Tuesday, February 17, 2015

How Charles Murray changed my mind



I always get a lot of pushback from liberals when I say that Charles Murray is one of America's most important thinkers, or that he's changed my mind in big, deep, fundamental ways. So let me explain.

First of all, The Bell Curve, of which I've only read part (the part about race), strikes me as relatively unimportant and counterproductive. James Heckman's takedown of the methodology hits the mark. Heckman does also praise the book for bringing the issue of IQ into the public consciousness, but my impression is that most Americans already think that IQ rules everything, so the book was probably just telling people what they already believed. And I think that on the margin, focusing on IQ is very very bad and counterproductive for Americans, and that Carol Dweck - who I think is the most important thinker in America today - shows exactly why. On the margin, America needs less focus on IQ and more focus on mindset. And of course I also think that the section on race stirred up racist attitudes among the American populace in a counterproductive way.

But The Bell Curve is not the Murray book that changed my thinking. That book was Coming Apart: The State of White America, 1960-2010.

Before I read Coming Apart, I was relatively unconcerned with the situation of the American lower middle class. I knew that their incomes had slightly declined, and that their economic risk had increased. But compared to people in poor countries, they seemed very well-off. Also, they weren't particularly nice people in high school. So I pretty much disregarded their problems.

Coming Apart  totally changed my mind.

First of all, the "white" part in the title didn't bother me a bit - in fact, I saw it as an attempt to atone for the excessive focus on race in The Bell Curve. Murray seemed to be saying "I'm not bashing black people here; now, I'm talking about class." Naturally, his detractors will tend to be less charitable, but that's how I interpret the title.

Anyway, Coming Apart is all about the social problems of the American lower middle class. They have broken families and poor health, and are disengaged from their communities. If you read the book, you will be convinced by the numbers that these things are really happening. The same problems are not happening to the upper middle class.

In other words, a big quality-of-life difference has opened up between the lower- and upper-middle-class. Economics typically disregards quality-of-life issues (except for things like hedonic regressions, which I think tend to have all kinds of problematic assumptions, and aren't always applicable anyway). But more and more, I've come to believe that human utility (and happiness) is dominated by things for which no market exists. I think this is much more true for people in rich countries than for people in poor countries.

If you focus on utility of wealth, and you assume diminishing marginal utility of wealth, then you tend to conclude that true inequality - inequality of utility - has decreased hugely in American society, even if wealth inequality has increased. If almost everyone is free from material deprivation, why should it bother us if rich people get mansions and private jets? That stuff makes you a little happier, but not much happier.

What Murray showed me is that I had been thinking too much like a neoclassical economist. Once you bring in non-market goods like family stability, imperfectly treatable health problems, and community engagement, you see that inequality of utility (or happiness) between the classes may actually have increased - or certainly hasn't decreased as much as you'd think from only looking at utility of wealth.

To reiterate: Murray, a sociologist, convinced me to stop thinking so much like a neoclassical economist, to have more concern for the lower middle class, and to worry more about inequality.

Quite a trick, eh?

Anyway, I still think that Murray's policy prescriptions for remedying this social inequality are not the right ones. But they are also not the main focus of the book - they are an afterthought, tossed in in the final chapter. The vast bulk of the book is about documenting the social ills of the lower middle class, as I describe above.

Diagnosing a problem, and making people care about it, is much easier than finding a workable solution. But diagnosis, and making people care, are necessary first steps on the road to finding and implementing a solution. In Coming Apart, Charles Murray does the former with amazing force and persuasiveness. That he does not manage to do the latter should not diminish the importance of his accomplishment.

64 comments:

  1. Anonymous3:55 PM

    Murray's solution is just less modern version of Uber for Welfare (GICYB).

    Why you prefer bureaucrats > more stuff for the poor I cannot figure out.

    Kimball, Farmer, Sumner all support Uber for Welfare, why in the world don't you?

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    1. Didn't you remember that you're supposed to sign all your comments "Lion riding a horse"? ;-)

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    2. Anonymous5:43 PM

      Dude, every single day, you see tech become exactly what I've been saying... Requiring (any kind of) work (paid for by another private citizen) driven by clearinghouse mobile software has ALLLLLLLLLLL the same 1+1=3 benefits of Uber.

      It's not "just Taxis" isn't not "just welfare" - poor people tend to work for one another already, so when you have concentrated areas where 30% are unemployed, the minimum wage, means in no uncertain terms: Your welfare check buys A LOT less.

      It's at least 30% less goods and services, and in businesses where labor is the main cost driver, it's 50%+ for the poor spending dollar.

