The “Irrationality” of American inequality

#1
On Open Source Dan Ariely on the “Irrationality” of American inequality
Dan Ariely of Predictably Irrational fame, makes the arresting point that from the standpoint of fairness and equity in the distribution of wealth and power, the vast majority of Americans (90-plus percent) would prefer to be living in Sweden. Which is to say: Mitt Romney’s scariest nightmare, “a European-style welfare state,” may be just the briar patch that most of us Bre’r Rabbits long for.

Dan Ariely is the Israeli-American psychologist, now at Duke, who has made a big name and career in the Dan Kahneman school of “behavioral economics.” The special Ariely gift is for surveys and social experiments that probe the gap between what we want and what we choose when we buy a house, pick a mate or vote for president. I’m bringing to the conversation my own probe for symptoms and causes behind Tony Judt‘s dying diagnosis, in Ill Fares the Land, that “something is profoundly wrong with the way we live today… We cannot go on living like this.”

Main roots of Judt’s and our own unease seem to pop right out of Dan Ariely’s experimental surveys — typically clever in their simplicity. First, when he asks his thousands of respondents to estimate the real division of wealth in the US, and then to propose an ideal distribution, we Americans confirm our sentimental attachment to a polite tilt of privilege. We cherish our mythic legacy of quasi-egalitarian social democracy, with no extreme concentrations of wealth or poverty. But what our answers really confirm is our delusion about the economy we live in now. The top 20 percent of the people in fact own 84 percent of the goods, and the bottom 40 percent of us, barely floating on a sea of debt, own less than half of one percent of the wealth of the nation. We live across roughly double the rich-poor gap measured in Germany, Japan and Denmark. By the standard “Gini coefficient” of wealth inequality, the US ranks with Turkestan and Tunisia, just a tad more equal than Chad and Sri Lanka.

The second key question in Ariely’s survey is even simpler; the answer is a slam dunk. Respondents were shown two pie charts — one with the actual American shares of wealth, in which 60 percent of the population nearly disappears with less than 5 percent ownership altogether; in the alternative, modeled on Sweden, the top 20 percent owns 36 percent of the wealth (almost double its claim by sheer numbers) and the bottom 20 percent owns 11 percent (about half its numerical share). In Dan Ariely’s study (with Michael Norton of the Harvard Business School), 92 percent of us Americans want to live Swedish-style instead. Women (93 percent in favor of the Swedish model) are a ever so slightly more egalitarian than men (90 percent for Sweden). But the results come out very nearly the same — Republicans and Democrats, richer and poorer, NPR listeners and readers of Forbes Magazine.


What we hear eternally in political chatter is Joe the Plumber’s dread of “spread the wealth” government, and Newt Gingrich’s alarm about “European Socialism.” And now the screech from Mitt Romney’s ex-Bain partner Edward Conard in the Times Magazine that we need bigger payoffs and “twice as many people” in the high-end investor class — in short, that we need a lot more inequality. But Dan Ariely’s evidence is that in the most steeply skewed social order in the industrialized world, we’re miserable about being skewered on the contradictions in a proud democracy that’s eroding fast at the foundations.

Dan Ariely brings, yes, the social-democratic biases of the Israeli left. He is imprinted unmistakably — body and soul — with the scars of severe burns he suffered as a teenager in a freak explosion: his face and most of his skin were remade over three excruciating years in hospital, all of the immeasurable expense covered by Israel’s socialized healthcare. Without it, as he told me, his family would have been bankrupted, his care might well have been curtailed.

The hope in Dan Ariely’s forecast for American politics and culture is for people who can hold out a while. How much do we need to change? I asked him:

A lot. I’m not a Biblical scholar, but after Moses came down from the mountain and saw the people of Israel celebrating the Golden Calf, God basically punished them by getting them to walk in the desert for 40 years, so that a generation would die. It might take a generation. That might be a reasonable time scale. The current generation that is running things might not be the right one. It might be that the generation that went to college during the financial crisis is the right generation — even if a lot of them are out of work. They’re thinking about what to do. They don’t have the Princeton-to-Wall Street path. They’re thinking of other things they might do with their lives, and because they don’t necessarily have jobs they are open to following their passions. My understanding is that volunteering is up. People are trying all kinds of things. There’s an increasing interest in graduate degrees — education is always counter-cyclical to the economy. This is a generation that saw the breakage of some ideologies of perfect capitalism, ready to revise their thinking. And they might be the right people to envision a new approach. The protests are a good signal. They’re a step in the right direction.
My bold, interesting idea, move people away from the politics of soundbites and ask them detailed question about how they think the state should be? How united Septics are on inequality is heartening and its rather touching that their ideal state is one more egalitarian than any that exists.

