Sheepskin effect doesn’t prove much

Sep 20 JDN 2459113

The sheepskin effect is the observation that the increase in income from graduating from college after four years, relative going through college for three years, is much higher than the increase in income from simply going through college for three years instead of two.

It has been suggested that this provides strong evidence that education is primarily due to signaling, and doesn’t provide any actual value. In this post I’m going to show why this view is mistaken. The sheepskin effect in fact tells us very little about the true value of college. (Noah Smith actually made a pretty decent argument that it provides evidence against signaling!)

To see this, consider two very simple models.

In both models, we’ll assume that markets are competitive but productivity is not directly observable, so employers sort you based on your education level and then pay a wage equal to the average productivity of people at your education level, compensated for the cost of getting that education.

Model 1:

In this model, people all start with the same productivity, and are randomly assigned by their life circumstances to go to either 0, 1, 2, 3, or 4 years of college. College itself has no long-term cost.

The first year of college you learn a lot, the next couple of years you don’t learn much because you’re trying to find your way, and then in the last year of college you learn a lot of specialized skills that directly increase your productivity.

So this is your productivity after x years of college:

Years of collegeProductivity
010
117
222
325
431

We assumed that you’d get paid your productivity, so these are also your wages.

The increase in income each year goes from +7, to +5, to +3, then jumps up to +6. So if you compare the 4-year-minus-3-year gap (+6) with the 3-year-minus-2-year gap (+3), you get a sheepskin effect.

Model 2:

In this model, college is useless and provides no actual benefits. People vary in their intrinsic productivity, which is also directly correlated with the difficulty of making it through college.

In particular, there are five types of people:

TypeProductivityCost per year of college
0108
1116
2144
3193
4310

The wages for different levels of college education are as follows:

Years of collegeWage
010
117
222
325
431

Notice that these are exactly the same wages as in scenario 1. This is of course entirely intentional. In a moment I’ll show why this is a Nash equilibrium.

Consider the choice of how many years of college to attend. You know your type, so you know the cost of college to you. You want to maximize your net benefit, which is the wage you’ll get minus the total cost of going to college.

Let’s assume that if a given year of college isn’t worth it, you won’t try to continue past it and see if more would be.

For a type-0 person, they could get 10 by not going to college at all, or 17-(1)(8) = 9 by going for 1 year, so they stop.

For a type-1 person, they could get 10 by not going to college at all, or 17-(1)(6) = 11 by going for 1 year, or 22-(2)(6) = 10 by going for 2 years, so they stop.

Filling out all the possibilities yields this table:

Years \ Type01234
01010101010
1911131417
2
10141622
3

131925
4


1930

I’d actually like to point out that it was much harder to find numbers that allowed me to make the sheepskin effect work in the second model, where education was all signaling. In the model where education provides genuine benefit, all I need to do is posit that the last year of college is particularly valuable (perhaps because high-level specialized courses are more beneficial to productivity). I could pretty much vary that parameter however I wanted, and get whatever magnitude of sheepskin effect I chose.

For the signaling model, I had to carefully calibrate the parameters so that the costs and benefits lined up just right to make sure that each type chose exactly the amount of college I wanted them to choose while still getting the desired sheepskin effect. It took me about two hours of very frustrating fiddling just to get numbers that worked. And that’s with the assumption that someone who finds 2 years of college not worth it won’t consider trying for 4 years of college (which, given the numbers above, they actually might want to), as well as the assumption that when type-3 individuals are indifferent between staying and dropping out they drop out.

And yet the sheepskin effect is supposed to be evidence that the world works like the signaling model?

I’m sure a more sophisticated model could make the signaling explanation a little more robust. The biggest limitation of these models is that once you observe someone’s education level, you immediately know their true productivity, whether it came from college or not. Realistically we should be allowing for unobserved variation that can’t be sorted out by years of college.

Maybe it seems implausible that the last year of college is actually more beneficial to your productivity than the previous years. This is probably the intuition behind the idea that sheepskin effects are evidence of signaling rather than genuine learning.

So how about this model?

Model 3:

As in the second model, there are four types of people, types 0, 1, 2, 3, and 4. They all start with the same level of productivity, and they have the same cost of going to college; but they get different benefits from going to college.

The problem is, people don’t start out knowing what type they are. Nor can they observe their productivity directly. All they can do is observe their experience of going to college and then try to figure out what type they must be.

Type 0s don’t benefit from college at all, and they know they are type 0; so they don’t go to college.

Type 1s benefit a tiny amount from college (+1 productivity per year), but don’t realize they are type 1s until after one year of college.

Type 2s benefit a little from college (+2 productivity per year), but don’t realize they are type 2s until after two years of college.

Type 3s benefit a moderate amount from college (+3 productivity per year), but don’t realize they are type 3s until after three years of college.

Type 4s benefit a great deal from college (+5 productivity per year), but don’t realize they are type 4s until after three years of college.

What then will happen? Type 0s will not go to college. Type 1s will go one year and then drop out. Type 2s will go two years and then drop out. Type 3s will go three years and then drop out. And type 4s will actually graduate.

That results in the following before-and-after productivity:

TypeProductivity before collegeYears of collegeProductivity after college
010010
110111
210214
310319
410430

If each person is paid a wage equal to their productivity, there will be a huge sheepskin effect; wages only go up +1 for 1 year, +3 for 2 years, +5 for 3 years, but then they jump up to +11 for graduation. It appears that the benefit of that last year of college is more than the other three combined. But in fact it’s not; for any given individual, the benefits of college are the same each year. It’s just that college is more beneficial to the people who decided to stay longer.

And I could of course change that assumption too, making the early years more beneficial, or varying the distribution of types, or adding more uncertainty—and so on. But it’s really not hard at all to make a model where college is beneficial and you observe a large sheepskin effect.

In reality, I am confident that some of the observed benefit of college is due to sorting—not the same thing as signaling—rather than the direct benefits of education. The earnings advantage of going to a top-tier school may be as much about the selection of students as they are the actual quality of the education, since once you control for measures of student ability like GPA and test scores those benefits drop dramatically.

Moreover, I agree that it’s worth looking at this: Insofar as college is about sorting or signaling, it’s wasteful from a societal perspective, and we should be trying to find more efficient sorting mechanisms.

But I highly doubt that all the benefits of college are due to sorting or signaling; there definitely are a lot of important things that people learn in college, not just conventional academic knowledge like how to do calculus, but also broader skills like how to manage time, how to work in groups, and how to present ideas to others. Colleges also cultivate friendships and provide opportunities for networking and exposure to a diverse community. Judging by voting patterns, I’m going to go out on a limb and say that college also makes you a better citizen, which would be well worth it by itself.

The truth is, we don’t know exactly why college is beneficial. We certainly know that it is beneficial: Unemployment rates and median earnings are directly sorted by education level. Yes, even PhDs in philosophy and sociology have lower unemployment and higher incomes (on average) than the general population. (And of course PhDs in economics do better still.)

What would a better job market look like?

Sep 13 JDN 2459106

I probably don’t need to tell you this, but getting a job is really hard. Indeed, much harder than it seems like it ought to be.