      This is how you advantage minority entrepreneurs, you give them a clear advantage on price. Once we say "let's have a safety net" we are FOOLS not to look at all this labor not worth Minimum Wage, and lever the terrible policy of MW against the Fortune 1000 incumbents (who normally benefit from it) - now they pay it, our training wheel entrepreneurs don't.

      As long as there are ghettos, we should be using the discounted labor to fix them up and let the hustlers therein organize them into discounted crews to steal business out in the fancy neighborhoods.

      Sure yes eventually there will be a new wage equilibrium found, but you get the immediate bump of a tight labor market for those who can't tap this labor, and the price advantage will continue as long as there are ghettos.

      But in 5-10 years time:

      1. Ghettos will end. Period. Right now professionally managed rentals can't get below $900-950 a month bc of price of rehab labor. We can get it down to $600.

      2. One million entrepreneurs will be born in poor areas. Drawing in buyers from outside it.

      3. Poor kids will all have full time summer jobs (part time rest of year) they can change weekly from 14 on - there's no better education for most of these kids, to find work that appeals to them early, to get clear signals on what skills are worth more and less. Sure, sure community college, blah blah - this is REAL skills, proven bc someone else says "I'd pay for that."

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    3. Anonymous6:44 PM

      Glibertarians are like Uber for Dunning-Kruger.

      (Also Sumner is an idelogue clown attached to a monetary economist, and Kimball seems to love lobbing idealized solutions over the wall)

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    4. Anonymous4:12 AM

      "Dude, every single day, you see tech become exactly what I've been saying..."

      "Dunning-Kruger Hurr Durr"

      Sumner, Kimball, Farmer are to be highly regarded, bc while they do not see the code EVERYDAY that makes Uber for Welfare incredibly obvious, they still grok it.

      Sure, yes I'm smarter than you. But (and this is a fact), if you took 100 startup founders and gave them each the task of "build Uber for Welfare"

      80% of them would sketch out 80% of what I have laid out. It's just that super friggin obvious.

      The difference is that startup guys, unlike economists, are wired to not worry about jobs destroyed / created - Economists can't get their brains off it.

      I laid out UfW by thinking about how to create a two sided market (Ebay / Uber), where price paid for the welfare recipient labor is priced assuming they already have a welfare check, meaning you are fed, housed, clothed, warmed, but you have to have to work.

      Notice now something ugly and brutal about your brain. You want them to have to do unfun jobs. You want them to do the jobs that that are worth Minimum Wage + regulatory costs (about $12 per hour) - this means working for a giant soul crusher like Walmart or McDonalds - a pure extension of the state.

      I want them to work for their buddy's BBQ food truck with a keg of beer selling racks of ribs for $10 (instead of $20) next door to McDonalds and kicking the shit out of clown on price.

      You want to maintain Fast Food Nation, owned by shareholders and paying CEOs $20M a year.

      I want Fortune 1000 (and their shareholders) to take it in the shorts, putting some power back into hands of Mom & Pop operators.

      FInally, working is required. I'm so sure of it that UfW software can easily allow some state like vermont or oregon to not require work.

      The REALITY is this: the poor people in Vermont in Oregon will see how the poor people live in Texas and most everywhere else (where work is required in their version of UfW), and seeing how much MORE the poor get in states where leisure is in the index of PRIMARY GOODS (Rawl's surfer analogy), and as such, those rich in leisure must give some of it up... the poor in liberal blue states will RISE UP and demand, that those amongst them who do not want to work be required to.

      I'm leaving it to DEMOCRACY to settle the case.

      If I'm wrong, Texas will see that there is no advantage to a work requirement, perhaps all people decide to work anyway!

      The point little one, is that my only sin (if you favor UBI) is designing welfare software that allows Economists to find out quickly, through 50+ A/B split tests, which settings optimize consumption for the poor.

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    5. Anonymous5:09 AM

      Oh Morgan, you're such a goober..

      Delete
    6. Anonymous10:36 AM

      tis true

      Delete
  2. Anonymous3:57 PM

    You admire Charles Murray, really? Take a look at what the Southern Poverty Law Center says about him:

    http://www.splcenter.org/get-informed/intelligence-files/profiles/Charles-Murray

    "Charles Murray, a fellow at the American Enterprise Institute, has become one of the most influential social scientists in America, using racist pseudoscience and misleading statistics to argue that social inequality is caused by the genetic inferiority of the black and Latino communities, women and the poor. According to Murray, disadvantaged groups are disadvantaged because, on average, they cannot compete with white men, who are intellectually, psychologically and morally superior."

    Good for you, Noah.

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    1. I didn't say I admire him, just that I think he's an important thinker, and he changed my mind about the big issue described in the post.

