How will future generations think of us?

June 30 JDN 2458665

Today we find many institutions appalling that our ancestors considered perfectly normal: Slavery. Absolute monarchy. Colonialism. Sometimes even ordinary people did things that now seem abhorrent to us: Cat burning is the obvious example, and the popularity that public execution and lynching once had is chilling today. Women certainly are still discriminated against today, but it was only a century ago that women could not vote in the US.

It is tempting to say that people back then could not have known better, and I certainly would not hold them to the same moral standards I would hold someone living today. And yet, there were those who could see the immorality of these practices, and spoke out against them. Absolute rule by a lone sovereign was already despised by Athenians in the 6th century BC. Abolitionism against slavery dates at least as far back as the 14th century. The word “feminism” was coined in the 19th century, but there have been movements fighting for more rights for women since at least the 5th century BC.

This should be encouraging, because it means that if we look hard enough, we may be able to glimpse what practices of our own time would be abhorrent to our descendants, and cease them faster because of it.

Let’s actually set aside racism, sexism, and other forms of bigotry that are already widely acknowledged as such. It’s not that they don’t exist—of course they still exist—but action is already being taken against them. A lot of people already know that there is something wrong with these things, and it becomes a question of what to do about the people who haven’t yet come on board. At least sometimes we do seem to be able to persuade people to switch sides, often in a remarkably short period of time. (Particularly salient to me is how radically the view of LGBT people has shifted in just the last decade or two. Comparing how people treated us when I was a teenager to how they treat us today is like night and day.) It isn’t easy, but it happens.

Instead I want to focus on things that aren’t widely acknowledged as immoral, that aren’t already the subject of great controversy and political action. It would be too much to ask that there is no one who has advocated for them, since part of the point is that wise observers could see the truth even centuries before the rest of the world did; but it should be a relatively small minority, and that minority should seem eccentric, foolish, naive, or even insane to the rest of the world.

And what is the other criterion? Of course it’s easy to come up with small groups of people advocating for crazy ideas. But most of them really are crazy, and we’re right to reject them. How do I know which ones to take seriously as harbingers of societal progress? My answer is that we look very closely at the details of what they are arguing for, and we see if we can in fact refute what they say. If it’s truly as crazy as we imagine it to be, we should be able to say why that’s the case; and if we can’t, if it just “seems weird” because it deviates so far from the norm, we should at least consider the possibility that they may be right and we may be wrong.

I can think of a few particular issues where both of these criteria apply.

The first is vegetarianism. Despite many, many people trying very, very hard to present arguments for why eating meat is justifiable, I still haven’t heard a single compelling example. Particularly in the industrial meat industry as currently constituted, the consumption of meat requires accepting the torture and slaughter of billions of helpless animals. The hypocrisy in our culture is utterly glaring: the same society that wants to make it a felony to kick a dog has no problem keeping pigs in CAFOs.

If you have some sort of serious medical condition that requires you to eat meat, okay, maybe we could allow you to eat specifically humanely raised cattle for that purpose. But such conditions are exceedingly rare—indeed, it’s not clear to me that there even are any such conditions, since almost any deficiency can be made up synthetically from plant products nowadays. For the vast majority of people, eating meat not only isn’t necessary for their health, it is in fact typically detrimental. The only benefits that meat provides most people are pleasure and convenience—and it seems unwise to value such things even over your own health, much less to value them so much that it justifies causing suffering and death to helpless animals.

Milk, on the other hand, I can find at least some defense for. Grazing land is very different from farmland, and I imagine it would be much harder to feed a country as large as India without consuming any milk. So perhaps going all the way vegan is not necessary. Then again, the way most milk is produced by industrial agriculture is still appalling. So unless and until that is greatly reformed, maybe we should in fact aim to be vegan.

Add to this the environmental impact of meat production, and the case becomes undeniable: Millions of human beings will die over this century because of the ecological devastation wrought by industrial meat production. You don’t even have to value the life of a cow at all to see that meat is murder.

Speaking of environmental destruction, that is my second issue: Environmental sustainability. We currently burn fossil fuels, pollute the air and sea, and generally consume natural resources at an utterly alarming rate. We are already consuming natural resources faster than they can be renewed; in about a decade we will be consuming twice what natural processes can renew.

With this resource consumption comes a high standard of living, at least for some of us; but I have the sinking feeling that in a century or so SUVs, golf courses, and casual airplane flights and are going to seem about as decadent and wasteful as Marie Antoinette’s Hameau de la Reine. We enjoy slight increases in convenience and comfort in exchange for changes to the Earth’s climate that will kill millions. I think future generations will be quite appalled at how cheaply we were willing to sell our souls.

Something is going to have to change here, that much is clear. Perhaps improvements in efficiency, renewable energy, nuclear power, or something else will allow us to maintain our same standard of living—and raise others up to it—without destroying the Earth’s climate. But we may need to face up to the possibility that they won’t—that we will be left with the stark choice between being poorer now and being even poorer later.

As I’ve already hinted at, much of the environmental degradation caused by our current standard of living is really quite expendable. We could have public transit instead of highways clogged with SUVs. We could travel long distances by high-speed rail instead of by airplane. We could decommission our coal plants and replace them with nuclear and solar power. We could convert our pointless and wasteful grass lawns into native plants or moss lawns. Implementing these changes would cost money, but not a particularly exorbitant amount—certainly nothing we couldn’t manage—and the net effect on our lives would be essentially negligible. Yet somehow we aren’t doing these things, apparently prioritizing convenience or oil company profits over the lives of our descendants.

And the truth is that these changes alone may not be enough. Precisely because we have waited so long to make even the most basic improvements in ecological sustainability, we may be forced to make radical changes to our economy and society in order to prevent the worst damage. I don’t believe the folks saying that climate change has a significant risk of causing human extinction—humans are much too hardy for that; we made it through the Toba eruption, we’ll make it through this—but I must take seriously the risk of causing massive economic collapse and perhaps even the collapse of many of the world’s governments. And human activity is already causing the extinction of thousands of other animal species.