Ariely suggests a Sim like game where people can see the consequences of their policy choices, e.g. what it means economically and politically to have a population that is 60% functionally illiterate?

Politicians just want sit up and beg voters that respond to key worded sound bites like a dumb bunch of Golden Retrievers rather than a population of careful and informed deliberators. I doubt many of our leaders actually have thought through such an experiment themselves and tested their preferred dogma against their rational preferences.

Worth a listen.
 
#2
That's a good post, Alib. Can't think of anything intelligent to say about it, but it's still a good post.

I always scratch my head when trying to get my head around the US - I've never been there but I suspect Yanks are a great deal more 'foreign' than we realise.
 
#3
To quote the man, a 'poor' person in America has a higher standard of living than a 'rich' people in most of the rest of the world.

And yes, America is a completely different planet.
 
#4
From Building a Better America—One Wealth Quintile at a Time by Michael I. Norton and Dan Ariely
...
Given the consensus among disparate groups on the gap
between an ideal distribution of wealth and the actual level
of wealth inequality, why are more Americans, especially those
with low income, not advocating for greater redistribution of
wealth? First, our results demonstrate that Americans appear
to drastically underestimate the current level of wealth inequality,
suggesting they may simply be unaware of the gap. Second,
just as people have erroneous beliefs about the actual level of
wealth inequality, they may also hold overly optimistic beliefs
about opportunities for social mobility in the United States
(Benabou & Ok, 2001; Charles & Hurst, 2003; Keister,
2005), beliefs which in turn may drive support for unequal
distributions of wealth. Third, despite the fact that conservatives
and liberals in our sample agree that the current level of
inequality is far from ideal, public disagreements about the
causes of that inequality may drown out this consensus (Alesina
& Angeletos, 2005; Piketty, 1995). Finally, and more broadly,
Americans exhibit a general disconnect between their attitudes
toward economic inequality and their self-interest and public
policy preferences (Bartels, 2005; Fong, 2001), suggesting that
even given increased awareness of the gap between ideal and
actual wealth distributions, Americans may remain unlikely to
advocate for policies that would narrow this gap.
Ariely makes an interesting point, 21st century America is residential segregated by income level, the classes don't really mix so there is little awareness of how the other half lives.

When asked if the poorest Americans should be helped the group most likely to respond negatively is not the rich, comfortable or getting by but the demographic just above the poverty line that also would stand to benefit from policies that helped the poorest. In psychology this is called "Last-place Aversion", this group are far from being consumed by jealousy of those richer them but by maintaining the narrow margin that separates them from those struggling beneath them, to the extent that they will make policy choices harmful to their own interests. I'd note this is founded more desperation than aspiration and is probably a key factor in the popularity of policies that look like class war conducted downward and the steady economically unhealthy rise in inequality.

Given the structure of the lower demographics there is often a racial component at play here, in the US labor movement they used to talk about the Niggerization of white labor. This goes back a long way ""free labor" was a big driver in the Northern loathing of slavery, not out of sympathy for blacks, Yankee attitudes were often more fiercely racist than in Dixie but the reality of economic competition at the bottom of the food chain, its not coincidental that black living standards actually fell after abolition. It's offshoring of much of the US industrial base and the collapse of the unions in the US that probably has undermined the relative economic position of blue collar folk in the US more than anything else.

The Economist has this Don’t look down on why soaking the rich with high taxes has limited appeal to the struggling than gentile liberals might assume
 
#5
Oh I don't know I think you're both spouting socialist twaddle.
Alib' why are you so fixated on the USA? Surely there are as many wrongs to be righted in the UK and the EU. Rampant mindless socialist beneficence has certainly worked wonders for Europe, hasn't it?
BTW your slant on US sociology is so very last century.

Micawber old boy, come on over - you'll be pleasantly surprised.
 
#6
Busterdog: I'm sure I'd have a fine time - I've always fancied doing some wide mouth Bass fishing as it happened - but I'm sure it rather depends on where I go.

The Wire must have been based at least a little bit on reality.

There is inequality in the US on an almost African level and it's going to be hard to deny that.

