. The Contras were a right-wing junta attempting to overthrow the Sandinista government. Congress had rightly banned funding for the Contras, here’s an example of why (NSFW).

Reagan claimed that the Contras were, “the moral equivalent of the Founding Fathers,” and during his presidency aid was restored through secret channels (Iran-Contra). After thousands of innocent citizens died, Nicaragua took the United States to the World Court and won, the U.S. vetoed the body numerous times and the Nicaraguans never received their reparations.

Liberation theology also cropped up in to El Salvador; Reagan trained and financed death squads followed (Carter had initiated funding, but the Reagan administration ramped up military aid). Three nuns and lay worker were brutally raped and murdered in 1980. The Reagan administration, fearing that aid to the junta would be cut off, attempted to cover-up the involvement of security forces.

The “War on Terror,” contrary to popular belief, did not begin under Bush, but rather under Reagan, who declared the African National Congress a terrorist organization and put Nelson Mandela on the terrorist watch list. Reagan sided with the Apartheid regime and vetoed proposed sanctions for their crimes against humanity (he was overruled by congress).

Remember that Reagan began his campaign with a stump speech in Philadelphia, Mississippi, where three civil rights workers were murdered and proclaimed support for “states’ rights.” Thurgood Marshall was so frustrated that he took the daring step of criticizing a sitting President from the bench, saying that he was one of the worst presidents when it came to the rights of African-Americans.

For those looking to celebrate a “Christian politician” the man who declared General Rios Montt (recently convicted of genocide, although the trial has been set back) a “man of great integrity and commitment” who wants to “promote social justice” and decided that Nelson Mandela was a terrorist is probably not the best place to start. Reagan may have driven by realpolitik or anti-communism, but I struggle to see how these are the actions of a man who actually takes his religion seriously.

As for the other two aforementioned namesakes, Thatcher was far more influenced by Hayek than Jesus, and Churchill was no saint.

As Richard Burton put it so eloquently,

In the course of preparing myself…I realized afresh that I hate Churchill and all of his kind. I hate them virulently. They have stalked down the corridors of endless power all through history…. What man of sanity would say on hearing of the atrocities committed by the Japanese against British and Anzac prisoners of war, ‘We shall wipe them out, everyone of them, men, women, and children. There shall not be a Japanese left on the face of the earth’? Such simple-minded cravings for revenge leave me with a horrified but reluctant awe for such single-minded and merciless ferocity.

Churchill was considered the most brudish of the imperialists. His doctor said of him, “Winston thinks only of the colour of their skin.”

When we as a school decide who to honor with a House, it should be a woman (or man) of integrity, one whose decisions were motivated by their faith and whose faith radically shaped the institutions of society. Was it Reagan’s Christianity that lead him to veto sanctions on the apartheid regime? Was it Just War theory that guided his invasion of Grenada? Was it Christ-like to publicly oppose the Civil Rights Act of 1964, weak the Voting Rights Act and oppose making Martin Luther King Jr. Day a holiday?

The school’s description of why Thatcher belongs as a namesake is hilariously Orwellian, “Sojourner Truth’s persistent opposition to slavery, Margaret Thatcher’s iron will in the face of opposition, and Dietrich Bonhoeffer’s sacrifice of his own life in an effort to end Hitler’s tyranny were all commendable examples.”

We can note that while Bonhoeffer and Truth both opposed something (slavery, Nazism), Thatcher just opposed. Opposed what? Not apartheid! Liberals–she opposed liberals. But we don’t say that because it would be very uncouth.

We are asked, “What would the world be without a Susan B. Anthony, Winston Churchill, or Queen Elizabeth 1?” Where indeed would we be without the man who declared “I am strongly in favour of using poisoned gas against uncivilised tribes…[It] would spread a lively terror”? I am reminded again of Paul’s famous verse, “There is neither Jew nor Gentile, neither slave nor free, nor is there male and female…only civilized and uncivilized, and you should really kill the uncivilized people.” To be fair though, it’s doubtful Churchill ever read Galatians since he was an atheist. I doubt King’s would make Nietzsche or Marx namesakes, but they certainly changed the world (and were atheists, like Churchill).

It is evident why King’s picked Reagan, Thatcher and Churchill. The school has a sad tradition of putting politics ahead of religion. Prior to his hiring as college president, Dinest D’Souza had written a book entitled The End of Racism in which he declared slavery a benign institution and and asked why slaves hadn’t paid reparations for their freedom. Two African-American scholars at the American Enterprise Institute, which sponsored the book,resigned in protest. D’Souza then wrote The Enemy at Home, which claimed that the cultural left bore responsibility for 9/11 and said that U.S. Conservatives should join up with Muslim fundamentalists to fight the left. The book was so incendiary that six Conservative scholars publicly disavowed the book in the National Review. Given D’Souza’s minimal scholarship on religion prior to joining King’s, and his Catholic (rather than Evangelical) faith, it is hard to conclude that his hiring was not primarily due to his politics. As of yet, we have no professors who have been outspokenly liberal.

At a school where tradition is venerated, I’m certain such a decision to remove these namesakes will create numerous objections (what will Reganites say if not “tear down this wall”?), although it didn’t matter when the college replaced the house of Martin Luther King with the house of C.S. Lewis (not to discredit Lewis’s contribution children’s books and children’s philosophy). I think it’s time to end the sad tradition at King’s of placing politics before faith.

I look forward to visiting the school and finding the House of Martin Luther King Jr., Frederick Douglass or William Wilberforce, of Mother Theresa or Rosa Parks (this, of course, is just a partial list of the numerous possible candidates). If President Thornbury wishes to push King’s away from simply being a partisan institution, one way to signal that shift would be to invoke new namesakes.

The hard part is, as Marx noted, “Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of all the dead generations weighs like a nightmare on the brain of the living.”