Having all but completed my PhD, I am now entering the job market. The job market for economists is quite different from the job market most people deal with, and these differences highlight some potential opportunities for improving job matching in our whole economy—which, since employment is such a large part of our lives, could have wide-ranging benefits for our society.

The most obvious difference is that the job market for economists is centralized: Job postings are made through the American Economic Association listing of Job Openings for Economists (often abbrievated AEA JOE); in a typical year about 4,000 jobs are posted there. All of them have approximately the same application deadline, near the end of the year. Then, after applying to various positions, applicants get interviewed in rapid succession, all at the annual AEA conference. Then there is a matching system, where applicants get to send two “signals” indicating their top choices and then offers are made.

This year of course is different, because of COVID-19. The conference has been canceled, with all of its presentations moved online; interviews will also be conducted online. Perhaps more worrying, the number of postings has been greatly reduced, and based on past trends may be less than half of the usual number. (The number of applicants may also be reduced, but it seems unlikely to drop as much as the number of postings does.)

There are a number of flaws in even this system. First, it’s too focused on academia; very few private-sector positions use the AEA JOE system, and almost no government positions do. So those of us who are not so sure we want to stay in academia forever end up needing to deal with both this system and the conventional system in parallel. Second, I don’t understand why they use this signaling system and not a deferred-acceptance matching algorithm. I should be able to indicate more about my preferences than simply what my top two choices are—particularly when most applicants apply to over 100 positions. Third, it isn’t quite standardized enough—some positions do have earlier deadlines or different application materials, so you can’t simply put together one application packet and send it to everyone at once.

Still, it’s quite obvious that this system is superior to the decentralized job market that most people deal with. Indeed, this becomes particularly obvious when one is participating in both markets at once, as I am. The decentralized market has a wide range of deadlines, where upon seeing an application you may need to submit to it within that week, or you may have several months to respond. Nearly all applications require a resume, but different institutions will expect different content on it. Different applications may require different materials: Cover letters, references, writing samples, and transcripts are all things that some firms will want and others won’t.

Also, this is just my impression from a relatively small sample, but I feel like the AEA JOE listings are more realistic, in the following sense: They don’t all demand huge amounts of prior experience, and those that do ask for prior experience are either high-level positions where that’s totally reasonable, or are willing to substitute education for experience. For private-sector job openings you basically have to subtract three years from whatever amount of experience they say they require, because otherwise you’d never have anywhere you could apply to. (Federal government jobs are a weird case here; they all say they require a lot of experience at a specific government pay grade, but from talking with those who have dealt with the system before, they are apparently willing to make lots of substitutions—private-sector jobs, education, and even hobbies can sometimes substitute.)

I think this may be because the decentralized market has to some extent unraveled. The job market is the epitome of a matching market; unraveling in a matching market occurs when there is fierce competition for a small number of good candidates or, conversely, a small number of good openings. Each firm has the incentive to make a binding offer earlier than the others, with a short deadline so that candidates don’t have time to shop around. As firms compete with each other, they start making deadlines earlier and earlier until candidates feel like they are in a complete crapshoot: An offer made on Monday might be gone by Friday, and you have no way of knowing if you should accept it now or wait for a better one to come along. This is a Tragedy of the Commons: Given what other firms are doing, each firm benefits from making an earlier binding offer. But once they all make early offers, that benefit disappears and the result just makes the whole system less efficient.

The centralization of the AEA JOE market prevents this from happening: Everyone has common deadlines and does their interviews at the same time. Each institution may be tempted to try to break out of the constraints of the centralized market, but they know that if they do, they will be punished by receiving fewer applicants.

The fact that the centralized market is more efficient is likely a large part of why economics PhDs have the lowest unemployment rate of any PhD graduates and nearly the lowest unemployment rate of any job sector whatsoever. In some sense we should expect this: If anyone understands how to make employment work, it should be economists. Noah Smith wrote in 2013 (and I suppose I took it to heart): “If you get a PhD, get an economics PhD.” I think PhD graduates are the right comparison group here: If we looked at the population as a whole, employment rates and salaries for economists look amazing, but that isn’t really fair since it’s so much harder to become an economist than it is to get most other jobs. But I don’t think it’s particularly easier to get a PhD in physics or biochemistry than to get one in economics, and yet economists still have a lower unemployment rate than physicists or biochemists. (Though it’s worth noting that any PhD—yes, even in the humanities—will give you a far lower risk of unemployment than the general population.) The fact that we have AEA JOE and they don’t may be a major factor here.


So, here’s my question: Why don’t we do this in more job markets? It would be straightforward enough to do this for all PhD graduates, at least—actually my understanding is that some other disciplines do have centralized markets similar to the one in economics, but I’m not sure how common this is.

The federal government could relatively easily centralize its own job market as well; maybe not for positions that need to be urgently filled, but anything that can wait several months would be worth putting into a centralized system that has deadlines once or twice a year.

But what about the private sector, which after all is where most people work? Could we centralize that system as well?

It’s worth noting the additional challenges that immediately arise: Many positions need to be filled immediately, and centralization would make that impossible. There are thousands of firms that would need to be coordinated (there are at least 100,000 firms in the US with 100 or more employees). There are millions of different jobs to be filled, requiring a variety of different skills. In an average month over 5 million jobs are filled in the United States.

Most people want a job near where they live, so part of the solution might be to centralize only jobs within a certain region, such as a particular metro area. But if we are limited to open positions of a particular type within a particular city, there might not be enough openings at any given time to be worth centralizing. And what about applicants who don’t care so much about geography? Should they be applying separately to each regional market?

Yet even with all this in mind, I think some degree of centralization would be feasible and worthwhile. If nothing else, I think standardizing deadlines and application materials could make a significant difference—it’s far easier to apply to many places if they all use the same application and accept them at the same time.

Another option would be to institute widespread active labor market policies, which are a big part of why #ScandinaviaIsBetter. Denmark especially invests heavily in such programs, which provide training and job matching for unemployed citizens. It is no coincidence that Denmark has kept their unemployment rate under 7% even through the worst of the Great Recession. The US unemployment rate fluctuates wildly with the business cycle, while most of Europe has steadier but higher unemployment. Indeed, the lowest unemployment rates in France over the last 30 years have exceeded the highest rates in Denmark over the same period. Denmark spends a lot on their active labor market programs, but I think they’re getting their money’s worth.

Such a change would make our labor markets more efficient, matching people to jobs that fit them better, increasing productivity and likely decreasing turnover. Wages probably wouldn’t change much, but working in a better job for the same wage is still a major improvement in your life. Indeed, job satisfaction is one of the strongest predictors of life satisfaction, which isn’t too surprising given how much of our lives we spend at work.

Reasons to like Joe Biden

Sep 6 JDN 2459099

Maybe it’s because I follow too many radical leftists on social media (this is at least a biased sample, no doubt), but I’ve seen an awful lot of posts basically making this argument: “Joe Biden is terrible, but we have to elect him, because Donald Trump is worse.”

And make no mistake: Whatever else you think about this election, the fact that Donald Trump is a fascist and Joe Biden is not is indeed a fully sufficient reason to vote for Biden. You shouldn’t need any more than that.

