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August 27, 2009

"Unreasonable Fears"?

The limits of your imagination are not the limits of reality. Every government programme that libertarians have argued against has been defended at its inception with exactly this argument.

Let me take three major legal innovations, one of them general, two specific to marriage.

The first, the general one, is well known to most hard-core libertarians, but let me reprise it anyway. When the income tax was initially being debated, there was a suggestion to put in a mandatory cap; I believe the level was 10 percent.

Don't be ridiculous, the Senator's colleagues told him. Americans would never allow an income tax rate as high as ten percent. They would revolt! It is an outrage to even suggest it!

Many actually fought the cap on the grounds that it would encourage taxes to grow too high, towards the cap. The American people, they asserted, could be well counted on to keep income taxes in the range of a few percentage points.

Oops.

Now, I'm not a tax-crazy libertarian; I don't expect you to be horrified that we have income taxes higher than ten percent, as I'm not. But the point is that the Senators were completely right--at that time. However, the existance of the income tax allowed for a slow creep that eroded the American resistance to income taxation. External changes--from the Great Depression, to the technical ability to manage withholding rather than lump payments, also facilitated the rise, but they could not have without a cultural sea change in feelings about taxation. That "ridiculous" cap would have done a much, much better job holding down tax rates than the culture these Senators erroneously relied upon. Changing the law can, and does, change the culture of the thing regulated.

Another example is welfare. To sketch a brief history of welfare, it emerged in the nineteenth century as "Widows and orphans pensions", which were paid by the state to destitute families whose breadwinner had passed away. They were often not available to blacks; they were never available to unwed mothers. Though public services expanded in the first half of the twentieth century, that mentality was very much the same: public services were about supporting unfortunate families, not unwed mothers. Unwed mothers could not, in most cases, obtain welfare; they were not allowed in public housing (which was supposed to be--and was--a way station for young, struggling families on the way to homeownership, not a permanent abode); they were otherwise discriminated against by social services. The help you could expect from society was a home for wayward girls, in which you would give birth and then put the baby up for adoption.

The description of public housing in the fifties is shocking to anyone who's spent any time in modern public housing. Big item on the agenda at the tenant's meeting: housewives, don't shake your dustcloths out of the windows--other wives don't want your dirt in their apartment! Men, if you wear heavy work boots, please don't walk on the lawns until you can change into lighter shoes, as it damages the grass! (Descriptions taken from the invaluable book, The Inheritance, about the transition of the white working class from Democrat to Republican.) Needless to say, if those same housing projects could today find a majority of tenants who reliably dusted, or worked, they would be thrilled.

Public housing was, in short, a place full of functioning families.

Now, in the late fifties, a debate began over whether to extend benefits to the unmarried. It was unfair to stigmatise unwed mothers. Why shouldn't they be able to avail themselves of the benefits available to other citizens? The brutal societal prejudice against illegitimacy was old fashioned, bigoted, irrational.

But if you give unmarried mothers money, said the critics, you will get more unmarried mothers.

Ridiculous, said the proponents of the change. Being an unmarried mother is a brutal, thankless task. What kind of idiot would have a baby out of wedlock just because the state was willing to give her paltry welfare benefits?

People do all sorts of idiotic things, said the critics. If you pay for something, you usually get more of it.

C'mon said the activists. That's just silly. I just can't imagine anyone deciding to get pregnant out of wedlock simply because there are welfare benefits available.

Oooops.

Of course, change didn't happen overnight. But the marginal cases did have children out of wedlock, which made it more acceptable for the next marginal case to do so. Meanwhile, women who wanted to get married essentially found themselves in competition for young men with women who were willing to have sex, and bear children, without forcing the men to take any responsibility. This is a pretty attractive proposition for most young men. So despite the fact that the sixties brought us the biggest advance in birth control ever, illegitimacy exploded. In the early 1960s, a black illegitimacy rate of roughly 25 percent caused Daniel Patrick Moynihan to write a tract warning of a crisis in "the negro family" (a tract for which he was eviscerated by many of those selfsame activists.)

