The new issue RegionFocus (the magazine of the Richmond Federal Reserve) is out, including an interview with yours truly.
There are a few things I might wish I’d said a little differently, but Aaron Steelman (the interviewer) did a fantastic editing job.
The RegionFocus site does not invite comments — so leave your comments here.
I appreciated the bit on the tie between compassion and economics. It’s an often overlooked but important point, and one that I think helps one understand, for example, how Adam Smith could write the Theory of Moral Sentiments and then turn around and write the Wealth of Nations. That can be a perplexing sequence of intellectual development for some people, but the point you make helps bridge that perceived gap.
You look very young in that photograph.
“People were absolutely committed to intellectual
honesty — if somebody found a mistake in your idea,
you would abandon it immediately. And people were very
committed to intellectual consistency. If it was pointed out
to you that you had just said something that contradicted
something you had said a couple years ago, people
worried about that — they worried about getting things
right and whether they were wrong then or wrong now.”
+1
Very interesting stuff Steve. I really enjoy the content of your posts even when I vehemently disagree with them. I just wish more economists with your level of understanding would participate in discussions without all the dense language.
In regards to what you said about population growth, I’ve tended to think that the best way to reduce population growth overall in the world would be to increase immigration to the high income countries because it would more quickly flatten wages around the world and lead to demographic transition, even as it might increase population growth in the US. I was just wondering if you think substantially increasing immigration to the US would also mitigate the problem we have with future payments to Medicare and SS?
“I am very disturbed at a visceral level by people who think that we should care more about people who happen to share a nationality.”
In particular, are you disturbed by American elected officials who support policies favorable to Americans? Or French officials who favor French citizens?
Steve,
When someone says definitively that the world is overpopulated, do you think it is because the benefits to a high population world are invisible or because it serves some strange, apocalyptic vision of the future?
Roger,
Landsburg never said he was against politicians passing legislation that is favorable to their constituents. Just because a law is favorable to a group of people (as in a law that makes it easier for the people of both countries to trade) in one country doesn’t necessarily mean the law hurts people in a different country. In fact, passing such laws might mean lawmakers value multiple peoples in multiple countries including their own!
You forgot to mention how incredibly good looking all your blog commenters are.
@8: Speak for yourself!
@Daniel:
“Best” is arguable. China’s approach is pretty good.
I think an improvement on your idea would be to just let women from poorer countries into higher income countries. Women in higher income countries tend to have less children.
It would also help to create a gender imbalance in poorer countries. These countries would be encouraged to treat women better (prosecute rape, equal education for men and women, better access to birth control, etc.) lest they loose more women to higher income countries.
Interesting piece. What are your views on Affirmative Action (specifically for black Americans) in the context of American History? Is there a case to be made that legal slavery hurt the potential earnings (or at least put today’s or recent black americans in a “state of the world” where the odds of them earning as much as they otherwise would have without their parents having been enslaved/segregated off were lower) of today’s black generation? If not now, perhaps the few decades after segregation? If slavery/segregation did hurt their potential earnings, what are the optimal/fair remedies if any?
Will A: “China’s approach [enforced one child policy] is pretty good.”
Are you joking Will A?
@ Ken B:
I believe that of the policies whose primary purpose to is reduce population, China’s is relatively effective.
Of the current (existing) policies whose primary purpose is to reduce world population which do you feel is more effective?
Among larger countries, Germany, Italy, and Japan have the lowest birthrates, but I would argue that starting a world war with the United States and giving women wages while on maternity leave is not a policy whose primary purpose is/was to reduce population.
Will A,
I’m not sure that creating a gender imbalance in countries is such a great idea.
I think the points about the philosophy behind economics is a very interesting one. Economics predicts an efficient outcome, and some may not agree that this is desirable – for example the Taliban have other priorities. However, I think it would be difficult for most people to justify any outcome other than an efficient one from “behind the veil”, as it were. Unless you start from some sort of dogma, I cannot see how any principles on which you base your philosophy could fail to opt for an efficient outcome.
However, whether efficiency is on its own the most desirable end depends on what is included in the determination of efficiency. For example, an alcoholic obtaining his spirits from a store may be efficient in one sense, but if we include a counterfactual where the addict is not an alcoholic, we can see that it is possible for one person to better off without making anyone else worse off. So the total of all the transactions is not efficient.