I think the work described in Alib's post shows that individual septics are much more decent than the society they have produced.
 
#7
That's a good post, Alib. Can't think of anything intelligent to say about it, but it's still a good post.

I always scratch my head when trying to get my head around the US - I've never been there but I suspect Yanks are a great deal more 'foreign' than we realise.
Aw, shucks--we aint no differnt than y'all.
 
#10
From Building a Better America—One Wealth Quintile at a Time by Michael I. Norton and Dan ArielyAriely makes an interesting point, 21st century America is residential segregated by income level, the classes don't really mix so there is little awareness of how the other half lives.

When asked if the poorest Americans should be helped the group most likely to respond negatively is not the rich, comfortable or getting by but the demographic just above the poverty line that also would stand to benefit from policies that helped the poorest. In psychology this is called "Last-place Aversion", this group are far from being consumed by jealousy of those richer them but by maintaining the narrow margin that separates them from those struggling beneath them, to the extent that they will make policy choices harmful to their own interests. I'd note this is founded more desperation than aspiration and is probably a key factor in the popularity of policies that look like class war conducted downward and the steady economically unhealthy rise in inequality.

Given the structure of the lower demographics there is often a racial component at play here, in the US labor movement they used to talk about the Niggerization of white labor. This goes back a long way ""free labor" was a big driver in the Northern loathing of slavery, not out of sympathy for blacks, Yankee attitudes were often more fiercely racist than in Dixie but the reality of economic competition at the bottom of the food chain, its not coincidental that black living standards actually fell after abolition. It's offshoring of much of the US industrial base and the collapse of the unions in the US that probably has undermined the relative economic position of blue collar folk in the US more than anything else.

The Economist has this Don’t look down on why soaking the rich with high taxes has limited appeal to the struggling than gentile liberals might assume
A bit old news but anyway as in most things there are contrarian views of the significance of all this:

How to Think About Misperceptions Regarding the Distribution of Wealth in the U.S.
By Reihan Salam

To my great amusement, a number of left-of-center commentators think it is profoundly significant that Americans don’t have a very accurate sense of the actual [COLOR=#216221 !important][FONT=inherit !important][COLOR=#216221 !important][FONT=inherit !important]wealth[/FONT][/FONT][/COLOR][/COLOR] distribution in the United States. New research by Michael Norton and Daniel Ariely has inspired the latest round of reflections on this unsurprising fact:
People know we’re living in a time of growing [COLOR=#216221 !important][FONT=inherit !important][COLOR=#216221 !important][FONT=inherit !important]income[/FONT][/FONT][/COLOR][/COLOR] inequality, Krugman told me, but “the ordinary person is not really aware of how big it is.” The ignorance hypothesis gets a strong assist from a new paper for the journal Perspectives on Psychological Science: ”Building a Better America—One Wealth Quintile at a Time.” The authors are Michael I. Norton, a psychologist who teaches at Harvard Business School, and Dan Ariely, a behavioral [COLOR=#216221 !important][FONT=inherit !important][COLOR=#216221 !important][FONT=inherit !important]economist[/FONT][/FONT][/COLOR][/COLOR] (and blogger) at Duke. Norton and Ariely focus on the distribution of wealth, which is even more top-heavy than the distribution of income. The richest 1 percent account for 35 percent of the nation’s net worth; subtract housing, and their share rises to 43 percent. The richest 20 percent (or “top quintile”) account for 85 percent; subtract housing and their share rises to 93 percent. But when Norton and Ariely surveyed a group whose incomes, voting patterns, and geographic distribution approximated that of the U.S. population, the respondents guessed that the top quintile accounted for only 59 percent of the nation’s wealth.
As Andrew Gelman observed a few years back, Americans also systematically misperceive the ethnoracial composition of the U.S. population. And this is just the tip of the iceberg. One assumes that this ignorance is a form of rational public ignorance. One could know the precise wealth distribution of the U.S., but it’s not as useful as knowing things that directly pertain to one’s work, etc.
The most appealing interpretation of public ignorance regarding the wealth distribution for egalitarians is that Americans would be outraged if they knew the real numbers. But another interpretation the wealth distribution doesn’t give us a very reliable guide to lived experience. The author I quoted above observes the following:
Norton and Ariely also asked respondents what they thought theideal distribution of wealth should be, and found, again, little difference among income groups, or between Bush voters and Kerry voters. Most favored a wealth distribution resembling that in … Sweden! But when you examine Norton and Ariely’s method, that particular finding gets a little shaky. They showed respondents three unlabeled pie charts. One depicted utopian equality, with wealth distributed equally among five groups. The second depicted the United States, with wealth distributed very unequally among five groups (one of which gobbled up 85 percent—Norton and Ariely put it at 84 percent, but let’s not quibble). The third depicted Sweden, where the top quintile accounts for 35 percent of the nation’s wealth. Neither the Swedish pie chart nor the U.S. pie chart was identified by nation. Norton and Ariely were astonished that 47 percent of respondents—remember these were all Americans—chose the pie chart depicting Sweden. But surely most survey-takers, when presented with two extreme options and one that lies in the middle, will instinctively gravitate, like Goldilocks, toward the middle option. More surprising to me was that second place went to Utopia (43 percent). Only 10 percent voted for the pie chart depicting the country the respondents actually live in.
But what if the respondents were then told that the bottom tenth of the income distribution in Sweden and the U.S. have comparable living standards, while the top 90 percent in the U.S. is far more affluent? Or, to be more generous to the Swedes, what if respondents were told that the bottom tenth of the distribution in Sweden has somewhat better public services and comparable living standards while the top 90 percent in the U.S. is far more affluent? (“Living standards” and “wealth” aren’t identical, to be sure. I’d submit that consumption and disposable income matter more to most than wealth per se, though of course wealth concentration has implications for intergenerational mobility and, to some extent, the distribution of political influence and power.) I sense that this might lead at least some of the respondents to conclude that the U.S. wealth distribution is kind of okay — if it’s compatible with a higher level of consumption for the vast majority, why should one care? How to Think About Misperceptions Regarding the Distribution of Wealth in the U.S. - National Review Online
and this:

