Minimum wage increases vs. alternative uses

One of the common, if often unstated assumptions behind support for higher minimum wages is that businesses can absorb the extra costs just fine. They are making $X/hr off employees currently, and they will simply chug along making $X-increase after the new policy goes into effect.

In general, businesses operate on thinner profit margins than most people realize, but assume this argument is correct. My first bosses, the owners of the Dairy Queen franchise where I worked when I was fifteen, made a pretty decent living. If that was, say, $100,000/year, dropping it down to $90,000/year or even $75,000/year wasn’t going to kill them. (I don’t really have a clue what they took home, but nice round numbers make better examples.) It might have meant something substantial to them, but it wasn’t the difference between the high life and the bread line.

What this common take ignores is that my bosses didn’t have to operate a Dairy Queen franchise to make money. Lionel Robbins defined economics as “the science which studies human behavior as a relationship between ends and scarce means which have alternative uses”, perhaps not a perfect definition but one that’s good enough for present purposes. My bosses’ time and energy were scarce means which had alternative uses. They could have operated a Dairy Queen, or they could have done something else. Artifically raising the costs to employ us would have made other uses of their time relatively more attractive. I suppose some owners and stockholders are committed to doing the specific thing their businesses do, but more often than not they want to make money, especially in the case of stockholders who buy and sell shares all the time. My bosses certainly didn’t have any special love for producing delicious ice cream treats.

The fact that my bosses probably could have absorbed some extra costs does not mean they would have absorbed extra costs, not when they had other ways to make money. I can already hear the internal dialogue: “It’s said that people are only motivated by greed.” I don’t agree with that statement, but it’s beside the point. Responsible policy is made for the people you have, not the people you wish you had.

This line of reasoning is completely natural to economists, but not to everybody else, and I wish the public dialogue on this topic pointed it out better.

Political and economic freedom, NK edition

A North Korean defector discusses the link between economic and political freedom:

Another sign of Mr. Kim’s weakening control, Mr. Thae said, is evident at the unofficial markets in North Korea where women trade goods, mostly smuggled from China. The vendors used to be called “grasshoppers” because they would pack and flee whenever they saw the police approaching. Now, they are called “ticks” because they refuse to budge, demanding a right to make a living, Mr. Thae said.

Such resistance, even if small in scale, is unprecedented, he added.

The spread of outside news and market activities could eventually doom Mr. Kim because his government “can be held in place and maintained only by idolizing Kim Jong-un like a god,” Mr. Thae said. “If he tries to introduce a market-oriented economy to North Korean society, then there will be no place for Kim Jong-un in North Korea, and he knows that.”

Bias in scholarship: Greek grammar edition

In a previous post I gave some excerpts of Jason BeDuhn’s excellent book Truth in Translation. I’ve continued to think about one of the sections. In his discussion of why John 1:1c is usually translated incorrectly (e.g. in every example here) BeDuhn refers to a common defense of the traditional rendering, an appeal to “Colwell’s Rule” about article use and definiteness. He writes:

Yet another argument made in defense of the traditional English translation of John 1:1 is based on something called “Colwell’s Rule.” This is a supposed rule of Greek grammar discovered by the great biblical scholar E.C. Colwell. Colwell introduced his rule in the article “A Definite Rule of the Use of the Article in the Greek New Testament.” Based on a sampling of New Testament passages, Colwell formulated his rule as follows: “A definite predicate nominative has the article when it follows the verb; it does not have the article when it precedes the verb” (Colwell, page 13). There are two problems with using “Colwell’s Rule” to argue for the traditional translation of John 1:1. The first problem is that the rule does nothing to establish the definiteness of a noun. The second problem is that the rule is wrong.

. . .

Colwell’s mistake, as so often is the case in research, is rooted in a misguided method. He began by collecting all of the predicate nouns in the New Testament that he considered to be definite in meaning, and then, when some of them turned out to look indefinite in Greek, he refused to reconsider his view that they were definite, but instead made up a rule to explain why his subjective understanding of them remained true, even though the known rules of Greek grammar suggested otherwise. Notice that he had already decided that the predicate nouns he was looking at were definite, based on his interpretation of their meaning rather than on the presence or absence of the one sure marker of definiteness in Greek: the article. His predetermination of definiteness made his whole study circular from the start.

Colwell decided that the nouns he was looking at were definite before he even started his research. He was not prepared to change his mind about that. So when nouns he thought were definite showed up without the definite article, he assumed some rule of grammar must case the article to be dropped. He never even considered the possibility that the article wasn’t there because the noun was not definite. It seems that Colwell was misled by how we might say something in English. If a certain expression is definite in English, he assumed it was definite in Greek, regardless of what the grammer suggested. Of course, Colwell know perfectly well that Greek communicates meaning in different ways than English does. It was an unconscious habit of mind that interfered with this usual capable scholarship in this instance. It was a bias derived from his everyday use of English.