If the case of th ealcoholic is not efficient, then what about a country where most people believe in a god that doesn’t exist? Do their free choices result in an efficicne outcome?
@Will A: Well if you only care about effectiveness and not the cost I suggest mass starvation.
I will respond moore later but am busy right now.
‘Is there a case to be made that legal slavery hurt the potential earnings (or at least put today’s or recent black americans in a “state of the world” where the odds of them earning as much as they otherwise would have without their parents having been enslaved/segregated off were lower) of today’s black generation?’
No, quite the opposite. Where are earnings higher for descendants of African blacks? Certainly not in Africa for those whose ancestors were left alone by European slave traders.
‘Well if you only care about effectiveness and not the cost I suggest mass starvation.’
They did that too.
@ Ken B:
Don’t get me wrong, I’m not really in favor of policies whose main purpose is the reduce population growth. I’m in favor of giving free/unlimited access to birth control in poor countries because I think that this will have the effect of improving life for women. A side effect might be that there is a reduction of the birthrate of a country, but this would simply be a side effect.
Of the policies that try to force population reduction, I think that China’s is not as bad as mass starvation.
@ Daniel #14:
I think that the United States has a growing population even without immigration. So I’m not sure that opening immigration to the United States will reduce world population.
Your concern seems to be reducing the world population. What policies do you think the United States should be take to either:
– Reduce the birthrate of those currently in the U.S. (China Policy?)
– Reduce the life expectancy of those in the U.S. (Random Starvation modified Ken B’s Policy?)
It seems highly inconsistent to ask other countries to shrink their population without asking the U.S. to shrink it’s population.
Lastly, there are approximately 7 billion people on the planet. In your opinion what is the goal that we should be aiming for? 1 Billion, 2 Billion? Or is the goal for us to follow Japan and cease to exist in 3000 years?
“No, quite the opposite. Where are earnings higher for descendants of African blacks? Certainly not in Africa for those whose ancestors were left alone by European slave traders.”
Good comeback. But I wonder how much the free and forced labor of those very same Africans contributed to jump starting a nation that would go on to be every wealthy but due to the nature of their treatment when brought over here were unfairly fully allowed to take advantage of the fruits they had helped bore.
Will A,
My argument was that, the more quickly wages flatten around the world, the more quickly we can bring down overall population growth. I think by increasing immigration to the United States it will increase the speed at which wages flatten.
@ Daniel #21:
The current world population annual growth rate is approximately 1.1%. The current U.S. annual growth rate is approximately .9%
Is .9% the target world growth rate (10 billion world population in 50 years)?
If you think the target growth rate should be lower than .9%, what policies do you think the U.S. should adopt to reduce its growth rate?
@Will A: I was pretty sure you weren’t in favor of mass starvation. But the example makes a point, which is that one-child, aside from its inherent undesirability, is a bad idea because of the way it distrubtes costs. Say I want 2 kids and you want none. I pay a high price, and you waste a resource (a permission). I cannot buy the credit from you, so I either suffer or we end up in a black market for babies. We want a boy so we abort the girl fetus. Quite a cost for the woman, and indeed the couple. A waste of scarce medical resources.
And then all the social ills attendant upon a geneder imbalance. I bet they are higher than we expect.
So the one child policy isn’t even a good way to cut population because it assigns the highest cost to those who will feel it most, creates perverse incentives.
@ Ken B #23:
My main concerns are:
– Are all people being treated fairly in the world (equal access to education, etc.)
– Is justice distributed equally to everyone.
– Global Warming
Population Growth is way down on my list of priorities. However, when I look at all of the policies that have ever been implement to limit the number of people who can breath, China’s seems to be the best.
I’m not in favor of the death penalty, but I think I can say that if you compare the existing methods for executions, lethal injection is probably a better way to kill someone then stoning.
Just a quick wicked question for Will A, registered Democrat. Didn’t we hear a lot recently about the horrors of how the Republicans wanted to control uteri?
@ Ken B #25:
I would see Republican attempts to block access to birth control and abortions as a policy designed to increase the birth rate in the U.S.