By 1990, that rate was over 70 percent. This, despite the fact that the inner city, where the illegitimacy problem was biggest, only accounts for a fraction of the black population.

But in that inner city, marriage had been destroyed. It had literally ceased to exist in any meaningful way. Possibly one of the most moving moments in Jason de Parle's absolutely wonderful book, American Dream, which follows three welfare mothers through welfare reform, is when he reveals that none of these three women, all in their late thirties, had ever been to a wedding.

Marriage matters. It is better for the kids; it is better for the adults raising those kids; and it is better for the childless people in the communities where those kids and adults live. Marriage reduces poverty, improves kids outcomes in all measurable ways, makes men live longer and both spouses happier. Marriage, it turns out, is an incredibly important institution. It also turns out to be a lot more fragile than we thought back then. It looked, to those extremely smart and well-meaning welfare reformers, practically unshakeable; the idea that it could be undone by something as simple as enabling women to have children without husbands, seemed ludicrous. Its cultural underpinnings were far too firm. Why would a woman choose such a hard road? It seemed self-evident that the only unwed mothers claiming benefits would be the ones pushed there by terrible circumstance.

This argument is compelling and logical. I would never become an unwed welfare mother, even if benefits were a great deal higher than they are now. It seems crazy to even suggest that one would bear a child out of wedlock for $567 a month. Indeed, to this day, I find the reformist side much more persuasive than the conservative side, except for one thing, which is that the conservatives turned out to be right. In fact, they turned out to be even more right than they suspected; they were predicting upticks in illegitimacy that were much more modest than what actually occurred--they expected marriage rates to suffer, not collapse.
How did people go so badly wrong? Well, to start with, they fell into the basic fallacy that economists are so well acquainted with: they thought about themselves instead of the marginal case. For another, they completely failed to realise that each additional illegitimate birth would, in effect, slightly destigmatise the next one. They assigned men very little agency, failing to predict that women willing to forgo marriage would essentially become unwelcome competition for women who weren't, and that as the numbers changed, that competition might push the marriage market towards unwelcome outcomes. They failed to forsee the confounding effect that the birth control pill would have on sexual mores.

But I think the core problems are two. The first is that they looked only at individuals, and took instititutions as a given. That is, they looked at all the cultural pressure to marry, and assumed that that would be a countervailing force powerful enough to overcome the new financial incentives for out-of-wedlock births. They failed to see the institution as dynamic. It wasn't a simple matter of two forces: cultural pressure to marry, financial freedom not to, arrayed against eachother; those forces had a complex interplay, and when you changed one, you changed the other.

The second is that they didn't assign any cultural reason for, or value to, the stigma on illegitimacy. They saw it as an outmoded vestige of a repressive Victorial values system, based on an unnatural fear of sexuality. But the stigma attached to unwed motherhood has quite logical, and important, foundations: having a child without a husband is bad for children, and bad for mothers, and thus bad for the rest of us. So our culture made it very costly for the mother to do. Lower the cost, and you raise the incidence. As an economist would say, incentives matter.

... all the reformers saw was the terrible pain--and it was terrible--inflicted on unwed mothers. They saw the terrible unfairness--and it was terribly unfair--of punishing the mother, and not the father. They saw the inherent injustice--and need I add, it was indeed unjust--of treating American citizens differently because of their marital status.

But as G.K. Chesterton points out, people who don't see the use of a social institution are the last people who should be allowed to reform it:

In the matter of reforming things, as distinct from deforming them, there is one plain and simple principle; a principle which will probably be called a paradox. There exists in such a case a certain institution or law; let us say, for the sake of simplicity, a fence or gate erected across a road. The more modern type of reformer goes gaily up to it and says, "I don't see the use of this; let us clear it away." To which the more intelligent type of reformer will do well to answer: "If you don't see the use of it, I certainly won't let you clear it away. Go away and think. Then, when you can come back and tell me that you do see the use of it, I may allow you to destroy it."

