Kids These Days

January 31, 2018

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Malcolm Harris. Kids These Days: Human Capital and the Making of Millennials. New York: Little, Brown and Company, 2017.

This is an unusual book, a portrait of a particular generation’s experience, interpreted in the context of a changing capitalist society. I found it reminiscent of Paul Goodman’s Growing Up Absurd from the 1950s, a book that resonated with many young Baby Boomers. Here the focus is on the Millennial generation, who were born between 1980 and 2000 and make up today’s young adults 18 to 38. Malcolm Harris himself is one of them.

Here he describes the book’s goal:

The only way to understand who we are as a generation is to look at where we come from, and the social and economic conditions under which we’ve become ourselves. What I’m attempting in this book is an analysis of the major structures and institutions that have influenced the development of young Americans over the past thirty to forty years.

Harris is not a social scientist, but just a “committed leftist and a gifted polemicist with a smart-aleck bent,” according to one reviewer. He provides no deep analysis of capitalism, but makes a broad claim that the frenetic quest for profits is now bringing society to some kind of breaking point:

Lately, this system has started to hyperventilate: It’s desperate to find anything that hasn’t yet been reengineered to maximize profit, and then it makes those changes as quickly as possible. The rate of change is visibly unsustainable. The profiteers call this process “disruption,” while commentators on the left generally call it “neoliberalism” or “late capitalism.” Millennials know it better as “the world,” or “America,” or “Everything.” And Everything sucks.

The burden of this supercharged capitalism is falling most heavily on Millennials. They will either by crushed by it, as America becomes some sort of fascist dystopia, or else lead a revolution against it. Harris sees little middle ground.

Human capital and hypercompetition

For Harris, the key to understanding what is happening to the younger generation is the idea of human capital. “We need to think about young people the way industry and the government already do: as investments, productive machinery, ‘human capital’.” Human capital is the economic value placed on the capacity for future work. New technologies can reduce that value by making existing capacities obsolete, most obviously when manual labor is replaced by machinery. But future workers can enhance their value by acquiring new capacities, enabling them to master technologies or provide some essential human input. This puts young people under pressure to become one of the value-enhanced winners instead of the devalued losers.

Isn’t this just the same old competition for success that has been a hallmark of modern society? Harris obviously sees it as more than that. As the development of human capital has become more extensive and more costly, paying for it has become a systemic problem. Society is currently organized in such a way that the benefits of human capital formation go primarily to capitalist organizations and their shareholders, while the costs fall primarily on individuals and their families. Investment in human capital is good for society, but it is risky for individual employers, since they do not normally own their workers and their future labor. Workers can leave and take their newly acquired human capital with them. So employers find it more profitable to hire workers who are already capable–or nearly capable–of doing the job; or just replace workers with robots, whose future labor they do own.

The intensified competition for good jobs becomes more than an individual competition to demonstrate merit. It is a competition among families to raise the most accomplished children they can, with the most expensive educations and all the trimmings–the music lessons, science projects, field trips, SAT prep classes, and so forth. Families of limited means are at a big disadvantage.

The paradox of productivity

In theory, the higher productivity resulting from new technologies and skills could lead to higher wages and/or more leisure. If people are more productive, why shouldn’t they enjoy a higher standard of living? And why shouldn’t the most tech-savvy generation be on its way to the highest standard of living of all? There’s little sign of that so far. “As it turns out, just because you can produce an unprecedented amount of value doesn’t necessarily mean you can feed yourself under twenty-first-century American capitalism.”

The problem goes to the heart of the capitalist system. Producing more per hour doesn’t translate into higher pay per hour if the extra output and its economic value belong solely to the employer. In that case the employer gets the benefits, in the form of higher revenues and lower labor cost per unit of output.

On the one hand, every kid is supposed to spend their childhood readying themselves for a good job in the skills-based information economy. On the other hand, improvements in productive technology mean an overall decrease in labor costs. That means workers get paid a smaller portion of the value they create as their productivity increases. In aggregate, this operates like a bait and switch: Employers convince kids and their families to invest in training by holding out the promise of good jobs, while firms use this very same training to reduce labor costs.

We may wonder why competition among employers for good workers doesn’t force them to raise wages. It does, but mainly in specialized occupations where needed skills are actually in short supply. What is remarkable is how little wages have risen in recent decades, even for college graduates. “Wages for college-educated workers outside of the inflated finance industry have stagnated or diminished, with real wages for young graduates down 8.5 percent between 2000 and 2012.” What seems to be working in favor of employers is a system that delivers a large enough supply of human capital to hold wages down, while making families bear the costs of developing that capital.

Harris notes that men and women have experienced this situation differently. “Median wages for men (50th percentile) have remained stagnant, at nearly $18 per hour, while median wages for women have increased from $11.28 in 1973 to $14.55 in 2009.” Women’s improvement in labor force participation and wages is a mixed blessing. Putting wives as well as husbands into the labor force is one way for families to try and get ahead. But it places the burden on families to work harder instead of on employers to pay better. “All work becomes more like women’s work: workers working more for less pay. We can see why corporations have adapted to the idea of women in the labor force.”

To summarize:

Technological development leads to increased worker productivity, declining labor costs, more competition, a shift in the costs of human capital development onto individual competitors, and increased productivity all over again. Millennials are the historical embodiment of this cycle run amok….

