Another, quite spectacular example of “revealed”:https://www.crookedtimber.org/archives/001446.html “preference”:https://www.crookedtimber.org/archives/001447.html theory in action. This time, it’s “David Brooks”:http://www.nytimes.com/2004/03/06/opinion/06BROO.html?hp, who uses Bush and Kerry’s privileged backgrounds to prove that Americans prefer to be ruled by blue-bloods.

bq. we don’t actually want to be governed by people like ourselves. We want the bloodlines.

It all goes back to primate social structures, you see.

This is almost so asinine an argument as not to be worth the refutation. Brooks doesn’t admit the possibility that ‘blue bloods’ might have structural advantages that go beyond commoners’ genetically hardwired instinct to yank forelocks in the presence of their superiors – money, connections anyone? Nor does he bother trying to explain how his thesis can be reconciled with viable Democratic candidates (Edwards) from humble backgrounds, or, indeed, Presidents like Clinton. Like Dan Drezner, I was quite pleased when the NYT gave Brooks a slot; some of his longer stuff is well argued and interesting. However, his op-eds have been a huge disappointment; sugary candy-fluff for the most part, but with a hard, bitter little center. The Times could and should do better.

Belle Waring has “a brilliant lampoon of utopian libertarian discourse”:http://examinedlife.typepad.com/johnbelle/2004/03/if_wishes_were_.html .

Seumas Milne has “an article in today’s Guardian”:http://www.guardian.co.uk/comment/story/0,3604,1163360,00.html plugging a book of his and remembering the British miners’ strike of 1984–5. Like Milne I was an active supporter of that strike, collecting for striking miners and offering as much propaganda and political support as I could. I worked for Verso, the publisher of Milne’s book, at the time and we produced a special on the strike called _Digging Deeper_ in record time: going from copy to bound volume in about two weeks.

So my memories are still pretty vivid and I think I’m in a position to assess the claims Milne makes. With his general characterization of the strike as being self-defence against a class war fought by a vengeful Tory government, I have no quarrel. Likewise with what he says of the police at the time. Since the strike we’ve had to listen to no end of sermons about “insurrection” and the assertion of the “rule of law”. There was no rule of law. The police and the government and the courts acted violently and cynically against the miners and their communities: men were attacked and beaten, their freedom of movement was restricted, they were not given fair hearings by magistrates and courts. I could go on, but those who know know and those who don’t want to will not be persuaded by further extending the list of arbitrary and violent state actions. The government had decided to break the NUM, was going to apply all necessary resources to doing so and could do so untrammeled by worries about legality.

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Brad de Long correctly summarises the argument of my papers with Simon Grant. If you accept that the equity premium (the large and unexplained difference between the rate of return expected by holders of private equity and the rate of interest on low-risk bonds) is explained in large measure by the fact that capital markets do not do a good job in allocating and spreading risk, the the natural solution to all this is the S-World: Socialism: public ownership of the means of production This is because risk can be more effectively through the tax system, and through governments’ capacity to run deficits during economic downturns than through private capital markets. A very robust implication of the observed equity premium is that a dollar of investment returns received during a recession is worth two dollars during a boom – this provides governments with a huge arbitrage opportunity.

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The Economist has an “article”:http://www.economist.com/World/europe/displayStory.cfm?story_id=2478574 this week on John Kerry’s popularity with Europeans. The argument is twofold – Europeans are rooting for Kerry to win, but they’re likely to end up disappointed if he does.

bq. whoever is in the White House, tensions between European and American approaches to the world seem sure to persist. The heyday of Atlanticism came to a close with the end of the cold war. … Indeed, in some areas, such as trade, the quarrels between the sides could get worse … Mr Kerry might explain American views more tactfully than Mr Bush. He might even do it in French. But transatlantic tensions would endure.

As a piece of international relations analysis, it’s an odd mixture of the obvious and the wrongheaded. Of course, transatlantic disputes aren’t going to go away if Kerry becomes President. But they’re likely to be transformed – much of the sting will go out of them.

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Some of the most charmingly pointless controversies on “my other blog”:http://brown.edu/Departments/Philosophy/tar/ have been about just what region is denoted by ‘Midwest’. (For prior installments, see “here”:http://www.brown.edu/Departments/Philosophy/tar/Archives/001580.html, “here”:http://www.brown.edu/Departments/Philosophy/tar/Archives/001568.html and “here”:http://www.brown.edu/Departments/Philosophy/tar/Archives/002519.html.) I think those are fun, but we seem to have run out of things to say on that word. So it’s time for something new. Just which parts of New York State are denoted by ‘upstate’?

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Wow. Here I am trying to figure out how to give a good kick in the arse to my humdrum mid-level policy career, and there Gordon Brown is, trying to decide whether to be Prime Minister of the U.K. or Director of the I.M.F.

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I’m in a social group called “Thinkers and Drinkers”, who meet every two weeks to debate. I submitted a question yesterday that I thought would be pretty controversial. I was surprised when it wasn’t, and I’d be very interested in thoughts from our readers.

It’s a two part question, with a hypothetical to set up the actual question. Here’s the hypothetical part:

There are a number of books with titles like “The Hitman’s Handbook”, which ostensibly tell you how to kill someone and get away with it. Let’s say that someone reads one of these books, takes its advice, and kills someone. That person is caught, convicted, and sent to jail. Then the family of the victim sues the publisher in a civil suit. The ACLU is defending the publisher on First Amendment grounds.