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    2. Anonymous4:57 PM

      I can't tell if this comment is satire or not.

      Delete
    3. It's not satire. You don't have to admire someone as a person in order to think (s)he is an important thinker, or to be persuaded by that person.

      Delete
    4. Anonymous6:53 PM

      (Different Anon)

      No, but you should look at all the previous garbage and realize that there's no reason to believe that Murray is an intellectually honest actor.

      I'm not saying he's wrong, I'm saying it's most likely selectively compiled, selectively interpreted and probably takes plenty of ideological motivated leaps over gaps in what he can actually prove. Like his previous works his methodologies are probably crap.

      Go ahead and disagree with me since I don't know you, but I think you might be a sucker for glibness.

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    5. I would rather impunge the intellectual honesty of the race-baiters from the Southern Poverty Law Center.

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    6. Anonymous10:09 PM

      That's because you're also an ideologiclown, duh...

      Delete
    7. Anonymous4:06 AM

      I'm the anonymous who questioned whether the comment was satire (and only that anonymous). Noah, that wasn't directed at your comment but the parent.

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    8. Anonymous5:10 PM

      Quoting the Southern Poverty Law Center? Really?

      Delete
    9. Mike Steinberg3:57 AM

      People who quote the Southern Poverty Law Center on "pseudoscience" tend to have little understanding of what they're talking about.

      As Noah quite rightly notes, whether you like/dislike Murray he does provide thorough research on issues. I haven't read Coming Apart, but will put it on my list.

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  3. If you come from the lower middle class and enter academia, one of the frustrations you quickly come across is the lack of sympathy and empathy that academia has with the LMC as a group. I think this is for a couple of reasons:

    1. TT academics are aspirational. They want to dissociate themselves from the LMC and associate themselves with the UMC and wealthy. Such false consciousness (most TT academics earn LMC incomes, especially factoring in student loan payments in the U.S.) means they are eager to denigrate the LMC to seem more sophisticated than they really are.

    2. Many academics live and deal with townies in small towns or LMC suburbs (Stony Brook, NY would be a phenomenal example). That tension creates an ideological aversion to the social class.

    3. Who else can they target? Any kind of criticism of racial minorities is taboo, and the wealthy can only be blamed for so much. The subtle snobbery and wastefulness of the UMC cannot be targeted, lest you insult people in the room. If I criticize Chomsky's million-dollar house at a conference, I'm the asshole, not Chomsky. Thus you get Marxists getting paid $10,000 to lecture on the glories of Marxism, and afterwards wrinkling their noses in disgust at the LMC who serve them lobster at the post-conference dinner.

    ReplyDelete
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    1. TT academics are aspirational. They want to dissociate themselves from the LMC and associate themselves with the UMC and wealthy. Such false consciousness (most TT academics earn LMC incomes, especially factoring in student loan payments in the U.S.) means they are eager to denigrate the LMC to seem more sophisticated than they really are.

      Actually Murray says pretty much exactly the same thing in Coming Apart, although I thought that section wasn't really important to his main argument, and was a bit of a distraction.

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    2. Anonymous2:46 PM

      You think Stony Brook NY is a lower middle class area? If that's true then the vast majority of the population in the US lives in abject poverty.

      Delete
  4. "I knew that their incomes had slightly declined, and that their economic risk had increased" - Didn't you try to argue the opposite of that a couple of weeks ago?
    And didn't you already realize that utility theory is relatively irrelevant to the average household during your reading of Kahneman's work?
    Murray is just saying what certain people like to hear.

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    1. "I knew that their incomes had slightly declined, and that their economic risk had increased" - Didn't you try to argue the opposite of that a couple of weeks ago?

      No, I was talking about the median.

      And didn't you already realize that utility theory is relatively irrelevant to the average household during your reading of Kahneman's work?

      I don't think Kahneman's work implies that. He shows that the peak and the most recent experience matter for retrospective evaluation. But retrospective evaluation may not be all that matters (one day we will die and have *no* retrospective evaluation of our lives!). And it seems to me that average realized utility is correlated with peak and most recent experience.

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    2. Remember though that the title of your post was "How did the middle-class do?" So the most precise way to bring all these arguments together would be to conclude that the middle-class split into two parts on diverging economic trajectories.

      About Kahneman: "Thinking, Fast and Slow", chapter 26 (the Prospect Theory one): "However, the theory-induced blindness of accepting the utility of wealth as an explanation of attitudes to small losees is a legitimate target for humorous comment". "Prospect theory and utility theory also fail to allow for regret." Quoting Rabin and Thaler:"it is time for economists to recognize that expected utility is an ex-hypothesis".

