No, this is one of the greatest arguments for small government or no government. People are more rational when the cost to them of being irrational is larger. Voting for good policies is a public good. When a voter is one among three hundred millions of citizens, only 1/300,000,000 (on average) of the benefits of the vote befall the individual voter. This gigantic externality means that the democratic market will severely underproduce votes for good policies. Simultaneously, social desirability bias means that voters have a strong incentive to believe in policies that are harmful to them but that make them look good to other people. Since the cost to them of being wrong about politics is so small and the benefit large, voters have gravely irrational beliefs. This conclusion is consistent with the results from social science that show that voters are ignorant about politics and with the widespread agreement with protectionist tariffs, price controls, restrictions on immigration, and many other policies that cause great economic harm.
I don't think he was referring to harsh sentences or punitive measures when someone breaks the law. I think its more that when its life and not the Government that is going to punish you for failing, you're going to work harder at not failing. In addition to the punishment provided by the Government there is also fall back mechanisms (bankruptcy protection, social security, medicare/medicaid, etc...) that they provide.
I would counter that without those punishments and protections, its possible that fewer people would do things like start businesses, for example. I don't really know. I'd love to see some data on this.
Seems to me that instead of rushing to one extreme or the other (no Government vs big Government), finding a good balance between the two is going to be the most productive for us all.
Likewise, there's data that shows one of the things that's special about entrepreneurs is the fact that they have strong familial safety nets. Part of their risk taking is literally that the risks are less risky for them, because their families will catch them. Which suggests that, if you want to increase the number of new businesses - implement a stronger social safety net (like a basic income). (https://www.theatlantic.com/politics/archive/2015/03/welfare... ; http://www.nber.org/papers/w19276.pdf?new_window=1) . The paper I linked there focused on the "smart" and "illicit" avenues and completely brushed past the "come from wealthier families" part, but I've seen other papers (that google isn't coughing up readily in the 5 minutes I have right now) that focused more on that latter part.
Conversely, you just have to look at the countries that do a good job of taking care of their citizens - Scandinavia, Canada, etc - to see pretty strong evidence for the idea that a well cared for populace is able to make better decisions.
I think the general consensus is that the ineffectiveness of long sentences is mostly about hyperbolic discounting. Hawaii has recently had a lot of success with a program providing small, immediate penalties to people who break their parole conditions. This seems to work far better than large penalties that will only be applied after a large number of offences.
If your choice is between death and jail, or if your life is not significantly better than jail, the duration of incarceration isn't going to matter to you at all.
I'd be willing to bet that harsher punitive measures (and more aggressive enforcement) would have a big impact on white collar crime rates.
I would guess that a higher chance of being caught would be a greater deterrent to first-time white collar offenders than harsher punishment.
I spent 6 months in prison as a conscientous objector. One thing I learned was, in the relatively humane nordic penal system, the reality of imprisonment was nowhere near as scary as I'd imagined. If I were to commit a serious crime now, I think the social stigma would be much more serious to me than incarceration, were I to be caught. I think that's probably true for most white-collar types as well. Losing time is one thing, losing standing among your peers is much worse, if you have standing to lose. Shame is a terrible thing. It wasn't an issue for me, fortunately.
Of course, most people in prison don't have the luxury of such problems. The majority of people I met inside were there as a result of psychological and substance abuse issues. One man there reassured me that I was going to be OK because unlike everyone else there, my problems were not with my self. That's got to be about the saddest thing I've ever heard.
In Finland, as a male, refusal to perform military or civil service is a crime punishable by approximately 6 months of imprisonment. I understand that very recently that has been put on hold as a result of a legal challenge on the grounds that a certain religious minority is exempted from such service, the claim being that this constitutes inequal treatment.
I guess that is how being a conscientous objector worked in the US during the Viet Nam war - anyone declaring themselves a conscientous objector had to due some kind of public service or face jail time (probably more than 6 months).
In the US the draft just allowed the US government to continue the Viet Nam war far longer than it otherwise would have gone, I am glad we don't have an active draft here.