Education: The labor of enhancing one’s labor

One of my graduate school professors used to say that the social function of higher education was not to produce and disseminate knowledge, but to keep young people out of the labor force so they could serve the economy as needed consumers rather than unneeded producers. Maybe that made sense at a time when people were enjoying the new prosperity and leisure of the post-Depression, postwar era. Having recently achieved good wages and a shorter work week, unions weren’t eager to see a horde of young people enter the labor force and drive wages and working conditions down.

Harris’s take on youth and education is very different, and probably more relevant to our times. Not only are a large percentage of young people in the labor force already–70% of college students, for example–but they are working very hard at their own human capital development, primarily for the benefit of their future employers. As a result of the economic conditions described, “Every child is a capital project.”

…It’s cheaper than it used to be to hire most workers, and extraordinarily hard to find the kind of well-paying and stable jobs that can provide the basis for a comfortable life. The arms race that results pits kids and their families against each other in an ever-escalating battle for a competitive edge, in which adults try to stuff kids full of work now in the hope that it might serve as a life jacket when they’re older.

In theory, new information technologies ought to make it easier to learn. My generation could have saved many hours digging for information in the library if we could have accessed a whole world of knowledge on a laptop (not to mention the time we could have saved on a term paper if we had word processing). Paradoxically, Harris reports that American children spend more time in school, more time on homework, and less time on unsupervised play than they used to. And they are producing a lot: “Nongrade measures of educational output–like students taking Advanced Placement classes or tests, or kids applying to college–have trended upward….” Grades have risen too, and Harris is not so quick to dismiss that as mere grade inflation.

A government study reported that “the number of applicants to four-year colleges and universities has doubled since the early 1970s, [but] available slots have changed little.” That form of intensified competition allows schools to raise tuition and fees dramatically. Only part of this increase is due to reduced public funding, since the increase by private schools is almost as great. The additional revenue has not gone into instruction; on the contrary, the ample supply of graduates seeking academic employment has allowed colleges to hire more lower-paid, part-time and temporary teachers. Instead it goes mainly toward administrative salaries or amenities to attract well-heeled students.

What this all amounts to is a clear tendency for both public and private colleges to behave like businesses, passing off a lower-quality product at a higher price by tacking on highly leveraged shiny extras unrelated to the core educational mission. Stadium skyboxes, flat-screen monitors, marble floors, and hors d’oeuvres for the alumni association. Consultants of all flavors and salaried employees to make sure it’s all efficient. Competition hasn’t improved the quality of higher education, it has made colleges more like sleepaway camps or expensive resorts.

Because they are defined as students rather than real workers, students can be made to work very hard for someone else’s profit. College sports generate substantial revenue, but not for the athletes, who regularly spend thirty to forty hours a week on their sports without being paid. Many students try to enhance their credentials with unpaid internships, although research has found no more than a slight impact on job offers.

Even the time spent on social media can be seen as exploitable unpaid labor. “These technologies promise (and often deliver) connectivity, efficiency, convenience, productivity, and joy to individual users….” Older adults may see them as a frivolous form of leisure. But they are also a way that young people self-publish their creative work and build an audience for it. That also generates profits for others, most obviously for the big companies that run the sites, but also for record producers that are spared the costs and risks of developing talent themselves. They can wait and see who is becoming popular, and only then offer a recording contract.

Not only do students get little immediate reward for their hard work, but most of them have to borrow against their future earnings to finance their higher education. They have to indenture themselves to obtain an enhancement in earning power that may or may not materialize. If their schools educate them poorly–and some for-profit schools seem to make that part of their business model–borrowers are still on the hook for the money. Excessive debt is one of the reasons why today’s young adults have relatively low net worth, not just in comparison to today’s older adults, but also in comparison to young adults of an earlier time. Between 1983 and 2010, net worth dropped 21% for the 29-37 age group.

Overall, Malcolm Harris finds that the pressure to develop their own human capital has forced Millennials to compete harder for a limited supply of rewards. What they get for their harder work is the mere promise of a higher standard of living–someday. So far at least, someday has not arrived.

Continued


The Righteous Mind (part 2)

January 24, 2018

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Here I will discuss Jonathan Haidt’s perspective on liberalism and conservativism, informed by his evolutionary psychology of morality. He views these opposing views as “deeply conflicting but equally heartfelt visions of the good society.” Both are influenced–albeit in somewhat different ways–by the foundations of morality that developed in the course of human evolution. While he sees liberals as placing primary emphasis on “caring for victims of oppression,” conservatives prefer to “preserve the institutions that sustain a moral community.” Haidt calls for a more civil, more empathetic politics, where each side opens their hearts, not just their minds, to the other.

If Haidt’s entire discussion were as even-handed as that, I would find little to criticize. But when Haidt compares conservative and liberal perspectives on each of his six moral foundations, the implicit conservatism I described in the last post comes out. So I want to do something unusual–first discuss how I wish he had approached this topic, and then describe what he actually says.

