If I told you about a policy that generates needed tax revenue, makes the economy more efficient, saves you substantial amounts of time, and greatly increases your happiness, and all comes at a low personal cost you’d probably think it is a no brainer, right? Well it is – and it’s congestion pricing. I pushed this a while back; now Matthew Yglesias and Jonah Lehrer are advocating the policy – both pieces are in response to David Brooks’ most recent column.
The daily activities most associated with happiness are sex, socializing after work and having dinner with others. The daily activity most injurious to happiness is commuting. According to one study, joining a group that meets even just once a month produces the same happiness gain as doubling your income. According to another, being married produces a psychic gain equivalent to more than $100,000 a year.
Brooks doesn’t pivot from this into any real policy specifics. But the upshot of the commuting point is very clear—we should charge people a fee to drive on crowded roads at peak hours. If you look at it in strict dollars and cents terms, the policy looks great. A relatively small fee can eliminate large economic losses due to congestion, and then the fee can finance useful public services or reductions in other taxes. But when you add in the fact that commuting time makes people miserable, you can see that the social gains from congestion pricing in our most-trafficked metro areas would be extremely large.
Of course, as Brooks notes, that time in traffic is torture, and the big house isn’t worth it. According to the calculations of Frey and Stutzer, a person with a one-hour commute has to earn 40 percent more money to be as satisfied with life as someone who walks to the office. Another study, led by Daniel Kahneman and the economist Alan Krueger, surveyed nine hundred working women in Texas and found that commuting was, by far, the least pleasurable part of their day.
Here’s some arguments against a VAT that focuses on some of the transitional problems and explains why it may end up more complicated then policy reformers hope.
Like, the U.K. when it adopted its VAT in 1973, the U.S. will struggle for at least two years and probably longer to implement a VAT. Hundreds of thousands of small businesses would have to register with the IRS and have their sales and remittances monitored. The IRS would have to hire tens of thousands more agents. Exemptions will alleviate some of that problem, but a VAT exemption still hits those businesses with the tax. The income tax looks bad now, but wait until you see this.
I still think the benefits outweigh the costs, but the concerns are real. If someone has a better idea for a more efficient and simpler tax I’d be happy to support that.
(via Marginal Revolution)
I promised my thoughts on Sam Harris’s TED talk – I also watched a longer version of the talk which he gave at Google containing a worthwhile Q&A session.
My thoughts below the fold.
Sam Harris always impresses me and I’m incredibly excited about this book. Although I don’t think he completely breaks through Hume’s “is/ought” barrier [update: see below], Harris adequately demonstrates that a science of morality is possible and objective facts can be known about moral systems. His major insight is to recognize that morality is really about answering questions about the well-being of conscious creatures. Once that move is made it becomes clear that objective values exist – actions either correspond to promoting greater well-being or they don’t. No matter how you parse it, murdering innocent babies doesn’t lead to greater flourishing of human well-being.
Harris, wisely, doesn’t claim that he or science currently knows all the answers to our moral dilemmas, only that it is possible that discoverable truths exist and that we should admit that we know more then nothing. Furthermore, Harris paints us a picture of our potential moral universe where different answers to moral questions can exist. That does not imply that all responses are equally valid. If you imagine his “moral landscape” it has many peaks and valleys. His analogy to health helps the most: a practically unlimited amount of different types of food can all lead to greater health (itself a fussy concept) but that doesn’t mean that poison is food or that science can’t identify objective truths about health-related questions.
I assume most of my concerns will be addressed in his 300+ page book; I eagerly await. For example, I’m curious if he thinks science can help us adjudicate between different peaks – not just map them. It wasn’t obvious to me how that would be possible. If two peaks are equally tall is the choice just personal or societal preference? Also, he argues that science can inform us about the objective moral worth of different political systems, which seems true if you accept his premises. Of course, if one expands morality to more then just well-being the moral landscape’s bedrock might become more fragile. As soon as I started thinking about various political systems, I began wondering about how the concept of liberty would be viewed through Harris’s moral microscope.
Maybe the argument is invalid but it seems a strong case can be made that liberty is a moral value that doesn’t rely on well-being as its foundation. Sure, supports can be garnered to strengthen the moral case for liberty but humans, for example, could theoretically be worse off because of liberty and a strong case can still be made for its moral value. Kant, of course, made a strong moral case that humans are ends not means. Therefore, conscious beings as autonomous agents might make suboptimal decisions, but restricting their free choice through a benevolent paternalism might be less moral even if it leads to greater well-being. Robert Nozick like Harris argues that values exist (he argues they are independent of us) and makes a moral case for rights and liberty without a necessary appeal to well-being. I know Harris is familiar with Nozick and other philosophers who value rights and liberty, so I’m very excited to see how he deals with these issues. Does he believe that rights are just useful tools to achieving greater well-being or does he believe that they are valuable for their own sake? I hope to expand on this topic further – if anyone finds out Harris’s opinion on these issues or if you want to take your own crack at it feel free to comment.
