Hard-Wired Envy. Bryan Caplan

Via Library of Economics and Liberty.

If people envy people richer than themselves, I say we should fight envy, not inequality.  A number of people have objected that "Envy is 'hard-wired.'"  They're right - but it doesn't matter.

Why not?  Most, if not all, of our emotions are hard-wired.  We're hard-wired to resent it when strangers take our stuff without our consent.  We're hard-wired to yell at people who make us angry.  And judging from how sexist kids are - even faced with constant adult objections - I'd add that humans are probably hard-wired to be sexist, too.

The catch, in every case, is that "hard-wired" does not mean fixed.  All humans may feel these emotions to some extent.  But there's plenty of room to maneuver.  You can become less envious than you are.  Make an effort to monitor your thoughts and behavior.  Count your blessings.  Give credit where credit is due.  Focus on improving yourself instead of comparing yourself to other people.  Spend more time with less envious people.  Will you achieve the nirvana of zero envy?  Probably not.  But you will become less envious and more enviable at the same time.

Communisim. Bryan Caplan

Vía Library of Economics and Liberty:

Stalin’s apologists argue that Germany forced militarization on him. In truth, Stalin not only began World War II as Hitler’s active ally against Poland, but also saw the war as a golden opportunity for communist expansion: “[T]he Soviet government made clear in its Comintern circular of September 1939 that stimulation of the ‘second imperialist war’ was in the interests of the Soviet Union and of world revolution, while maintaining the peace was not.”

Foolish as he looked after Hitler’s double-cross in 1941, Stalin’s assessment was correct. After World War II, the USSR installed communist regimes throughout Eastern Europe. More significantly, Japan’s defeat created a power vacuum in Asia, allowing Mao Zedong to establish a Leninist dictatorship in mainland China. The European puppets closely followed the Soviet model, but their greater prewar level of development made the transition less deadly. Mao, in contrast, pursued even more radical economic policies than Stalin, culminating in the Great Leap Forward (1958–1960). Thirty million Chinese starved to death in a rerun of Soviet collectivization.

Corruption, Parasitism, and the Abuse of Agency. Anthony de Jasay

Vía Library of Economics and Liberty.

T

ransparency International, a non-profit organisation, relies on reports of data and impressions from correspondents the world over to compile a ranking of countries in order of corruptness.1 The more corrupt the country, the lower it is placed. The ranking is inevitably imperfect and contestable, for corruption is by its very nature hidden and becomes a known fact only if the attempt of its perpetrators to conceal it fails. Besides, different correspondents report on different countries according to the experience or knowledge they have of particular ones. Hence individual bias, depth of familiarity with the local scene, and severity of judgment of the observer will impact the ranking of different countries differently. Nevertheless, the attempt to rank states by their corruptness is definitely worth while. Transparency International's report, being the only one, is the best we have.

The list for the year 2010 makes interesting reading. The top ten countries are Denmark, New Zealand, Singapore, Finland, Sweden, Canada, The Netherlands, Australia, Switzerland and Norway. The ten bottom countries down to 178 are Equatorial Guinea, Burundi, Chad, Sudan, Turkmenistan, Uzbekistan, Iraq, Afghanistan and Somalia. The first thing that springs to the eye is that the least corrupt countries are all rich and the most corrupt ones all poor or worse, downright miserable basket cases.

There is, then, an evident correlation between rectitude and wealth as well as between corruption and poverty. But there is no telling whether the correlation signals a causal connection or merely what David Hume would call a "constant conjunction". Nor can we easily tell which way the causation runs if there is one. Are countries rich because their people are righteous, demonstrating by their prosperity that honesty is really the best policy? Or are they righteous because sheer need does not press them and they can more easily afford self-respect and clean hands? By the same token, is it corruption that drags countries into backwardness and misery, or are they corrupt because poverty has few defences against corrupt practices just as a weak body has few defences against illness?