But in fact Joe Biden is not terrible. Yes, there are some things worth criticizing about his record and his platform—particularly with regard to civil liberties and war (both of those links are to my own posts making such criticisms of the Obama administration). I don’t want to sweep these significant flaws under the rug.

Yet, there are also a great many things that are good about Biden and his platform, and it’s worthwhile to talk about them. You shouldn’t feel like you are holding your nose and voting for the lesser of two evils; Biden is going to make a very good President.

First and foremost, there is his plan to invest in clean energy and combat climate change. For the first time in decades, we have a Presidential candidate who is explicitly pro-nuclear and has a detailed, realistic plan for achieving net-zero carbon emissions within a generation. We should have done this 30 years ago; but far better to start now than to wait even longer.

Then there is Biden’s plan for affordable housing. He wants to copy California’s Homeowner Bill of Rights at the federal level, fight redlining, expand Section 8, and nationalize the credit rating system. Above all, he wants to create a new First Down Payment Tax Credit that will provide first-time home buyers with $15,000 toward a down payment on a home. That is how you increase homeownership. The primary reason why people rent instead of owning is that they can’t afford the down payment.

Biden is also serious about LGBT rights, and wants to pass the Equality Act, which would finally make all discrimination based on sexual orientation or gender identity illegal at the federal level. He has plans to extend and aggressively enforce federal rules protecting people with disabilities. His plans for advancing racial equality seem to be thoroughly baked into all of his proposals, from small business funding to housing reform—likely part of why he’s so popular among Black voters.

His plan for education reform includes measures to equalize funding between rich and poor districts and between White and non-White districts.

Biden’s healthcare plan isn’t quite Medicare For All, but it’s actually remarkably close to that. He wants to provide a public healthcare option available to everyone, and also lower the Medicare eligibility age to 60 instead of 65. This means that anyone who wants Medicare will be able to buy into it, and also sets a precedent of lowering the eligibility age—remember, all we really need to do to get Medicare For All is lower that age to 18. Moreover, it avoids forcing people off private insurance that they like, which is the main reason why Medicare For All still does not have majority support.

While many on the left have complained that Biden believes in “tough on crime”, his plan for criminal justice reform actually strikes a very good balance between maintaining low crime rates and reducing incarceration and police brutality. The focus is on crime prevention instead of punishment, and it includes the elimination of all federal use of privatized prisons.

Most people would give lip service to being against domestic violence, but Biden has a detailed plan for actually protecting survivors and punishing abusers—including ratifying the Equal Rights Amendment and ending the rape kit backlog. The latter is an utter no-brainer. If we need to, we can pull the money from just about any other form of law enforcement (okay, I guess not homicide); those rape kits need to be tested and those rapists need to be charged.

Biden also has a sensible plan for gun control, which is consistent with the Second Amendment and Supreme Court precedent but still could provide substantial protections by reinstating the ban on assault weapons and high-capacity magazines, requiring universal background checks, and adding other sensible restrictions on who can be licensed to own firearms. It won’t do much about handguns or crimes of passion, but it should at least reduce mass shootings.

Biden doesn’t want to implement free four-year college—then again, neither do I—but he does have a plan for free community college and vocational schooling.

He also has a very ambitious plan for campaign finance reform, including a Constitutional Amendment that would ban all private campaign donations. Honestly if anything the plan sounds too ambitious; I doubt we can really implement all of these things any time soon. But if even half of them get through, our democracy will be in much better shape.

His immigration policy, while far from truly open borders, would reverse Trump’s appalling child-separation policy, expand access to asylum, eliminate long-term detention in favor of a probation system, and streamline the path to citizenship.

Biden’s platform is the first one I’ve seen that gives detailed plans for foreign aid and international development projects; he is particularly focused on Latin America.

I’ve seen many on the left complain that Biden was partly responsible for the current bankruptcy system that makes it nearly impossible to discharge student loans; well, his current platform includes a series of reforms developed by Elizabeth Warren designed to reverse that.

I do think Biden is too hawkish on war and not serious enough about protecting civil liberties—and I said the same thing about Obama years ago. But Biden isn’t just better than Trump (almost anyone would be better than Trump); he’s actually a genuinely good candidate with a strong, progressive platform.

You should already have been voting for Biden anyway. But hopefully now you can actually do it with some enthusiasm.

Sincerity inflation

Aug 30 JDN 2459092

What is the most saccharine, empty, insincere way to end a letter? “Sincerely”.

Whence such irony? Well, we’ve all been using it for so long that we barely notice it anymore. It’s just the standard way to end a letter now.

This process is not unlike inflation: As more and more dollars get spent, the value of a dollar decreases, and as a word or phrase gets used more and more, its meaning weakens.

It’s hardly just the word “Sincerely” itself that has thus inflated. Indeed, almost any sincere expression of caring often feels empty. We routinely ask strangers “How are you?” when we don’t actually care how they are.

I felt this quite vividly when I was applying to GiveWell (alas, they decided not to hire me). I was trying to express how much I care about GiveWell’s mission to maximize the effectiveness of charity at saving lives, and it was quite hard to find the words. I kept find myself saying things that anyone could say, whether they really cared or not. Fighting global poverty is nothing less than my calling in life—but how could I say that without sounding obsequious or hyperbolic? Anyone can say that they care about global poverty—and if you asked them, hardly anyone would say that they don’t care at all about saving African children from malaria—but how many people actually give money to the Against Malaria Foundation?

Or think about how uncomfortable it can feel to tell a friend that you care about them. I’ve seen quite a few posts on social media that are sort of scattershot attempts at this: “I love you all!” Since that is obviously not true—you do not in fact love all 286 of your Facebook friends—it has plausible deniability. But you secretly hope that the ones you really do care about will see its truth.

Where is this ‘sincerity inflation’ coming from? It can’t really be from overuse of sincerity in ordinary conversation—the question is precisely why such conversation is so rare.

But there is a clear source of excessive sincerity, and it is all around us: Advertising.

Every product is the “best”. They will all “change your life”. You “need” every single one. Every corporation “supports family”. Every product will provide “better living”. The product could be a toothbrush or an automobile; the ads are never really about the product. They are about how the corporation will make your family happy.

Consider the following hilarious subversion by the Steak-umms Twitter account (which is a candle in the darkness of these sad times; they have lots of really great posts about Coronavirus and critical thinking).

Kevin Farzard (who I know almost nothing about, but gather he’s a comedian?) wrote this on Twitter: “I just want one brand to tell me that we are not in this together and their health is our lowest priority”

Steak-umms diligently responded: “Kevin we are not in this together and your health is our lowest priority”

Why is this amusing? Because every other corporation—whose executives surely care less about public health than whatever noble creature runs the Steak-umms Twitter feed—has been saying the opposite: “We are all in this together and your health is our highest priority.”

We are so inundated with this saccharine sincerity by advertisers that we learn to tune it out—we have to, or else we’d go crazy and/or bankrupt. But this has an unfortunate side effect: We tune out expressions of caring when they come from other human beings as well.

Therefore let us endeavor to change this, to express our feelings clearly and plainly to those around us, while continuing to shield ourselves from the bullshit of corporations. (I choose that word carefully: These aren’t lies, they’re bullshit. They aren’t false so much as they are utterly detached from truth.) Part of this means endeavoring to be accepting and supportive when others express their feelings to us, not retreating into the comfort of dismissal or sarcasm. Restoring the value of our sincerity will require a concerted effort from many people acting at once.

