Racial Distribution in America

The WSJ today has an article on race in America by Jason Riley with heavy use of quotations from Abigail Thernstrom. It is provocative throughout. I have not read any of Dr. Thernstrom’s books, but I found the following quote interesting:


“I think there’s a running assumption through all of the writing on the left about racial issues that, were it not for racism, you would have random distribution of racial and ethnic groups in education, employment, contracting, elections—whatever you’re looking at. But the notion of random distribution of blacks, Latinos, Jews, Armenians or whomever is absurd. It’s indifferent to the reality of society. That’s just not how people distribute themselves.”


I think that’s about right as a first pass criticism of a lot of what you hear in the public sphere. Though I’m not sure what Thernstrom means by “random distribution.” Perhaps “equal distribution” would be more apt. This, of course, applies to the distribution of men and women as well. As for how “people distribute themselves,” I’m not sure of the answer to that question. If we suppose, first, an absence of racism and, second, an equal probability that minorities and women distribute themselves in any particular way across, say, American firms, it may well be that an “equal distribution” is perfectly reasonable, however unlikely probabilistically. Both assumptions, however, are dubious.


But to piggyback on Dr. Thernstrom’s point, I think one problem that equal rights advocates have is that there is no obvious normative standard against which to judge progress. Is 50% representation by women on the boards of Fortune 500 companies the correct amount? Too much? Too little? I have no idea. Women make up about 50% of the US population, but it isn’t immediately obvious that this implies they should make up roughly half of the population of whatever institution we’re examining. The same is true for minorities. If we want to honor the differences of minorities and women at the macro level, I’m not sure why we expect, or advocate, that these groups make the same educational and occupational decisions as white men. What is the normative basis for this type of advocacy?


Sure, I can understand the elements of power involved—we don’t want white men to be the only ones running businesses or representing us in local, state, and national politics, because “we” are not all white men and there is a normative discourse about the types of values American democracy should stand for and a general feeling of what is equitable when it comes to power distribution. I just think that tacitly implying that proportional minority representation is normative is an oversimplification and actually disenfranchises those that want to make non-normative educational and employment decisions. I’m sure Critical Race Theory has a lot to say on this subject (probably in disagreement with me), but unfortunately I am not familiar enough with the field to speak intelligently.


To be fair, equal rights advocates look at a lot more than simply the proportion of minorities and women in any given setting. They look at public discorse, media representation, personal experience, and historical accretion (to name just a few factors) to determine whether things “look out of whack.” Nonetheless, I have a feeling these broad statistics largely drive the examination of the other factors. So if women did enjoyed equal pay and happened to represent half of any particular US occupation, I think the critics would be less boisterous and fewer in number.


However, this is where I think things get complicated. Minority representation in US universities and occupations most probably influences the factors I mentioned above, which in turn further influence the choices minorities make. So, in fact, these elements are impossible to disentangle. Dr. Thernstrom seems to overlook the fact (in her quote, at least) that the way minorities choose to distribute themselves is itself influenced by the current distribution. Moreover, what constitutes a “choice” gets very sticky. If we momentarily ignore the effects of the structural composition of society and introduce a framework of rational choice, it wouldn’t be too difficult to determine the efficient distribution of minorities across US society. It would be that decision set that is absent of any coercive forces, such as legal preference or economic incentives given by the government. I see this as the classical liberal stance.


However, it is unclear what a neutral legal structure looks like. To have any legal system at all is to preference some at the expense of others. And even if we ignore that problem, we still wouldn’t have things quite right since undoubtedly parents and friends heavily influence how people choose to distribute themselves, by offering advice on the best colleges or the companies with the most generous benefits, for example. Even interactions that are not specifically geared toward such distribution decisions undoubtedly end up affecting them. Surely, growing up in Arizona for one’s entire adolescence, for instance, helps to determine what climate a person likes or dislikes and, thus, how he or she distributes him or herself. Once we add back in any structural elements of society, long histories of slavery and Jim Crow-era regulation, for example, things get even more complicated. It’s clear that what we see as free choice is actually a complex biological system constantly influenced by long-lasting exogenous shocks from the environment around us.


The world, then, is socially constructed (not a new insight by any stretch of the imagination, see Sociology since the field began, for example). And it’s constructed such that we can’t simply ignore the way society is structured or define “free choice” in any meaningful sense. (Indeed, philosophers can’t even agree on its meaning). But this leads me back to my original point. There is no such thing as an “authentic” distribution of any category of persons across any institution. Any distribution is valid in the sense that at any point in time the distribution is the result of the accumulation of the world’s social action. And so again, I don’t know know what a normative distribution looks like, since I don’t know what normative means in this context.


But that doesn’t get us very far. Throwing up your hands and saying, “it’s all relative” is a distasteful, and to some extent, intellectually lazy position to take. To revisit an earlier point, I think equal rights advocates, as well as Critical Race theorists would, and have, advocated for a world without white hegemony. A world in which “whiteness” doesn’t bestow unique privileges and rights beyond those who weren’t granted “whiteness” at birth. I think that’s right. And Dr. Thernstrom, and others, seem to overlook the contributions of Critical Theory, instead adopting their own set of aggregate statistics to show how much progress has been made.