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    3. So the most precise way to bring all these arguments together would be to conclude that the middle-class split into two parts on diverging economic trajectories.

      Yep. Exactly.

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  5. Noah!

    If you really want to talk about class consciousness, I have some literature for you, Comrade!

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  6. What bugged me about Coming Apart was the, uh, suspect methodology. For example, while it may tell one something about class divisions to contrast the number of higher-priced cars in the parking lot of an elite private school with the number of lower-priced cars in the parking lot of a Walmart, I'm not entirely convinced that it can tell the observer anything rigorous.

    If this penetrating insight had been part of a longer narrative, for anecdotal purposes, I could forgive it. Murray described this contrast in a footnote meant to back up a conclusion.

    Right-wingers shit all over sociologists broadly, but give Murray a pass.

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  7. Anonymous5:33 PM

    "Before I read Coming Apart, I was relatively unconcerned with the situation of the American lower middle class. I knew that their incomes had slightly declined, and that their economic risk had increased. But compared to people in poor countries, they seemed very well-off. Also, they weren't particularly nice people in high school. So I pretty much disregarded their problems."

    And Democrats wonder why they have such a hard time getting the working class on their side.

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    1. I thought that was an especially well-turned paragraph. I went back and read it twice.

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  8. So what is new? Previously they couldn't afford divorce. Was that better? Women didn't work or earn much if they did. Having to work may be negative but independence positive. Or is the problem that so little has changed, what little has tends to be for the worse? The lack of progress probably is new, and may even be prophetic.

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  9. "What Murray showed me is that I had been thinking too much like a neoclassical economist. Once you bring in non-market goods like family stability, imperfectly treatable health problems, and community engagement, you see that inequality of utility (or happiness) between the classes may actually have increased - or certainly hasn't decreased as much as you'd think from only looking at utility of wealth."

    No mention of positional extrernalities?

    I know you don't like that they exist, but that doesn't negate their impact on human, happiness, utility, decision making and inefficiency with regard to maximizing total societal utility. And I think these impacts are profound and monumental, with clear evidence.

    Also, as I've noted before, Coming Apart has a really striking quote in The Second Machine Age. I'll reprint it later.

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    1. Here's the quote:

      Brynjofsson and McAfee in "The Second Machine Age", pages 235-6:

      "In his 2012 book Coming Apart, social researcher Charles Murray put numbers to the problems Wilson described and also showed that they weren't confined to the inner cities or largely minority neighborhoods. Instead they were squarely part of mainstream white America. Murray identified two groups. The first comprises Americans with at least a college education and a professional or managerial job; these are dubbed the residents of the hypothetical town 'Belmont', named after a prosperous suburb in Boston. The second group consists of those with no more than a high school education and a blue collar or clerical job; these are residents of 'Fishtown', named after a working-class suburb of Philadelphia. In 2010 approximately 30% of the American workforce lived in Belmont, 20% in Fishtown.

      Using a variety of data sources Murray tracked what happened in Belmont and Fishtown from 1960 to 2010. At the start of that time span the two towns were not that far apart in most measures that tracked the health of a community—marriage, divorce, crime, etc.—and they were also full of people that worked. In 1960, 90 percent of Belmont households had at least one adult working forty or more hours a week, as did 81 percent of Fishtown households. By 2010 the situation had changed drastically for one of the communities. While 87 percent of Belmont households still had at least one person working that much, only 53 percent of Fishtown households did.

      What changed in Fishtown?...In 1960, only about 5 percent of Fishtowners between the ages of thirty and forty-none were divorced or separated; by 2010 a third of them were. Over time many fewer children in Fishtown grew up in two parent homes; by 2004 the figure dropped below 30 percent. And incarceration rates skyrocketed; in 1974, 213 out of every 100,000 Fishtowners were in prison. The number grew more than fourfold, to 957, over the next thirty years. Belmont also saw negative changes in some of these areas, but they were tiny in comparison. As of late 2004, for example, fully 90 percent of children in Belmont were still living with both of their biological parents."

      Powerful stuff, that surprised me by it's extent.

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    2. I know you don't like that they exist, but that doesn't negate their impact on human, happiness, utility, decision making and inefficiency with regard to maximizing total societal utility. And I think these impacts are profound and monumental, with clear evidence.

      Well, I think that positional externalities present a problem, but it's very hard to rejigger society to account for them. People are *very* good at making up stupid bullshit to rank each other on, and if you go through the whole laborious and incredibly costly process of engineering society to give everyone equal position according to yesterday's criterion, people may just go and invent some new criterion tomorrow, bringing back the positional externality in full force after you paid all those costs.