Two sides of the six moral foundations

Recall that Haidt’s six moral foundations are:

  • care/harm
  • fairness/cheating
  • loyalty/betrayal
  • authority/subversion
  • sanctity/degradation
  • liberty/oppression

The paired terms suggest to me a simple way of distinguishing conservatives and liberals. Let’s start with Haidt’s quotation from John Stuart Mill: “A party of order or stability, and a party of progress or reform, are both necessary elements of a healthy state of political life.” When these two parties react to the established social order, the party of stability will naturally appreciate its positive adaptive accomplishments (the first terms in the pair), while the party of reform will naturally criticize its failures.

  • On care/harm, conservatives may appreciate the care provided by the conventional family, while liberals may criticize the harm resulting from public neglect of the poor, homeless, mentally ill, medically uninsured, addicted, etc.
  • On fairness/cheating, conservatives may appreciate the rewards delivered by the market to those who are productive, while liberals may criticize the ways the rich and powerful rig the game to deprive others of a fair chance.
  • On loyalty/betrayal, conservatives may appreciate the social cohesion fostered by parochial loyalties, while liberals may criticize the betrayal of higher loyalties like democratic values or universal human rights.
  • On authority/subversion, conservatives may respect the contribution of legitimate authorities to the common good, while liberals criticize self-serving authority figures who abuse their positions.
  • On sanctity/degradation, conservatives may appreciate the social order for protecting what they hold sacred; to use Haidt’s own example, they may appreciate the role of Christian sexual morality in protecting the chastity of young women. Liberals are more likely to notice how the traditional sexual double standard allows men to degrade women, or how industrial capitalism degrades the environment.
  • On liberty/oppression, conservatives may appreciate existing liberties, while liberals react to the plight of oppressed peoples who are not yet free.

Note that if the focus is not on the established order but some proposed alternative system or policy, the tables can be turned, so that liberals accentuate the positive and conservatives the negative. For example, liberals are more likely to see the redistribution of wealth through progressive taxation as an increase in fairness (allowing children of all families to compete on a more level playing field), while conservatives see it as cheating (violating the rules of the game by letting the losers steal from the winners).

From this balanced perspective, we can easily understand how each group is seeking the good in its own way, with some good moral intuitions on each side.

A conservative advantage?

What Haidt actually does is a little different. He argues that conservatives have a distinct advantage in moral/political debates. This is not because they are better people, necessarily, but rather because they are more in touch with fundamental moral realities, the basic moral intuitions that drive moral judgments. The difference between being morally better and being morally more realistic is subtle, and I suspect that in Haidt’s scientific scheme of things they amount to very much the same thing. Much of the time, what he is describing seems also what he is prescribing.

Haidt says that conservatives are better moral psychologists, which may be just another way of saying that moral psychology as Haidt sees it has inherently conservative sympathies. “Republicans have long understood that the [intuitive] elephant is in charge of political behavior, not the [conscious, rational] rider, and they know how elephants work. Their slogans, political commercials, and speeches go straight for the gut….” While liberals blinded by the “rationalist delusion” are trying and failing to persuade people through rational arguments, conservatives are doing something more effective–making emotional appeals to people’s deepest moral intuitions. They are appealing to the elephant that is in control most of the time, not the conscious rider who only occasionally gets the elephant to change direction.

I have to acknowledge the large element of truth in this description. Of course it is easier to press people’s traditional moral buttons than it is to get them to think critically about their society. Of course emotional appeals to family, God and country are effective ways of shaping opinion. As well as race, by the way. Haidt’s example of a Republican message going “straight to the gut” is the Willie Horton ad associating a black criminal with a Democratic presidential candidate. I wonder why that wasn’t a bigger red flag for him. He acknowledges that conservatives are more parochial, but seems rather complacent about the obvious link between parochialism and racism. He even says at one point that parochial love “may be the most we can accomplish.”

Yes, critical thinking is harder, which is why so much of higher education is devoted to it. Study after study has found that more educated people are less parochial and racially prejudiced. Critical thinking about society is especially prized in sociology.

Conservatives may have the upper hand much of the time, but not all of the time. In times of social crisis, when established institutions are not working very well, consciousness tends to be raised and movements for liberal reform come to the forefront. Liberal views that are underdeveloped and poorly articulated in calmer times may suddenly burst on the scene. I find Haidt’s work stronger on past evolution than on contemporary social change, so he may have trouble seeing beyond the recent period of conservative success.

Counting and measuring moral foundations

According to Haidt, conservatives have another advantage in building on the evolutionary foundations of morality. “Liberals have a three-foundation morality, whereas conservatives use all six.” Because liberal philosophy sees society as a collection of autonomous individuals, liberals have a narrower morality that is short on loyalty, authority and sanctity.

Republicans since Nixon have had a near-monopoly on appeals to loyalty (particularly patriotism and military virtues) and authority (including respect for parents, teachers, elders, and the police, as well as for traditions). And after they embraced Christian conservatives during Ronald Reagan’s 1980 campaign and became the party of “family values,” Republicans inherited a powerful network of Christian ideas about sanctity and sexuality that allowed them to portray Democrats as the party of Sodom and Gomorrah.

Notice, however, the traditional ways in which Haidt has described loyalty, authority and sanctity. For example, the conservative advantage would be less clear if he had made reference to alternative authorities, such as scientists, federal regulatory agencies, or international law. The historical sociologist Max Weber distinguished between “traditional authority” and “rational-legal” authority; the latter would surely command more respect from liberals.