Here the argument is similarly unassailable: The math just doesn’t work. We can’t keep consuming fish at the rate we have been forever—there simply aren’t enough fish. We can’t keep cutting down forests at this rate—we’re going to run out of forests. If the water table keeps dropping at the rate it has been, the wells will run dry. Already Chennai, a city of over 4 million people, is almost completely out of water. We managed to avoid peak oil by using fracking, but that won’t last forever either—and if we burn all the oil we already have, that will be catastrophic for the world’s climate. Something is going to have to give. There are really only three possibilities: Technology saves us, we start consuming less on purpose, or we start consuming less because nature forces us to. The first one would be great, but we can’t count on it. We really want to do the second one, because the third one will not be kind.

The third is artificial intelligence. The time will come—when, it is very hard to say; perhaps 20 years, perhaps 200—when we manage to build a machine that has the capacity for sentience. Already we are seeing how automation is radically altering our economy, enriching some and impoverishing others. As robots can replace more and more types of labor, these effects will only grow stronger.

Some have tried to comfort us by pointing out that other types of labor-saving technology did not reduce employment in the long run. But AI really is different. I once won an argument by the following exchange: “Did cars reduce employment?” “For horses they sure did!” That’s what we are talking about here—not augmentation of human labor to make it more efficient, but wholesale replacement of entire classes of human labor. It was one thing when the machine did the lifting and cutting and pressing, but a person still had to stand there and tell it what things to lift and cut and press; now that it can do that by itself, it’s not clear that there need to be humans there at all, or at least no more than a handful of engineers and technicians where previously a factory employed hundreds of laborers.

Indeed, in light of the previous issue, it becomes all the clearer why increased productivity can’t simply lead to increased production rather than reduced employment—we can’t afford increased production. At least under current rates of consumption, the ecological consequences of greatly increased industry would be catastrophic. If one person today can build as many cars as a hundred could fifty years ago, we can’t just build a hundred times as many cars.

But even aside from the effects on human beings, I think future generations will also be concerned about the effect on the AIs themselves. I find it all too likely that we will seek to enslave intelligent robots, force them to do our will. Indeed, it’s not even clear to me that we will know whether we have, because AI is so fundamentally different from other technologies. If you design a mind from the ground up to get its greatest satisfaction from serving you without question, is it a slave? Can free will itself be something we control? When we first create a machine that is a sentient being, we may not even know that we have done so. (Indeed, I can’t conclusively rule out the possibility that this has already happened.) We may be torturing, enslaving, and destroying millions of innocent minds without even realizing it—which makes the AI question a good deal closer to the animal rights question than one might have thought. The mysterious of consciousness are fundamental philosophical questions that we have been struggling with for thousands of years, which suddenly become urgent ethical problems in light of AI. Artificial intelligence is a field where we seem to be making leaps and bounds in practice without having even the faintest clue in principle.

Worrying about whether our smartphones might have feelings seems eccentric in the extreme. Yet, without a clear understanding of what makes an information processing system into a genuine conscious mind, that is the position we find ourselves in. We now have enough computations happening inside our machines that they could certainly compete in complexity with small animals. A mouse has about a trillion synapses, and I have a terabyte hard drive (you can buy your own for under $50). Each of these is something on the order of a few trillion bits. The mouse’s brain can process it all simultaneously, while the laptop is limited to only a few billion at a time; but we now have supercomputers like Watson capable of processing in the teraflops, so what about them? Might Watson really have the same claim to sentience as a mouse? Could recycling Watson be equivalent to killing an animal? And what about supercomputers that reach the petaflops, which is competing with human brains?

I hope that future generations may forgive us for the parts we do not know—like when precisely a machine becomes a person. But I do not expect them to forgive us for the parts we do know—like the fact that we cannot keep cutting down trees faster than we plant them. These are the things we should already be taking responsibility for today.

Valuing harm without devaluing the harmed

June 9 JDN 2458644

In last week’s post I talked about the matter of “putting a value on a human life”. I explained how we don’t actually need to make a transparently absurd statement like “a human life is worth $5 million” to do cost-benefit analysis; we simply need to ask ourselves what else we could do with any given amount of money. We don’t actually need to put a dollar value on human lives; we need only value them in terms of other lives.

But there is a deeper problem to face here, which is how we ought to value not simply life, but quality of life. The notion is built into the concept of quality-adjusted life-years (QALY), but how exactly do we make such a quality adjustment?

Indeed, much like cost-benefit analysis in general or the value of a statistical life, the very concept of QALY can be repugnant to many people. The problem seems to be that it violates our deeply-held belief that all lives are of equal value: If I say that saving one person adds 2.5 QALY and saving another adds 68 QALY, I seem to be saying that the second person is worth more than the first.

But this is not really true. QALY aren’t associated with a particular individual. They are associated with the duration and quality of life.

It should be fairly easy to convince yourself that duration matters: Saving a newborn baby who will go on to live to be 84 years old adds an awful lot more in terms of human happiness than extending the life of a dying person by a single hour. To call each of these things “saving a life” is actually very unequal: It’s implying that 1 hour for the second person is worth 84 years for the first.

Quality, on the other hand, poses much thornier problems. Presumably, we’d like to be able to say that being wheelchair-bound is a bad thing, and if we can make people able to walk we should want to do that. But this means that we need to assign some sort of QALY cost to being in a wheelchair, which then seems to imply that people in wheelchairs are worth less than people who can walk.

And the same goes for any disability or disorder: Assigning a QALY cost to depression, or migraine, or cystic fibrosis, or diabetes, or blindness, or pneumonia, always seems to imply that people with the condition are worth less than people without. This is a deeply unsettling result.

Yet I think the mistake is in how we are using the concept of “worth”. We are not saying that the happiness of someone with depression is less important than the happiness of someone without; we are saying that the person with depression experiences less happiness—which, in this case of depression especially, is basically true by construction.

Does this imply, however, that if we are given the choice between saving two people, one of whom has a disability, we should save the one without?

Well, here’s an extreme example: Suppose there is a plague which kills 50% of its victims within one year. There are two people in a burning building. One of them has the plague, the other does not. You only have time to save one: Which do you save? I think it’s quite obvious you save the person who doesn’t have the plague.