      "The same games that we played in dirt, in dusty school yards has found a higher pitch and broader scale than we feared possible, and someone must be picked last, and one must bruise and one must fail."
      - The Weakerthans

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    3. Well, Robert Frank has some great simple ideas, but basically highly progressive taxes to pay for non-positional goods like basic scientific and medical research, free high quality bachelors degree, Heckman style early human development, smart and clean infrastructure, etc.

      Even with highly progressive taxes, there are such strong positional incentives to still work hard (plus income and substitution effects, plus how much extra incentive is there really for $300 million/year instead of $30 million/year, or even $300,000/year if you maintain the same position relative to everyone else. Did the Nobel Prize winning economists not work very hard because they were in the $300,000 zone?)

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    4. The end result is you end up with a lot less of GDP spent on ever more ginormous mansions and yachts, and a lot more spent on basic scientific and medical research, clean energy, education and early human development, public health and recreation, and so on. This just instantly falls out, as highly progressive taxation will come out of the dollars spent on highly positional goods naturally, and can then go into spending on non-positional goods of high public utility.

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  10. One of the things I like about this blog is that it's obvious that Noah, while obviously leaning to the left, does not let idealogy drive him and what he says. He's open to good ideas regardless of where or who they come from. That's one of the things that sort of disappoints me about Krugman. Sure Krugman seems to make great points and often has great insights, but you know (rightly or wrongly) he has an ax to grind and will not entertain ideas from those he disagrees with. I think Greg Mankiw has a spirit similar to Noah, as does Steven Landsburg, though Steven can be quite harsh at times. But Steven has actually agreed with Krugman from time to time on his blog. Anyway, as fascinating as Krugman is, I prefer the Noah and Mankiw styles of treating good ideas and good work as good ideas and good work, period.

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  11. This is an interesting confession, but I think this is more about your personal awakening to thinking about the "other half" than it is about Charles Murray. I haven't read that book but I've read other things by him and the man is just intellectually dishonest to the bone.

    It's good you read that book and had some revelations. I grew up in a Boeing suburb during the '70s, with families crumbling and falling out of the middle class all around me. So I know there's a lot of truth to the title of that book, though I can't imagine I'll ever read it. I'm just not convinced though that things really fell apart overall for lower middle class whites in that fifty year span. If they did that would make the 50s into a sort of shining brief moment of glory, because before then things were just so, so much rougher than anything that came after the 50s. All everything's-going-downhill tales take an idealization of some prior period for granted, which turns out not to be so ideal after all.

    Whenever an economist starts veering away from trusting the value of money I think, well, why not just give up on economics completely then? Sure I can find all sorts of reasons why a lower middle class person today might be less happy than even a lower class person in the 50s. Or I can find reasons to argue that lower class people today are happier than lower middle class people in the 50s. If you give up the anchor of material wealth you go adrift in a sea of total subjectivity, where anyone can take any position based on what they feel to be better, and no one can be proved wrong.

    So I won't follow you down that road. Even though I know there's a lot of arbitrary subjective judgment in "real" measures of material wealth, especially over long time periods, if you can't show that material wealth measured as objectively as we can has diverged, you haven't got a serious case that a quality of life difference "has opened up." All you've got are a bunch of sad stories and a naive assumption that such things didn't used to happen in an idealized past.

    I do see Americans getting more polarized, not just economically but politically and geographically. I worry that conservative lower and middle-class whites are becoming increasingly bitter and alienated, and many seem to be explaining their situation with conspiracy theories rather than facing up to the harsh truth that their skills aren't worth an upper middle class income. But I also think for every one of them doing a bit worse, there's twenty Asians doing a lot better. To be totally honest my concern is more for the Republic than it is for them.

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    1. o. nate3:26 PM

      Whenever an economist starts veering away from trusting the value of money I think, well, why not just give up on economics completely then?

      On the one hand, I can sympathize with this point of view. If the question is "What is the good life?" then I'd prefer to see that dealt with explicitly as the philosophical question it is. All too often economists smuggle philosophical assumptions in through the back door, while loudly booting subjective questions out through the front door. On the other hand, I think economics is inseparable from the squishy human stuff. Otherwise it is just accounting.

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    2. Anonymous4:39 AM

      lower and middle class white's have been sucked into "market economy" as a salvation. once that is gone and the real skinny hits these people, their minds will change and politics is always changing. The current model is growing very long in the tooth.

      I don't consider them conservative at all. Conservatives believe in a organic and non-egalitarian view of the structure. These people think they are mini-gods on their government invented 1 foot of property. Full of the intellectualism the bourgeois throw at them to extract rent. A true egalitarianism that is dangerous to society. Once they find out(or reremember) that market economy is nothing more than the creation of Paupers and Nomads, they will get mad. They got mad before, will again.