The conservative way in which Haidt conceptualizes these moral foundations also affects how he measures them with his “Moral Foundations Questionnaire.” If you are a social conservative, many items give you a chance to express your views of loyalty, authority and sanctity:

Questions about what considerations are relevant to judgments of right and wrong:

  • whether or not someone conformed to the traditions of society
  • whether or not someone acted in a way that God would approve
  • whether or not someone violated standards of purity and decency
  • whether or not someone’s action showed love for his or her country

Statements calling for agreement or disagreement:

  • I am proud of my country’s history
  • People should be loyal to their family members, even when they have done something wrong
  • I would call some acts wrong on the grounds that they are unnatural
  • Men and women each have different roles to play in society
  • Chastity is an important and valuable virtue
  • If I were a soldier and disagreed with my commanding officer’s orders, I would obey anyway because that is my duty

If, on the other hand, you are a liberal with a strong sense of moral obligation to protect the environment, you’re out of luck. The questionnaire has no place to express a reverence for nature, or a belief in climate science, or respect for the rule of law, or support for international climate agreements. Because of how he thinks about these things, Haidt has inadvertently constructed measures of loyalty, authority and sanctity on which conservatives can hardly fail to score higher.

Conservative morality on the defensive

Still another problem is that recent history has called into question Haidt’s simple distinction between individualistic liberals and sociocentric conservatives, and his clear preference for the latter.  The distinction may work pretty well for the eighteenth and nineteenth centuries, when liberals were indeed promoting rational individualism in rebellion against such traditional institutions as absolute monarchy, mercantilism, hereditary aristocracy and church-state theocracy. But as Haidt acknowledges toward the end of his book, twentieth-century liberals split into two camps, often called libertarians and progressives. The libertarians are the main proponents of the old individualistic liberalism, especially the pursuit of self-interest in the free market (think of the Koch brothers and the writings of Ayn Rand). The progressives actually share many of Haidt’s own moral concerns about laissez-faire industrial capitalism, and they are often the ones advocating for more social responsibility.

To upset Haidt’s intellectual apple cart further, most libertarians have joined a conservative Republican coalition, in cooperation with most white social conservatives. The libertarians seem especially influential in that coalition, since they have more money and often get their way on low taxes and less regulation for corporations and the wealthy. But social conservatives keep voting Republican in the hope of legislating their “family values,” especially a return to strict abortion laws.  Haidt’s somewhat rosy view of conservative morality overlooks the fact that religious conservatives have cast their lot with the rugged individualists, who press their moral buttons to get their vote, but then do things that should make a Christian blush, like trying to throw millions of children off of health insurance.

Today the conservative coalition provides the core support for that great exemplar of morality, Donald Trump. Where does he stand on Haidt’s six moral foundations? Is he more noted for care or harm? Fairness or cheating? Loyalty or betrayal? Authority or subversion? Sanctity or degradation? Liberty or oppression? Hmm, I guess I would associate him with liberty, although he values it primarily for himself and his rich friends and family. In general, his amoral egotism is an embarrassment to conservatives who would like to claim the moral high ground.

Haidt says that “conservatives do a better job of preserving moral capital,” which he defines as a community’s stock of “interlocking sets of values, virtues, norms, practices, identities, institutions, and technologies that mesh well with evolved psychological mechanisms and thereby enable the community to suppress or regulate selfishness and make cooperation possible.” But just as financial capital can be squandered on bad investments, moral capital can be squandered by standing up for the wrong things. Many social commentators are expressing consternation that the religious right is turning a blind eye to Trump’s misbehavior, especially in light of the new allegations about paying hush money to a porn star to cover up an extramarital affair. Family values indeed. Yesterday, Michael Steele, former chairman of the Republican National Committee, said that he no longer wants to hear from evangelical Christians at all, since they have now lost their moral authority.

Meanwhile, progressives are building their moral capital by redefining social responsibility and standing up against  harm, cheating, betrayal, subversion (of democratic institutions and values), degradation and oppression. There is an historical process going on here that Haidt’s sweeping generalizations are poorly equipped to handle. One would never know from reading The Righteous Mind that America ever had a religious left, but it has played a strong role in social reform in the past, and may be about to do so again.

In evaluating the book as a whole, I am deeply ambivalent. Haidt has made a reasonable case for the evolution of human morality, and that part of the book may stand the test of time. His political analysis is flawed by overly broad generalizations about conservatism and liberalism and his tendency to favor one over the other without regard to the historical situation. Now that the moral ground is shifting beneath our feet, his argument doesn’t seem as compelling as it may have been just a few short years ago.

 


The Righteous Mind

January 22, 2018

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Jonathan Haidt. The Righteous Mind: Why Good People Are Divided by Politics and Religion. New York: Pantheon Books, 2012

Here it is 2018, and I’m just getting around to reviewing this thought-provoking book from 2012. Waiting this long does have one advantage, however. Recent political events provide additional context for evaluating Haidt’s view of moral conflicts between liberals and conservatives. In the age of Trump, some of his ideas are already starting to seem a little dated.

This is in a way two books, one on the evolutionary origins of human morality and the other on contemporary political conflict. As an evolutionary psychologist, Haidt makes a pretty good contribution to the first topic, but I found him much less convincing on the second. I will deal with these two sides of his argument in separate posts.