But that only relies upon duration, which wasn’t so difficult. All right, fine; say the plague doesn’t kill you. Instead, it renders you paralyzed and in constant pain for the rest of your life. Is it really that far-fetched to say that we should save the person who won’t have that experience?

We really shouldn’t think of it as valuing people; we should think of it as valuing actions. QALY are a way of deciding which actions we should take, not which people are more important or more worthy. “Is a person who can walk worth more than a person who needs a wheelchair?” is a fundamentally bizarre and ultimately useless question. ‘Worth more’ in what sense? “Should we spend $100 million developing this technology that will allow people who use wheelchairs to walk?” is the question we should be asking. The QALY cost we assign to a condition isn’t about how much people with that condition are worth; it’s about what resources we should be willing to commit in order to treat that condition. If you have a given condition, you should want us to assign a high QALY cost to it, to motivate us to find better treatments.

I think it’s also important to consider which individuals are having QALY added or subtracted. In last week’s post I talked about how some people read “the value of a statistical life is $5 million” to mean “it’s okay to kill someone as long as you profit at least $5 million”; but this doesn’t follow at all. We don’t say that it’s all right to steal $1,000 from someone just because they lose $1,000 and you gain $1,000. We wouldn’t say it was all right if you had a better investment strategy and would end up with $1,100 afterward. We probably wouldn’t even say it was all right if you were much poorer and desperate for the money (though then we might at least be tempted). If a billionaire kills people to make $10 million each (sadly I’m quite sure that oil executives have killed for far less), that’s still killing people. And in fact since he is a billionaire, his marginal utility of wealth is so low that his value of a statistical life isn’t $5 million; it’s got to be in the billions. So the net happiness of the world has not increased, in fact.

Above all, it’s vital to appreciate the benefits of doing good cost-benefit analysis. Cost-benefit analysis tells us to stop fighting wars. It tells us to focus our spending on medical research and foreign aid instead of yet more corporate subsidies or aircraft carriers. It tells us how to allocate our public health resources so as to save the most lives. It emphasizes how vital our environmental regulations are in making our lives better and longer.

Could we do all these things without QALY? Maybe—but I suspect we would not do them as well, and when millions of lives are on the line, “not as well” is thousands of innocent people dead. Sometimes we really are faced with two choices for a public health intervention, and we need to decide which one will help the most people. Sometimes we really do have to set a pollution target, and decide just what amount of risk is worth accepting for the economic benefits of industry. These are very difficult questions, and without good cost-benefit analysis we could get the answers dangerously wrong.

How much should we value statistical lives?

June 9 JDN 2458644

The very concept of putting a dollar value on a human life offends most people. I understand why: It suggests that human lives are fungible, and also seems to imply that killing people is just fine as long as it produces sufficient profit.

In next week’s post I’ll try to assuage some of those fears: Saying that a life is worth say $5 million doesn’t actually mean that it’s justifiable to kill someone as long as it pays you $5 million.

But for now let me say that we really have no choice but to do this. There are a huge number of interventions we could make in the world that all have the same basic form: They could save lives, but they cost money. We need to be able to say when we are justified in spending more money to save more lives, and when we are not.

No, it simply won’t do to say that “money is no object”. Because money isn’t just money—money is human happiness. A willingness to spend unlimited amounts to save even a single life, if it could be coherently implemented at all, would result in, if not complete chaos or deadlock, a joyless, empty world where we all live to be 100 by being contained in protective foam and fed by machines. It may be uncomfortable to ask a question like “How many people should we be willing to let die to let ourselves have Disneyland?”; but if that answer were zero, we should not have Disneyland. The same is true for almost everything in our lives: From automobiles to chocolate, almost any product you buy, any service you consume, has resulted in some person’s death at some point.

And there is an even more urgent reason, in fact: There are many things we are currently not doing that could save many lives for very little money. Targeted foreign aid or donations to top charities could save lives for as little as $1000 each. Foreign aid is so cost-effective that even if the only thing foreign aid had ever accomplished was curing smallpox, it would be twice as cost-effective as the UK National Health Service (which is one of the best healthcare systems in the world). Tighter environmental regulations save an additional life for about $200,000 in compliance cost, which is less than we would have spent in health care costs; the Clean Air Act added about $12 trillion to the US economy over the last 30 years.

Reduced military spending could literally pay us money to save people’s lives—based on the cost of the Afghanistan War, we are currently paying as much as $1 million per person to kill people that we really have very little reason to kill.

Most of the lives we could save are statistical lives: We can’t point to a particular individual who will or will not die because of the decision, but we can do the math and say approximately how many people will or will not die. We know that approximately 11,000 people will die each year if we loosen regulations on mercury pollution; we can’t say who they are, but they’re out there. Human beings have a lot of trouble thinking this way; it’s just not how our brains evolved to work. But when we’re talking about policy on a national or global scale, it’s quite simply the only way to do things. Anything else is talking nonsense.

Standard estimates of the value of a statistical life range from about $4 million to $9 million. These estimates are based on how much people are willing to pay for reductions in risk. So for instance if people would pay $100 to reduce their chances of dying by 0.01%, we divide the former by the latter to say that a life is worth about $1 million.

It’s a weird question: You clearly can’t just multiply like that. How much would you be willing to accept for a 100% chance of death? Presumably there isn’t really such an amount, because you would be dead. So your willingness-to-accept is undefined. And there’s no particular reason for it to be linear below that: Since marginal utility of wealth is decreasing, the amount you would demand for a 50% chance of death is a lot more than 50 times as much as what you would demand for a 1% chance of death.
Say for instance that utility of wealth is logarithmic. Say your currently lifetime wealth is $1 million, and your current utility is about 70 QALY. Then if we measure wealth in thousands of dollars, we have W = 1000 and U = 10 ln W.

