flwyd: (McCain Palin Abe Maude Simpsons)
Today's Conference on World Affairs Howard Higman Memorial Plenary was by former South Carolina congressman Robert Inglis, who is now the executive director of republicEn.org, a site and nonprofit organization run by conservatives concerned about climate change focused on swaying other conservatives about the issue. The talk was entitled "How Free Enterprise Can Solve Climate Change" (video here) but it wasn't so much an economics presentation as a discussion about what it would take to convince conservatives (and particularly conservative U.S. politicians) to implement a carbon tax. In particular, he argued that for the right wing to buy in, it needs to be a revenue-neutral, border-adjusted carbon tax.

Revenue-neutral means the money earned by the tax needs to be offset by cutting taxes somewhere else. The plan needs to be revenue-neutral because you can't get the Republican party to agree to a carbon tax which will also increase the size of government.

Border-adjusted means that an import tax on carbon would be imposed if the goods came from a country which didn't tax carbon at the source of production. The border adjustment is important because it would let individual countries set up taxes on their own (without requiring worldwide coordinated government action), but would make American-made goods which paid the carbon tax (or were developed with cleaner technology) competitive with foreign-made goods from countries which use cheap but dirty production methods.

The focus wasn't so much on the mechanics of how such a scheme might be implemented, but rather on how climate change believers might effect action on the issue through a congress whose position over the last two decades has ranged from skeptical to hostile. Speaking to a Boulder audience dominated by folks on the left, Inglis talked about how to frame the conversation in terms that a conservative (like your uncle Charlie at the holidays) can support. Inglis's own history went from opposing climate change legislation based on no knowledge except that Al Gore supported it (mid-90s) to introducing a bill which would tax carbon and cut payroll tax (2009). The bill died, and he was thanked for his efforts by being defeated by the Tea Party in the 2010 primaries.

Inglis's biggest topic of framing was on tax. A plan that sets out to make things like manufacturing and driving more expensive is on shaky ground with Republicans already; if it sends more money to Washington, they'll stop listening. He wasn't especially particular about the way in which taxes were reduced, though he called out a corporate income tax reduction as a particularly attractive option for swaying Republican lawmakers. He said that many liberals seemed unwilling to reduce corporate income tax in exchange for a carbon tax and he questioned how much those liberals were truly convinced that climate change was the most important issue of the generation. (One could play the same trick on any number of issues: offer to cut income tax but make it revenue-neutral by imposing a tax on firearms and ammunition and see how committed conservatives are to income tax reduction.)

Of the revenue-neutral schemes Inglis mentioned: payroll tax, income tax, or a dividend, I think the latter is best-suited to balance a carbon tax. If the dividend were distributed equally to all American citizens, it would be a much more progressive tax benefit than cutting the corporate rate. Furthermore, an annual cash payment to everyone, even if they are currently unemployed and thus not paying much payroll tax, would help people cover the costs of increased energy bills, buy a more energy-efficient car, move away from rising sea levels, or otherwise cope with the new world of climate change.

I asked Inglis about the details of border-adjustment and whether it would account for non-tax incentives which lower the price of carbon production like foreign aid to Saudi Arabia and Venezuela or governmental policies by a country like China which provide polluting industries with benefits like unrestricted access to land or other perks. Inglis wasn't concerned with internalizing all externalities, and he also said the import duty would be based on the carbon content of an American-equivalent product, meaning that as American production becomes less-polluting, carbon-derived imports will get cheaper. I'll let the economists hammer out the details on this front, though.

I think Inglis's most important focus isn't on the policy specifics, but on reaching out to Republicans and conservatives as one of their own. He (and the folks republicEn can gather to their rallying call) can speak the free enterprise orthodoxy lingo that progressives aren't as fluent in and he can appeal to them from heart-felt religious conviction grounds upon which even religious liberals, let alone secular scientists, don't stand. (This isn't to say that religious liberals don't have religious conviction, but that their dogma has evolved so significantly from conservative religious dogma that attempts at convergence mostly end in a lot of barking.)

Unfortunately, the opportunities for reasonable and rational engagement across ideological lines seems to be shrinking faster than polar ice caps. In the past, the stereotypical conservative uncle Charlie and liberal niece Linda listened to similar news sources and spent time with overlapping sets of people and so could converse with a shared view of consensus reality. Today's media (broadcast and social) is so specialized that it seems difficult for folks on either side of the spectrum to agree on terminology and facts, let alone discuss a policy approach with a cool head. And it seems like at a holiday gathering that Linda's mostly on defense in response to Charlie's rants about gays or immigrants or guns tough to even start a conversation about sea level rise and crop failure. If instead of a holiday, Linda tries to start the conversation on Facebook, it's easy for Charlie to glance at the subject and skip right over it, avoiding discomfort and hitting the Like button on an inspirational message in a colorful font. Meanwhile, broadcasters and publishers can get more advertising eyeballs if they present the "opposing" side as other or untouchable, which puts politicians interested in collaboration in danger of being scorned by their in-group.