Intuitions come before reasons

Haidt is fond of animal metaphors, like “the rider on the elephant” and “the intuitive dog and its rational tail.” His central metaphor for Part I of the book is that “the mind is divided, like a rider on an elephant, and the rider’s job is to serve the elephant.” The rider is our conscious reasoning, which serves much deeper and more extensive mental processes most of the time. Moral judgment is mostly a matter of reacting quickly and intuitively to situations. Reasoning is secondary, and consists mainly of giving reasons to justify our intuitions in the eyes of others.

According to Haidt, most Western philosophers have had it wrong, accepting Plato’s “rationalist delusion” that reason ought to be the master of the passions. Hume was an exception, saying that “reason is, and ought only to be the slave of the passions.” Haidt sides with Hume, although he qualifies his position a little later.

Haidt also criticizes developmental psychologists such as Kohlberg for exaggerating how much children can figure out morality for themselves through increasingly advanced reasoning. He sees such views as an expression of a Western liberal tradition of rational individualism. Most of the world’s people, including the less educated within Western countries, are more sociocentric. They react to moral dilemmas by simply and unreflectively applying the intuitions that thousands of years of biological evolution and cultural experience have built into them. Haidt likes the acronym WEIRD for the Western, educated, industrial, rich, democracies, indicating how far out of step they are with the world’s moral majority.

Is an unreflective conformity to moral tradition a good thing? I don’t know that Haidt is entirely clear about that, even in his own mind. Sometimes he claims to be just describing, not prescribing, but social scientists have a way of sliding from is to ought. Haidt seems a little too comfortable with a world in which most people stick to their past adaptations and traditions. He does acknowledge the parochialism of the righteous mind, and he would like different social tribes to respect one another and perhaps learn from one another. But he displays no confidence in an expansion of individual consciousness or critical thinking. He claims that the philosophy he studied in college was no help in figuring out the meaning of life. (For a lover of both science and philosophy like myself, that was a red flag.)

Evolutionary origins of moral intuitions

In accounting for people’s powerful moral intuitions, Haidt tries to balance nature and nurture, the innate and the learned. “Nature provides a first draft, which experience then revises….’Built-in’ does not mean unmalleable; it means ‘organized in advance of experience’.” Social experience further organizes what evolution has already organized.

The innate part consists of six universal foundations of morality. These are “adaptations to long-standing threats and opportunities in social life. They would draw people’s attention to certain kinds of events (such as cruelty or disrespect), and trigger instant intuitive reactions, perhaps even specific emotions (such as sympathy or anger).” The situations that trigger these reactions today can be very different from what may have triggered them earlier in our evolutionary history, allowing for considerable variation in cultural experience and cultural norms.  Unlike some earlier evolutionists who fell into the trap of biological determinism, Haidt is sensitive to the need to reconcile evolutionary biology and cultural anthropology.

Perhaps the most obvious of the moral foundations is what Haidt calls “care/harm.” The human species is noted for its large-brained but extremely dependent offspring, who require prolonged protection and care. Humans who didn’t have a strong impulse for care would be out-reproduced by those who did. Once a foundation was laid for caring behavior in human evolution, the caring impulse could be extended and applied in many different ways, depending on the cultural situation.

Haidt relates each of the moral foundations to the adaptive challenge it evolved to meet in the course of building reproductively-successful human groups. The challenges and corresponding foundations are:

  • protecting and caring for children (care/harm)
  • reaping the benefits of two-way partnerships (fairness/cheating)
  • forming cohesive coalitions (loyalty/betrayal)
  • forging beneficial relationships within hierarchies (authority/subversion)
  • avoiding contaminants (sanctity/degradation)
  • avoiding domination (liberty/oppression)

Rationality and politics

In Haidt’s “social intuitionist” model of morality, intuitions come first and reasoning second. When moral reasoning does occur, its function is not primarily to figure out what is right, but rather to “help us pursue socially strategic goals, such as guarding our reputations and convincing other people to support us, or our team, in disputes.” In Plato’s Republic, Socrates and Glaucon argue over which is more important for happiness, being just (Socrates) or appearing to be just in the eyes of others (Glaucon). Haidt agrees with Glaucon that “people care a great deal more about appearance and reputation than about reality.” And he says, “Our moral thinking is much more like a politician searching for votes than a scientist searching for truth.” That description leads to this prescription: “Make sure that everyone’s reputation is on the line all the time, so that bad behavior will always bring bad consequences.” Thus Haidt pins his hopes for moral improvement on tighter social control, not on moral education.

Haidt does try to avoid taking his disparagement of moral reasoning too far, as he admits that Hume did. He allows that “elephants are sometimes open to reason.” People can sometimes question their intuitive moral reactions, especially when people interact with others whose reactions are different from theirs. In fact, better reasoning is very likely under certain conditions:

But if you put individuals together in the right way, such that some individuals can use their reasoning powers to disconfirm the claims of others, and all individuals feel some common bond or shared fate that allows them to interact civilly, you can create a group that ends up producing good reasoning as an emergent property of the social system. This is why it’s so important to have intellectual and ideological diversity within any group or institution whose goal is to find truth (such as an intelligence agency or a community of scientists) or to produce good public policy (such as a legislature or advisory board).