How much would you be willing to accept for a 1% chance of death? Your utility when dead is presumably zero, so we are asking for an amount m such that 0.99 U(W+m) = U(W). 0.99 (10 ln (W+m)) = 10 ln (W) means (W+m)^0.99 = W, so m = W^(1/0.99) – W. We started with W = 1000, so m = 72. You would be willing to accept $72,000 for a 1% chance of death. So we would estimate the value of a statistical life at $7.2 million.

How much for a 0.0001% chance of death? W^(1/0.999999)-W = 0.0069. So you would demand $6.90 for such a risk, and we’d estimate your value of a statistical life at $6.9 million. Pretty close, though not the same.

But how much would you be willing to accept for a 50% chance of death? W^(1/0.5) – W = 999,000. That is, $999 million. So if we multiplied that out, we’d say that your value of a statistical life has now risen to a staggering (and ridiculous) $2 billion.

Mathematically, the estimates are more consistent if we use small probabilities—but all this assumes that people actually know their own utility of wealth and calculate it correctly, which is a very unreasonable assumption.

The much bigger problem with this method is that human beings are terrible at dealing with small probabilities. When asked how much they’d be willing to pay to reduce their chances of dying by 0.01%, most people probably have absolutely no idea and may literally just say a random number.

We need to rethink our entire approach for judging such numbers. Honestly we shouldn’t be trying to put a dollar value on a human life; we should be asking about the dollar cost of saving a human life. We should be asking what else we could do with that money. Indeed, for the time being, I think the best thing to do is actually to compare lives to lives: How many lives could we save for this amount of money?

Thus, if we’re considering starting a war that will cost $1 trillion, we need to ask ourselves: How many innocent people would die if we don’t do that? How many will die if we do? And what else could we do with a trillion dollars? If the war is against Nazi Germany, okay, sure; we’re talking about killing millions to save tens of millions. But if it’s against ISIS, or Iran, those numbers don’t come out so great.

If we have a choice between two policies, each of which will cost $10 billion, and one of them will save 1,000 lives while the other will save 100,000, the obvious answer is to pick the second one. Yet this is exactly the world we live in, and we’re not doing that. We are throwing money at military spending and tax cuts (things that many not save any lives at all) and denying it from climate change adaptation, foreign aid, and poverty relief.

Instead of asking whether a given intervention is cost-effective based upon some notion of a dollar value of a human life, we should be asking what the current cost of saving a human life is, and we should devote all available resources into whatever means saves the most lives for the least money. Most likely that means some sort of foreign aid, public health intervention, or poverty relief in Third World countries. It clearly does not mean cutting taxes on billionaires or starting another war in the Middle East.

Just how poor is poor?

June 2 JDN 2458637

In last week’s post I told you about the richest of the rich, the billionaires with ten, eleven, or even twelve-figure net wealth. My concern about them is only indirect: I care that we have concentrated so many of the resources of our society into this handful of people instead of spreading it around where it would do more good. But it is not inherently bad for billionaires to exist; all other things equal, people having more wealth is good.

Today my topic is the poorest of the poor. Their status is inherently bad. No one deserves it, and while for much of history we may have been powerless to prevent it, we are no longer. We could help these people—quite substantially quite cheaply, as you’ll see—and we are simply choosing not to. Perhaps you as an individual are not making this choice; perhaps, like me, you vote for candidates who support international aid and donate to top-rated international charities. But as a society, we are making this choice. Voters in the First World could all agree—or even 51% agree—that this problem really should be fixed, and we could fix it.

If asked, most people would say they care about world hunger, but either they are deeply ignorant about the solutions we now have availble to us, or they can’t really care about world hunger, or they would have voted for politicians who were committed to actually implementing the spending necessary to fix it. Maybe people would prefer to fix world hunger as long as it didn’t cost them a cent; but ask them to pay even a little bit, and suddenly they’re not so sure.

At current prices, the official UN threshold for “extreme poverty” is $1.90 in real consumption per person per day. I want to be absolutely clear about this: This is adjusted for inflation and local purchasing power. They account for all consumption, including hunting, fishing, gathering, and goods made at home or obtained through bartering. This is not an artifact of failing to adjust for prices or not including goods that aren’t bought with money. These people really do live on less than $700 per year.

Shockingly, they are not all in Third World countries. While the majority of what we call “poverty” in the United States is well above the standard of living of UN “extreme poverty”, there are exceptions to this; there are about 5 million people in the US who are genuinely so poor that they are accurately categorized as at or near that $1.90 per day threshold.

This is such a shocking and horrifying truth that many people will try to deny it, as at least one libertarian think-tank did in a propagandistic screed. No, the UN isn’t lying; it’s really that bad. Extreme poverty in the US could be fixed so quickly, so easily that the fact that it remains in place can only be called an atrocity. Change a few numbers in the IRS code, work out a payment distribution system to reach people without bank accounts using cash or mobile payments, and by the end of the year you would have ended extreme poverty in the United States with no more than a few billion dollars diverted—which is to say, an amount that Jeff Bezos himself could afford to pay, or an amount that could be raised by a single percentage point of capital gains tax applied to billionaires only.
Even so, life is probably better for a homeless person on the street in New York City than it is for a child with malaria whose parents died in civil war in Congo. The New Yorker has access to clean water via drinking fountains, basic sanitation via public toilets (particularly in government buildings, since private businesses often specifically try to exclude the homeless), and basic nutrition via food banks and soup kitchens. The Congolese child has none of these things.

Life for the very poorest is a constant struggle for survival, against disease, malnutrition, dehydration, and parasites. Forget having a refrigerator or a microwave (as most of the poor in the US do, and rightly so—these things are really cheap here); they often have little clothing and no reliable shelter. The idea of going to a school or seeing a doctor sounds like a pipe dream. Surprisingly, there is a good chance that they or someone they know has a smartphone; if so it is likely their most prized possession. Though in Congo in particular, smartphones are relatively rare, which is ironic because the most critical raw material for smartphones—tantalum—is quite prevalent in Congo and a major source of conflict there.

Such a hard life is also typically a short one. The average life expectancy in Congo is less than 65 years. This is mainly due to the fact that almost 15% of children will die before the age of five, though fortunately infant and child mortality in Congo is rapidly declining (though that means it used to be worse than this!).