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    3. I think economics can in some ways take on what Noah calls "non-market goods." But what it can't do is make objective comparisons.

      If the statement is: the lower middle class are more miserable relative to the upper middle class than objective measures of material wealth can reveal, I might read that and maybe agree, or disagree. There are always counterpoints. Sometimes poor people really are happier than the rich. It's almost impossible to generalize.

      If the statement is: despite that objective measures of the material wealth of the lower middle class shows their situation gradually improving, I believe that it's actually deteriorating because they're getting poorer in "non-market goods," I'm going to ask, how do you measure those, how do you value them, and why should anybody else agree with your judgements?

      I'm sure that reading a book explaining various ways things are getting worse for some lower middle class whites could be interesting, though I'm not going to read one by someone so committed to lying as Murray. But claiming their overall situation has deteriorated since the 1950s based on some fuzzy-wuzzy measures and valuations of "non-market goods" just isn't credible.

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    4. Anonymous10:12 PM

      "But claiming their overall situation has deteriorated since the 1950s based on some fuzzy-wuzzy measures and valuations of "non-market goods" just isn't credible."

      I have read the book, and that doesn't do justice to the argument that Murray makes. While Mr. Smith asserts that he believes that non-market goods impact happiness, I recall Murray arguing that things like stable marriages, participation in religious and civic organizations, and steady work are the things that are most strongly correlated with self-reported satisfaction with life. These things have all been in decline among Americans without a college degree for a generation or more. Hence, if one makes the assumption that those things are not merely correlated with living a satisfying, fulfilling life but are indeed the causal root of such a life (at least for most people, I mean, we are talking about populations and not individuals), then it stands to reason that despite any improvements in material wealth among the working class, their lives have deteriorated in quality. Of course, I cannot remember Murray citing survey research indicating that reported life satisfaction has been declining for working class Americans, which isn't a good sign that the argument is sustainable in light of the best available evidence. But it is certainly the case that there is evidence out there or that could be collected that could easily disprove Murray's hypothesis. So while the way the argument
      was characterized by Mr. Smith might have seemed "fuzzy-wuzzy," the argument really does depend on measurable evidence.

      -Paul

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    5. ut claiming their overall situation has deteriorated since the 1950s based on some fuzzy-wuzzy measures and valuations of "non-market goods" just isn't credible.

      I didn't claim their overall situation has deteriorated. I claimed that *inequality* is worse than the income numbers suggest!

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  12. "To reiterate: Murray, a sociologist, convinced me to stop thinking so much like a neoclassical economist, to have more concern for the lower middle class, and to worry more about inequality."

    Noah, there is nothing inherent in neoclassical theory (as far as I know) that leads one to have less concern for the poor or issues of inequality. Indeed, I've often used neoclassical models with heterogeneous agents to demonstrate the effects of redistributive policies (both positive and normative analysis).

    If there is a macro model that has no concern for the income disparity it is the standard Hicks-Keynesian models that focus on "representative agent" models as is implicit in their (e.g.) aggregate consumption functions.

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    1. Yes, but it took Murray to make me think about how policy affects the distribution of non-market goods.

      In all those models you're talking about, utility is a function of consumption (and maybe leisure). In the real world, there are a lot of other things that affect utility. Neoclassical economics leaves these things out because it's generally focused on making the simplest possible model needed to describe a phenomenon. If you really take a social welfare function seriously, though, and if that welfare function depends on utilities as inputs and is egalitarian, you've got to get a little more serious about looking at all those amenities. You *can* do that with neoclassical econ, but for good reasons, people usually *don't*.

      Or as this guy put it in a movie... https://www.youtube.com/watch?v=93tR96egox4

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  13. Christoph3:15 AM

    I salute your willingness to interact with people of different persuasions and to learn from them! Having said that, I still need to point out the following remark in one of your posts on Niall Ferguson:

    http://noahpinionblog.blogspot.co.at/2011/10/niall-ferguson-does-not-know-what.html

    Midway through the post you quote Ferguson citing Murray and provide the following opinion:

    "When you admit to taking your cues from America's most prominent academic racist, you've pretty much laid your cards on the table."

    Well, it seems that Ferguson is no longer the only one taking cues from "America's most prominent racist" :).

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    1. Very true! I take back what I said then. I was wrong.

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  14. "But compared to people in poor countries, they seemed very well-off." Not to pick -- but why compare the standards of half the American population to the level of poor countries -- especially when it seems undoubted they are living at that (excruciating?) level only because of complete loss of labor market bargaining ability, a.k.a., deunionization.