[h=3]Ariely and Norton: Never Mind the Gap[/h] Everyone knows the social sciences are fuzzy. Economists, political scientists and anthropologists bring their moralistic baggage into the ivory tower as soon as they decide what to study and what not to. There’s no avoiding social science’s value-ladenness.

But on the value-ladenness continuum, there’s a point at which you undermine your credibility as a scholar. That is, if you use your status as a scholarly “expert” to launch a political crusade, you are engaging in a form of academic malpractice. Michael I. Norton of Harvard and Dan Ariely of Duke are guilty of such malpractice. Let me explain.

In a recent “study,” Norton and Ariely seem to be engaging in a kind of democracy-by-proxy. They claim Americans really want more “wealth redistribution” and they have the evidence to prove it. Here’s their own description of the findings from the Los Angeles Times.
We recently asked a representative sample of more than 5,000 Americans (young and old, men and women, rich and poor, liberal and conservative) to answer two questions. They first were asked to estimate the current level of wealth inequality in the United States, and then they were asked about what they saw as an ideal level of wealth inequality.
In our survey, Americans drastically underestimated the current gap between the very rich and the poor. The typical respondent believed that the top 20% of Americans owned 60% of the wealth, and the bottom 40% owned 10%. They knew, in other words, that wealth in the United States was not distributed equally, but were unaware of just how unequal that distribution was.
When we asked respondents to tell us what their ideal distribution of wealth was, things got even more interesting: Americans wanted the top 20% to own just over 30% of the wealth, and the bottom 40% to own about 25%. They still wanted the rich to be richer than the poor, but they wanted the disparity to be much less extreme.
Okay. So Norton and Ariely succeeded in proving that Americans don’t know who has how much money. We the People are not only largely ignorant of quintiles, but how many assets are controlled by each quintile.

Norton and Ariely ask the same Americans who are ignorant of the current wealth distribution what their “ideal” distribution is. Those surveyed then dream up what they think would be a good breakdown, even though no such ideal exists in that Great-Truth-Tablet-in-the-Sky. From all of this surveying they conclude something that cannot readily be concluded (notice, especially, the slippery language): [O]ur results suggest that policies that increase inequality — those that favor the wealthy, say, or that place a greater burden on the poor — are unlikely to reflect the desires of Americans from across the political and economic spectrum. Rather, they seem to favor policies that involve taking from the rich and giving to the poor. [Emphasis mine.]
You see, Norton and Ariely can’t claim those surveyed favor coercive redistribution. They merely infer it. Absent any context or micro-reality, the most ardent libertarian surveyed might wish that poor people had more resources and yet not support forced redistribution. I know I do. But even if they did learn most people favor redistribution at some point, we cannot conclude such desires justify redistribution -- much less prove that redistribution is a good thing. And this is where the malpractice really begins.