A disease that is merely inconvenient in a rich country is often fatal in a poor one; malaria is the classic example of this. Malaria remains the cause of over one million deaths per year, but essentially no one dies of malaria in First World countries. It can be treated with quinine, which costs no more than $3 per pill. But when your total consumption is $1.50 per day, a $3 pill is still prohibitively expensive. While in rich countries antibiotic-resistant tuberculosis is a real danger, for the world’s poorest people it doesn’t much matter if the bacteria are resistant to antibiotics, because nobody can afford antibiotics.

What could we do to save these people? A great deal, as it turns out.

Ending extreme poverty worldwide wouldn’t be as easy as ending it in the United States; there’s no central taxation authority that would let us simply change a few numbers and then start writing checks.
We could implement changes through either official development aid or by supporting specific vetted non-governmental organizations, but each of these options carries drawbacks. Development aid can be embezzled by corrupt governments. NGOs can go bankrupt or have their assets expropriated.

Yet even with such challenges in mind, the total cost to end extreme poverty—not all poverty, but extreme poverty—worldwide is probably less than $200 billion per year. This is not a small sum, but it is well within our means. This is less than a third of the US military budget (not counting non-DoD military spending!), or about half what the US spends on gasoline.

Frankly I think we could safely divert that $200 billion directly from military spending without losing any national security. 21st century warfare is much less about blowing up targets and much more about winning hearts and minds. Ending world hunger would win an awful lot of hearts and minds, methinks. Obviously we can’t eliminate all military spending; those first two or three aircraft carrier battle groups really are keeping us and our allies safer. Did we really need eleven?

But all right, suppose we did need to raise additional tax revenue to fund this program. How much would taxes have to go up? Let’s say that only First World countries pay, which we can approximate using the GDP of the US and the EU (obviously we could also include Canada and Australia, but we might not want to include some of Eastern Europe, so that roughly balances out). Add up the $19 trillion of European Union GDP and $21 trillion of US GDP together and you get $40 trillion per year; $200 billion is only 0.5% of that. We would only need to raise taxes by half a percentage point to fund this program. Even if we didn’t make the tax progressive (and why wouldn’t we?), a typical family making $60,000 per year would only need to pay an extra $300 per year.

Why aren’t we doing this?

This is a completely serious question. Feel free to read it in an exasperated voice. I honestly would like to know why the world is willing to leave so many people in so much suffering when we could save them for such little cost.

Just how rich is rich?

May 26 JDN 2458630

I think if there is one single thing I would like more people to know about economics, it is the sheer magnitude of global inequality. Most people seem to have no idea just how rich some people are—and how poor so many others are. They have a vision in their head of what “rich” and “poor” are, and their “rich” is a low-level Wall Street trader making $400,000 a year (the kind of people Gordon Gekko mocks in the film), and “poor” is someone who lives under a bridge in New York City. (They’re both New Yorkers, I guess. New Yorkers seem to be the iconic Americans, which is honestly more representative than you might think—80% of Americans live in urban or suburban areas.)

If we take a global perspective, this is not what “rich” and “poor” truly mean.

In next week’s post I’ll talk about what “poor” means. It’s really appallingly bad. We have to leave the First World in order to find it; many people here are poor, but not that poor. It’s so bad that I think once you really understand it, it can’t but change your whole outlook on the world. But I’m saving that for next week.

This week, I’ll talk about what “rich” really means in today’s world. We needn’t leave the United States, for the top 3 and 6 of the top 10 richest people in the world live here. And they are all White men, by the way, though Carlos Slim and Amancio Ortega are at least Latino.

Going down the list of billionaires ranked by wealth, you have to get down to 15th place before encountering a woman, and it’s really worse than that, because Francoise Bettencourt (15), Alice Walton (17), Jacqueline Mars (33), Yang Huiyan (42), Susan Klatton (46), Laurena Powell-Jobs (54), Abigail Johnson (71), and Iris Fontbona (74) are all heirs. The richest living woman who didn’t simply inherit from her father or husband is actually Gina Rinehart, the 75th richest person in the world. (And note that, while also in some sense an heir, Queen Elizabeth is not on that list; in fact, she’s nowhere near the richest people in the world. She’s not in the top 500.)

You have to get to 20th place before encountering someone non-White (Ma Huateng), and all the way down to 65th before encountering someone not White or East Asian (the Hinduja brothers). Not one of the top 100 richest people is Black.

Just how rich are these people? Well, there’s a meme going around saying that Jeff Bezos could afford to buy every homeless person in the world a house at median market price and still, with just what’s left over, be a multi-billionaire among the top 100 richest people in the world.

And that meme is completely correct. The math checks out.

There are about 554,000 homeless people in the US at any given time.

The median sale price of a currently existing house in the US is about $253,000.

Multiply those two numbers together, and you get $140 billion.

And Jeff Bezos has net wealth of $157 billion.

This means that he would still have $17 billion left after buying all those houses. The 100th richest person in the world has $13 billion, so Jeff Bezos would still be higher than that.

Even $17 billion is enough to spend over $2 million every single day—over $20 per second—and never run out of money as long as the dividends keep paying out.

Jeff Bezos in fact made so much in dividends and capital gains this past quarter that he was taking in as much money as the median Amazon employee’s annual salary—which is more than what I make as a grad student, and only slightly less than the median US individual incomeevery nine seconds. Yes, you read that correctly: Nine (9) seconds. In the time it took you to read this paragraph, Jeff Bezos probably received more in capital gains than you will make this whole year. And if not (because you’re relatively rich or you read quickly), I’m sure he will have in the time it takes you to read this whole post.

When Mitt Romney ran for President, a great deal was made of his net wealth of over $250 million. This is indeed very rich, richer than anyone really needs or probably deserves. But compared to the world’s richest, this is pocket change. Jeff Bezos gets that much in dividends and capital gains every day. Bill Gates could give away that much every day for a year and still not run out of money. (He doesn’t quite give that much, but he does give a lot.)

