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robertogreco : steverandywaldman   3

interfluidity » Attributions of causality
"Drum is certainly right to characterize the explicitly racist appeals of these movements as loathsome. But it isn’t enough to say “that’s where we are”. His interlocutors are right to point to economic anxiety and other disruptive changes rather than leave it there. We have to share the same world with every other human. Drum and I have to share the same country with Trump voters. We try to understand the world in order to better live in it. Explanations or assertions that don’t contribute to that are not worth very much.

How we attribute causality is a social choice, and it is a choice much less constrained than people who clothe themselves in the authority of “social science” or “the data” often pretend. Quantitative methods like instrumental variable analysis at their best indicate that some element is a factor in causing a measured phenomenon. For anything complex, they are rarely strong enough to even suggest either the necessity or the sufficiency of a factor. Social outcomes like susceptibility to racist appeals are affected by lots of things, and are probably overdetermined, so that one could generate equally strong results implicating a wide variety of different factors depending upon what is excluded from or included in ones model.

In political life, there are nearly always multiple reasonable models to choose from. Our choice of models is itself a moral and political act. For example, conservatives prefer cultural explanations for communities with high rates of young single motherhood, while liberals prefer economic explanations. These explanations are not mutually exclusive, both can be simultaneously true, but cultural explanations serve mostly to justify the social stratification that correlates with single motherhood, while economic explanations invite remedies. It might be true, and demonstrable in the usual statistical ways, that a certain neurological state “causes” the verbally expressed sensation of hunger. It might also be true and demonstrable that a prolonged absence of food causes the same expressed sensation. Both of these models may be true, but one of them suggests a more useful remedy than the other. And a more moral remedy. Prescribing a drug to blunt the hunger may yield a different long-term outcome than feeding food, in ways that are morally salient.

It may or may not be accurate to attribute the political behavior of large groups of people to racism, but it is not very useful. Those people got to be that way somehow. Presumably they, or eventually their progeny, can be un-got from being that way somehow. It is, I think, a political and moral error to content oneself with explanations that suggest no remedy at all, or that suggest prima facie problematic responses like ridiculing, ignoring, disenfranchising, or going to war with large groups of fellow citizens, unless no other explanations are colorable. It turns out that there are lots of explanations consistent with increased susceptibility to racist appeals that also suggest remedies less vague and more constructive than, say, “fighting racism” or censoring the right-wing press. With respect to Britain’s trauma, for example, Dan Davies points to Great Britain’s geographically concentrated prosperity, and the effect that has had on the distribution of native versus immigrant young people. I can’t evaluate the merits of that explanation, but it might at least be useful. It does suggest means by which the British polity might alter its arrangements to reintegrate its divided public.

I don’t mean to pick on Kevin Drum, whom I’ve read for more than a decade, and whom I really like a great deal. But it seems to me that the alleged “good guys” — the liberal, cosmopolitan class of which I myself am a part — have fallen into habits of ridiculing, demonizing, writing off, or, in its best moments, merely patronizing huge swathes of the polities to which we belong. They may do the same to us, but we are not toddlers, that is no excuse. In the United States, in Europe, we are allowing ourselves to disintegrate and arguing about who is to blame. Let’s all be better than that."
steverandywaldman  2016  via:tealtan  kevindrum  chrisarnade  uk  brexit  economics  disparity  inequality  labor  work  unemployment  disenfranchisement  racism  elitism  ageism  dehumanization  demonization  donaldtrump  class  classism  precarity 
june 2016 by robertogreco
interfluidity » Home is where the cartel is
"Housing is a bitch.