No one would doubt that the murderer, and the publisher, are morally in the wrong. The question is, given that there’s a world full of hurt out there, is it wrong for the ACLU to offer its time and money in support of the publisher?

The discussion group, which is largely made up of center/ center-left, religious, young female professionals, uniformly came down in defense of the ACLU. There was widespread agreement that publishers can’t be held responsible for the actions taken by people who read their books, and that a victory would set a dangerous precedent. We refused to see a distinction between fiction that could inspire people to commit crime and explicit how-to books. It would be easy to lightly mask a how-to book with a fictional veneer, and we didn’t want courts trying to interpret that distinction. We all agreed that this book doesn’t make anyone commit murder- that only the murderer, and people who actively aid him, could be held responsible.

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Brad DeLong has had a string of posts referring to the possibility that some or all of the US Social Security fund should be invested in stocks rather than, as at present, in US Treasury bonds, of which the most pertinent is this one. This idea first came up in a major way in Clinton’s 1999 State of the Union speech, and has since had some play on the Republican side, especially now that privatization individual accounts seem to be off the agenda.

The key fact that makes the idea attractive is the equity premium, the fact that, historically the rate of return to investment in stocks has been well above that in bonds. This used to be explained by the fact that stocks were riskier than bonds. But ever since the work of Mehra and Prescott in the 1980s it’s been known that no simple and plausible model of the social cost of risk that would be generated by efficient capital markets can explain more than a small fraction of the observed premium. The immediate response, that of finding more complicated, but still plausible models hasn’t gone very far. The alternative explanation is that capital markets don’t do a very good job of spreading risk. For example it’s very hard to get insurance against recession-induced unemployment or business failure, even though standard models imply that this should be available.

Simon Grant and I have done a fair bit of work on this, with some specific attention to the Social Security issue. In this paper (large PDF file), published in the American Economic Review, we argued that substantial gains could be realized by investing Social Security funds in the stock market. We didn’t put a number on it, but I don’t find Brad’s half-embraced suggestion of $2.4 trillion in present value implausible.

An important point, though, is that investing in stocks will generally not be the best way to go, at least if the amount invested is large. A government agency holding, say 20 per cent of the shares in Ford and General Motors, would seem to have big problems. Leaving aside the specific institutional issues of the US Social Security fund, the obvious implication of the equity premium is that, unless there are large differences in operating efficiency between private and public enterprises, government ownership of large capital-intensive enterprises like utilities will be socially beneficial. The case is strengthened if monopoly or other problems mean that the enterprises have to be tightly regulated in any case. Again, Simon Grant and I have written this up, this time in Economica (PDF version available here)

With the pressure increasing on Robert Mugabe’s extremely unpleasant government, I thought I’d repost an old comment of mine from D2D on the subject of how things got this way. There is an unfortunate tendency on the left to lose their nerve in the face of human rights disasters in left-wing regimes and take their eye off the ball – to commit the fundamental attribution error of assuming that the problems they see aer the result of particular moral corruption in the regime in question, rather than maintaining more plausible structural assumptions. As I say below, there is no exonerating Mugabe; there is always the option of not being a bastard and he didn’t take it. But it is very hard to see how any good outcome could have come out of the situation created by the British.

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My view of the US is probably overly influenced by Hollywood, but I had the impression that the right to marry your high school sweetheart was a crucially important instance of the inalienable right to the pursuit of happiness set out in the Declaration of Independence. If so, it seems as if there’s a contradiction between this and this.

“Juan non-Volokh”:http://volokh.com/2004_02_29_volokh_archive.html#107834026231790507 and “David Bernstein”:http://volokh.com/2004_02_29_volokh_archive.html#107820064555793050 suggest that the recent brouhaha over the Bush administration politicization of science is only to be expected; whenever the government funds scientific research, it’s liable to get politicized. Their proposed alternative – a “separation of science and state.” This proposal rests on an implicit claim that is, to put it kindly, contestable: that scientific research on politically topical issues is liable to be less politicized when it’s funded by the private sector. Judging by the sober and disinterested contributions to the public scientific debate coming from junkscience.com, Tech Central Station, and, in an earlier era, the good old “Council on Tobacco Research”:http://www.prwatch.org/improp/ctr.html, I reckon that Bernstein and non-Volokh have their argument cut out for them.

Apparently, the new Bush ads — which use images of Ground Zero — have upset some of the relatives of the victims of 9/11 tragedy, or, as Karen Hughes calls them, “Democrats.”

Wonkette

It seems “googling” is now used by many as a synonym for online searches just like kleenex is used to refer to a tissue or xeroxing to using a copier. I have yet to see empirical evidence that suggests Google is used by the majority of Internet users, yet many people talk about it as though it was the only existing search engine. References to Google as the be-all and end-all of search engines abound at least among journalists and academics, and perhaps it is not surprising that such people know about and use Google. But not everybody does although you’d be hard-pressed to know that judging from the rhetoric.

I have a small piece in this month’s First Monday in which I discuss this issue and why it is problematic to assume everyone uses a certain service when that is not necessarily the case.

Actually, I only mention one concern in that piece. Another that I do not bring up there but have alluded to elsewhere is that it is problematic to have so much riding on a proprietary service. We do not know where it is headed and since the details of its algorithm for displaying results are not transparent to the public we should not depend on it to guarantee equal access to all types of information indefinitely.