If anything the draft brought the war to a close sooner. Once kids of upper and middle class parents started getting drafted and killed they started putting pressure on the government to end the war.
Now that American wars are mostly being fought by volunteers from classes without political power they can drag on for decades and most Americans barely even think about them anymore.
>If anything the draft brought the war to a close sooner.
I don't think there is much evidence for this. Over 2.7 million Americans served in Viet Nam. If the politicians could have possibly gotten millions of young people to drop what they were doing and go 5 thousand miles to fight in a civil war in a country most had never heard of before, they would certainly have done so. There is simply no possible way they could have gotten that many troops on a volunteer basis, or they would have done so.
>Once kids of upper and middle class parents started getting drafted and killed they started putting pressure on the government to end the war.
The upper class were able to get out of serving in Viet Nam with deferments, serving in the National Guard, etc. Johnson acknowledged this and that is why they never sent the National Guard to fight in Viet Nam.
The middle and lower classes were dieting in Viet Nam long after the average American had given up on the war. Johnson din't even run for re-election because people were so opposed to the war but the war still dragged on for several more years. The politicians didn't end the war sooner because they didn't want to suffer the political consequences of looking like the person who lost and they knew there was plenty of cannon fodder to replace the soldiers who came back in a body bag.
>...Now that American wars are mostly being fought by volunteers from classes without political power they can drag on for decades and most Americans barely even think about them anymore.
There are differences between the wars of today and the Viet Nam war. The Viet Nam war had literally an order of magnitude more deaths than our current wars. A war zone is never safe but there are at least a few occupations that are a more dangerous than fighting in Afghanistan. Having a volunteer force means the soldiers have to treated better and paid more than a draftee. These wars have been a waste of lives and money but things would have been much worse if there were millions of draftees serving in the middle east and Afghanistan. At a minimum, I think it is very likely there would have been a war for regime change in Iran if there were a draftee army that was forced to fight there.
Having a volunteer force in the 1960s would have meant that the Viet Nam war would have been fought with a lot more concern for the loss of life of the solders, and it likely wouldn't have been fought anything like it was fought.
>a legal challenge on the grounds that a certain religious minority is exempted from such service, the claim being that this constitutes inequal treatment.
Kind of amazing that this is ground for a legal challenge but the fact that female aren't drafted isn't. That's one of the part of Western societies around which I can't wrap my mind.
I hope this get fixed eventually, either by extending it to both genders or removing it completely.
In Switzerland we had a small reform of our army and copying the Norwegians was considered for a while, but they ended up dropping the idea for just doing small changes. Quite disappointing.
I thought that in Finland you could do other public works (something along the lines of Americorps in the USA) instead of serve in the army if you were a conscientious objector.
Yes, that's the civil service. I was using "conscientous objector" to describe what are called "total objectors" here, men who refuse to serve in any capacity for a variety of reasons.
No. Women may choose to serve in the military, but there is no requirement for them to do so. There's been talk of instituting a "citizen's service" for all citizens, where presumably women mostly would be expected to perform civil service similar to what men can now choose.
The exempted religious group are the Jehova's witnesses. It's my understanding they were granted an exemption because men in the group would by and large all refuse to serve, and putting them all in prison wasn't doing much good. However, recently a conscientous objector was released by a court on the grounds that this exemption constitutes inequal treatment, and the state now has to address the issue. I suppose the options they have are to either extend the exemption to others based on some grounds to be determined, or remove the exemption of Jehova's witnesses.
The ministry of defense has proposed to solve the problem by removing the witnesses' exemption. In general, the state appears to be consistently treating this as a practical matter of maintaining the current policy of general conscription, and not as a rights issue at all.
“Parco, Rapoport and Stein (2002) illustrated that the level of financial incentives can have a profound effect on the outcome in a three-player game: the larger the incentives are for deviation, the greater propensity for learning behavior in a repeated single-play experimental design to move toward the Nash equilibrium.”