As flawed as the original “Colwell’s Rule” is, it has been made worse by misrepresentation down through the years. Notice that, according to Colwell, his “rule” allows him to explain why a noun that you already know (somehow) to be definite turns up sometimes without the definite article. The “rule” does nothing to allow you to determine that a noun is, or is not, definite. Even if “Colwell’s Rule” were true, it would at most allow the possibility that an article-less predicate nominative before a verb is definite. It could never prove that the word is definite. But since the rule leaves no way to distinguish between a definite and indefinite predicate nominative before a verb, many have mistaken it as making all pre-verb predicate nominatives definite.

Most people couldn’t be less interested in the minutiae of Greek grammar and its implications for Christian theology, and frankly I’m not terribly enthused about it either. But if BeDuhn and others are correct—which I don’t know for certain, not being expert in Koine Greek, though he continues after the excerpt to make a good case—it illustrates a point about scholarship: many intelligent, conscientious scholars in a field can be wrong because of bias. If they all share the same perspective, they don’t check each other. In this example, at least several hundred thousand people have read the original Greek passage countless numbers of times, and most have failed to see it correctly.

I think about this a lot when I see articles from Heterodox Academy. I think this is less of a problem in economics than in other social science fields, although that too could be bias. But it ought to be keeping scholars awake at night, at least for a little while.

Frankfurt’s “On Bullshit” pt. 3: Trump

Another in the series of posts applying Harry Frankfurt’s essay “On Bullshit”. If you haven’t yet read it, I recommend it.

Every week or so Donald Trump tweets something ridiculous, outrageous, or just plain trollish, and it drives people crazy. There are plenty of legitimate reasons to find these messages distasteful, and I usually do, but the reaction is usually way out of proportion. You could pick many examples, but the big one at the moment is this:

One of the reasons Trump (intentionally) drives people crazy with this kind of tweet is simple: he’s bullshitting, but they’re taking take it seriously. He knows how burning the US flag is constitutionally protected, and how successfully implementing this idea is completely infeasible. He’s a blowhard, not an idiot.

To recap what Frankfurt means by bullshit, it’s speech unconnected to truth value. A liar is still concerned with truth value. He wants his statement to be taken as true when it should not be. A bullshitter isn’t concerned with truth value one way or the other. (Note: bullshit is not necessarily always a bad thing. It depends on context. A lot of pleasant bonding conversation we engage in is bullshit, because in that case conveying truth is not the point and we don’t count on it. I think of how many amusing tall tales I’ve heard in bars through the years.)

Trump’s opponents get so riled up because they think he means what he says. He does this to agitate them, and it works. He’s both a lot more clever and a lot less ideological than they think. People will be able to respond more effectively when they realize he’s not serious about every bad idea he suggests.

It’s unbecoming and improper of a president-elect to bullshit on so grand a scale. Politicians bullshit frequently. They have to talk about a lot of things they aren’t experts on. It comes with the territory. But they shouldn’t go out of their way to do it. Trump is about to become the most powerful man in the world. That is serious business. He should not be trolling on Twitter. But his opponents have enough to be concerned about—his bullheaded rejection of the clear economic consensus about trade, his total lack of understanding of international relations, etc.—without adding nonsense to the pile.

It’s not just Twitter. During his campaign he said a lot of outrageous things. It’s not likely most of his supporters really thought he would impose a blanket ban on Muslim immigration, as if that were possible to get past Congress and the courts anyway. They knew that was bullshit. His opponents didn’t seem to. Merely suggesting it is a very bad and un-presidential thing to do and the fact that he did should worry us. But don’t think he’s going to do it. Focus on the things he can do.

This will be an especially difficult year for the media. The media model is designed for reporting news, and is not well-equipped to deal with bullshit. Presidents have told the truth and have lied, and the media can cover these things straightforwardly. A politician talking through his hat so consistently is confusing. Do they report it straightforwardly, taking the statements at face value when large parts of their audience know better? Do they ignore the more outlandish claims? Do they tell the reader “He said this but nobody could seriously think he meant it so let’s stop here”? What will rival outlets do? Sponsors pay for readers and viewers, not maturity. I said an especially difficult year because I expect they’ll adjust eventually. This assumes he doesn’t start acting presidential soon, although I would love to be wrong on that assumption.

So I’m not accused of ignoring the harm of inflammatory rhetoric, yes, even the mere fact of suggesting these kinds of policies, however unrealistic, is an antisocial thing for a person in his position to do that could give aid and comfort to the even more antisocial fringe. The point is that with better bullshit detectors we could stop being kept off balance by nonsense like this flag burning tweet, and focus on the times when he means it.