For this project to succeed, we must learn to make a sharp distinction between the institutions that are trying to extract profits from us and the people who have relationships with us. This is not to say that human beings cannot lie or be manipulative; of course they can. Trust is necessary for all human relationships, but there is such a thing as too much trust. There is a right amount to trust others you do not know, and it is neither complete distrust nor complete trust. Higher levels of trust must be earned.

But at least human beings are not systematically designed to be amoral and manipulative—which corporations are. A corporation exists to do one thing: Maximize profit for its shareholders. Whatever else a corporation is doing, it is in service of that one ultimate end. Corporations can do many good things; but they sort of do it by accident, along the way toward their goal of maximizing profit. And when those good things stop being profitable, they stop doing them. Keep these facts in mind, and you may have an easier time ignoring everything that corporations say without training yourself to tune out all expressions of sincerity.

Then, perhaps one day it won’t feel so uncomfortable to tell people that we care about them.

This attack on the postal service must not stand

Aug 23 JDN 2459085

Trump has done so many unprecedented and terrible things that we can become numbed by it all, unable to process each new offense because we are already overwhelmed by the others. Perhaps this is a kind of strategy on his part: Keep doing so many outrageous things that we lose our capacity to be outraged. Already it is fair to say that at least half of the 160,000 (and counting) Americans killed by COVID-19 would still be alive if a better President had been in office.

But the attack on the US Postal Service deserves particular attention, because the disruption of mail-in voting during a pandemic could radically alter the results of the election. Indeed, Trump has all but said that this was his goal in defunding the post office.

Trump has long hated the postal service (perhaps because it is a clear example of federal government doing things well and helping people), but his full-scale war upon it started with the appointment of Louis DeJoy as Postmaster General, whose main qualifications appear to be that he has given millions of dollars to Republican campaigns and hates everything the post office stands for. I am quite certain that if there were a Director of Henhouse Affairs, Trump would appoint the Fantastic Mr. Fox.

The White House chief of staff claims that there have been no mail sorting machines decommissioned aside from those that were normally scheduled for replacement. Yet it’s easy to find a number of different sources claiming that there have been far more machines shut down than usual. Postal workers have also spoken out about other kinds of restructuring in the postal system that claim to be about “reducing costs” but seem to be systematically impairing the speed and reliability of service.

Trump claims that mail-in voting is insecure, which has a kernel of truth: Mail-in voting certainly doesn’t have the ironclad security against fraud that in-person voting has. (Unlike in-person voter fraud, mail-in voter fraud actually exists.) But not only is his concern obviously overblown, the USPS has even taken measures to upgrade their security using blockchain encryption. Bitcoin has always been a stupid idea (though a very lucrative one for anyone who bought in early), but blockchain does have some major advantages for voting security, because it is one of the few ways to make a remote system that is simultaneously secure and anonymous. Indeed, I think blockchain encryption (combined with more standard SSL encryption that most web pages already use) might well be a way to implement full-scale online voting—though surely not in time for this election.

The US Postal Service is the most popular federal agency in the United States, followed by the CDC, the Census Bureau, and the Department of Health and Human Services, all of which deservedly have strong bipartisan majority support among voters. It may surprise you to learn that the Department of Homeland Security, the IRS, and the Department of Justice also have strong majority support—though with substantial partisan differences. The most divisive federal agency is ICE, which is beloved by Republicans but hated by Democrats.

Some 91% of Americans approve of the USPS—and why shouldn’t they? It is objectively rated one of the best postal systems in the world—and if anything this isn’t even fair, because most of the other top-rated postal services, particularly Switzerland, the Netherlands, and Singapore, have far smaller areas to cover than the US does. If we restrict ourselves to countries of at least 10 million people and territory of at least 100,000 square kilometers, there are only four postal services rated higher than the US: Japan, Germany, France, and Poland. If we restrict to countries of at least 100 million people, only Japan remains.

Thus, attacking the postal service is clearly not a winning proposition if your goal is to advance the interests of your constituents or even gain more votes. But during a pandemic, mail-in voting is likely to be—and well should be—a very large proportion of all votes. Sabotaging the mail system is a highly effective way to make it much harder to vote in general. And that seems to very much be Trump’s intention.

It is a general pattern that when voting gets harder, Republicans become more likely to win. Liberal voters are more likely to be young adults, poor people, or people of color, all of whom generally have a harder time making it to the polls. This may be less true in this election in particular, because against Trump in particular people who are highly educated and live in cities have been far more likely to vote against Trump—and these are groups of people with particularly high voter turnout. Empirical estimates of how a switch to mail-in voting will affect the election results have been highly ambiguous.

Indeed, perhaps this makes the Republican vote suppression campaign even more sinister: Perhaps they have moved beyond simply trying to tilt the scales in elections and are now willing to actively suppress democracy itself. It sounds radical, if not outright crazy, to assert such a thing—but many of the things that Trump and his Republican lackeys have done would have sounded crazy to me just a few years ago. I can’t believe I’m saying this, but I honestly don’t know that Trump will concede defeat when he loses the election—he may refuse to accept the election results and try to stay in office via some sort of coup d’etat. Why do I think this could happen? Because he said so himself on national television. Vladimir Putin must be so embarrassed; his protege doesn’t even know how to be subtle about his authoritarianism.

FiveThirtyEight is currently giving Biden a 72% chance of victory, which is about 27% too low for my taste. That isn’t much better than the margin Hillary Clinton had four years ago. We can only hope that Trump attacking the most popular agency in our federal government will tilt those odds a little further.

Why nonviolence?

Aug 16 JDN 2459078

You are no doubt aware that there are widespread protests going on right now. You may even have marched in some of them. Nearly 30 million Americans have participated in the Black Lives Matter protests, located in cities all around the country; this makes them quite likely the largest protests in American history.

The right wing is of course making much of the isolated incidents of violence that have occurred, often but not always actually provoked by the police or federal agents assigned to quell the protests. They have also made much of the property destruction caused by riots that have emerged from the protests, typically eliding the distinction between property destruction and violence. Since there has been far more property destruction than actual violence, this allows them to effectively inflate the level of violence.

In reality, the total deaths caused by these protests over two months and counting is clearly less than the number of Americans who are shot by police in an average week. And the total amount of property destruction is clearly less than the tens of billions of dollars per year that are stolen in wage theft, let alone the hundreds of billions of dollars per year that are stolen by white-collar crime. If violence and loss of property are really what you care about, these protests should not be your main concern.

Yet, I am concerned that too many on the left are too willing to accept violence. I have seen far too many people sharing and endorsing this quote:

“Dr. King’s policy was that nonviolence would achieve the gains for black people in the United States. His major assumption was that if you are nonviolent, if you suffer, your opponent will see your suffering and will be moved to change his heart. That’s very good. He only made one fallacious assumption: In order for nonviolence to work, your opponent must have a conscience. The United States has none.”