But even when I accept the “white hegemony” argument, which I largely do, I still come up short, because (1) I think a world without such hegemony is very hard to envision (though, again, I’ve read relatively little on the subject, so haven’t been exposed to the full panoply of ideas); and (2) I’m still not sure that this argument ex ante prescribes any particular distribution of minorities across institutions, other than saying that when such a world is achieved we will sufficiently have crossed over into the realm where “free choice” takes over and so whatever distribution arises ex post must be the correct one.


In conclusion, perhaps both sides should stop using aggregate statistics to try to prove one way or the other that the current distribution is either just or unjust, and instead focus on defining normative institutional and societal forms using such tools as Critical Legal Theory as a basis (again, probably already been done). That’s more challenging and more amorphous, and certainly harder to measure, but it is probably more intellectually rigorous across many dimensions and will likely offer an ultimate outcome that is more agreeable to everyone involved…except for White men, of course.


Note: To those with a Critical Studies background I’m sure this post sounds unbelievable naive. So please, inculcate me with your knowledge.

Is All Self-Interest Social?


In this—what I can only hope for Walter Williams’s sake is a video from the 1970s (otherwise it’s time for some new glasses)—the laissez faire economist makes the case that greed is good. He argues that greed, channeled through the free market, provides outcomes that would be unprovided in a system driven by alturism. Williams gives the example of ranchers in Texas struggling to round up missing herds in harsh weather to provide beef to consumers in New York—consumers that the Texans may very well hate. It is greed, not alturism or kindness, that motivates such commitment to providing beef, and thus enriches the lives of both the ranchers (with a paycheck) and New Yorkers who can now eat beef.


I have two thoughts on the video. The first is that, while Williams certainly understands that economics is not about money, here he places too much emphasis on financial gains. It’s certainly true, IMHO, that many people do not think hard enough about what outcomes would materialize in a non greed-driven system, to adopt Williams’s terminology. But more pervasive is the misunderstanding of what money is and how it is used. I don’t mean the money is store of value, unit of account, medium of exchange definition. Well, maybe I do, but I don’t like to put it in those terms. Fundamentally, money is not wealth. That is to say, if I have a stack of fiber-based paper with dead presidents on them, I can’t do much with it. I can’t eat it. I can’t burn it (very well). It won’t keep me warm. It isn’t much fun to play with. So a litteral stack of money is pretty useless to me. But what I can buy with it is extremely valuable.


And that gets me to my second point. After we realize we shouldn’t couch things in terms of “money,” but in terms of the goods and services we can purchase—in other words how we use the money is what’s really important—we approach what I think is one of the most misunderstood points in economics (for the layperson). The things that we buy with the money help to accomplish the very goals that those who eschew a money-based system advocate. Importantly, we spend money primarily on our friends and family: we go on trips with them, we buy cars so we can get to them (and drive them around after we do), we go to baseball games with them, we buy phones to talk to them, we buy new microwaves so we can spend less time cooking and more time having fun with them, we buy food to put in that microwave to eat with them, we buy books to read to them and with them, the list goes on. We are social creatures and as far as I can tell most of our money is spent on enriching the social connections that are important to us. And in the modern world, many of these are labor and time saving devices that allow us to spend more time with our family and friends, not less as is implied by a the-pursuit-of-money-is-evil mentality. Indeed, data shows that leisure time across the world is increasing, not decreasing.


(The above point is one reason why I think those who promote non-GDP alternatives fundamentally misunderstand the importance of GDP and what it really measures. This is a popular view among college-educated leftists who like to think they are outsmarting economists without really understanding much about economics. Ironically, those like Amartya Sen and Martha Nussbaum, who innovated the Capabilities Approach, while moving beyond the GDP measure, openly recognize its importance. But this is a post for another day).


Sure, some money is spent on ourselves too. A lot even. And some (a lot?) is also spent on frivolities, if we want to term a certain type of purchase as such. A $300 dress when an $80 dress would have done, for instance. Further, in the later case the extra $220 could have been given to a charity. There are problems with this type of reasoning though, which I want to avoid at the moment for simplicity. I simply want to point out that there is a difference in the social value of an $80 dress and a $300 dress, even if they are the same in every respect except price. Note that I’m not implying that one or the other has more social value, the specifics of that value depend on the social context of the purchaser. For some, frugality is part of the way they construct their identity and connect socially with others. “I only paid $80 for this dress” is part of a different social experience, and indeed creates a different social trajectory, than, “this dress cost me $300.”


This is all simply to say that when we pronounce that people act in their self-interest (or toward “greedy” ends), what we should be saying is that people act in their social self-interest, since, as I’ve argued here, money is a means to connect socially, either directly by allowing us to spend more time and energy on our family and friends (as in the first examples), or by helping to construct an identity that is used toward social ends (such as the case with fashion).