This paradox rests on the most elementary common sense. The gate or fence did not grow there. It was not set up by somnambulists who built it in their sleep. It is highly improbable that it was put there by escaped lunatics who were for some reason loose in the street. Some person had some reason for thinking it would be a good thing for somebody. And until we know what the reason was, we really cannot judge whether the reason was reasonable. It is extremely probable that we have overlooked some whole aspect of the question, if something set up by human beings like ourselves seems to be entirely meaningless and mysterious. There are reformers who get over this difficulty by assuming that all their fathers were fools; but if that be so, we can only say that folly appears to be a hereditary disease. But the truth is that nobody has any business to destroy a social institution until he has really seen it as an historical institution. If he knows how it arose, and what purposes it was supposed to serve, he may really be able to say that they were bad purposes, that they have since become bad purposes, or that they are purposes which are no longer served. But if he simply stares at the thing as a senseless monstrosity that has somehow sprung up in his path, it is he and not the traditionalist who is suffering from an illusion.


- Jane Galt

In a way consequences, whether positive or negative, are a form of prices. They operate as signals that encourage or discourage various courses of action.

Price controls lie at the heart of much of progressive public policy. In the name of fairness or equality, progressives want to place artificial limits on the natural costs (or prices) associated with individual decisions. Usually this is done by forcing one class of people to subsidize - or even wipe out - costs actually incurred by a second class of people through their decisions. Progressives view the end state - a more equal outcome - as more "fair". But conservatives view the end state - a shifting of natural costs from one class of citizens who wish to engage in certain behaviors while avoiding their natural consequences to a second class of citizens who did nothing to incur those costs, as "unfair".

If the activity which incurred the cost is one society has an interest in encouraging (marriage, for instance), this kind of cost shifting may make sense. But where is the rational argument for encouraging actions that not only create negative consequences for the individuals involved, but result in increased costs for their fellow citizens? The fly in the ointment is that artificial price controls address only one consequence of a particular action - the primary or surface cost (or price). Because second order negative costs exist, and because they are typically are unaffected by price controls, unintended consequences abound:


Prices are not just arbitrary numbers plucked out of the air or numbers dependent on whether sellers are "greedy" or not. In the competition of the marketplace, prices are signals that convey underlying realities about relative scarcities and relative costs of production.

Those underlying realities are not changed in the slightest by price controls. You might as well try to deal with someone's fever by putting the thermometer in cold water to lower the reading.

Municipal transit used to be privately owned in many cities, until local politicians' control of fares kept those fares too low to buy and maintain buses and trolleys, and replace them as they wore out. The costs of doing these things were not reduced in the slightest by refusing to let the fares cover those costs.

All that happened was that municipal transit services deteriorated and taxpayers ended up paying through the nose as city governments took over from transit companies that they had driven out of business -- and government usually did a worse job.

Something similar has happened in rental housing markets, where rent control laws have kept the rents too low to build and maintain rental housing. Whether in Europe or America, rent-controlled housing is almost invariably older housing and more deteriorated housing.

Costs don't go away because you refuse to pay them, any more than gravity goes away if you refuse to acknowledge it. You usually pay more in different ways, through taxes as well as prices, and by deterioration in quality when political processes replace economic process.

But the lure of the free lunch goes on.

This is a point Elise makes obliquely, here:

Danielle Allen’s “Opponents Are Prejudging Health Reform’s Side Effects” explains why worries about “death panels” and rationing cannot be assuaged by quoting chapter and verse of the legislation. Do read the whole thing but I was particularly struck by these two lines about the thinking of those who oppose Obamacare:
The issue, rather, is that they recognize that the stated goals and structure of a policy may not fully capture its full range of outcomes in practice. [snip]

In asking lawmakers to consider not merely the goals of their policies but also the experiential meaning of concrete realities that those policies may bring, they have a point.

It is hard to understand why the idea that what happens in the real world isn’t always what we intended is so valid a concern in medicine but so ludicrous a concern in politics. If anything, we should expect there to be far, far less discrepancy between the predicted and actual outcomes in medicine than in politics.

In a country where marriage is the single best predictor of wealth and financial stability, how "unreasonable" or "extremist" is it to fear the unintended consequences of well intended public policy intiatives?