I recall reading somewhere that people also behave more rationally in other games like the Dictator Game (and exhibit fewer cognitive biases) when the stakes are higher, but can’t remember where.
The Nash equilibrium in this case being immediately taking the larger stash, instead of waiting (or even cooperating) with the other player for much higher payouts.
> Voting for good policies is a public good. When a voter is one among three hundred millions of citizens, only 1/300,000,000 (on average) of the benefits of the vote befall the individual voter.
Typically, voting results are highly skewed towards 50/50, say in most elections in democratic regimes with fair elections. This was the case for Brexit or the popular vote in the US 2016 election for instance.
For an election whose expected result is close to 50/50, each voter is highly influential; intuitively, if all but one voter are decided and produce a 50/50 draw, the last undecided voter has complete power. Since a lot of fair elections are approximately 50/50, undecided voters have far better influence than 1/300,000,000 for a population of 300,000,000.
In an approximately 50/50 election with few undecided voters, it is quite cheap to swing the results by bombarding the few undecided voters with ads.
Mathematicians use this concept coined "influence" of a variable, or "influence function" to analyze properties of random boolean functions in percolation for instance.
I don't think that 1/300 million part was about the likelihood of influencing the election, but rather about what percentage of the gains go to the person (not more than the percentage that that person represents of the population, presumably).
Even if you had guaranteed ability to affect the outcome of an election, supposing you knew that by spending many hours researching the correct policy to vote for you could save each person in USA $1, it would not be worth it for you to spend the time figuring it out. Although from a social perspective it would be a worthy thing to spend time on.
To be fair in some situations where it is not internal political pressure that caused the vote in the first place, large majorities can occur; see the falkland islands referendum on joining argentina
On commenting on an article about why people have difficulty comprehending complex systems, you have just delivered an example of the phenomena.
Your basic point seems to be that a big Government will be so well run that individuals would rely on it to provide them with benefits, even in the case that the Government make poor decisions on policy choices. That is the whole point of a Government: to make life easier for people by taking care of things that are too expensive or complicated for people to do individually.
It's also a regulatory body to ensure that certain functions and services are provided equally to every citizen. E.g. everyone has the same basic human right of access to health care and education for example. Who else should guarantee that access for a whole population if not the government?
I really wish this notion of "society by survival of the fittest" would die its long-overdue death.
What actually happens, in the real world, in situations like this, is that people suffer and die. They don't become Ayn Rand's ideal man; there's just lots of needless suffering.
And because people are capable of violence, and because people don't like suffering very much, they commit violence against each other to improve their own position -- which increases the suffering.
And then other people, who don't want to suffer and don't want to commit violence, try to leave. And they come to countries like the United States, which they've heard at some point is a great and welcoming land of opportunity, only to discover that it's all a big marketing sham and the majority of the US wants to put up a sign that says, "Go away, we're closed."
Given the number of failing or failed states around the world recently, you have to have your head quite deep in the sand, or maybe far up in some body part, to still subscribe to this idea that anarcho-capitalism is a solution to anything.
There are many complex problems with many governments around the world right now. "Get rid of government" will not make any of it better.
> What actually happens, in the real world, in situations like this, is that people suffer and die. They don't become Ayn Rand's ideal man; there's just lots of needless suffering.
There's a lot of good evidence that people are in fact capable of taking care of themselves pretty well. But violence, especially organized violence, is tho a very real problem for basically everyone. But that's basically what a government is, fundamentally, so it's not obvious that 'more government' always rebounds to the betterment of everyone or even most people. As with everything, there are tradeoffs to be weighed!
This is an unorthodox way of looking at this, and could only be persuasive with actual data.
The economic argument for government providing public services is actually that for public goods, the incentives on the individual lead to sub-optimal outcomes (that’s partly just the definition of a public good).
Just because voters vote for government that may be less good at providing that public good (let’s say police protection) is not an argument that this completely eliminates any benefit from that service being provided as a public good.
From the simple example, the Democrats may provide less optimal policing than Republicans (wasting money on nanny state directives) does not mean the service can effectively provided by the private market.