If I look at existing policies designed to increase the birth rate, I would prefer the italian/japanese approach to giving generous maternity leave (potentially paid maternity leave).
Again though this doesn’t mean that I think we would implement policies to increase birth rate in the U.S., but if I think the Italian/Japanese approach is a better approach than blocking access to birth control and abortion.
What existing (current or historical) policy designed to limit/reduce the number of people that can breath is better than China’s?
Just like I can answer a question about what I feel to be the best existing form of execution even though I don’t believe in the death penalty, you should be able to answer this question regardless of how you feel about implementing a policy to limit the number of people who can breath.
Is North Korean’s policy of starvation equally abhorrent as China’s one birth policy? If not, is one less abhorrent?
@Will A, the total fertility rate in the US is either exactly replacement rate or below replacement rate. Any population growth is due to immigration. Further more recent immigrants will have higher birth rates than the rest of the population, but would probably have had an even higher birth rate if they had remained in their origin country. Their children will probably have a birth rate much lower than if they had remained in their origin country.
@ Daniel #27:
Can you provide a reference to back up your statement?
Per the following, the u.s. growth rate is .9%:
http://www.indexmundi.com/g/g.aspx?c=us&v=24
Per the following the immigration rate is 3.62/1000;
http://en.wikipedia.org/wiki/List_of_countries_by_net_migration_rate
So last year, the U.S. population grew by ~2,700,000. Of that amount ~1,100,000 was via Immigration. ~1,600,000 was the increase if there was no immigration.
So it looks like the population growth is .5% outside of immigration. So, assuming you want the U.S. to have a flat population growth outside of immigration, what policies do you suggest that the U.S. implement so that its growth is flat outside of immigration.
@Will A,
It’s actually more complicated than you’re making it out to be. The US is still experiencing population momentum from the baby boomers kids coming of child bearing age despite the fact that that TFR was stable at just below 2.1, which is at or below replacement rate. Also if you’ll refer to this reference, total TRF has declined for all demographic groups even though Latinas total fertility rate is still above replacement rate. Some of this effect may be due to the Great Recession but it also seems like a longer trend. If we do nothing than more than likely population growth rates excluding immigration will turn negative come mid-century.
http://www.prb.org/Publications/Datasheets/2012/world-population-data-sheet/fact-sheet-us-population.aspx
There is a bit of an elephant in the room regarding population growth. As far as I can work out, the belief that there are (or will be) too many people is that people consume resources and create pollution (CO2 for example), and there won’t be enough to go around. The problem is that it is not the number of people that matters, but their relative wealth. If everybody on Earth consumed the same as USA, we would not be able to keep up. An example, if everyone consumed as much oil as the USA, we would need to produce 4.5 billion barrels a day, compared to our current 93 million. Whilst claims of peak oil seem to be exagerated – we have simply moved to exploit more expensive resources- there clearly is a limit, and I think 4.5 bbl/day is over it.
Wealth has a very strong correlation with low birth rates. So reducing population growth is very likely to be accompanied by increasing wealth. We cannot possibly consider increasing wealth a bad thing, surely, yet it will have the same effect on resources as population growth. This is something of a paradox, the solution to the problem actually creating the problem.
The big question is how we can get everyone in the world to have a decent living standard with the resources we have. I do not think it will be possible with fossil resources.
The market will sort this out eventually – scarcity will drive up oil price so alternatives will be more attractive. The problem is that the market may not respond to future problems as much as it should.
@Harold,
I think a properly priced carbon tax would be the best solution to our carbon problem. Economic growth and preventing carbon emmissions don’t necessarily have to be counter to one another, although it will hurt in the short term while markets figure out a better way.
Daniel, quite possibly a carbon tax would be useful, but it is not just about carbon emmissions. If we ignore that for the moment we still have a problem. It is quite possible that there are not enough terrestrial resources to provide the world with a USA style of living (although there may be). Even without population growth, increasing wealth will increase resource consumption by orders of magnitude. In this context, actual population of the world is something of a red herring.
Will A: “What existing (current or historical) policy designed to limit/reduce the number of people that can breath is better than China’s?”
How about no policy?