~ Stokely Carmichael

Nonviolence does work. Nonviolence did work for the civil rights movement. No, it doesn’t depend upon your opponent having a conscience—it only depends upon bystanders having a conscience. (Also, “the United States has no conscience” is only true insofar as socially constructed institutions don’t have feelings. Clearly most of the people in the United States—probably even most of the people in the US government—have a conscience!)

In fact, nonviolent protest is typically more effective than violent protest. When protesters turn to violence, they alienate the public whose support they need, and they allow the government to feel justified in responding with even more force. Campaigns of nonviolent civil resistance have been historically more effective than violent revolutions, even against authoritarian governments. On average, nonviolent protests are twice as likely to achieve their goals than violent protests.

Even worse than the Carmichael quote are the memes that have been shared saying things like this: “You want to fix the system, but not use violence; so, by magic?”

Nonviolence doesn’t mean politely asking for rights. It doesn’t mean being calm and non-confrontational. It doesn’t mean waiting patiently.

Nonviolence doesn’t even mean following the law or never damaging property. Some of the most important and effective acts of nonviolent protest involved breaking laws and damaging things—Rosa Parks was breaking the law, and does the Boston Tea Party ring a bell?

Nonviolence doesn’t even mean that nobody gets hurt; it often means strategically placing your own people in harm’s way knowing that the government’s violent overreaction will stir support for your cause. It’s a kind of ethical and political judo: Instead of directly resisting your stronger opponent, you maneuver so that their own power ends up damaging them. You use the government’s repression as a weapon for your own cause.

What does nonviolence mean?

Nonviolence means you don’t hurt people.

It sounds so simple and obvious, but a lot of people still don’t seem to get it. They seem to think that our only choices are “ask nicely” or “start a civil war”. Asking nicely obviously would not be effective; only someone deeply naive could imagine otherwise. Working legally within the system can sometimes be effective, but when really deep reforms are needed urgently it is often not enough. Starting a civil war might work—it has sometimes worked in the past—but it would come at a horrendous cost, probably thousands if not millions of lives.

Fortunately, these are not our only options. We don’t have to ask nicely; we don’t even have to obey the law. We can even break things. We just need to not hurt people. That still allows for a variety of forms of protest, confrontation, civil disobedience, and direct action. Jacobin, oddly enough, gets this right.

In reality, any movement is going to have extremists who act violently. A protest movement can still be considered nonviolent as long as such incidents of violence can be kept to a minimum, and never condoned by the leaders of the movement. Thus far, Black Lives Matter has absolutely fit that description—indeed, impressively so, given the sheer scale of the protests.

Some degree of self-defense can even be consistent with nonviolence, though it must be of a very minimal sort. Wearing armor and carrying a shield is entirely consistent with nonviolence. Hitting back after you are hit is a finer line. This is morally still nonviolence as long as you use only the minimal necessary force—but politically it will only work if the public clearly knows that you are not the ones who hit first.

The ethical case for nonviolence is simple, but worth repeating: Human lives have intrinsic value. Yes, even if those human beings work willingly for a corrupt and evil system. Yes, even the average Nazi was a sentient being of intrinsic moral worth.

The only people who really deserve to die are the psychopaths at the top pulling the strings—and they are almost never the ones on the front lines getting shot or bombed. If you had a plan to kill Donald Trump, I would have no particular moral objection. I think such a plan would be very unlikely to succeed, and I would never attempt such a thing myself; but does Donald Trump deserve to die for his brazen authoritarianism, overwhelming corruption, and depraved indifference for over 160,000 dead Americans? Yes. But how does that justify killing random police officers?

Nonviolence also has another great advantage, which is that it works better when you are on the right side. The effectiveness of violence is proportional to your firepower; the effectiveness of nonviolence is proportional to your righteousness. Why in the world would you, who are righteous but have little firepower, want to use violence against an enemy that is unrighteous and has more firepower?

Nonviolent protest actually works best when your enemy is violent and repressive; it is precisely that contrast between your nonviolence and their violence that wins people to your cause. Probably the smartest thing a government could do to respond to nonviolent protests would be to sit back and calmly watch them, then make whatever was the minimal level of concessions in order to make the protests lose momentum. When you bring out the tear gas, you have basically already admitted that you are on the wrong side of history. But repressive governments don’t think that way; if they did, they would have given those same concessions before the protests even gathered steam. They imagine that by simply cracking down harder they will be able to win—but they are usually wrong.

And even if the ethical case for nonviolence means literally nothing to you, please consider the strategic case: The empirical data says quite clearly that nonviolent protest works better. In many ways, violence is the default; it’s the conflict revolution mechanism that we evolved to use, largely unmodified from the same instincts that motivate any other primate. Nonviolence is a recent invention, a high-tech solution to this ancient problem. Violence is easy; just about anyone can do it. Nonviolence is hard; it requires strategic cleverness, unwavering vigilance, and deep moral courage.

This is not to say that violence is never necessary: Against a truly totalitarian regime that is willing to murder people simply for speaking out against the government, violence may well be the only option. I certainly do not begrudge the French Resistance for using violence against the Nazis. But violence should be a last resort, not simply for ethical reasons—but also for strategic reasons.

How to hurt allies and alienate people

Aug 9 JDN 2459071

I’ve been wanting to write this post for awhile now, but I have been worried about the reaction I might get. Ultimately I realized that this is precisely why it needs to be written. Especially since Slate Star Codex is offline for the foreseeable future, there don’t see to be a lot of other people willing to write it.

The timing could be questioned, I suppose; when we are in the throes of a historic pandemic and brazen creeping authoritarianism, perhaps now should be the time for unconditional solidarity. But I fear that unconditional solidarity is one of the most dangerous forces in human existence: Politics is the mind-killer, arguments are soldiers, and the absolute unwillingness to question one’s own side is how we get everything from the Spanish Inquisition to Vladimir Lenin.

And since this is about not simply being mistaken but alienating allies, perhaps these desperate times are when we need the correction most: For we simply cannot afford to lose any allies right now.

“All men benefit from male violence.”

“It’s impossible to be racist against White people.”

“I hate White people.”

“Men are pigs.”

“All I want for Christmas is White genocide.”

Statements like these have two things in common: One, they are considered appropriate and acceptable to say by most of the social justice left; and two, they are harmful, alienating, and wrong.

All men benefit from male violence? You mean that male rape victims benefit from male violence? The thousands of men who are assaulted and murdered by other men—at far higher rates than women—benefit from that, do they? Did Matthew Shepard benefit from male violence?

It’s impossible to be racist against White people? Then tell me, what was it when a Black woman told me that melanin is the gateway to the soul and all White people are soulless snakes? Swap the colors, and it sounds like something only a diehard KKK member or neo-Nazi could say. If that’s not racism, what is?

The insistence that racism is “prejudice plus power” is a disingenuous redefinition of the concept precisely in an attempt to retroactively make it true that it’s impossible to be racist against White people. This is not what the word “racist” means to most people. But even if I were to allow that definition, do you think Black people never have power over White people? There are no Black managers who discriminate against their White employees, no Black teachers who abuse their White students? I’m not aware of Barack Obama discriminating against any White people, but can anyone deny that he had power? White people may have more power on average, but that doesn’t mean they have more power in every case.