A case can be made that divisive hot-button issues like inequality and immigration ultimately derive from housing dysfunction. Kevin Erdmann eloquently tells the tale. Matt Rognlie has famously argued that the increase in capital’s share of income, often blamed for inequality, is due largely to housing, once depreciation is taken into account. All of this reinforces the thesis of people like Ryan Avent, Edward Glaeser, and Matt Yglesias who have argued for years that housing supply constraints are to blame for high rents in powerhouse cities, and may constitute an important drag on productivity growth and a cause of macroeconomic stagnation. (See also Paul Krugman, quite recently.) Several of these writers argue that cities should eliminate restrictive zoning and other regulatory barriers to development, then let the free-market create housing supply. In a competitive marketplace, high prices are supposed to be their own cure. Zoning restrictions, urban permitting, and the de facto capacity of existing residents to veto new development are barriers to entry that prevent the magic of competition from taking hold and solving the problem.

My view is that the “market urbanist” diagnosis of the problem is more persuasive than its prescription for addressing it. As a positive matter, they just won’t win the political fights they propose. On normative grounds, I’m not sure that they should. The market urbanists present themselves as capitalist deregulators but I think they can be described with equal accuracy as radical redistributionists. The customary property rights surrounding homeownership in many cities and suburbs include much more than the use of a square of earth and whatever is built on it. Existing homeowners bought into particular neighborhoods in large part because of their “character”, which includes nice-sounding things like walkability or “charm”, as well as not-so-nice-sounding things like access to exclusionary education. Newer residents have bought and paid for those amenities, while older residents may feel they have earned them by helping to create them. Economists describe houses as a form of capital that provides a stream of services, rather than a cash flow, to owner-occupants. We should also describe the arrangement of neighborhoods as a form of capital that provides services people value. Property owners have disproportionate use of, and, informally, enjoy substantial control rights over this “neighborhood capital”, and these benefits have been capitalized into residential real-estate prices. (Location, location, location!) “Zoning reform” is an anodyne way to describe an expropriation of those customary rights. It amounts to diminishing residents’ ability to preserve or control the evolution of their neighborhoods, in order to challenge the exclusivity on which the value of existing neighborhood amenities may be based.

Market urbanists sometimes respond that eliminating restrictions should, in economic terms, be good for existing property owners. Suppose I own a plot of land, and today I’m only allowed to have a two story house on it. If tomorrow I suddenly have the right to build ten stories, but I can still keep the little house if that’s what I prefer, the new option can only improve my property’s value, right? Surely de-zoning would be a windfall for property owners, as land prices would include part of the capitalized stream of rents from the ten urban lofts that could now, potentially, be built there.

This is unpersuasive “partial-equilibrium” reasoning, which explains why homeowners are usually unpersuaded. Any given property owner rationally wants restrictions lifted on the use their own property, but lifting restrictions on neighbors’ use of their properties creates risks and costs. The ultimate effect of a general upzoning is hard to predict and may not be positive for incumbents, especially when potential impairment existing amenities — “neighborhood capital” — is factored in. Far from being a sure gain to existing residents, upzoning is a form of risky investment, the proceeds of which will be shared with developers and new residents, the costs of which will be concentrated on people whose financial statements and human lives are deeply exposed, with little diversification, to the quality of their neighborhoods. Even if, in aggregate, land values increase, densification of an existing neighborhood creates risks for individual property owners they many not wish to bear. If an apartment block is built next door, my old neighbor may have gotten rich from selling, but my plot may not be suitable for putting up yet another tower, and my home may be worth less for its busy, unquaint new neighbor. People experience individual not aggregate outcomes, and individual outcomes are usually riskier than aggregate outcomes. Absent some insurance mechanism, it is rationally hard to persuade individuals to consent to policy changes that, in aggregate terms, would meet a return-to-risk hurdle but at an individual level might not. When market urbanists point to how much more productive and awesome the city as a whole might become, they are missing this point."

"I don’t know what will work. But, looking around a bit, I’d suggest we take a look at two particularly promising examples. The housing policies of Singapore and Germany couldn’t be more different. But both countries have been remarkably successful.