As is often the case when the direction of causation is not obvious, it is not obvious because it runs both ways at the same time along a feedback loop. Each point and each phase in the loop is both cause and effect. It looks tempting to think that they reinforce each other in a virtuous cycle for the clean countries and a vicious circle for the corrupt ones, but I think this would be jumping to conclusions. It would be ignoring all the other causes at work in a tangle of multiple causation, including history and its unpredictable turning points.

Italy and Spain are both Latin, Catholic and Mediterranean countries. Italy is richer than Spain and we might expect it to rank much higher than Spain. Instead, it is considerably lower in the list, presumably because the history of Naples and Sicily has brought into being strong organised-crime societies as defenders of the common people and they have remained, after all these stormy centuries, an integral yet intensely corrupt thread in the social fabric. No such criminal societies exist in Spain. Another historical twist accounts, at least in part, for the place of Russia as a very corrupt country in the list. The Soviet Union was no doubt a thoroughly corrupt place, but it devoted such an extraordinarily big share of its national income to internal controls and surveillance of everybody by everybody else that large-scale corruption remained limited (though petty corruption flourished as did petty crime). With the collapse of the Soviet system, organs of control turned themselves into organs of corruption. Russia is now corrupt almost beyond belief, much more so than its wealth and education would lead us to predict.

A few standard types of corruption might be distinguished for a better understanding of the whole phenomenon. One is simple parasitism, where a person or group uses its power to suck up resources that would otherwise accrue to those under their power. The case of Angola is a shining example. French and American oil companies discovered vast oil fields offshore Angola in the 1980s and '90s and obtained concessions to exploit them. An explicit clause in the concessions forbade them ever to publish or otherwise disclose the astronomical royalties and production-sharing profits they paid annually to the government. The latter used some of it to keep the army happy and run the state, and stole the rest; in fact, it is presumably still stealing it while suppressing the evidence that it is doing so. The Angolan people who own the oil remain dirt poor. A similarly parasitic practice on a less spectacular scale is the creation of sinecures and their allocation to friends of the ruling elite and their children.

In another and most widespread type of corruption, officials in some local or central government administration are supposed to render some service (to pay entitlements, certify facts of birth, death or property, award a licence permitting some business activity), but will only do so in exchange for bribes at tacitly understood tariffs. Such corruption may be petty, but in unique cases, such as the awarding of a large government contract to a favoured insider instead of to the lowest bidder, the excess cost and the mis-allocation of resources to inefficient uses is doing great damage.

Crowning it all is corruption within the police and the judiciary that are supposed to detect and punish, and hence to scare off, corruption by others. Alliances between corrupt officials (as well as common-law criminals) and the police, the public prosecutor and the judge appear to be standard practice in Russia today, and also occur in countries with heavy involvement in the drug trade.

All or nearly all forms of corruption can be reduced to a basic principal-agent problem. Instead of principals (families, owners of property and business) acting for themselves and dealing with other principals on terms of conventional bargaining equilibria or conventional rules (that may or may not involve payment), principals resort to agents who are supposed to represent and defend them and are better equipped to deal with the agents on the opposite side. The incentives that motivate the agents are never identical with the interests of their principals. The agents are under a constant temptation to abuse the bargaining and dealing powers delegated to them, and in effect to betray their principals.

The greatest agent, over-arching them all, is of course the sovereign state acting on behalf of its principal, the people. The great majority of less universal principal-agent relations are created by and derived from the many roles the state as the people's putative agent has been empowered to play. It is the ultimate creator of opportunities for corruption.

If a lesson can be drawn from such reflections, it is that fighting corruption by investing in police and judicial activity is unlikely to yield much of a result even against types of corruption where the perpetrator is not the government itself, but its lower-grade agents. The near-epic war against the drug trade in Mexico and Colombia has shown that as narco-traders are picked off by police and army, they are promptly replaced by others, for the size of the drug industry is dependent almost exclusively on American demand for drugs that, in turn, resists attempts to reduce it by police work. In like wise, corruption fills the scope that is inherent in the principal-agent relationship and its built-in ease of abuse. The reduction of corruption would follow as naturally from a reduction in the scope of government as the decline of the drug trade would follow from a fall in the demand for narcotics.

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Footnotes

1.