    Short-hand look at the $50K minimum needs line for a family of three -- claimed in chart 3-2, on p.44 of the MS Foundation book Raise the Floor.

    $11,000 Obamacare for a family of four (not three), $498 a month (after $541 subsidy) + $4900 deductible (from Brill, p. 346, close enough);
    $4,000 payroll taxes (not even counting all those regressive taxes that we take for granted in consumer prices);
    $15,000 rent and utilities for any place decent;
    leaving a big $400 a week to feed, cloth, transport (entertain?; MS does not allow a cent for entertainment) four people. I would call that minimum needs.

    Meanwhile the median income is $26,000.

    3.5% shift in income would pay for a $15 minimum wage (half the workforce is seriously treading water between $300 a week (assuming min wagers get 40 hours; most may not) and $500. If the 16% of income that shifted to the top 1% after the mid-seventies had instead shifted to the bottom 90% (the top 10% mostly held on to their income share until recent years) the latter would be swimming in money (and FICA collections would be going through the roof -- would stop diverting funds to over bloated TF at some point).
    * * * * * * * * * *
    Quick account of my personal decent into the lower middle class (or maybe the much lower) because of complete lack of labor market bargaining power AND concomitant political muscle:
    I arrived in Chicago to support myself driving taxicabs in 1980. Between 1981 and 1997 Chicago allowed one 30 cent rise in the mileage rate -- at which 1990 midpoint it started building subways to both airports, opened up unlimited limos, began putting on free trolleys between all the hot spots downtown (e.g., the Aquarium) AND adding 40% more cabs. By early 1997 I had emigrated 2,000 miles to San Francisco to get an (American?) job driving a cab.

    NYC, same story: in 2004 dollars: after last successful taxi strike in 1976 (rug then pulled out by lease system) meter raised to $2.25 a mile. By early 2004 had dropped to $1.50 a mile (lease meant shortfall totally on drivers) before raises back to $2.00 -- after over 50% increase in per capita income, in the only place on earth (lower Manhattan) where wealth is a plateau not a pinnacle.

    Jobs taken over by people from poor countries. :-)

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  15. Childhood lead levels explain violence more than any racial theories.

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    1. Anonymous4:25 AM

      Yes, though blacks have not shown to be able to adapt to market economy like the other races. That is unquestionable.

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    2. Blacks lived in sub par housing with higher blood lead levels. This has an effect on IQ and behavior later in life. Crime has fallen remarkably since the mid 1990s, that is because childhood lead levels fell tenfold after the EPA removed lead from paints and gasoline in the 1970s and 1980s. Kevin Drum wrote a wonderful article about this on the Mother Jones website. I believe it can even explain a lot of the violence in the Middle East, among the last countries to remove lead.

      It isn't about race at all.

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    3. Your lead toxicity theory for low Black IQs is a rather implausible theory. Blacks tend to have lower IQs regardless of whether they live in old buildings or new lead paint-free developments. Blacks tend to have low IQs all over the world. Also other ethnoracial groups show differences in average IQ, how does your theory explain why Jews and East Asians tend to have higher IQs--are they somehow very adept at avoiding lead ingestion???
      Face up to the obvious, just as ethnoracial groups differ in physical traits (e.g. sprinting ability) mainly due to genetic differences it is highly likely that IQ differences are also mainly due to genetic differences.

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    4. This comment has been removed by the author.

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    5. What Murray shows is that lower-middle-class and poor whites are closely following the path that much of black culture took. In other words, it's not race - it's class.

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  16. Anonymous4:24 AM

    Sorry, but there is no such thing as the "middle class". That was a post-1933 illusion brought on by the government to try and stop the Carlyle-ian "Hobbsian beast' "Paupers" and "Nomads" market economy creates. Murray is a typical market economy biased intellectual and it shows. He tries to spin everything as not the market economies fault when everything is its fault.

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  17. Anonymous7:15 AM

    Try a Western European socialdemocratic approach, come back in 20 years if you still have a problem. Could be that simple?

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    1. THE NEXT STAGE?

      [cut and paste]
      The ultimate – federally prosecutable -- sweetheart labor contract may be no contract at all.

      No one would doubt the criminality of a mob union boss and/or an employer threatening to fire workers for speaking out against a mobbed-up sweetheart contract – in order to obtain for themselves the pay and benefit moneys that might otherwise have gone to employees through fair bargaining practices. A for certain RICO or Hobbs Act target.
      http://ricoact.com/

      Why shouldn't the exact same extortionate activity be view in the exact same extortionate light when union busting “consultants” and ownership threaten to strip away workers' economic livelihoods should they dare to participate in a federally approved path to establish federally approved union bargaining rights?
      US Attorneys -- Criminal Resource Manual 2403
      http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm02403.htm

      In current (virtually universal) practice this economically -- and by extension politically -- ruinous extortion is “punished” only under administrative law laid down by the National Labor Relations Board -- and employers found guilty pay only a (usually small) compensation for lost wages (not a penalty).