UPDATE: A little extra from a Washington Post article about a forum of campaign people, quoting Trump’s first campaign manager:

“This is the problem with the media. You guys took everything that Donald Trump said so literally,” Lewandowski said. “The American people didn’t. They understood it. They understood that sometimes — when you have a conversation with people, whether it’s around the dinner table or at a bar — you’re going to say things, and sometimes you don’t have all the facts to back it up.”

The reports of the NFL’s death are greatly exaggerated

I keep seeing the meme all over sports media that NFL television ratings are down, as if this is a big deal, tied to scandals and hypermasculinity. I have little use for that line of thought, and there’s a better one.

In a recent interview with Peter King, Brian Rolapp, Executive VP of Media for the NFL, offered a few reasons for the ratings drop. First, presidential election years always have a dip in ratings. This is fascinating! Maybe the explanation is people getting serious once every four years, but I doubt it. The explanation that fits with my priors (and thus the clear frontrunner, right?) is that politics and sports are substitutes. Politics deals with serious issues, but many people consume it as entertainment. They pick teams and get invested in them in the way they do with football. This election was pretty unusual, too, which almost guarantees getting more eyeballs, even for neutrals, which means less attention left over for football.

Another point I thought was interesting was that the number of viewers hasn’t declined, they’re just sticking around less. This makes sense too. If the games are not fun to watch—neither is your team, the outcome is not in doubt—there are a practically unlimited number of alternative things to watch without moving out of your spot. The random variation in game quality week-to-week and year-to-year isn’t under the NFL’s control anyway. This is a big challenge for the NFL, and indeed for any media enterprise. By the way, college football ratings are not down. I think the identification people have with college teams is a lot stronger than with NFL teams, and the markets are not the same. There is a lot less parity in college football anyway, and there always has been, so bad games don’t turn people off as much.

The London games don’t help with domestic viewership either. Obviously they help with European exposure, but there’s only so much football a viewer can watch in a day. If your team plays in London (at 9:30am Eastern time/6:30 am Pacific time) you’re not likely to watch the rest of the games, and if your team doesn’t play in London you’re not likely to watch that game.

One year does not make a trend. I know media people have to talk about something, but we don’t have to take everything at the same level of seriousness.

Election 2016 thoughts

A presidential election is surely big enough to merit comment, so here’s what I’m thinking so far. I’m still digesting it. Consider it a public notebook. All of this is from a non-partisan standpoint. I drafted this a few days ago, didn’t add much, and finally figured it was time to pull the trigger.

First, I believed there were more “closeted” Trump voters than the polls showed—social desirability bias is real—but I was still surprised when Trump won. I thought it would be Clinton by a hair.

An explanation I’ve been telling myself for a few months now, I don’t know how seriously, was that Trump decided to run on a lark, probably just to promote his brand, and after winning a couple primaries by tapping into something began to see how far he could ride it. I don’t think he has a coherent mental framework that motivates his support for various policies. For all the fear of what his administration will mean for various groups, I doubt he has a lot of ideas he takes seriously one way or the other. I can’t imagine the day-to-day reality of being president will suit him, nor can I imagine voters giving him a second term, even calibrating for the fact that he won a first. There are secular economic trends at play that nobody is going to stop. Overturning Obamacare will be difficult with only 51 Republican senators. The mid-term elections could put more Democrats back into Congress. And it remains to be seen how much the Republican Party establishment will want to cooperate with the newcomer.

One of the biggest points is the protest vote against elites. It’s not part of the left’s self-image that they are a big part of “the system”. They tend to identify with underdogs. But Hillary Clinton is as close to royalty as the US has. The entire Democratic Party leadership treated the 2016 campaign as her obviously due turn. All living former and current presidents opposed Trump, as did the rest of the Bush clan, the Beltway Republican class, Hollywood, a sitting Supreme Court Justice, etc. At a broader level, the left controls so much of the cultural narrative that it’s like the air they breathe, no longer noticeable to them. The elites range in opinion from ignoring the rubes in flyover states to white hot contempt, and it came back to bite them when somebody at least pretended to take them seriously. I note with disappointment the first round of reaction articles doubling down on the contempt. It may be emotionally comforting, but will not help.

I can’t speak to Wikileaks’ end game (if they have one), but the inner workings of the Democratic National Committee, the Clinton campaign, and the Clinton Foundation were not pretty. Maybe everything at that level runs that way, and maybe in the grand scheme of things that’s acceptable, but there’s no hiding how distasteful it is to the average person.

It was obvious that the media were all-in for Clinton, and this ended up hurting her campaign. Most minds were probably made up when the news broke that Donna Brazile passed debate questions from CNN to Clinton’s camp ahead of time, but that was very illustrative. Trump did and said plenty of things to jump on fairly, but I know the man on the street saw it as much more than that. There were hints that Texas might have been competitive, for example, that were unbelievable and undermined media credibility. He said rude things to Alicia Machado, but when voters got a deeper look at her and it wasn’t helping she was dropped. It looked like they were out of touch at best and propagandists at worst. Plus, Hitler comparisons in the less-serious media, the kind that get shared all over Facebook, stop working when applied to, say, the relatively moderate Mitt Romney. You can only cry wolf so many times.