Saddam Hussein had a professional rapist; his job was to rape women to punish Saddams’s opponents. What existing (current or historical) policy designed to maximize of rapes is better than Saddam’s?
Aside from that Will, both you and I have given an answer in the comments above: prices. I oppose the policy entirely but if your concern is how to do a bad thing at lowest cost then your best answer is usually prices.
“Will A: “What existing (current or historical) policy designed to limit/reduce the number of people that can breath is better than China’s?”
How about educating girls?
http://www.population.org.au/articles/2011-09-16/media-release-reduce-population-growth-educate-girls
Ken B: “What existing (current or historical) policy designed to maximize of rapes is better than Saddam’s?”
How about war?
@Harold: That works!
It is quite effective at population reduction too. What a policy!
Harold,
In addition to a carbon tax then a general consumption tax would be a part of the solution if there’s an over-consumption problem, wouldn’t it? Obviously income taxes would have to be substantially reduced to offset some of the loss in wages, and perhaps information goods would carry a substantially lower consumption tax, since they use minimal resources? What do you think?
The problem with a carbon tax is that it will come with exemptions for the breeders, who otherwise won’t be able to afford to pay it. We childfree folks will have to subsidize the costs of their carbon consumption, just as we already subsidize the mis-education of their brood. Indeed, both those subsidies just contribute to the problems of war, pollution, species degradation and extinction.
Jimbino,
What would you prefer, Brave New World?
Roger,
In particular, are you disturbed by American elected officials who support policies favorable to Americans? Or French officials who favor French citizens?
I presume by “favor” you mean “at the expense of others”. I wonder if you might look so kindly on the question being phrased as “Are you disturbed by white elected officials who support policies favorable to whites? Or black officials who favor black citizens?”
Xenophobia is as ugly as racism. Finding favor for one group at the expense of another is nothing to crow about. True freedom means not interfering with people’s non-violent preferences. The ill thought out ideas of xenophobia results in damage to both the “favored” group and the “non-favored” groups. Restricting Americans ability to trade with foreigners is just as damaging to Americans as foreigners. Protectionism is nothing more than forcing American consumers to pay higher prices for products and services to make a special interest American group richer. This represents not simply a redistribution of wealth, but actively keeping in place inefficiency, which makes everyone worse off.
Or do you think that Jim Crow laws were beneficial for whites and/or blacks by forcibly preventing them from trading with each other?
Jimbino,
And why would the carbon tax have exceptions for people with kids. Do sales taxes have exemptions?
A BURNING QUESTION
Hello, I emailed this to Steve, but I guess he’s been too busy or doesn’t know the answer – and as in the above interview Steve was full of praise for his commenters, I thought I’d ask here. I’ve asked this question to a few highly intelligent thinkers, and they’ve all drawn a blank. I’ve drawn a blank too.
Here it is….
Apparently according to the UK’s Telegraph Newspaper, statistically most babies in the UK are conceived on December 11 – scientists say the colder air helps to improve sperm quality; one report says couples simply have more conjugal bliss in the run up to Christmas. As an economist, can you please comment on this? I would have thought that this is such a random thing over the year that every year should have a different ‘most babies are conceived’ date – or at the very least quite a varying record, instead of just Dec 11th every year. Everyone I know here in the UK is absolutely baffled as to why the date is December 11th each and every year.
What’s your take on it? I’ve pondered the December 11th is the most fertile day on the calendar in the UK question, and I can think of three reasons why December (not specifically the 11th) might be the most fertile month of the year. One is that colder air helps to improve sperm quality (but that should only narrow it down to winter months, not specifically December). Two is that parents plan pregnancies in December so that their children’s birthdates are in September, which increases the probability that their children are among the oldest in their school year (giving those children an advantage). And three is that early to mid December is when the country has lots of Christmas office parties and work nights out, which might amount to an increase in sexual activity in early to mid December. The problem with the last idea is that Christmas office parties usually happen on Fridays and Saturdays, and those days are different dates each year.