Norton and Ariely have concluded something very strange. They happily admit that Americans are ignorant of the real distribution of assets. Now, this information can pretty easily be gained online. Indeed, Academic socialists with bees in their bonnets are eager to trot out who has what at every turn, as if concern for the poor somehow translates into worries about the holdings of the rich. (On this point, more later.) So these self-same ignorant Americans - when aggregated - suddenly become endowed with a magical wisdom -- a “wisdom of crowds” if you will? And apparently, this wisdom confers justification for all manner of redistributionist policies. Don’t believe me? It’s right there in the Los Angeles Times.

First of all, why should we think that Americans factually ignorant in one area would have some sort of special wisdom on the timeless and intractible questions of justice? Norton and Ariely conclude that asking Joe Sixpack, Jill Accountant, and Barb Waitress their thoughts about a mathematical abstraction like income distribution limns some great insight into what justice demands. Even the venerable soft egalitarian John Rawls -- were he alive today -- would have bristled at this kind of scholarship. For it is a clumsy intrusion into a discipline (philosophy) that demands more than what amounts to the naturalistic fallacy dressed up in the trappings of Zogby and Rasmussen.

Speaking of Rawls, Norton and Ariely start out their actual paper claiming their study is Rawlsian:

We take a different approach to determining the “ideal” level of wealth inequality: Following the philosopher John Rawls (1971), we ask Americans to construct distributions of wealth they deem just.
One may have have good reasons to disagree with the late Rawls, but his theory is elegant and sophisticated. Norton and Ariely have no business hitching their wagon to the Theory of Justice. Rawls’s theory was a product of a prioristic reasoning and “reflective equilibrium.”

In other words, Rawls’s theory requires one to think about what sort of society he or she would want to be born into if he or she didn’t know what his own circumstances would be. Rawls believed people would want a high degree of individual freedom, but that they would want the least well off to be cared for -- lest they be born in that stratum. More importantly, Rawls’s theory -- even if it was wrong -- was about rigorous philosophical deliberation from one person to the next, not about opinion polls or focus groups in which people simply get to come up with a distribution and have academics standing by to call it Utopia. Thus, when it comes to Rawls, Norton and Ariely are apparently shrouded in a veil of ignorance.

I’m pretty sure it was David Hume who said you cannot derive a value from a fact -- or an “ought” from an “is”. And yet Norton and Ariely dance that two-step. From the fact that a statistically significant number of people have a loosely similar mathematically abstracted idealization of how wealth should be distributed they are lead to the value that wealth ought to be distributed by state coercion. This is the kind of thing students quickly learn to dispatch with in Philosophy 101. (I also wonder whether the respondents had the option to say “I don’t think there is such an “ideal distribution,” but I digress.)

Norton and Ariely never consider the notion that people might want to see a different wealth distribution carried out through means other than forced redistribution, for example, by ridding government of all the rent-seeking schemes that protect the assets of corporate CEOs and shift the costs onto consumers. Nor do they consider that if people had greater information about the circumstances of specific times and places -- like taking x dollars from businessman B means B can afford to hire y fewer people. Ask people for idealized abstractions and you’ll get idealized abstractions. After all, people are “predictably irrational.”

Likewise, even if we went back and asked all these folks if -- given their ideal distribution -- they would support policies of forced redistribution and they all said “yes,” it wouldn’t make it Truth. Heaven forbid, we learn this in Logic class, too. Ever heard of Fallacy Ad Populum? The gist is this: just because a bunch of people believe or claim it, doesn’t make it so. Norton and Ariely’s entire thesis seems to be that because a bunch of people believe it, it ought to be policy. If that were the case, we’d have to agree that popular support for Jewish pogroms justified policies put in place during 1930s Germany. Or we might agree that Islam is the only true religion. There are, after all, more Muslims than members of any other faith.

Let’s just assume that the assumptions and conclusions of Norton and Ariely’s research are sound -- and that we can overlook all the problems above. We could then apply the same methodology to people’s “ideals” about sexiness and dating.