Transparency International describes itself as a "global civil society organisation leading the fight against corruption." Their website ishttp://www.transparency.org/ and they publish an annual Corruption Perceptions Index.

Discipline: Advice and Evidence by Bryan Caplan‏

Here's an excerpt on discipline (plus academic references) from Selfish Reasons to Have More Kids.

If parents want a happier life, they need to rethink the justification for discipline. The welfare of the child is one legitimate goal. If your toddler runs into the street, zero-tolerance really is for his own good. But the child's welfare is only the beginning. Another legitimate function of discipline is to keep the child from abusing the people around him - and no one is more susceptible to a child's abuse than his own parents. Your kid knows where you live. You're stuck with him, and he knows it. He also knows that you love him, so you're inclined to forgive him his trespasses. Armed with these advantages, your child can make your life awful - unless you stand up for yourself.

The smart adjustment to make is just the wisdom of the ages: Clarity, Consistency, and Consequences. Adopt firm rules, clearly explain the penalties for breaking the rules, and impose promised penalties to the letter. If your child punches or kicks you, you've got to tell your child that this is against the rules, and that the punishment for transgression is, say, one day without television. Every time your child breaks the rule, harden your heart and impose the punishment. Clear, consistent punishment isn't foolproof, and some kids are tougher to crack than others, but it beats being a punching bag.

If you're skeptical of the wisdom of the ages, there is solid experimental evidence in its favor. When parents ask psychologists to help control their children's disobedience, tantrums, and aggression, psychologists often respond by training the parents.They call it "behavioral parent training," but it's Clarity, Consistency, and Consequences by another name.[i] Researchers have run dozens of experiments to see whether behavioral parent training actually works. It does. Suppose you have a list of parents who want help with their problem children. You randomly train some, and leave the rest on a waiting list. Experiments typically find that the average child of the trained parents behaves better than 80% of the children of the parents on the wait list. [ii] The main weakness of behavioral parent therapy is parental backsliding: Once parents tire of Clarity, Consistency, and Consequences, their kids go back to their old tricks.[iii] Discipline is like dieting: It works when tried.

When you're trying to improve your kid's behavior, other authorities - teachers, grandparents, nannies, and so on - often frustrate you by undermining your rules. What good is it to practice the Three C's if no one else does? Selfishly speaking: Plenty of good. Kids quickly discover that different people have different rules. If the typical teenager treated his friends the way he treats his parents, he wouldn't have any friends. A central criticism of behavioral parent therapy is that it "only" improves children's behavior in the home.[iv] But an optimist would draw a different lesson: Parental discipline is enough to make children treat their parents decently. If other authorities in your child's life have lower standards, that's largely their problem.

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[i] "They call it "behavioral parent training..." See Anne Shaffer et al, "The Past, Present, and Future of Behavioral Parent Training: Interventions for Child and Adolescent Problem Behavior." Behavioral Analyst Today 2001; Michelle Wierson and Rex Forehand, "Parent Behavioral Training for Child Noncompliance: Rationale, Concepts, and Effectiveness." Current Directions in Psychological Science 1994; and Anthony Graziano and David Diament, "Parent Behavioral Training: An Examination of the Paradigm." Behavioral Modification 1992.

[ii] "Experiments typically find that the average child of the trained parents behaves better than 80% of the children of the parents on the wait list." Wendy Serketish and Jean Dumas, "The Effectiveness of Behavioral Parent Training to Modify Antisocial Behavior in Children." Behavior Therapy 1996, p.178. See also Sheila Eyberg et al, "Evidence-Based Psychosocial Treatments for Children and Adolescents With Disruptive Behavior." Journal of Clinical Child and Adolescent Psychology 2008.

[iii] "The main weakness of behavioral parent therapy seems to be parental backsliding..." Shaffer et al, "The Past, Present, and Future of Behavioral Parent Training."

[iv] " A central criticism of behavioral parent therapy is that it 'only' improves children's behavior in the home." See e.g. Judith Harris, No Two Alike. W.W. Norton and Company 2006, pp.130-5.