So my best guess is that it’s a threefold combination of the school planning, colder weather and Christmas jiggy jiggy that gives us the statistic that December 11th is the most fertile day on the calendar each year. Despite this, I still find it very odd that it would be the same day each year – which makes me think something is being missed. At best I would expect the most fertile day to be occurring consistently in December, but not consistently on that particular day (or any particular day) in December. Maybe there is one factor still missing, but that’s as far as I’ve got.
Thanks in anticipation.
@Ken 41
You are missing Roger’s point. He reads Steve as saying that given a choice he would favor policies that hurt Americans to benefit Malians. It’s a reasonable reading. Roger is poking at what looks to be a problem in Steve’s position. It’s one thing to say pursue your interests but try not to hurt others, which is what your comment assumes, and what Roger is taking as a logical implication of what Steve actually said.
@Ken
Should border guards be able to turn away would be immigrants who have Ebola and are contagious? Not if you deny the host country has any right or standing to restrict entry. Once you grant that right then you have to discuss costs and benefits, you can no longer assert immigration is a right. This is why these discussions always get so damned annoying. The open borders crowd posture about principles and rights and racism, and the restrictionists spout nonsense about jobs. The important point is the one Steve mentions in the article: immigration in the current case benefits both sides. At one point in the interview Steve pushed beyond that claim, leaving himself open to Roger’s retort.
James Knight. A quick review shows that the “new reasearch” is actually a survey conducted Britains biggest on-line retailer of sex toys. This is just a re-hash of a press release.
The data shows Sept 11th is the most common birthday. A more detailed picture is presented here:
http://www.panix.com/~murphy/bday.html
Not entirely scientific, but probably a lot more so than the survey. It shows a statistically significant excess of births during July, August, Sept and October. Basically there are more conceptions in winter, but Dec 11th has no significance. Blame the long cold evenings.
This one for the USA shows a similar pattern, with September the highest number of births.
http://thedailyviz.com/2012/05/18/how-common-is-your-birthday-pt-2/
However, in Sweden, there is a different story, with March/April/May births the most common.
http://www.amstat.org/sections/srms/proceedings/papers/1993_191.pdf
Thanks very much Harold. I still can’t for the life of me figure how it peaks on the same day every year in the UK – do you know why? I’d have thought even if Sept is peak month each year, it shouldn’t fall on the same day erach year?
Regarding immigration, we have had this discussion before, with different people arguing different things. As far as I can make out, SL is quite sure that the economic analysis shows that increased immigration would be beneficial to both immigrants and current USA citizens at the moment. That is, there is benefit in admitting one more immigrant.
Other people are arguing from a different position, extrapolating well beyond the current margin, and arguing that unlimited immigration may well be bad at least for substantial sectors of current USA citizens. Is it possible in theory that both positions are true? Hence we have endless arguments with no resolution.
I have not seen Steve comment on the unlimited case – possibly because it involves speculation about what the situation would be after more immigration, and hence is not susceptible to proper analysis.
Or possibly because the effects that people are concerned about are not primarily economic, but political. For example, if we were to admit 100 million dedicated communists who would elect a communist government.
Or because increased immigration would change society from one they like to one they would not like as much- say the majority language became Spanish. Economics has no preference for English, but many Anglophones would feel themselves to be much worse off if TV had English sub-titles.
Maybe it all comes down to segmenting. Allowing an extra immigrant in now will do the immigrant good, and it will do current USA citizens good on average, but perhaps there will be one US citizen who is worse off, at least in the short term. As an observer, this is a good outcome, but for the one American, maybe not so good. If we were to let in 150 million immigrants, maybe 150 million current citizens are worse off, although the outcome is economically more efficient.
Steve has commented before that there is no particular reason why we should care more about a stranger from, say, Texas than a stranger from Mexico. However, if that stranger becomes you, then we will obviously care more about ourselves than a random stranger. The more immigration, the more likely it is that you will be that marginal person.
I don’t know, it is very difficult to get to the bottom of these arguments.
James Knight – without seeing the original data for the claim, I can’t say for certain, but my guess is that it does not peak on the same day each year. I think that was just the most common birthday in the survey, and a combination of lazy journalism, self promoting press release and the general pooor quality of science reporting has led to a very misleading article.
It is interesting that Sweden has a different time of popular birthdays- maybe Swedes can’t sleep in June because of the very long days.