Perhaps if Haidt had taken that ball and run with it a little further, he would have had a little more respect for Western liberal rationalism.

A more rational society?

Once one has acknowledged that “good reasoning” can be an emergent property of a social system, contributing to better public policy, then why not also acknowledge that a society can move in that direction in an historical process? Isn’t that exactly what one would expect of a modern, pluralistic democracy? Isn’t Haidt’s own scientific psychology and his critical thinking about prevailing psychological theories a product of such a society? Western societies are in need of reform, to be sure, but rejecting their rationality as WEIRD seems to me to be overkill.

Haidt’s position seems implicitly conservative because he is more interested in how morality evolved in the past than how it continues to evolve culturally in the present. What else besides critical thinking can evaluate traditional morality in the light of new experience?  For example, trying to restrict sexual activity to heterosexual, reproducing couples made a lot more sense when death rates were high, and high birth rates were needed for group survival. Today, societies with low birth rates but prosperous economies flourish, and they do so less by out-reproducing their competitors as by sharing their culture with them. Innovations like contraception and same-sex marriage are not a threat to such societies.

In his discussion of the “sanctity/degradation” moral foundation, Haidt expresses his appreciation for conservative sexual morality, especially the idea of chastity, while he portrays liberals as individualistic hedonists. He fails to appreciate the emerging morality expressed in such ideas as safe sex, mutual respect and mutual consent. Isn’t today’s #MeToo movement a moral crusade to hold men accountable for their behavior toward women?

In dismissing Kohlberg’s developmental psychology as too rational, he overlooks the significance of Kohlberg’s “post-conventional” moral stage. Haidt’s conception of morality is so focused on conformity to society that he fails to grasp how a rapidly changing society requires some post-conventional thinking in order to adapt to changing times.

All of this is relevant to Part II of the book, which praises conservatives for being the superior moral politicians. They win a lot of the political arguments by appealing to more of the evolutionary foundations of morality than liberals do. Or so it would seem. That will be the topic of my next post.

Continued

 

 


Republicans Pass Tax Cut; Who Wins?

December 20, 2017

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Congressional Republicans, with no support from Democrats, have used their majority control of both houses to pass the tax bill that emerged from the conference committee. It is fairly close to the one passed by the Senate, the one I’ve referred to previously as the “Magical Disappearing Tax Cut.” Unlike the corporate tax cuts, the individual cuts in the bill are scheduled to expire after 2025.

The final bill differs in a few ways from the earlier Senate version:

  • The top tax rate for wealthy taxpayers is lowered from 39.6% to 37%, instead of only to 38.5%
  • The corporate rate is cut from 35% to 21% instead of to 20%
  • Taxpayers with income from “pass-through” businesses such as partnerships and S-corporations still have to pay taxes at individual rates, but they can deduct 20% of the income before applying those rates
  • The deduction for state and local taxes is not repealed, but is now limited to $10,000
  • The Alternative Minimum tax, which is designed to keep rich individuals and businesses from reducing their taxes too much with deductions, is repealed only for corporations, but individuals can exempt more income before paying it

Who gets a tax cut? The short, but somewhat misleading answer is almost everybody who pays income taxes now.  However, the big winners are corporations and the wealthy, despite the assurances from the White House to the contrary. The benefits for the rest of us are a little harder to sort out, but they fall into a range from small (for the middle class) to almost nonexistent (for low-income households).

The richest fifth

I will once again draw on an analysis by the Tax Policy Center, which considered the effects of the bill on each quintile of the population by income. They estimated that in the top quintile in 2018, the average tax filer will see a $7,640 reduction in taxes and an increase of 2.9% in after-tax income.  The percentage of filers getting a tax cut will be about 94%.

The bill includes many benefits that go disproportionately to the wealthiest Americans:

  • The lower corporate rate that primarily benefits the wealthy because they own most of the corporate stock
  • The lower individual rates, especially the reduction in the top rate from 39.6% to 37%
  • The exemption of 20% of income from “pass-through” businesses, especially beneficial to real-estate partnerships such as Donald Trump’s
  • The exemption of more income from the Alternative Minimum Tax
  • The doubling of the estate tax exemption, so that heirs can inherit twice as much money tax-free

One provision of the new law that will impact negatively on some wealthy families is the reduced reduction for mortgage interest from $1.1 million to $750,000.

The Tax Policy Center estimates that in 2018, 65% of all the tax cuts will go to the richest fifth of the population. That does not include benefits that may trickle down from corporations to their workers, but most economists expect those benefits to be pretty small.

The middle fifth

In the middle quintile (neither in the upper 40% nor lower 40%), the percentage of filers getting a tax cut will also be very high, 91%. The average change in taxes will be much smaller, $930, and so would the increase in after-tax income, only 1.6%. The tax brackets that most affect the middle class have rate reductions of only 3 or 4 points. Contrast that with the 14-point reduction in corporate taxes and the new 20% exemption for pass-through business income.