      Alternate route: if any state independently outlaws this form of labor market extortion with a penalty of at least one year in prison, federal prosecution can automatically step in.

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  18. Wait.

    Isn't Charles Murray kind of arguing that bad things are happening to the lower classes BECAUSE of their behaviors and culture and norms?

    I don't remember the book perfectly, but to me it seemed like he was saying that because the people in Fishtown don't get married, have children out of wedlock, and don't respect other social institutions, their incomes are stagnant and their quality of life is lower.

    In other words, it didn't seem like Murray was lamenting the impact of stagnant incomes and reduced opportunity on happiness, health, marriage, and family life.

    Rather, he was arguing that Fishtown brought its misery on itself by not focusing enough on marriage, family life, religion, and civic virtue.

    Something like that. Again, could be wrong.

    (was it even called Fishtown?... hm... something like that)

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    1. Isn't Charles Murray kind of arguing that bad things are happening to the lower classes BECAUSE of their behaviors and culture and norms?

      It's not clear. For much of the book he talks about economic factors - basically he says that low-IQ people can't earn as much anymore so their culture is breaking down. Then later he seems to imply that behavior is the problem. It's not really consistent, but then again, how could we expect Murray to know which came first, the chicken or the egg? The important part of the book, IMO, is just documenting the social breakdown. Assigning causation is a bridge too far.

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    2. "Survey cites "local high school" for high suspension rates of minority students . . " Sometime in the future the effects of the explosion of out of wedlock births especially among black Americans and the decline of marriage will be more fully realized. Even today, there is a hint of political incorrectness to assert that a single mom is less desirable than a married mom when it comes to raising kids. I taught for 30 years in a racially diverse high school and it breaks my heart to see how the effects of this parenting choice has impeded the progress as the legal and social racial barriers have fallen, decrease. When the big push for equal rights began in the 50s and 60s 75% of black families had a married mom and dad. How much better would things be today if that were still true?

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  19. Morris4:11 AM

    but my impression is that most Americans already think that IQ rules everything

    Really? Which America are you talking about? An imaginary one? No part of social science is resisted as furiously as research on IQ and its social implications.

    that Carol Dweck - who I think is the most important thinker in America today - shows exactly why

    If you really think Heckman's critique (much of which he walked back on in later publications) shows The Bell Curve to be methodologically weak, then you surely must agree that Dweck's work is methodologically complete garbage not worth paying attention to. That is, if you apply similar standards of methodological rigor regardless of whether you like the results or not.

    the excessive focus on race in The Bell Curve

    Like Coming Apart, The Bell Curve is mostly about whites. Herrnstein and Murray did not excessively focus on race, their critics did.

    Murray, a sociologist

    Murray isn't a sociologist. He has said that calling him one is an insult.

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  20. [tangential at best] The photo -- you should give a photo credit to the photographer, Tuca Vieira, and you should read what he says about it: “this picture of Paraisópolis […] does not show things as they are. It is not the richest who live in the building with swimming-pools, and they are not right next to the poorest, who by the way don’t live in Paraisópolis.”

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    1. It's a metaphor, homes. :-)

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  21. Anonymous5:47 PM

    Noah,

    I appreciate your treatment and discussion of this topic and book. But a year ago you stated that you would come up with some solutions to this problem.

    I guess I am growing bored of the diagnosis (hell, according to you, Murray already did this), and would like to know what public policy measures you support to combat the collapse of the lower-half of "white America," which would also presumably help african and hispanic Americans...

    Waiting for Noah,

    Frank

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  22. You've persuaded me: I'm going to stop reading the Bell Curve to children, and stop recommending it as a parenting guide generally.
    Is the distinction between (1) what policy-minded people ought to know and (2) how to give a pep-talk too elitist for an economics blogger? IQ is an excellent predictor of many outcomes; so we shouldn't persist in blinding ourselves to its importance. For example, one way (or component) of estimating the long-term benefits of any policy intervention--say, lead paint removal--might be to estimate the effects on IQ. Because you might not have good data for direct estimates of lifetime earnings and other long term outcomes, etc.
    All of this is conceptually compatible (obviously, because they're both true) with claims that for motivational purposes, we should focus on process more than "fixed" potential, in many circumstances anyway. I think it's all practically compatible too. But I suppose that's an empirical question.

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