This is the article I got it from, Harold…
http://www.dailymail.co.uk/femail/article-2245829/Have-sex-tomorrow-want-baby-December-11th-named-fertile-day-year.html
What do you think?
James Knight: the article says Sept 16th is the most common birthday – that is averaged over all years in the survey. There is nothing to suggest that this is the same for every year. I would bet a lot that the most common birthdays for those born in different years varied quite widely.
Oh good point, yes – I’ll bet it was done on an average over a few years. Thanks Harold.
@ Harold #48:
However, if that stranger becomes you, then we will obviously care more about ourselves than a random stranger.
I’m trying to understand this as it relates to open immigration. I guess the argument goes that if I get laid off and my job goes to South Dakota for lower wages, then I should be OK because South Dakota is part of what we call ourselves.
What I can see makes this outsourcing to South Dakota more palatable is that people in South Dakota pay federal taxes so even though I lost my job I can see some tax dollars being contributed to my safety net.
However, this would also be the case if we opened immigration. People coming into our country would be paying taxes into our general fund.
Are there other reasons (other than tribalism) why a person in Washington state should feel better when Boeing lowers his wages by moving his job to a state that pays lower wages than if his wages are lowered because we have opened immigration?
Harold 48: ” Is it possible in theory that both positions are true? ”
Yup, and a good point. Some Americans will loose from more and more rapid immigration. More to the point it is even possible to frame a compelling argument as to who they might be (and notice please that the effect I am describing does not depend on the argument being correct, only on being persuasive). So you will have a group who cares a lot about restricting immigration. As you say, a recipe for endless debate and strife, and for policies that lack internal logic but can be seen to be cut to suit certain interests.
Will A: Interesting point, how would Americans feel about losing their job to a fellow citizen rather than a foreigner? At the moment therer is little prospect of mass job shifting because wages are quite similar across the USA. Maybe in the past there has been inter-state tensions because of this issue? I speculate that if conditions are different enough to cause mass movement of jobs, then the people in the other area may be considered “not-one-of-us”.
However, I don’t think that is the main point. I should not particularly care if a stranger in Texas loses a job to a stranger from S. Dakota. Extending the argument slightly, I should not particularly care if the stranger from Texas loses a job to a stranger from Mexico. However, I am going to care if I lose my job to a stranger from either S. Dakota or Mexico.
Increasing immigration by one results in a vanishingly small chance that I will loose my job. If we suddenly admit 150 million, there is a very good chance that I will lose my job.
The economic argument suggests that I will become better off in the longer term as prosperity increases, but there will be time to adjust. In the long run we are all dead.
Apart from anything else, it is perhaps a good idea to restrict the speed of imigration so that we are aware of the position at any time. Ideally, the pace would be such that we were never displaced too far from equilibrium, then few people should become worse off even temporarily. I don’t know how quickly the economy can adjust. How quickly after employers make savings on wages would those savings result in more jobs?
@Harold 55: Oh I think people do care. They see the act of immigration as the *cause* of their job loss. So comparing me losing a job to someone in S Dakota vs to a new immigrant from Ruritania misses an important point. People don’t think the prior existence of the S Dakotan caused their loss; many do believe the immigration of the Ruritanian did. And many of them do have a point.
Ken B 56: As I said, “However, I am going to care if I lose *my* job to a stranger from either S. Dakota or Mexico.” (I am reluctant to put italics in for emphasis after what happened last time.)
However, I take your point that many care *more* if they lose it to a Ruritanian than a Dakotan. Or another way to put it, do I care more if a Texan stranger loses his job to a Ruritanian or a Dakotan? I think that people actually do care more if a Texan loses his job to an immigrant than if he loses it to a Dakotan. I think Steves point is that that we should not.
The key thing about the loss of the job is that it is only because the new employee is prepared to work for less. Since the living standard is fairly similar accross the USA, there is not very much economic migration within the USA – (or is there)? If there were thousands of S. Dakotans crossing state borders to work for peanuts, I think there would soon be an anti-South Dakotan sentiment.
@harold: about migratory Americans, yes. Oakies in the 30s. But in each case there is a perceived (and real) causal link. The perceived causal link, not ethnocentricity, is the key factor I think.