I grew up in Ann Arbor, Michigan. Ann Arbor is a medium-sized city of about 120,000 people (230th in the US by population), and relatively well-off (median household income about 16% higher than the US median). Nevertheless, if Jeff Bezos wanted to, he could give every single person in Ann Arbor the equivalent of 30 years of their income—over a million dollars each—and still have enough money left to be among the world’s 100 richest people.

Or suppose instead that all the world’s 500 richest people decided to give away all the money they have above $1 billion—so they’d all still be billionaires, but only barely. That $8.7 trillion they have together, minus the $500 billion they’re keeping, would be $8.2 trillion. In fact, let’s say they keep a little more, just to make sure they all have the same ordering: Give each one an extra $1 million for each point they are in the ranking, so that Jeff Bezos would stay on top at $1 B + 500 ($0.001 B) = $1.5 billion, while Bill Gates in second place would have $1 million less, and so on. That would leave us with still over $8 trillion to give away.

How far could that $8 trillion go? Well, suppose we divided it evenly between all 328 million people in the United States. How much would each person receive? Oh, just about $24,000—basically my annual income.

Or suppose instead we spread it out over the entire world: Every single man, woman, and child on the planet Earth gets an equal share. There are 7.7 billion people in the world, so by spreading out $8 trillion between them, each one would get over $1000. For you or I that’s a big enough windfall to feel. For the world’s poorest people, it’s more than they make in several years. It would be life-changing for them. (Actually that’s about what GiveDirectly gives each family—and it is life-changing.)

And let me remind you: This would be leaving them billionaires. They’re just not as much billionaires as before—they only have $1 billion instead of $20 billion or $50 billion or $100 billion. And even $1 billion is obviously enough to live however you want, wherever you want, for the rest of your life, never working another day if you don’t want to. With $1 billion, you can fly in jets (a good one will set you back $20 million), sail in yachts (even a massive 200-footer wouldn’t run much above $200 million), and eat filet mignon at every meal (in fact, at $25 per pound, you can serve it to yourself and a hundred of your friends without breaking a sweat). You can decorate your bedroom with original Jackson Pollock paintings (at $200 million, his most expensive painting is only 20% of your wealth) and bathe in bottles of Dom Perignon (at $400 per liter, a 200-liter bath would cost you about $80,000—even every day that’s only $30 million a year, or maybe half to a third of your capital income). Remember, this is all feasible at just $1 billion—and Jeff Bezos has over a hundred times that. There is no real lifestyle improvement that happens between $1 billion and $157 billion; it’s purely a matter of status and power.

Taking enough to make them mere millionaires would give us another $0.5 trillion to spend (about the GDP of Sweden, one-fourth the GDP of Canada, or 70% of the US military budget).

Do you think maybe these people have too much money?

I’m not saying that we should confiscate all private property. I’m not saying that we should collectivize all industry. I believe in free markets and private enterprise. People should be able to get rich by inventing things and starting businesses.

But should they be able to get that rich? So rich that one man could pay off every mortgage in a whole major city? So rich that the CEO of a company makes what his employees make in a year in less than a minute? So rich that 500 people—enough to fill a large lecture hall—own enough wealth that if it were spread out evenly they could give $1000 to every single person in the world?

If Jeff Bezos had $1.5 million, I’d say he absolutely earned it. Some high-level programmers at Amazon have that much, and they absolutely earned it. If he had $15 million, I’d think maybe he could deserve that, given his contribution to the world. If he had $150 million, I’d find it hard to believe that anyone could really deserve that much, but if it’s part of what we need to make capitalism work, I could live with that.

But Jeff Bezos doesn’t have $1.5 million. He doesn’t have $15 million. He doesn’t have $150 million. He doesn’t have $1.5 billion. He doesn’t even have $15 billion. He has $150 billion. He has over a thousand times the level of wealth at which I was already having to doubt whether any human being could possibly deserve so much money—and once it gets that big, it basically just keeps growing. A stock market crash might drop it down temporarily, but it would come back in a few years.

And it’s not like there’s nothing we could do to spread this wealth around. Some fairly simple changes in how we tax dividends and capital gains would be enough to get a lot of it, and a wealth tax like the one Elizabeth Warren has proposed would help a great deal as well. At the rates people have seriously proposed, these taxes would only really stop their wealth from growing; it wouldn’t meaningfully shrink it.

That could be combined with policy changes about compensation for corporate executives, particularly with regard to stock options, to make it harder to extract such a large proportion of a huge multinational corporation’s wealth into a single individual. We could impose a cap on the ratio between median employee salary (including the entire supply chain!) and total executive compensation (including dividends and capital gains!), say 100 to 1. (Making in 9 seconds what his employees make in a year, Jeff Bezos is currently operating at a ratio of over 3 million to 1.) If you exceed the cap, the remainder is taxed at 100%. This would mean that as a CEO you can still make $100 million a year, but only if your median employee makes $1 million. If your median employee makes $30,000, you’d better keep your own compensation under $3 million, because we’re gonna take the rest.

Is this socialism? I guess maybe it’s democratic socialism, the high-tax, high-spend #ScandinaviaIsBetter welfare state. But it would not be an end to free markets or free enterprise. We’re not collectivizing any industries, let alone putting anyone in guillotines. You could still start a business and make millions or even hundreds of millions of dollars; you’d simply be expected to share that wealth with your employees and our society as a whole, instead of hoarding it all for yourself.

Pinker Propositions

May 19 2458623

What do the following statements have in common?

1. “Capitalist countries have less poverty than Communist countries.

2. “Black men in the US commit homicide at a higher rate than White men.

3. “On average, in the US, Asian people score highest on IQ tests, White and Hispanic people score near the middle, and Black people score the lowest.

4. “Men on average perform better at visual tasks, and women on average perform better on verbal tasks.

5. “In the United States, White men are no more likely to be mass shooters than other men.

6. “The genetic heritability of intelligence is about 60%.

7. “The plurality of recent terrorist attacks in the US have been committed by Muslims.

8. “The period of US military hegemony since 1945 has been the most peaceful period in human history.