You’re positing that sort inverse incentives apply when voters are choosing the governmental provision of public services. This seems unlikely to be true in the aggregate because voters do not get to choose politicians who are going to pursue policies to benefit themselves, as an individual, when they vote. As you point out, they may vote for totally psychological benefits.
So the tension is not really over the size of government; it is over making the correct determination of how much of a good or service is comprised of being a “public good.”
Classic public good problems, like imposing the correct costs on pollution, can’t be solved by wishing them away.
What you’re complaint more seems to be with is that democracy allows elements of self, or class, interests into individuals voting choices. The solution to this would be some kind of perfect benevolent dictator, who would make the optimum determination as to which goods should be provided by the government, and dedicate the correct resources to them.
The problem with this, of course, is again the incentives on the holders of power distort their decision making to their own benefit, as had be shown over and over in the real world.
People will be irrational regardless of its cost. Here's some evidence to support my claim with no citation: people will gamble their entire life savings away, regardless of how much money they have.
Other commenters have addressed how your claim that people behave more rationally when government is small. I would like to address the fact that even if we assume that citizens behave rationally, this does not mean that behavior maximizing personal benefit translates to behavior maximizing net benefit.
Consider, for example, the international politics arena, wherein there is no government over state actors, and where sufficiently important players pursue sufficiently rational actions, since the cost of not pursuing it is so high. Yet even with good evidence that current human activities are leading to future food and environmental insecurity via climate change, the rational actors have been struggling to coordinate on a plan.
I don't think it's valid to discount the individual's power by the number of voters. If the low impact of any single vote had the sort of effect you're suggesting, people would be much more likely not to vote at all.
When a voter is just one of millions, their share of power is necessarily low. Yet the total power obviously rises linearly. (or even super-linearly, considering the outsize influence the US has in the world). Your comment also suggests that you believe people are fundamentally open to altruistic decisions. It should therefore not matter if the power they have is over themselves, or their compatriots.
I also doubt widespread agreement with the policies you mention. Answers to such survey questions depend on the phrasing more than anything. And to use one recent datapoint: we all know a recent candidate who embodied those policies more than anyone before him. Yet they actually got fewer votes than their free trade / pro-immigration opponent.
Note that you are still living in the best times humanity has ever seen. That's true in the US, but also world-wide, with few exceptions such as Syria.
There's less war, life expectancies are generally rising (the opioid epidemic being a temporary, and local, blip), the possibility of achieving one's true potential is less dependent on class/gender/race than it has ever been.
It's not perfect, but it's far away from life as it was even 100 years ago: nasty, brutish, and short.
“Suppose you’re on a game show, and you’re given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door, say No. 1, and the host, who knows what’s behind the doors, opens another door, say No. 3, which has a goat. He then says to you, ‘Do you want to pick door No. 2?’ Is it to your advantage to switch your choice?”
Let A be the event that the car is behind door 1, B that the car is behind door 2, and C that the car is behind door 3. Let E be the event that the host opens door 3. We assume that the car is initially equally likely to be behind each door and that the host opens a door with a goat at random, never opening the door we picked.
Since A, B, and C are exhaustive and mutually exhaustive propositions, we can calculate the marginal probability of E by using the law of total probability:
P(E) = P(E ∧ A) + P(E ∧ B) + P(E ∧ C).
Bayesians like to define joint probability from conditional probability instead of the reverse; that is, define P(A ∧ B) as P(A | B) P(B) instead of P(A | B) as P(A ∧ B) / P(B).
So P(E ∧ A) = P(E | A) P(A). P(E | A) is 1/2 because we picked door 1, the car is behind door 1, and the host chooses at random a door that has a goat, of which there are two: 2 and 3. P(A) is 1/3. Therefore P(E ∧ A) is 1/2 × 1/3 = 1/6.