Singapore never solved the problem we are banging our head against, how to take existing prosperous neighborhoods and make them more dense. It never tried. Instead, Singapore expanded its housing supply, at remarkable speed and scale, by building out extremely dense but nevertheless green, livable, and attractive “new towns“. Rather than restricting our attention to putting more housing in existing desirable neighborhoods, why not follow Singapore and build new neighborhoods, and when we run out of space for those, new ring cities? Singapore has done a ton of experimenting, in regulation, architecture and urban design, in putting greenspaces around (and on) increasingly creative high-rise developments. Obviously, Singapore is very different, socially and politically, than the United States and other Western countries. Some things won’t (and shouldn’t) translate. But we still have a lot to learn from their experience. Are we really incapable of building new, compact, microcities without their becoming Cabrini-Green or the banlieues of Paris?

Germany’s virtues are less sexy than Singapore’s sci-fi eco-towers. But they are great virtues nonetheless. Somehow, Germany has managed to avoid the price booms that in so many countries (including the Scandinavians) have segregated society between those who were homeowners at just the right times and those who were not. Germany’s path is ideologically mixed. On the one hand, German property owners have a right to build within broad planning parameters. On the other hand, what we in the United States call rent controls are universal in Germany. (German leases are implicitly “rent stabilized”. Berlin has recently begun an experiment with old fashioned administered prices.) Lending for home buying is regulated and conservative in Germany, preventing joint credit/housing booms. (You’ll recall that German banks had to dive headlong into American junk housing securities and Southern European bonds to get themselves into trouble, since their own economy wouldn’t produce enough product.) Homeownership and renting are roughly balanced, and home prices have had no tendency to increase dramatically. Homes in Germany are what a naive economist might predict they should be, a very durable consumption good that provides a stream of housing services, not a ticket to financial gain at all. Germany’s cities are very affordable relative to their counterparts elsewhere in Europe and in the United States. Germany’s housing success seems boring, in the way that your chest might seem boring to a guy who has just been stabbed and is spurting blood from a ventricle. Boring, but wonderful.

Boring Germany, sci-fi Singapore, or something else entirely. Urban housing is a really hard problem. We’ll need lots of inspiration. That economics textbook might help a little, but don’t try to use it as a cookbook."
housing  economics  via:tealtan  2015  steverandywaldman  germany  singapore  us  capitalism  cities  urban  sanfrancisco  rents  inequality  affordability  regulation  policy  ryanavent  edwardglaeser  paulkrugman  kevinerdmann  mattrognlie  exclusion  outcomes  risk  aggregation  matthewyglesias 
december 2015 by robertogreco
Our Work Here Is Done: Visions of a Robot Economy [.pdf]
"The essays in this volume address a number of possibilities for how the proceeds of a robot revolution might be redistributed. Notably, Noah Smith’s piece argues for a universal basic income for everyone, paid for from the proceeds of robot–enhanced productivity.

What is clear is that if automation necessitates a big shift in how we tax, it offers an opportunity to start taxing more sensible things. Economists have long argued for taxing land, carbon emissions and other bads, rather than taxing work. If there is less work about in the future, this may be the chance to make a change.

There is also the question of how we share out the rewards of a robot economy. We may not yet be ready for a universal basic income, since at least for the time being so many people’s conception of (their own and others’) value to society is bound up in work. But it is surely worth making policies to encourage ownership of robots is widely dispersed. The simplest way to make sure everyone has a stake in robots is to encourage widespread pension ownership – so that people own shares in the companies that own the robots.

But if the riches of automation are really as abundant as some people think they are, we could go further, and learn a lesson from the few countries that have dealt well with natural resource riches, like Norway and Alaska, by establishing a national endowment to hold wealth on behalf of citizens. The proceeds of this could be used to pay an annual dividend to citizens (as in Alaska) or to invest in future productivity (as has been proposed in Norway)."
universalbasicincome  labor  robot  income  taxation  taxes  economics  2014  nesta  change  jsutice  future  competition  cooperation  ryanavent  noahsmith  francescoppola  alanwinfield  nickhawes  ertruitt  jonturney  izabellakaminska  georginavoss  machines  slavery  edwardskidelsky  frederickguy  tessreidy  steverandywaldman  machineage  power  wages  ubi 
june 2014 by robertogreco

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