Although the standard deduction increases by $5,500 for individuals and $11,000 for married couples, that is largely offset by the repeal of the personal exemption, currently $4,050 per person. Similarly, the child tax credit increases from $1,000 to $2,000, but families need that to make up for the lost tax exemption for children. Taxable income will remain just as high as now for many filers, and for some it will increase. Those who want to itemize because their deductions for mortgage interest, property taxes, state taxes, charitable donations, etc., exceed the standard deduction may not get much under the new system. They will gain nothing from the increased standard deduction, but they will still lose their personal exemptions. Those in high-tax states will also lose from the new limitation on state and local tax deductions.

The bottom line for the middle-class is a modest and temporary tax cut. The rhetoric on both sides has been a little excessive about this. The new law isn’t a huge cut for the middle class, but it’s not a transfer of wealth from the middle class to the rich either. It is a small tax cut whose full impact depends on who ultimately pays for it and how.

The lower two-fifths

In the lowest 40% of the population, the immediate effects are even smaller. In the Tax Policy Center analysis, only 54% of the lowest quintile and 87% of the next quintile even get a tax cut. The average change in taxes is only $60 for the lowest quintile and $380 for the next. The average increases in after-tax income are 0.4% and 1.2% respectively.

The main reason why the impact is so small is that people with low incomes are not paying much federal income tax to begin with. They are often paying more in payroll taxes, and the bill provides no relief there. Consider a married couple with two children and an income of $45,000. Under the system in effect for 2017, they reduce their taxable income by taking a $4,050 personal exemption for each member of the household and a standard deduction of $12,700. That makes their taxable income low enough to put them in the 10% bracket, and their calculated tax low enough to be wiped out by their child tax credit of $1,000 per child. Cutting taxes for people who don’t pay much in taxes isn’t easy. Many families will experience what changes there are not as a cut in what they pay, but as a small increase in what the government pays them in refundable child tax credits.

That does not mean that low-income households have no stake in tax policy. Defenders of the legislation argue that it cuts taxes for the people who pay most of the taxes. That would be all well and good if the government were running a surplus, and could afford to send some tax revenue back where it came from. But when the government is running a deficit and having trouble paying for important things that need to be done, like rebuilding infrastructure and keeping Social Security solvent, borrowing more money in order to finance tax breaks for corporations and the wealthy makes less sense. Because the tax cuts for corporations and higher-income households will drive up the federal deficit by an estimated $1.45 trillion over ten years*, Republicans can be expected to drop the other shoe, calling for offsetting spending cuts. And since low-income households depend more on federal programs like Medicaid, Medicare and food stamps, they have the most to lose. In addition, the Congressional Budget Office projects that the repeal of the Obamacare insurance mandate will force health insurers to raise premiums 10% per year because they will have fewer healthy customers. That would make subsidized health insurance less affordable for low-income families. So the tax bill is a big deal for the rich, a small deal for the middle class, and a bad deal for the lower classes.

Looking ahead

The Tax Policy Center projects that in 2027, after most of the individual tax cuts have expired, only 25% of taxpayers will still be getting a cut, while 53% will be paying a little more than they would under current law. One reason for that is that the bill changes the way tax brackets are indexed for inflation, and does it in a way that favors the government. For most people, however, any tax increases will be extremely small. The more important part of the story is that the top quintile will still see an average tax cut of $1,260 while people at other income levels get virtually nothing. That’s probably because the wealthy continue to benefit from the permanent cut in corporate taxes.

Instead of exaggerating any harm that will be done to the middle class after the individual tax cuts expire, we should instead be focusing on the potential harm to society in general if our government is deprived of the revenue it needs to address pressing social needs. The tax cut makes perfect sense to those who believe that government should sit back and wait for free markets to solve our problems. The number of people who believe that government has waited too long already seems to be growing, which may explain why this tax cut is the least popular one in modern American history. Republicans say that we will learn to love it. We’ll see.


*In the time available, the CBO was not able to factor in the possibility that additional growth in the economy generated by the tax cut might produce some offsetting revenue. Most economists expect such effects to be small. Although they have made extravagant claims about these effects, Republicans quickly passed the bill without giving the CBO time to estimate them. Secretary Mnuchin claimed that the Treasury Department had its own analysis of this question, but he has not produced it.

 


The Senate’s Magical Disappearing Tax Cut

November 28, 2017

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The tax bill proposed by Senate Republicans differs in at least two noteworthy ways from the version already passed by the House: It repeals the individual mandate in the Affordable Care Act, and it makes the tax cuts for individuals expire after only eight years. These provisions make the bill an even worse deal for the middle class than the House version, which was already bad enough.

The individual mandate

What is another attempt to repeal Obamacare doing in a tax bill? Technically, it can be there, because the mandate to buy health insurance depends on tax penalties for failing to do so. The tax penalties also give the mandate a legal basis in the government’s power to tax, instead of just in the government’s power to regulate interstate commerce, an argument that proved decisive when the Supreme Court found the law constitutional. Without those tax penalties, most experts worry that too few healthy people will choose to carry insurance, forcing insurance companies to raise premiums on those with pre-existing conditions. If millions of them go without coverage too, that will defeat the whole purpose of the law. According to the Congressional Budget Office, “Healthier people would be less likely to obtain insurance; especially in the nongroup market, the resulting increases in premiums would cause more people to not purchase insurance.” The CBO estimated that the number of insured Americans would drop by 13 million.