[Update: Sam writes a lengthy response to a lot of the critiques of his lecture (including some issues I brought up]:
All other notions of value will bear some relationship to the actual or potential experience of conscious beings. So my claim that consciousness is the basis of values does not appear to me to be an arbitrary starting point.
Now that we have consciousness on the table, my further claim is that wellbeing is what we can intelligibly value—and “morality” (whatever people’s associations with this term happen to be) reallyrelates to the intentions and behaviors that affect the wellbeing of conscious creatures. And, as I pointed out at TED, all the people who claim to have alternative sources of morality (like the Word of God) are, in every case that I am aware of, only concerned about wellbeing anyway: They just happen to believe that the universe functions in such a way as to place the really important changes in conscious experience after death (i.e. in heaven or hell). And those philosophical efforts that seek to put morality in terms of duty, fairness, justice, or some other principle that is not explicitly tied to the wellbeing of conscious creatures—are, nevertheless, parasitic on some notion of wellbeing in the end (I argue this point at greater length in my book. And yes, I’ve read Rawls, Nozick, and Parfit). The doubts that immediately erupt on this point seem to invariably depend on extremely unimaginative ideas about what the term “wellbeing” could mean, altogether, or on mistaken beliefs about what science is.
David Frum responds to Murray and corrects Bartlett’s claim.
1) Was the firing political? Obviously I cannot enter into people’s minds, and at my termination lunch AEI President Arthur Brooks insisted that politics had nothing to do with the decision. So let’s just follow the time line. Waterloo piece is posted Sunday March 22. Wall Street Journal editorial denouncing me appears March 23. Summons to lunch arrives mid-morning of March 23. At lunch I am told that AEI wishes to terminate my salary, office, benefits, and research assistance. I am however at liberty to continue to consider myself part of the AEI family. I declined that offer and wrote a letter of resignation
3) Did AEI muzzle healthcare scholars? I fear that in reproducing in print a private conversation from some months ago, Bruce Bartlett made a transmission error. I did not report as fact that scholars were laboring under any restrictions. What I did say was that AEI was punching way below its weight in the healthcare debate. I wondered, not alleged, wondered, whether AEI scholars were constrained by fear of saying something that might get them into trouble. To repeat: this was something I asked many months ago in private conversation, not something I allege today in public debate.
Bartlett makes a correction but stands behind his larger message.
With the benefit of hindsight I should have left the charge of muzzling out of my original post because it distracted people from the larger point I was making about the rigidity of thought at conservative think tanks and adherence to the Republican Party line, which I still believe to be the case. The fact that David was fired and the way he was fired is sufficient proof of that.
The Milgram experiments get updated for our TV culture in France.
Egged on by a glamorous presenter, cries of “punishment” from a studio audience and dramatic music, the overwhelming majority of the participants obeyed orders to continue delivering the shocks – despite the man’s screams of agony and pleas for them to stop.
Greg Mankiw in The New York Times argues we should acknowledge our limits and prepare for inevitable future crises.
MY favorite proposal is to require banks, and perhaps a broad class of financial institutions, to sell contingent debt that can be converted to equity when a regulator deems that these institutions have insufficient capital. This debt would be a form of preplanned recapitalization in the event of a financial crisis, and the infusion of capital would be with private, rather than taxpayer, funds. Think of it as crisis insurance.
Charles Murray on Frum’s departure:
David resigned. He could have stayed. But I will tell what is common knowledge around AEI: David got a handsome salary but, for the last few years, has been invisible as a member of the institute. Being a scholar at a think tank (or any institution) is not just a matter of acknowledging your affiliation in your books and op-eds. It’s also a matter of blogging at the institute’s blog, not just your own blog (David had a grand total of 3 posts on AEI’s blog in the year since it began), reviewing colleagues’ drafts, reacting to their ideas, contributing chapters to their books, organizing scholarly events, participating on the institute’s panels, attending the institute’s conferences, helping out with fundraising, serving on in-house committees, giving in-house seminars, and mentoring junior staff. Different scholars are engaged in these activities to different degrees.