Suppose the conclusions of their research were not about asset distribution, but about the distribution of dates (or sex). (By analogy, let’s also pretend that the distribution of assets in the U.S. is not already distorted by taxcode- and regulatory rent-seeking, but is rather a natural result of the free market at work.) Pretty people would have a lot more dates than ugly people. Now, I doubt folks surveyed -- unless very ugly -- would say we ought forcibly to redistribute dates to ugly people. But if we look at the analogy, there would be no relevant difference in the structure of these cases.

The structure is that people use their natural endowments to gain advantages in individual acts of consensual exchange in both dating and trading. Such results in natural inequality in the distribution of sex and money, respectively. The distribution is such that ugly people normally get dates with other ugly people if they get dates at all. Sexy people get dates with sexier people--and more of them. I think we can agree that it would be wrong somehow to suggest “redistribution” based on any mathematical abstractions like the “distribution of dates among the sexy and the ugly.” So why is this different for other outcomes of exchange?

One might try to respond by saying “Ah, but we’re talking about the basic needs of the poor.” First, we’re really not talking about the basic needs of the poor. We’re talking about the distributional distance between rich and poor, whatever the wealth of the poor. Second, even if were talking about the needs of the poor - which we are not -- sex qualifies as a basic need according to Abraham Maslow. So if we can agree there is something wrong with redistributing the dates of the pretty among the ugly, then there is probably something wrong with wealth distribution too -- that is, under certain conceptions of justice (which Norton and Ariely clearly don’t share).

Reference to Maslow’s Hierarchy should also remind us of some things about wealth. The first one, economist Don Boudreaux puts succinctly in his own critique of Norton and Ariely:
That Americans "drastically" underestimate the wealth of "the very rich" compared to the wealth of "the poor" reveals that the difference in the number of dollars owned by "the very rich" compared to the number of dollars owned by "the poor" translates into a much smaller - that is, far more equal - difference in living standards. In other words, differences in monetary wealth are not the same as differences in living standards.
Bill Gates's monetary wealth, for example, is approximately 70,000 times greater than my own, but I'm certain that he doesn't daily ingest 70,000 times more calories than I eat in a day. I'm also certain that the food he eats isn't 70,000 times tastier than the food I eat; that his many homes are not 70,000 times larger than my one home; that his children are not educated 70,000 times better than is my child; that he cannot travel to Europe or to Asia 70,000 times faster or more safely than I can; that he doesn't have 70,000 times more annual leisure than I have; and that he will not live 70,000 times longer than I will live.
Indeed, maybe the reason Americans misjudge the actual wealth distribution is that most consider themselves wealthy in Boudreaux’s sense -- at least when it comes to the basics.

Along the same lines, I wrote:
So when it comes to the “Great Divergence” — a.k.a. “the gap” — the essential question becomes: What exactly is your point? If your goal is to alleviate poverty or perhaps to raise the baseline for what constitutes a minimum level of income that most people, conservative, liberal or libertarian could tolerate — maybe that‘s something we can talk about. But that is not the same thing as worrying about how much money the rich have.
In other words, suppose you asked the same Americans “If you could guarantee that every poor person in America had their basic needs met, would you agree to abandon your ‘ideal’ wealth distribution?” Their answers might surprise us. That’s because most people -- very likely including Norton and Ariely -- conflate wealth distribution and concern for the poor.

I realize academics like Dan Ariely and Cass Sunstein are currently enjoying a kind of rock star status for their work on irrationality, paternalism and central nudging. But I’m going to go out on a limb and argue that these showbiz behavioral economists are under a spell that, if lifted, would invalidate much of their work. This spell was cast long ago by men in two discredited traditions. These traditions coupled in the underworld to produce a most insidious scion -- Skeynesianism. Skeynesianism takes the black box behaviorism of B.F. Skinner and couples it with the aggregates and abstractions of Keynes. Here's how I have described it elsewhere:
Skinner thought you could tweak people into ideal behaviors. The mind, brain and the genes could simply be cut away in his methodology. To perfect people would be to stimulate them in the appropriate ways. But that required lobotomizing them. The baby Skinner threw out with the bathwater -- cognitive neuroscience -- has come a long way since Skinner orphaned it. And, though Skinner has been pretty thoroughly discredited by contemporary science since Beyond Freedom and Dignity, strands of his thinking have re-emerged in the work of some behavioral economists.