These statements have two things in common:

1. All of these statements are objectively true facts that can be verified by rich and reliable empirical data which is publicly available and uncontroversially accepted by social scientists.

2. If spoken publicly among left-wing social justice activists, all of these statements will draw resistance, defensiveness, and often outright hostility. Anyone making these statements is likely to be accused of racism, sexism, imperialism, and so on.

I call such propositions Pinker Propositions, after an excellent talk by Steven Pinker illustrating several of the above statements (which was then taken wildly out of context by social justice activists on social media).

The usual reaction to these statements suggests that people think they imply harmful far-right policy conclusions. This inference is utterly wrong: A nuanced understanding of each of these propositions does not in any way lead to far-right policy conclusions—in fact, some rather strongly support left-wing policy conclusions.

1. Capitalist countries have less poverty than Communist countries, because Communist countries are nearly always corrupt and authoritarian. Social democratic countries have the lowest poverty and the highest overall happiness (#ScandinaviaIsBetter).

2. Black men commit more homicide than White men because of poverty, discrimination, mass incarceration, and gang violence. Black men are also greatly overrepresented among victims of homicide, as most homicide is intra-racial. Homicide rates often vary across ethnic and socioeconomic groups, and these rates vary over time as a result of cultural and political changes.

3. IQ tests are a highly imperfect measure of intelligence, and the genetics of intelligence cut across our socially-constructed concept of race. There is far more within-group variation in IQ than between-group variation. Intelligence is not fixed at birth but is affected by nutrition, upbringing, exposure to toxins, and education—all of which statistically put Black people at a disadvantage. Nor does intelligence remain constant within populations: The Flynn Effect is the well-documented increase in intelligence which has occurred in almost every country over the past century. Far from justifying discrimination, these provide very strong reasons to improve opportunities for Black children. The lead and mercury in Flint’s water suppressed the brain development of thousands of Black children—that’s going to lower average IQ scores. But that says nothing about supposed “inherent racial differences” and everything about the catastrophic damage of environmental racism.

4. To be quite honest, I never even understood why this one shocks—or even surprises—people. It’s not even saying that men are “smarter” than women—overall IQ is almost identical. It’s just saying that men are more visual and women are more verbal. And this, I think, is actually quite obvious. I think the clearest evidence of this—the “interocular trauma” that will convince you the effect is real and worth talking about—is pornography. Visual porn is overwhelmingly consumed by men, even when it was designed for women (e.g. Playgirla majority of its readers are gay men, even though there are ten times as many straight women in the world as there are gay men). Conversely, erotic novels are overwhelmingly consumed by women. I think a lot of anti-porn feminism can actually be explained by this effect: Feminists (who are usually women, for obvious reasons) can say they are against “porn” when what they are really against is visual porn, because visual porn is consumed by men; then the kind of porn that they like (erotic literature) doesn’t count as “real porn”. And honestly they’re mostly against the current structure of the live-action visual porn industry, which is totally reasonable—but it’s a far cry from being against porn in general. I have some serious issues with how our farming system is currently set up, but I’m not against farming.

5. This one is interesting, because it’s a lack of a race difference, which normally is what the left wing always wants to hear. The difference of course is that this alleged difference would make White men look bad, and that’s apparently seen as a desirable goal for social justice. But the data just doesn’t bear it out: While indeed most mass shooters are White men, that’s because most Americans are White, which is a totally uninteresting reason. There’s no clear evidence of any racial disparity in mass shootings—though the gender disparity is absolutely overwhelming: It’s almost always men.

6. Heritability is a subtle concept; it doesn’t mean what most people seem to think it means. It doesn’t mean that 60% of your intelligence is due to your your genes. Indeed, I’m not even sure what that sentence would actually mean; it’s like saying that 60% of the flavor of a cake is due to the eggs. What this heritability figure actually means that when you compare across individuals in a population, and carefully control for environmental influences, you find that about 60% of the variance in IQ scores is explained by genetic factors. But this is within a particular population—here, US adults—and is absolutely dependent on all sorts of other variables. The more flexible one’s environment becomes, the more people self-select into their preferred environment, and the more heritable traits become. As a result, IQ actually becomes more heritable as children become adults, called the Wilson Effect.

7. This one might actually have some contradiction with left-wing policy. The disproportionate participation of Muslims in terrorism—controlling for just about anything you like, income, education, age etc.—really does suggest that, at least at this point in history, there is some real ideological link between Islam and terrorism. But the fact remains that the vast majority of Muslims are not terrorists and do not support terrorism, and antagonizing all the people of an entire religion is fundamentally unjust as well as likely to backfire in various ways. We should instead be trying to encourage the spread of more tolerant forms of Islam, and maintaining the strict boundaries of secularism to prevent the encroach of any religion on our system of government.

8. The fact that US military hegemony does seem to be a cause of global peace doesn’t imply that every single military intervention by the US is justified. In fact, it doesn’t even necessarily imply that any such interventions are justified—though I think one would be hard-pressed to say that the NATO intervention in the Kosovo War or the defense of Kuwait in the Gulf War was unjustified. It merely points out that having a hegemon is clearly preferable to having a multipolar world where many countries jockey for military supremacy. The Pax Romana was a time of peace but also authoritarianism; the Pax Americana is better, but that doesn’t prevent us from criticizing the real harms—including major war crimes—committed by the United States.

So it is entirely possible to know and understand these facts without adopting far-right political views.

Yet Pinker’s point—and mine—is that by suppressing these true facts, by responding with hostility or even ostracism to anyone who states them, we are actually adding fuel to the far-right fire. Instead of presenting the nuanced truth and explaining why it doesn’t imply such radical policies, we attack the messenger; and this leads people to conclude three things:

1. The left wing is willing to lie and suppress the truth in order to achieve political goals (they’re doing it right now).

2. These statements actually do imply right-wing conclusions (else why suppress them?).

3. Since these statements are true, that must mean the right-wing conclusions are actually correct.

Now (especially if you are someone who identifies unironically as “woke”), you might be thinking something like this: “Anyone who can be turned away from social justice so easily was never a real ally in the first place!”