What’s more, I don’t really understand what leftists think they are accomplishing by making this kind of assertion. Is it just an expression of rage, or a signal of your group identity? You’re clearly not going to convince any White person who has been discriminated against that White people never get discriminated against. You’re clearly not going to convince any man who has been brutally attacked by another man that all men benefit from male violence. It would be one thing to say that White people face less discrimination (clearly true) or that most White people don’t face discrimination (maybe true); but to say that no White people ever face discrimination is just obviously false, and will be disproved by many people’s direct experience.

Indeed, it seems quite obvious to me that this kind of talk is likely to frustrate and alienate many people who could otherwise have been allies.

The left has a counter-argument prepared for this: If you are alienated by what we say, then you were never a true ally in the first place.

The accusation seems to be that alienated allies are just fair-weather friends; but I don’t think someone is being a fair-weather friend if they stop wanting to be your friend because you abuse them. And make no mistake: Continually telling people that they are inferior and defective because of their race or gender or some other innate aspect of themselves absolutely constitutes abuse. Indeed, it’s nothing less than a mirror image of the very abuse that social justice is supposed to exist to prevent.

To be sure, there are cases where people claim to be alienated allies but were never really allies to begin with. Anyone who says “Wokeness made me a Nazi” obviously was far-right to begin with, and is just using that as an excuse. No amount of people saying “I hate White people” would justify becoming a Nazi or a KKK member. This isn’t them genuinely being alienated by the left being unfair; this is them saying “Look what you made me do” as they punch you in the face.

But I think the far more common scenario is more like this: “I want to support social justice, but every time I try to participate in leftist spaces, people attack me. They say that I’m defective because of who I am, and it hurts. They don’t seem interested in my input anyway, so I think I’ll just stay away from leftist spaces to preserve my own mental health.” These are people who broadly agree with social justice in principle, but just feel so frustrated and alienated by the movement in practice that they decide they are better off remaining on the sidelines.

Is it really so hard to understand how someone might feel that way? Why would anyone want to interact in a social space where most of the time is spent disparaging people like them? To stay in such a space, one either needs to have very strong moral convictions to sustain them against that onslaught, or needs to be masochistic or self-loathing.


Maybe it is self-loathing, actually: Liberal White people are the only group that systematically exhibits a negative in-group bias. The further left you are on the political spectrum, the more likely you are to suffer from mental illness, especially if you are male. I’ve seen some right-wing sources use this to claim that “liberalism is a mental illness”, but the far more sensible explanation is that the kind of collective guilt and self-hatred that the left inculcates in liberal White people is harmful to mental health. It may also be because concern about the injustice in the world makes your life generally harder, even though you are right to be concerned.

There really does seem to be a lot of pressure to confess and self-flagellate among White leftists. I think my favorite is the injunction to “Divest from Whiteness“; it’s beautiful because it’s utterly meaningless. If you really just meant “fight racial discrimination”, you could have said that. Better yet, you could have recommended some specific policy or belief to adopt. (“Defund the Police”, for all its flaws, is an infinitely superior slogan to “Divest from Whiteness”.) By saying it this way, you’re trying to bring in some notion that we are morally obliged to somehow stop being White—which is of course completely impossible. Frankly I think even if I got gene therapy to convert my body to a West African phenotype people would still say I was “really White”. Thus, Whiteness becomes Original Sin: A stain acquired at birth that can never be removed and must always be a source of guilt.

So let me say this in no uncertain terms:

It’s okay to be White.

It’s okay to be straight.

It’s okay to be male.

It’s wrong to be racist.

It’s wrong to be homophobic.

It’s wrong to be sexist.

No, it isn’t “covertly racist” to say that it’s okay to be White—and if you think it is, you are part of the problem here. People do not have control over what race they are born into. There is no moral failing in being a particular color, or in being descended from people who did terrible things. (And it’s not like only White people have ancestors who did terrible things!)

Yes, I know that there are White supremacist groups using the slogan “It’s okay to be White”, but you know what? Stopped Clock Principle. Reversed stupidity is not intelligence. Nazis believe many things that are wrong, but the mere fact that Nazis believe something doesn’t make it wrong. Nazis also generally believe in Darwinian evolution, and Adolf Hitler was a strict vegetarian.

I am not denying that privilege and oppression exist. But there is a clear and absolutely vital moral distinction between being a member of a group and oppressing people who are not in that group. Being White is not the same thing as being racist. Being straight is not the same thing as being homophobic. Being male is not the same thing as being sexist. Indeed, I would argue that being a member of the privileged category is not even necessary to participate in oppression—you can oppress people of your own group, or be in one underprivileged group and oppress someone in another group. Being privileged certainly makes it easier for you to support oppression and more likely that you’ll do so—but it is neither necessary nor sufficient.

Another common response is that this is just “tone policing“, that complaining about alienating rhetoric is just a way of shutting down dissent in general. No doubt this is sometimes true: One of the more effective ways of silencing someone’s argument is to convince people that it has been delivered in an overly aggressive or shrill way, thus discrediting the messenger. (This was basically the only major criticism ever leveled against New Atheism, for instance.)

But it clearly takes the notion too far to say that any kind of rhetoric is acceptable as long as it’s for the right cause. Insulting and denigrating people is never appropriate. Making people feel guilty for being born in the wrong group is never fair. Indeed, it’s not clear that one can even argue against tone policing without… tone policing. Sometimes your tone is actually inappropriate and harmful and you need to be criticized for it.

In fact, some of the people that harsh rhetoric is alienating may harbor real prejudices that need to be challenged. But they aren’t very likely to make the intense effort to challenge their own prejudices if every interaction they have with the social justice community is hostile. If we want to change someone’s mind, it helps a great deal to start by showing them compassion and respect.

I’m not saying that fighting for social justice is never going to upset people. Social change is always painful, and there are many cherished beliefs and institutions that will have to be removed in order to achieve lasting justice. So the mere fact that someone is frustrated or upset with you doesn’t necessarily mean you’ve done anything wrong. But you should at least consider that people might sometimes be upset with you for genuinely good reasons, that when they say your aggressive rhetoric is hurtful and alienating that might be because it’s actually true.

This is not just about selfishness

Aug 2 JDN 2459064

The Millennial term is “Karen”: someone (paradigmatically a middle-aged White woman) who is so privileged, so self-centered, and has such an extreme sense of entitlement, that they are willing to make others suffer in order to avoid the slightest inconvenience.

I recently saw a tweet (which for some reason has been impossible to find; I think I must have misremembered its precise wording, because putting that in quotes in Google yields nothing) saying that Americans are not simply selfish, we are so selfish that we would gladly let others die to avoid mildly inconveniencing ourselves. Searching Twitter for “Americans are selfish” certainly yields plenty of results.

And it is tempting to agree with this, when it seems that re-opening the economy and so many people refusing to wear masks has given us far worse outcomes from COVID-19 than most other countries.

But this can’t be the whole story. Perhaps Americans are a bit more self-centered than other cultures, because of our history of libertarian individualism. But if we were truly so selfish we’d gladly let others die to avoid inconvenience, whence the fact that we donate more to charity than any other country in the world? I don’t simply mean total amount or per-capita dollars (though both of those are also true); I mean as a fraction of GDP Americans give more to charity than any other country, and by a wide margin.