Trump’s understanding of economics is woeful, but it’s fairly common across the political spectrum. Honest-to-goodness free trade has very few supporters (outside of economics departments), and the insincere appeals to its merits by cronyists might be worse than no support at all. Politicians of all stripes are guilty for setting this stage.

Trump has some nightmarish supporters, no doubt about it, but lumping all of his supporters in with the fringe only made them angry and blunted the power of further smears. Nobody was going to reach my immigrant grandmother by telling her she was a misogynist xenophobe in voting for Trump, not the clever people at The Atlantic, and certainly not the hacks at Slate. I don’t deny racism and misogyny exist and motivate some people, but I think most Americans are not racists or misogynists and resent being labeled as such. Trump’s leaked comments about women were incredibly crass, but running against a Clinton took a lot of the power out of that angle. His statements about Muslims were shocking but were gradually walked back, and those plans were impossible anyway.

At the very least I’m glad the campaigning is done.

Experts vs. everybody else, pt. 71394587236

One of the things I find so interesting about the sociology of religion is the divide between scholars and non-scholars. Take, for example, this part of the introduction to the book of Judges from The New Oxford Annotated Bible with the Apocrypha, Revised Standard Version:

Despite the optimistic report in the book of Joshua that Israel conquered Palestine in a brief series of campaigns under a single leader, it is evident from the book of Judges that the process was not quite so simple. Chapter 1 says plainly that many parts of the country were never subjugated, while the rest of the book is largely an account of battles which had to be fought through several generations before the land was securely in Israel’s hands. The enthralling tales the book contains are traditions preserved by various tribes about the exploits of their particular heroes—the “judges” of whom the title speaks. An editor has given the tales a factitious unity by making all the judges national, instead of tribal leaders and by providing for all the events a moral and theological interpretation.

I think many Christians would balk at hearing this, but the editors of this version were committed lifelong Christians, and as far as I can tell, acceptably orthodox; see e.g. Old Testament editor Herbert May’s bio. (I am less confident in my ability to guess how religious Jews would react, although I imagine it is similar.)

Why this divide exists continues to puzzle me. I touched on it here but still don’t have a very confident answer.

Incentives matter, college football edition

NFL.com has a great article about the difficult art of quarterbacking in the modern game that includes a gem from Buffalo Bills offensive coordinator Greg Roman:

Of course, handling NFL offensive concepts tends to be especially hard for quarterbacks who’ve spent their college years in systems that don’t require a ton of processing. ESPN analyst Trent Dilfer, an NFL quarterback from 1994 to 2007, puts it bluntly: “The majority of quarterbacks coming out of college these days are as football remedial as you could possibly be.”

Schneider sees the same issue from a scouting perspective: “When you look at college football now, it’s harder to evaluate these guys, because the position is so much easier to play. In so many systems, guys are just looking at the sidelines, waiting for the coach to give them a play with minimal options.”

Adds Roman: “Nobody can really figure out [if they can thrive in an NFL offense] until you get your hands on them, ’cause they’re not being trained to do that. They’re being trained to win the next game in college so the college coach can keep his job.”

The Efficient Fantasy Football Draft Hypothesis

Like millions of other people, I play fantasy football. My league has some of the same people each year, but a handful rotate through. We always end up with some people who aren’t very confident in their fantasy skills so I’ve had plenty of opportunities to explain drafting.

What I end up saying is: don’t overthink it. Draft rankings are done by teams of people who understand more about football than you and I ever will, and it’s unlikely we’ll outguess them. Stick with the consensus rankings that already incorporate the relevant information about players instead of trying to find it all out for yourself.

I suppose it’s possible to consistently beat the experts, but I doubt it. Every year the leader boards have some teams with absurd amounts of points, but that’s only one side of the distribution. There are plenty of teams that fare poorly, and most of us are somewhere in the middle. Moreover, consistently beating the experts year after year is a feat rare enough that I’m not familiar with it. (Even if it were possible, most of us don’t have the time or energy to become the Warren Buffett of fantasy football.)

QOTD

A statesman can succeed only insofar as his plans are adjusted to the climate of opinion of his time, that is to the ideas that have got hold of his fellows’ minds. He can become a leader only if he is prepared to guide people along the paths they want to walk and toward the goal they want to attain. A statesman who antagonizes public opinion is doomed to failure. No matter whether he is an autocrat or an officer of a democracy, the politician must give the people what they wish to get, very much as a businessman must supply the customers with the things they wish to acquire.

– from Ludwig von Mises, Theory and History, p. 187.