Keynes has enjoyed a revival too. Where Skinner discarded the mind, brain and genes at the local level, Keynesian turned individuals and their behavior into aggregates and abstractions at the macro level. Sophisticated mathematical models were enough, it seemed, to limn the important aspects of a deterministic economy. Generally, it doesn’t matter if that economy is made up of thinking, feeling, acting individuals. Circumstances of time and place -- individual actions and local knowledge - are not important from the perspective of policymakers.
The result is an unholy hybrid methodology certain “experts” have embraced to justify all manner of intrusions into our lives by government elites.
I’ll do my best to drive a stake into the Skeynesian creature elsewhere. Here’s a sliver:
[N]udgers are usually establishing choice architectures for aggregates, not individuals. That is, they're setting policy. So it's not exactly like offering to pay your 15-year-old son not to tattoo his girlfriend's name on his behind. The woulda-shoulda-coulda considerations will always differ from one person to the next, at different times and in different contexts. Government policy almost never does a good job of addressing particular circumstances. Nor does government policy tease out the degree to which a particular person possesses cognitive ability or information—dimensions that are facets of subjective valuation. Worse still, nudgers are seldom any smarter, more attentive or better-informed than the rest of us. They can be. But more often than not, even old-fashioned good advice requires local knowledge that bureaucrats simply aren't privy to—even if values were objective. Before making our lives better, the choice architectures they dream up in their marbled rotundas end up in perverse dead ends. Weren't Americans marnudged towards home ownership via the tax code and loose qualifying standards for mortgages? How's that working out for us?
In the context of Norton and Ariely’s “study” of opinions on asset distribution, they are doubly Skeynesian. Not only do they rely on the aggregate abstractions of regular folk thinking about aggregated abstract things, they’re using such to justify aggregate abstract social policy. This level of Skeynesian circularity is enough to make your head spin.

That’s why I contend that these celebrity behavioral economists need to chill out. They may be good here and there for convincing people to save money or not to use their credit card so much, but Dave Ramsey is probably better. I know, they’re best sellers. New York Times readers love authors who justify their elitism. But until behavioral economics rids itself of all its Keynesian claptrap, we would do well to conclude it’s gotten too big for its britches. Max Borders: Ariely and Norton: Never Mind the Gap
 
#11
#15
Oh I don't know I think you're both spouting socialist twaddle.
Alib' why are you so fixated on the USA? Surely there are as many wrongs to be righted in the UK and the EU. Rampant mindless socialist beneficence has certainly worked wonders for Europe, hasn't it?
BTW your slant on US sociology is so very last century.

Micawber old boy, come on over - you'll be pleasantly surprised.
Well the march of folly in the US is just so much more amusing, the UK has some similar faults but you can beat the US for slapstick politics.

The EU is so dull with what are mostly soberly run economies that produce waves of PHDs and relatively cheap services, what we can't get working is something like the Fed, to iron out the bumps in a largely capitalist economy or the idea of getting any control of an internationalized banking sector that thinks its Wall St but should not be let out nights. We are also not good at dramatic innovation which I put down to all those PHDs and grey technocrats inhibiting US style emboldened stupidity.

Having been in the 60s the nearest thing to an egalitarian workers paradise in world history you guys manage to devise a system where the average Joe, works far harder than the lazily contented Germans in their lavish social state, the poor sucker in the US pays almost the same taxes as them, gets bugger all back for that, while being gouged mercilessly for basics like healthcare and education. Blue collar Krauts luxuriate in spas at the slightest hint of a headache while Septics burn out in a epidemic of anxiety disorders. To top it off have also perfected a stealthy varient of socialism based on sausage factories that provide comfort and shelter to the most privileged. It's almost Swiftian in the cruelty of its satire of Capitalism as envisaged by Adam Smith.

What's interesting is the mismatch between apparent aspiration and realization, Americans are instinctively egalitarian and worship aspiration but produced a society more stifling to that than stuck in the mud Germans.

In europe we often get pretty close to what we vote for, and we generally vote in pursuit of our self interests, that may be stolid heavily sheltered lives like in Germany, an insane decade long boondoggle of party pork like in Greece or all the risks of booming neo-liberal free market economy as we had in Ireland. US politicians simply haven't been doing what it says on the can since Nixon, they've been looking after one tiny demographic at the expense of all other and those lucky few surprisingly don't even like the idea of being exalted like Louis XV by these cup bearers.
 
#16
Well the march of folly in the US is just so much more amusing, the UK has some similar faults but you can beat the US for slapstick politics.