Climate change is a global problem and it needs pan-ideological work to address it. Unfortunately, building a coalition ain't what it used to be.
flwyd: (Om Chomsky)
I started reading Paul Graham when he wrote A Plan for Spam, and I wrote a masters' thesis examining several variants on Bayesian spam filtering. He generally writes insightful articles about creating tech startups, in large part because he's a domain expert on startup companies.

Graham's latest essay, on income equality is, however, mostly useless. (Perhaps because he's writing about economics and society, about which he is not a domain expert.) He published a simplified version of his argument boils down to the claim that economic inequality is purely a measurement and an outcome. He argues that economic inequality is not inherently bad and that we should instead focus on the problematic subset of causes of inequality. There's a grain of truth in this, but Graham totally ignores the outbound edges from economic inequality in the graph of social ills.

Some specific fallacies in Graham's essay:
Straw man
Graham seems to be arguing against the position that less wealth inequality is always better than more inequality. The end state of such a position is zero inequality, in which all people have the same amount of wealth, which is basically extreme communism. He says "You can't end economic inequality without preventing people from getting rich, and you can't do that without preventing them from starting startups." I'm not aware of anyone who actually holds that position. Even the Occupy Wall St. movement, a melting pot of some fairly radical ideas, wasn't advocating for the top 1% to hold precisely 1% of the wealth; they just thought the richest 1% should own significantly less than 50% of the wealth. The non-vacuous position Graham fails to argue against is the case for reducing income equality, not eliminating income equality.
Anecdotal fallacy
The long version of Graham's essay focuses on startup founders, with Mark Zuckerberg (Facebook founder) and Larry Page (Google founder) as anecdotes. Startup founders are probably disproportionately represented in the top 20 billionaires, but I suspect that they make up a smaller fraction of the full 1% cohort. Even if, as Graham argues, major wealth acquisition for startup founders is socially beneficial, that does little to support his argument that income inequality in general isn't problematic if most of the wealth is concentrated in non-startup hands. Graham's reliance on anecdote is so strong in this piece that he dismisses economic statistics as a way to analyze the situation.
Appeal to consequences
Graham suggests that reducing economic inequality would reduce or eliminate startup culture. Graham basically takes it as a given that startups are good, and therefore concludes that attacking economic inequality would be bad. There is plenty of room for both. Furthermore, startups might not contribute that much to wealth inequality. Initial startup funding generally comes from venture capital firms and individual wealthy investors. A moderately successful startup typically gets bought by a larger company, enriching the initial investors, the founders and early employees, and potentially the shareholders of the purchasing company (if the market reacts positively to the news). Wildly successful startups usually create wealthy founders when the company goes public and the stock market places a high value on the company. In both of these cases, the story is mostly about the already wealthy moving money around, some of which goes to a relatively small number of previously-not-wealthy folks. Even here, Graham doesn't address whether the existing wealth disparity between successful founders, ordinary tech workers, and folks in less-lucrative is better or worse than other potential wealth distributions. Should employees hold a greater fraction of startup shares? Should IPOs be taxed to support poverty reduction efforts? Graham's essay gives no guidance on such matters.

Graham's essay proposes an odd argument of inevitability, too. He cites the exponential curve of technological growth as evidence that economic inequality has historically and will continue to grow exponentially. This seems factually inaccurate: the western has significantly less wealth inequality today than it did under feudalism. I suspect too that technological and economic progress in the post-war era was greatly facilitated by the destruction of significant amounts of wealth which (naturally) disproportionately impacted the rich.

Graham points out the "pie fallacy"–that there's a fixed amount of wealth to go around–and spends much of the essay talking about creating wealth. However, he ignores the fact that many important components of wealth are finite resources for which pie-division is a very important concern. The most notable of these is land, a finite resource whose supply and demand imbalance is being felt particularly acutely in Paul Graham's back yard: Silicon Valley where even educated and skilled workers are finding it difficult to afford housing. A more subtle somewhat-finite resource is consumers. A society in which few people have disposable income is one in which building new enterprises becomes increasingly tough. The lower rate of income inequality in post-war America is an important example (though Graham tries to dismiss it) because well-payed workers play an important ecological role in a growing economy, providing a wide base which can buy new products in turn funding the creation of more new products. Perhaps such an arrangement is unstable: from a relatively equal distribution wealth will naturally accumulate with the institutions and individuals who reliably generate successful business. But perhaps there's another part of that natural cycle in which the wealth becomes too concentrated and the system destabilizes, leading to destruction and redistribution of wealth, starting the cycle anew. If that's the case, should we pursue a "controlled burn" approach of intentional wealth redistribution or should we follow a "forest fire" approach when wealth redistribution comes with little warning and dramatic upheaval?
flwyd: (Trevor glowing grad macky auditorium)
In private school, parents are the customers. In public schools, taxpayers are the customers. In both cases, teachers do best when they don't let the customers get in the way and instead focus on developing the best "product" possible.
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