How then do we explain that so many Americans are not wearing masks?

Well, first of all, most of us are wearing masks. The narrative about people not wearing masks has been exaggerated; the majority of Americans, including the majority of Republicans, agree that wearing masks is a matter of public health rather than personal choice. There are some people who refuse to wear masks, and each one adds a little bit more risk to us all; but it’s really not the case that Americans in general are refusing to wear masks.

But I think the most important failings here come from the top down. The Trump administration has handled the pandemic in an astonishingly poor way. First, they denied that it was even a serious problem. Then, they implemented only a half-hearted response. Then, they turned masks into a culture war. Then, they resisted the economic relief package and prevented it from being as large as it needed to me. At every step of the way, they have been at best utterly incompetent and at worst guilty of depraved indifference murder.

From denying it was a problem, to responding too slowly, to disparaging mask use, to pushing to re-open the economy too soon, at every step of the way our government has made things worse. Above all, a better economic relief package—like what most other First World countries have done—would have done a great deal to reduce the harm of lockdowns, and would have made re-opening the economy far less popular.

Republican-led states have followed the President’s lead, refusing to implement even basic common-sense protections. But even Democrat-led states have suffered greatly as well. New York and California have some of the most cases, though this is surely in part because they are huge states with highly urbanized populations that get a lot of visitors and trade from other places. The trajectory of infections looks worst in Lousiana and Missouri, surely among the most conservative of states; but it also looks quite bad in New Jersey and Hawaii, which are among the most liberal.

I think what this shows us is that America lacks coordination. Despite having United in our name and E pluribus unum as our motto (“In God We Trust” was a Cold War change to spite the Soviets), what we lack most of all is unity. Viruses do not respect borders or jurisdictions. More than perhaps any other issue aside from climate change, fighting a pandemic requires a unified, coordinated response—and that is precisely what we did not have.

In some ways the pluralism of the United States can be a great strength; but this year, it was very much a weakness. And as the many crises around us continue, I fear we grow only more divided.

We must not tolerate this brazen authoritarianism

Jul 26 JDN 2459057

Imagine for a moment what this would feel like:

Your girlfriend, who works as an EMT, just got home and went to bed after a long shift. Suddenly you hear banging on your door. “Who is it?” you shout; no answer. “Who is it?” you ask again; still no answer. The banging continues.

You know there is a lot of crime in your neighborhood, so you bought a handgun to protect your family. Since it seems like someone is about to invade your home, now seems like the obvious time to use it. You get the gun, load it, and aim it at the doorway. You hesitate; are you really prepared to pull that trigger? You know that you could kill someone on the other side. But you need to protect your family. So you fire a few shots at the doorway, hoping it will be enough to scare them away.


The response is a hail of bullets from several different directions, several of which hit your girlfriend and kill her while she is asleep.


Then, the door breaks down and several police officers barge in, having never announced themselves as police officers. They arrest you. You learn later that they were serving a so-called “no knock warrant”, which was intended for someone who wasn’t even there. They were never supposed to be in your home in the first place. Your girlfriend is now dead. And then, to top it all off, they have the audacity to charge you with attempted murder of a police officer because you tried to defend your home.

Now imagine what this would feel like as well:

In the evening you joined a protest. It was a peaceful protest, and there were hardly even any police officers around. There was no rioting, no vandalism, no tear gas or rubber bullets; just people holding signs and chanting. It’s now about 2:00 AM, and the protest is ending for the night, so you begin walking home.

Suddenly a van pulls up next to you. It’s completely unmarked; it just looks like a rental car that anybody could have rented. The door slides open and men in tactical body armor leap out of it, pointing rifles at you. They demand that you get in the van with them, and since you think they’re likely to shoot you if you don’t, you comply.

They handcuff you, cover your eyes with your hat, and drive you somewhere. They unload you into a building, then frisk you, photograph you, and rummage through your belongings. Then, they put you into a cell. They have not identified themselves. They have not explained why they abducted you.

Only after they have put you into a cell do they identify themselves as federal agents and start reading you your Miranda rights. They still won’t tell you why you were arrested. They ask you to waive your right to counsel; when you refuse, they leave you there for an hour and a half and then release you. Only as you walk outside do you realize that you had been taken to a federal courthouse.

These stories did not happen in Zimbabwe or Congo or Nicaragua. They did not happen in Russia or China or Venezuela. They happened right here in the United States of America. The first one is the story of Kenneth Walker in Louisville, whose girlfriend Breonna Taylor was murdered by police who didn’t announce that they were police and were never supposed to be in his home. It wasn’t a completely random error; the intended target was someone Breonna Taylor knew. So yes, it was possible that the intended target—who did have a legitimate warrant out for his arrest—might have been present. But how does that justify not even announcing themselves as police?

The second is the story of Mark Pettibone in Portland, who was abducted by anonymous paramilitary forces in an unmarked van. The Department of Homeland Security (an Orwellian name for an agency if ever there were) released a report on the incidents of “violent anarchists” that justified their use of such extreme measures: Most of them are graffiti or vandalism. There are a few genuinely violent incidents in there: Some throwing rocks, some pointing laser pointers at police officers’ eyes, and at least one alleged pipe bomb; but in the whole report there is only one incident listed in which any police officers were injured.

This is authoritarianism. It is not like authoritarianism; it is not moving toward authoritarianism. It is authoritarianism. Secret police in unmarked vehicles abducting people off the street is simply something that should not be allowed to happen in a liberal democracy. Right now it is rare, and for this we should be grateful; but it should not be rare, it should be non-existent. And we should continue fighting until it is. This is not a utopian dream, like imagining that we could make rape or murder non-existent. This is a policy choice. No other First World country does this. (Indeed, are we even a First World country anymore? We were supposed to be the paragon of the First World, but I’m not so sure we even belong in the category anymore.) What we have made rare they have managed to avoid entirely.

While arrest warrants are a necessary part of law enforcement, “no-knock” warrants are inherently authoritarian. Police should be required to identify themselves: Not simply that they are law enforcement, but what agency they work for, their own names and badge numbers, and the reason they are conducting the arrest. A “no-knock” warrant would already be unjust even applied in the best of circumstances (capturing an organized crime boss, perhaps); but typically they are used for drug raids (is criminalizing drugs is even right in the first place?), and in this case the person they wanted wasn’t even there.

Pettibone was at least promptly released. Walker will grieve the loss of his girlfriend for the rest of his life. Jonathan Mattingly, Brett Hankison, and Myles Cosgrove, the officers who shot Breonna Taylor, have still not been charged.

I wish that I could blame Trump for all of this and promise that it will go away when he loses the election in November (as statistical forecasts strongly predict he will). But while Trump and those who enable him have clearly accelerated and exacerbated this problem, the roots run much deeper.

For many people, particularly Black people, the United States is a de facto police state, and more or less always has been. (In fact, in most ways it’s probably better than it used to be—which isn’t to say that it is remotely acceptable right now, but to point out just how horrific it once was.) Harassment and abuse by police are commonplace, and death at the hands of police is a constant fear. Many of us are blissfully unaware of this, because we live in places where it doesn’t happen. This violence is highly concentrated: Major US cities vary in their races of police homicide by nearly a full order of magnitude.