The EU is so dull with what are mostly soberly run economies that produce waves of PHDs and relatively cheap services, what we can't get working is something like the Fed, to iron out the bumps in a largely capitalist economy or the idea of getting any control of an internationalized banking sector that thinks its Wall St but should not be let out nights. We are also not good at dramatic innovation which I put down to all those PHDs and grey technocrats inhibiting US style emboldened stupidity.

Having been in the 60s the nearest thing to an egalitarian workers paradise in world history you guys manage to devise a system where the average Joe, works far harder than the lazily contented Germans in their lavish social state, the poor sucker in the US pays almost the same taxes as them, gets bugger all back for that, while being gouged mercilessly for basics like healthcare and education. Blue collar Krauts luxuriate in spas at the slightest hint of a headache while Septics burn out in a epidemic of anxiety disorders. To top it off have also perfected a stealthy varient of socialism based on sausage factories that provide comfort and shelter to the most privileged. It's almost Swiftian in the cruelty of its satire of Capitalism as envisaged by Adam Smith.

What's interesting is the mismatch between apparent aspiration and realization, Americans are instinctively egalitarian and worship aspiration but produced a society more stifling to that than stuck in the mud Germans.

In europe we often get pretty close to what we vote for, and we generally vote in pursuit of our self interests, that may be stolid heavily sheltered lives like in Germany, an insane decade long boondoggle of party pork like in Greece or all the risks of booming neo-liberal free market economy as we had in Ireland. US politicians simply haven't been doing what it says on the can since Nixon, they've been looking after one tiny demographic at the expense of all other and those lucky few surprisingly don't even like the idea of being exalted like Louis XV by these cup bearers.
Our politicians hAve been using sleight of hand far longer than the tricky Dick era. As I (and other far more intelligent and learned people) have said elsewhere, progressivism (rule by an oligarchic elite) has been the real agenda of US national politics since Teddy Roosevelt. This zeal of the ruling elite for control over the masses (who in their view are mentally inferior to their wisdom and desire to serve the "greater good") is manifested in myriad ways but the most obvious has been the inexorable aggrandizement of federal political power in the hands of a largely unaccountable (from a Constitutional standpoint) elite.
 
#17
This zeal of the ruling elite for control over the masses (who in their view are mentally inferior to their wisdom and desire to serve the "greater good") is manifested in myriad ways but the most obvious has been the inexorable aggrandizement of federal political power in the hands of a largely unaccountable (from a Constitutional standpoint) elite.
The unaccountability is made all the more obvious, imho, by the fact that the USA is not a single country, as we in the raddled, old world, who go to Orlando for our hols, think.

America is at least four countries: you've got the very eastward-looking, old world East Coast. You've got the Deep South. You've got the Mid West and you've got the marvellous weirdness of California. All different.

Actually, the regional differences in the US are every bit as great as they are in Europe. How can Texas be connected to Maine aside from the phoney connection of networked telly?

Navaho Indians, Texan oil workers, New York cops, New Jersey Mafia, Mid West, er, piles of corn cobs, Nashville country music and Chicago blues. It ain't one cultural entity.

Which allows the idea that anything Federal is bad to progress to the tin foil hat marker.
 
#18
The unaccountability is made all the more obvious, imho, by the fact that the USA is not a single country, as we in the raddled, old world, who go to Orlando for our hols, think.

America is at least four countries: you've got the very eastward-looking, old world East Coast. You've got the Deep South. You've got the Mid West and you've got the marvellous weirdness of California. All different.

Actually, the regional differences in the US are every bit as great as they are in Europe. How can Texas be connected to Maine aside from the phoney connection of networked telly?

Navaho Indians, Texan oil workers, New York cops, New Jersey Mafia, Mid West, er, piles of corn cobs, Nashville country music and Chicago blues. It ain't one cultural entity.

Which allows the idea that anything Federal is bad to progress to the tin foil hat marker.
I quite like my tinfoil hat.
 
#19
I quite like my tinfoil hat.
Aye, can understand that a bit.

I'd march to Garry Owen even though I don't have da green card. But the Federal element of America does have a hill to climb because of the sheer and wonderful diversity of America.

It's why the US Military doesn't have the same regimental system that we do. Split the USMC or the Ranger, or whoever, between north and south and they'll be fighting Shiloh over again, even if it's just in a pub. Best to keep it on a Federal level.

No. America is a partial union of states. If Toby Keith turned up in Washington Square NYC, they'd throw organic bananas at him.
 
#20

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