As much as I respect David Frum, I actually hope Murray is right. Places like AEI are a necessary part of the fight against the unthinking wing of the conservative movement. Murray also thinks that Arthur Brooks responding to donor pressure is ridiculous. I don’t think that’s so crazy – but I’ll withhold my judgement on that unless some evidence can be marshaled to support it.
Two posts ago I wrote, “I’m not sure what it will take to regain a sane GOP. More people like David Frum would help.”
Well looks like it is going to get worse before it gets better for the mainstream conservative movement. Frum was pushed out of the American Enterprise Institute:
I have been a resident fellow at the American Enterprise Institute since 2003. At lunch today, AEI President Arthur Brooks and I came to a termination of that relationship.
He’s criticized Rush, Palin, and the current Republican Party in order to improve it – unacceptable, I guess. Bruce Bartlett had a similar experience at the National Center for Policy Analysis. I don’t really understand what is driving the conservative movement to such extremes – anything Obama does is evil to them even if they supported it before he did. Bartlett reveals:
Since, he is no longer affiliated with AEI, I feel free to say publicly something he told me in private a few months ago. He asked if I had noticed any comments by AEI “scholars” on the subject of health care reform. I said no and he said that was because they had been ordered not to speak to the media because they agreed with too much of what Obama was trying to do.
The huge losses to the Republican Party that the Bush administration and the recessing economy caused may very well have given the GOP the wrong lesson. Almost all moderate Republicans lost their seats, leaving only the hard right wing in control. Doubling down and listening to Rove doesn’t seem rational. Frum probably had it right that the Republican Party needs to recognize that talk-radio and Fox News don’t have the GOP’s interests at heart – they want ratings.
Anyone have any theories? My feeling is that a sluggish economy led to a growing populist movement which is fed by ratings hungry right-wing media along with the loss of the liberal and moderate Republicans in the legislature. The most active potential Republican voters are also the most extreme so any politically minded politician has to crater to those sentiments. But do think-tanks like AEI really need to tailor their messages to this movement? They have no elections or ratings to worry about – aren’t they non-profit? Are their donors that swept up with the rest of the paranoid right?
A Republican compromise on the healthcare bill on things like tort reform and other cost control issues made sense. Of course they didn’t and we got a Democratic Party-only designed bill, which actually turned out fairly well since they moderated themselves. Of course, major improvements are still needed – especially to control costs and to make sure this bill is payed for. There is no doubt that this is an expensive bill – in theory the GOP could still offer some sensible conservative ideas. But as I’ve discussed with many people compromise couldn’t and still can’t mean that only the politically popular things both parties can agree on get passed (or kept). A comprehensive solution was necessary; not a few incremental reforms. Peter Suderman at Reason magazine tells us the problems of over-compromising. Keep in mind that Suderman is not a proponent of this bill but recognizes the key problem with the Republican’s “do only the stuff we agree on” approach.
[I]nsurance reforms without a mandate would, in their own way, be just as bad, and twice as stupid. Prohibiting preexisting conditions entails enacting two different regulations, known as “community rating” and “guaranteed issue.” There are variations on each, but in basic terms, these regulations mean that insurance companies have to charge everyone the same amount for the same policy, regardless of risk factors, and that they have to issue policies to everyone who’s willing to pay.
The problem is that with these regulations in place, there’s no incentive to buy insurance until you’re already very sick. After all, if the insurance companies can’t turn you down or jack up your rates, why buy in early? So what happens is that, in hopes of saving money, some number of healthy people decline to buy insurance, creating a sicker, more expensive pool. That pushes a new wave of the healthy people to jump ship, which creates a pool that’s even sicker and even more expensive. Go through a couple iterations of this, and fairly quickly you have a very small, very sick, and very, very expensive insurance pool.
David Frum tries (again) to teach the Republicans some lessons.
Could a deal have been reached? Who knows? But we do know that the gap between this plan and traditional Republican ideas is not very big. The Obama plan has a broad family resemblance to Mitt Romney’s Massachusetts plan. It builds on ideas developed at the Heritage Foundation in the early 1990s that formed the basis for Republican counter-proposals to Clintoncare in 1993-1994.
Barack Obama badly wanted Republican votes for his plan. Could we have leveraged his desire to align the plan more closely with conservative views? To finance it without redistributive taxes on productive enterprise – without weighing so heavily on small business – without expanding Medicaid? Too late now. They are all the law.
We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat.
There were leaders who knew better, who would have liked to deal. But they were trapped. Conservative talkers on Fox and talk radio had whipped the Republican voting base into such a frenzy that deal-making was rendered impossible.
I’m not sure what it will take to regain a sane GOP. More people like David Frum would help.