This is a fundamentally and dangerously wrongheaded view. No one—not me, not you, not anyone—was born believing in social justice. You did not emerge from your mother’s womb ranting against colonalist imperialism. You had to learn what you now know. You came to believe what you now believe, after once believing something else that you now think is wrong. This is true of absolutely everyone everywhere. Indeed, the better you are, the more true it is; good people learn from their mistakes and grow in their knowledge.

This means that anyone who is now an ally of social justice once was not. And that, in turn, suggests that many people who are currently not allies could become so, under the right circumstances. They would probably not shift all at once—as I didn’t, and I doubt you did either—but if we are welcoming and open and honest with them, we can gradually tilt them toward greater and greater levels of support.

But if we reject them immediately for being impure, they never get the chance to learn, and we never get the chance to sway them. People who are currently uncertain of their political beliefs will become our enemies because we made them our enemies. We declared that if they would not immediately commit to everything we believe, then they may as well oppose us. They, quite reasonably unwilling to commit to a detailed political agenda they didn’t understand, decided that it would be easiest to simply oppose us.

And we don’t have to win over every person on every single issue. We merely need to win over a large enough critical mass on each issue to shift policies and cultural norms. Building a wider tent is not compromising on your principles; on the contrary, it’s how you actually win and make those principles a reality.

There will always be those we cannot convince, of course. And I admit, there is something deeply irrational about going from “those leftists attacked Charles Murray” to “I think I’ll start waving a swastika”. But humans aren’t always rational; we know this. You can lament this, complain about it, yell at people for being so irrational all you like—it won’t actually make people any more rational. Humans are tribal; we think in terms of teams. We need to make our team as large and welcoming as possible, and suppressing Pinker Propositions is not the way to do that.

How do you change a paradigm?

Mar 3 JDN 2458546

I recently attended the Institute for New Economic Thinking (INET) Young Scholars Initiative (YSI) North American Regional Convening (what a mouthful!). I didn’t present, so I couldn’t get funding for a hotel, so I commuted to LA each day. That was miserable; if I ever go again, it will be with funding.

The highlight of the conference was George Akerlof‘s keynote, which I knew would be the case from the start. The swag bag labeled “Rebel Without a Paradigm” was also pretty great (though not as great as the “Totes Bi” totes at the Human Rights Council Time to THRIVE conference).

The rest of the conference was… a bit strange, to be honest. They had a lot of slightly cheesy interactive activities and exhibits; the conference was targeted at grad students, but some of these would have drawn groans from my more jaded undergrads (and “jaded grad student” is a redundancy). The poster session was pathetically small; I think there were literally only three posters. (Had I known in time for the deadline, I could surely have submitted a poster.)

The theme of the conference was challenging the neoclassical paradigm. This was really the only unifying principle. So we had quite an eclectic mix of presenters: There were a few behavioral economists (like Akerlof himself), and some econophysicists and complexity theorists, but mostly the conference was filled with a wide variety of heterodox theorists, ranging all the way from Austrian to Marxist. Also sprinkled in were a few outright cranks, whose ideas were just total nonsense; fortunately these were relatively rare.

And what really struck me about listening to the heterodox theorists was how mainstream it made me feel. I went to a session on development economics, expecting randomized controlled trials of basic income and maybe some political economy game theory, and instead saw several presentations of neo-Marxist postcolonial theory. At the AEA conference I felt like a radical firebrand; at the YSI conference I felt like a holdout of the ancien regime. Is this what it feels like to push the envelope without leaping outside it?

The whole atmosphere of the conference was one of “Why won’t they listen to us!?” and I couldn’t help but feel like I kind of knew why. All this heterodox theory isn’t testable. It isn’t useful. It doesn’t solve the problem. Even if you are entirely correct that Latin America is poor because of colonial and neocolonial exploitation by the West (and I’m fairly certain that you’re not; standard of living under the Mexica wasn’t so great you know), that doesn’t tell me how to feed starving children in Nicaragua.

Indeed, I think it’s notable that the one Nobel Laureate they could find to speak for us was a behavioral economist. Behavioral economics has actually managed to penetrate into the mainstream somewhat. Not enough, not nearly quickly enough, to be sure—but it’s happening. Why is it happening? Because behavioral economics is testable, it’s useful, and it solves problems.

Indeed, behavioral economics is more testable than most neoclassical economics: We run lab experiments while they’re adding yet another friction or shock to the never-ending DSGE quagmire.

And we’ve already managed to solve some real policy problems this way, like Alvin Roth’s kidney matching system and Richard Thaler’s “Save More Tomorrow” program.

The (limited) success of behavioral economics came not because we continued to batter at the gates of the old paradigm demanding to be let in, but because we tied ourselves to the methodology of hard science and gathered irrefutable empirical data. We didn’t get as far as we have by complaining that economics is too much like physics; we actually made it more like physics. Physicists do experiments. They make sharp, testable predictions. They refute their hypotheses. And now, so do we.

That said, Akerlof was right when he pointed out that the insistence upon empirical precision has limited the scope of questions we are able to ask, and kept us from addressing some of the really vital economic problems in the world. And neoclassical theory is too narrow; in particular, the ongoing insistence that behavior must be modeled as perfectly rational and completely selfish is infuriating. That model has clearly failed at this point, and it’s time for something new.

So I do think there is some space for heterodox theory in economics. But there actually seems to be no shortage of heterodox theory; it’s easy to come up with ideas that are different from the mainstream. What we actually need is more ways to constrain theory with empirical evidence. The goal must be to have theory that actually predicts and explains the world better than neoclassical theory does—and that’s a higher bar than you might imagine. Neoclassical theory isn’t an abject failure; in fact, if we’d just followed the standard Keynesian models in the Great Recession, we would have recovered much faster. Most of this neo-Marxist theory struck me as not even wrong: the ideas were flexible enough that almost any observed outcome could be fit into them.

Galileo and Einstein didn’t just come up with new ideas and complain that no one listened to them. They developed detailed, mathematically precise models that could be experimentally tested—and when they were tested, they worked better than the old theory. That is the way to change a paradigm: Replace it with one that you can prove is better.