Republicans have a twofold purpose in slipping this into their tax bill. Not only do they strike another blow against Obamacare, but they save the government an estimated $318 billion they can use to carry out their prime objective–tax breaks for corporations and the wealthy. If fewer people sign up for health insurance, the government pays out that much less to subsidize their premiums.

Tax cuts, permanent and temporary

Both the House and Senate bills cut the corporate tax rate from 35% to 20%. The Senate bill starts the cut one year later, but makes the cuts permanent from then on. For the individual tax changes, however, the Senate bill includes sunset provisions to end them after 2026. That applies to the rate cuts, the increase in the standard deduction, the elimination or scaling back of certain itemized deductions, the repeal of personal exemptions, and the cuts in estate taxes. It even applies to the tax cuts for small businesses such as partnerships and S-corporations, which currently pass through their income to individuals to be taxed at individual rates. Large corporations get a permanent tax cut, while small businesses get only a temporary one.

The reason for these differences is both fiscal and political. Republican tax writers found that they couldn’t make all the cuts permanent without adding more to the federal deficit than is allowed by the budget reconciliation process. The bill can only add $1.5 trillion to the deficit over ten years and no more after that. Only if they play by the rules of reconciliation can they pass the bill with a simple majority, so they can do it with Republican votes alone and prevent a Democratic filibuster.

On a deeper level, this is an admission that the country cannot really afford both the corporate and individual cuts. Republicans are evading this truth by assuring the country that the individual cuts can be made permanent later. Treasury Secretary Steven Mnuchin has said that he has “every expectation that down the road Congress will extend them.” The Republicans want to have their cake and eat it too, describing the cuts as temporary for purposes of squeaking the bill through Congress, but describing them as permanent for purposes of selling the bill to the public.

When “later” actually arrives, the country will face a stark choice: Either raise taxes by letting the cuts expire, or allow the kind of massive deficits that Republicans have always claimed to be against, or cut popular programs like Medicaid and Medicare (which many Republicans would love to do but hate to admit it publicly). In any case, this curious bill is an admission that they do not know how to fulfill President Trump’s promises for massive middle-class tax relief, debt reduction, and protection of entitlement programs. They are no closer to pulling that off than they are to creating a better health insurance system to replace Obamacare.

Winners and losers

The Tax Policy Center has released its independent analysis of the Senate bill. It shows that upper-income taxpayers gain more than the middle class, even before the individual tax cuts expire.

In 2019, 76% of taxpayers would get at least some tax cut. One reason why that percentage isn’t even higher is that some taxpayers lose more in itemized deductions than they gain in lower tax rates, especially because the Senate bill eliminates the deduction for state and local taxes. On the average, taxpayers in the middle quintile (40th to 60th percentiles of the income distribution) see a cut of $850 and an increase of 1.4% in after-tax income. But taxpayers in the richest quintile (top 20%) see a cut of $5,740 and an increase of 2.2% in after-tax income. Overall, 63.2% of the individual tax cuts go to the richest 20%.

In 2027, after most of the individual tax changes expire, only 28% of taxpayers still get a cut, while 50% pay a little more than they would under current law. One reason for that is that the bill changes the way tax brackets are indexed for inflation, and does it in a way that favors the government. In the middle quintile, after-tax income would be only slightly lower than it is now. But in the top quintile, after-tax income would be 0.6% higher, for an average gain of $2,230. That’s probably because the top quintile owns about 80% of the corporate stock, and so they benefit most from the permanent cut in corporate taxes.

The Congressional Budget Office has done a different kind of distributional analysis, focusing on how much it will cost the government to provide tax-cuts affecting different income groups. The CBO found that most of the cost–85% in 2019 and 100% by 2027–will be incurred by providing tax cuts for people with incomes over $75,000. Little is actually devoted to tax relief for the mid-to-lower part of the distribution.

A successful con?

In the name of tax reform and simplification, Senate Republicans have produced a masterpiece of obfuscation that shortchanges those it claims to benefit. They are aided in this effort by a President who speaks regularly in oversimplifications, exaggerations, and outright lies. Essentially, Senate Republicans are cutting taxes for corporations and the wealthy, while letting their Con-Man-in-Chief tout the bill as the biggest middle-class tax cut ever, which it certainly is not. All that the middle class actually gets is a small, temporary tax reduction. That is supposed to fool them into supporting a permanent corporate tax cut that will primarily benefit wealthy shareholders. When the day of fiscal reckoning comes, middle- and lower-income people will bear the brunt of the program cuts required to manage the debt.

Part of the con is the endless repetition of the dubious claims of “trickle-down economics.” Very little evidence supports the idea that corporations will use their tax cut to raise wages or hire more workers. Because of the numerous tax breaks already in the code, most of which are left standing in the proposed legislation, the average corporation pays far less than the official 35% rate. The effective tax rate on US corporations is not out of line with other wealthy countries. The corporate share of the federal tax burden has already declined dramatically since the mid-twentieth century, when the economy flourished despite high taxes.

As of this writing, polls show that most Americans are not being fooled by this proposal. Whether that will make any difference is not clear, since so many Republicans listen to their wealthy donors more than to the public. If the Senate does pass this Thanksgiving turkey, one can only hope that there is hell to pay in 2018 and 2020.