Similarly, P(E ∧ B) = P(E | B) P(B). P(E | B) is 1 because we picked door 1 so the host will not open door 1 and we assume the car is behind door 2 so the host will not open door 2, leaving only door 3 to be opened. P(B) is 1/3. Therefore P(E ∧ B) is 1 × 1/3 = 1/3.
P(E ∧ C) = P(E | C) P(C). P(E | C) is 0 because the host will never open the door the car is behind. P(C) is 1/3. Therefore P(E ∧ C) is 0 × 1/3 = 0.
So P(E) = 1/6 + 1/3 + 0 = 1/2. We know that the host opened door 3 (this is E), so the car cannot be behind door 3. How likely is it to be behind door 1? By Bayes’ theorem,
P(A | E) = P(E | A) P(A) / P(E).
We said earlier that P(E | A) is 1/2, P(A) is 1/3, and P(E) is 1/2. So P(A | E) = (1/2 × 1/3) / (1/2) = 1/3.
Given E, the car must be behind door 1 or door 2 since the host opened door 3. Therefore the sum of P(A | E) and P(B | E) must be 1. P(A | E) is 1/3, so P(B | E) is 2/3. The car is more likely to be behind door 2 than door 1. We initially picked door 1, so, if we want the car, we should switch.
Thanks, this looks quite a bit more succinct than other examples of the math. I think I will have to make an app that renders out results using this. :)
Bayes’ theorem says no such thing. Your friend is wrong, but please do not let this reflect badly on the Bayesian interpretation of probability in general—it has nothing to do with this.
And in fact a Bayesian approach, by being explicit about conditioning information, helps to show the “trick” behind the Monty Hall problem: when Hall opens a door, he reveals information about what’s behind the other two doors that the contestant didn’t have when he made his initial choice. The probabilities change in response to this new information.
Live a modern life, comfortable by modern standards? You’re right about that. But people in the past lived in worse conditions that were considered modern and comfortable then and credit ratings, by making the market for loans more efficient than it was before (however bad it may still be, it’s better than what it replaced), contributed to the improvements. You want to have your cake and eat it too, and it would be nice if that was possible but it is not because nobody is going to give you cheap loans if it comes with too much risk.
Lots of countries in Europe have nothing remotely resembling the US credit scoring system and people there obviously live comfortable, modern lives and have access to financial services.
So far, I have had a credit check done once. It was done
by me voluntarily, to unlock additional functionality (receiving the purchase before the payment gets cleared), with my explicit consent ("checking your credit involves transmitting the following data to xyz") and had a link to a form I could use to request the data they had on me from the credit rating agency (via post). Very different experience from what it sounds like people in the US have.
> You want to have your cake and eat it too, and it would be nice if that was possible but it is not because nobody is going to give you cheap loans if it comes with too much risk.
OP is not saying that he doesn't want anyone performing credit checks. He's saying that he wants to be able to choose a company that values privacy. Currently, there's no option of choice for the consumer, and that's a problem.
If the bank loses too many customers because a competing bank is offering to use a better credit checking company, you can bet that they are gonna change.
Most people don't care enough, and only select on price. So the bank gets the cheapest option for nonvisible backends (like credit checks)
The institutions give you cheap loans in exchange. This has opportunity costs. Giving you cheap loans is not free for these institutions. They could be investing their money elsewhere instead. They would do so if it wasn’t for the fact that having this information about you reduces the risk just enough that they prefer giving you the cheap loans to investing their money elsewhere. People who are offered these terms are offered a fair deal that is a win for both parties and that they are offered a fair deal is exactly the reason they accept it.
There is no externality here because the costs fall entirely on the person who takes the decision. People, myself and quite possibly yourself included, really do want to sign up with 30 marketing companies to save 5% on a car.
Equifax has an incentive not to get things wrong because their customers care about having accurate information. Nationalizing credit ratings would remove this incentive. That Equifax still gets things wrong does not imply that things would not be even more wrong if it was nationalized.
The banks don't actually eat the risk of inaccurately offered loans, this is why the housing market collapsed (simplified). Most of the logical incentives in financial sectors have become corrupted by perverse incentives with securities trading.