The power of our government is unmatched. We have the third-largest standing army (after China and India, each of which has four times our population), the fourth-largest police force (in addition to China and India, add Russia to the list—though their population is less than half ours), and the largest incarcerated population in the world. Our military spending is higher than the next ten countries combined. Our intelligence services are not simply the largest in the world; the CIA alone accounts for nearly two-thirds of all worldwide intelligence spending. And while by the CIA is by far the largest, the US has over a dozen other intelligence agencies. When this power is abused—as it all too often is—the whole world feels the pain. We cannot afford to tolerate such abuses. We must stamp them out while we still can.

Getting Trump out won’t fix this. We must get him out, for a hundred thousand reasons, but that will not be nearly enough. Like hairline fractures in a steel beam that become wide gashes when the bridge is loaded, there are deep, structural flaws in our society and our system of government that are now becoming visible under the strain of crisis. I for one believe that these flaws can still be mended. But the longer we wait, the closer we come to a total collapse.

The Race to the Bottom is not inevitable

Jul 19 JDN 2459050

The race to the bottom is a common result of competition, between firms, between states, or even between countries. One firm finds a way to cut corners and reduce costs, then lowers their price to undercut others; then soon every firm is cutting those same corners. Or one country decides to weaken their regulations in order to attraction more business; then soon every other country has to weaken their regulations as well.

Let’s first consider individual firms. Suppose that you run a business, and you are an upstanding, ethical person. You want to treat your employees, your customers, and your community well. You have high labor standards, you exceed the requirements of environmental regulations, and you make a high-quality product at a reasonable price for a moderate profit.

Then, a competitor appears. The owner of this company is not so ethical. They exploit their workers, perhaps even stealing their wages. They flaunt environmental regulations. They make shoddy products. All of this allows them to make their products for a lower price than yours.

Suppose that most customers can’t tell the difference between your product and theirs. What will happen? They will stop buying yours, because it’s more expensive. What do you do then?

You could simply go out of business. But that doesn’t really solve anything. Probably you’ll be forced to lower your standards. You’ll treat your workers worse, pollute more, reduce product quality. You may not do so as much as the other company, but you’ll have to do it some in order to get the price down low enough to still compete. And your profits will be lower than theirs as a result.

Far better would be for the government to step in and punish that other business for breaking the rules—or if what they’re doing is technically legal, change the rules so that it’s not anymore. Then you could continue to produce high-quality products with fair labor standards and good environmental sustainability.

But there are some problems with this. First, consider this from the point of view of a regulator, who is being lobbied by both companies. Your company asks for higher standards to improve product quality while protecting workers and the environment. But theirs claims that these higher standards will push them out of business. Who will they believe?

In fact, it may be worse than that: Suppose we’ve already settled into an equilibrium where all the firms have low standards. In that case, all the lobbyists will be saying that regulations need to be kept weak, lest the whole industry fail.

But in fact there’s no reason to think that stricter regulations would actually destroy the whole industry. Firm owners are used to thinking in terms of fixed competitors: They act in response to what competitors do. And in many cases it’s actually true that if just one firm tried to raise their standards, they would be outcompeted and go out of business. This does not mean that if all firms were forced to raise their standards, the industry would collapse. In fact, it’s much more likely that stricter regulations would only moderately reduce output and profits, if imposed consistently across the whole industry.

To see why, let’s consider a very simple model, a Bertrand competition game. There are two firms, A and B. Each can either use process H, producing a product of high quality with high labor standards and good sustainability, or use process L, producing a product of low quality with low labor standards and poor sustainability. Process H costs $100 per unit, process L costs $50 per unit. Customers can’t tell the difference, so they will buy whichever product is offered at the lowest price. Let’s say you are in charge of firm A. You choose which process to use, and set your price. At the same time, firm B chooses a process and sets their price.

Suppose choose to use process H. The lowest possible price you could charge to still make a profit would be a price of $101 (ignoring cents; let’s say customers also ignore them, which might be true!).

But firm B could choose process L, and then set a price of $100. They can charge just one dollar less than you charge for their product, but their cost is only $50, so now they are making a large profit—and you get nothing.

So you are forced to lower your standards, in order to match their price. You could try to undercut them at a price of $100, but in the long run that’s a bad idea, since eventually you’ll both be driven to charging a price of 51 and making only a very small profit. And there’s a way to stop them from undercutting you, which is to offer a price-matching guarantee; you can tell your customers that if they see a lower price from firm B than what you’re offering, you’ll match it for them. Then firm B has no incentive to try to undercut you, and you can maintain a stable equilibrium at a price of $100. You have been forced to used process L even though you know it is worse, because any attempt to unilaterally deviate from that industry norm would result in your company going bankrupt.

But now suppose the government comes in and mandates that all firms use process H, and they really enforce this rule so that no firm wants to try to break it. Then you’d want to raise the price, but you wouldn’t necessarily have to raise it all that much. Even $101 would be enough to ensure some profit, and you could even maintain your current profits by raising the price up to $150. In reality the result would probably be somewhere in between those two, depending on the elasticity of demand; so perhaps you end up charging $125 and make half the profit you did before.

Even though the new regulation raised costs all the way up to the current price, they did not result in collapsing the industry; because the rule was enforced uniformly, all firms were able to raise their standards and also raise their prices. This is what we should typically expect to happen; so any time someone claims that a new regulation will “destroy the industry” we should be very skeptical of that claim. (It’s not impossible; for instance, a regulation mandating that all fast food workers be paid $200 per hour would surely collapse the fast food industry. But it’s very unlikely that anyone would seriously propose a regulation like that.)

So as long as you have a strong government in place, you can escape the race to the bottom. But then we must consider international competition: What if other countries have weaker regulations, and so firms want to move their production to those other countries?

Well, a small country may actually be forced to lower their standards in order to compete. I’m not sure there’s much that Taiwan or Singapore could do to enforce higher labor standards. If Taiwan decided to tighten all their labor regulations, firms might just move their production to Indonesia or Vietnam. Then again, monthly incomes in Taiwan, once adjusted for currency exchange rates, are considerably higher than those in Vietnam. Indeed, wages in Taiwan aren’t much lower than wages in the US. So apparently Taiwan has some power to control their own labor standards—perhaps due to their highly educated population and strong industrial infrastructure.

However, a large country like the US or China absolutely has more power than that. If the US wants to enforce stricter labor standards, they can simply impose tariffs on countries that don’t. Actually there are many free-trade rules in place precisely to reduce that power, because it can be easily abused in the service of protectionism.

Perhaps these rules go too far; while I agree with the concern about protectionism, I definitely think we should be doing more to enforce penalties for forced labor, for instance. But this is not the result of too little international governance—if anything it is the result of too much. Our free trade agreements are astonishingly binding, even on the most powerful countries (China has successfully sued the United States under WTO rules!). I wish only that our human rights charters were anywhere near as well enforced.

This means that the race to the bottom is not the inevitable result of competition between firms or even between countries. When it occurs, it is the result of particular policy regimes nationally or internationally. We can make better rules.

The first step may be to stop listening to the people who say that any change will “destroy the industry” because they are unable (or unwilling?) to understand how uniformly-imposed rules differ from unilateral deviations from industry norms.