Further, constructing self-interest in this way integrates nicely with non-monetary self-interest, which has been increasingly studied in economics and is obvious in such activities as editing Wikipedia entries. Here, there is clearly no monetary benefit, yet people spend hundreds of hours doing it. It is a special type of hobby that has net positive externalities in a wide-reaching way that most hobbies don’t. Using a social self-interest framework can also better account for human motivations that are part biological and part environmental like competitiveness. Certainly, some of the richest people in the world who seek to “collect” wealth, if you will, do so not for reasons that can be described by any sort of traditional notion of self-interest. More likely, they do so for reasons of competitive drive or similarly poorly understood rationales. These motivations might also include orientations toward constructing narrative heroic legacies, probably important for presidents and senators, or the need to create and share new inventions in order to intentionally fuel creative destruction, perhaps what was at the core of Steve Jobs’s drive toward transformative design.


Finally, viewing things socially also comports more closely with what we know from survey data. Namely, that people are not mainly motivated by money in the workplace, for example. Instead satisfaction rests on factors such as whether they have a best friend, a good manager, and have their hard work recognized. So while Williams articulates some important points about what he calls “greed,” he leaves left unexplained the finer points of what is a more fundamental, and more complex argument.


In recent years Subjective Utility Theory (SEU Theory)—the “cold” version of self-interest, if you will—has been buttressed by advances in behavioral economics that attempt to add “warmth” and “depth” to the economic understanding of decision making and explore the limits of human rationality. The field has elucidated concepts such as “framing,” in which people’s decision making is affected by the surrounding environmental context. For example, if a person, say, watches a sad movie, they will subsequently make different decisions than if they had watched a childhood favorite (at least until the effect “wears off”). So-called “crowding out” of intrinsic motivation by substituting monetary payment is another finding of the field. But economics has a long way to go to explain how such effects are constructed both socially and biologically. Framing and crowding out work differently for different people so while economics can now explain that certain phenomenon take place outside of the standard neo-classical framework, it still has a long way to go in explaining why and accounting for the variation among communities and individuals.


I used “cold,” “warmth,” and “depth” in quotations in the paragraph above because it is clear that economics and strict models of SEU Theory, in which humans are utility maximizing agents, have alienated much of the general public because they present a robotic version of human affairs that differs greatly from the way the average person lives. And so the theories are cold in the sense that they are absent of emotion and complexity, while modern economics has indeed tried to add complexity and depth to models of human choice and validate the importance of emotion, context, and the limits of human knowledge. So Williams’s use of the word “greed” matters because language matters, especially to the average person who poorly understands the tenets of classical economics much less its modern incarnations and addendums. Once we say “greed” is good, or people only live to maximize their “self-interest” we’ve turned a lot of people off to economics, no matter how hard we try to redefine those terms in clever ways or convince people that what we’re saying is actually true using praxeology as a philosophical basis of human action.  That’s why I think it’s important to talk about self-interest in social terms and make clear that economic well being is, in fact, simply a channel to social well-being. What “well-being” means in this context is still to be explored, and I suppose whether self-interest is socially motivated at all remains an empirical question. But I think it is a question that needs exploration and one that fields such as neuroeconomics are only beginning to address.


That is all.

Two Economists Agree: Austerity Not the Answer

The photo above is from an NPR story. How do we know economists agree that austerity is not the answer? Because NPR interviewed two of them for us. Unfortunately, the real story is more complicated. Here is more.  And more. And what does austerity even mean? And has Europe experienced it?…

HT: Veronique de Rugy via Marginal Revolution.


Why you (and I) should read more fiction.

Where is the center of the universe? Answer: there isn’t one.

What is your dog thinking?


Don’t punch a fire extinguisher.

Argentina’s paper The Nation has an interesting article (in Spanish) about capital flight.

“La directora de la Aduana, Siomara Ayerán, explicó ante los medios que estos perros son especialmente entrenados para detectar el olor de la tinta de los billetes y que la dirección de Aduanas de Estados Unidos prestó colaboración en las tareas de adiestramiento.”

The paragraph above says that “The Director of Customs, Siomara Ayerán, explained before the media that [officials in Argentina] are using specially trained dogs to detect the scent of ink on the bills and that the position of the US Customs office has been to collaborate with the training.” Basically, they really, really don’t want money to leave the country. The dogs found one BMW with US$30,000 cash trying to board a ferry to Uruguay.

Sight and Sound’s 2012 Poll

Voting has opened for Sight and Sound‘s 2012 list of greatest films. Here are the films Roger Ebert will be voting for. I was sad to see Roger won’t be able to vote for Dekalog by krzysztof Kieslowski because of a change in Sight and Sound‘s rules, which requires each movie to receive a separate vote. Since Dekalog is technically 10 one-hour films (each one loosely based on one of the 10 Commandments), Ebert had to take it off his list. It will be replaced with Terrene Malick’s The Tree of Life.

The poll is conducted every 10 years. Here is the 2002 list.