Black marriage in the U.S. is in crisis. During the last several decades the rates of marriage in the Black community have declined while the rates of divorce, separation, cohabitation, out-of-wedlock births, and children residing in female-headed households have increased. Between 1950 and 1996, the percentage of Black families headed by married couples declined from 78 percent to 34 percent.[1] Between 1940 and 1990, the percentage of Black children living with both parents dropped from 75.8 percent to 33.2 percent, largely because of increases in never-married Black mothers.[2] During this period African American couples reported more spousal abuse and singles and couples reported less connection to relatives.[3] Most striking, Blacks who do marry (and stay married) are increasingly indicating less marital satisfaction, but researchers do not know why.

Even though increasing numbers of African Americans have not married or have been unable to achieve healthy and lasting marriages, most African Americans still value and desire marriage. One survey reports 77 percent of Black adults ages 19-35 said they wished to get married.[4] In a 2006 Gallup Poll, Blacks were more likely than Whites to say that marriage is very important; yet, anecdotal evidence suggests that young Blacks may be losing hope that a good marriage is attainable.[5]

Posted by Cassandra at August 27, 2009 07:12 AM

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Comments

And that last line, "...may be losing hope that a good marriage is attainable." is the saddest point of all. Because as little incentive as there is for marriage now, if there is no hope of a good marriage then little incentive becomes no incentive and we all become surly and angry like Bill Maher, adding nothing of real value to the world but dragging everyone else down into misery with him.

What I appreciate about what you've written is that it takes the things I was intrinsically feeling and lays out the reasons behind them - something absolutely necessary. I knew what I had been seeing, but had no idea how to draw it all together. And I, too, felt caught in the conundrum of things that weren't fair and things that weren't nice.

Now I have even more to think about.

Posted by: airforcewife at August 27, 2009 11:35 AM

Cassandra does that very well; when we talk about the feelings of being hard done by and life being unfair, we talk about choices being made that were not thought out with regard to the consequences. I do not see where I have to pay for someone else's mistake, especially if they keep on making the same mistake.

Excellent post and good response, AFW.

PS. The CLUs are making me a red hat today. Heh.

Posted by: Cricket at August 27, 2009 11:54 AM

I know this post is long. And the odds are that anyone looking at the comments at least skimmed the post (making this comment fairly ineffective).

But I think this is one of the more important things I've posted lately, not the least of which is b/c I wrote little of it. Sometimes I feel real despair at the level of discourse on the Internet. And then I read things like the ones excerpted here, and I am profoundly humbled.

Posted by: Cassandra at August 27, 2009 03:50 PM

I've got opinions on this, but I'll have to wait until I am home this evening to give it the attention I think it deserves...

Posted by: Miss Ladybug at August 27, 2009 03:54 PM

One of the problems with polls is that respondents have a nasty habit of giving what they consider to be the acceptable answer. Ergo, marriage is acceptable, so, that is the answer I will give.

As to taxes, if I do not pay taxes, feel free to raise the tax rate to 100%.

Getting to "Reformers," the wonderful thing about being one is that you never have to look back and say, oops, I was wrong. No, what you say is, throw more money at it. They will go on and ask, how can you not care for (fill in whatever brings a tear to your eye)?

In the next census, they are going to count illegal aliens in the general population. Oh, and don't forget using guesstimates. In other words, the next census will mean nothing in absolutist terms. Just think how that will redraw Congressional representation, my friends.

Posted by: RIslander at August 27, 2009 04:31 PM

... all the reformers saw was the terrible pain--and it was terrible--inflicted on unwed mothers. They saw the terrible unfairness--and it was terribly unfair--of punishing the mother, and not the father. They saw the inherent injustice--and need I add, it was indeed unjust--of treating American citizens differently because of their marital status.

This is why I don't hold that most democrats are selfish/unreasonable. Their intentions are certainly good. Too bad the road to Hell is paved with them. They just don't see how their good intentions could ever possibly backfire. They don't see how, even though *the individual* was helped, they've set up a system by which creates increasingly more people who *need* help. That, perhaps, allowing a small handful of people to suffer mightily, might actually prevent a vastly greater number to not have to suffer at all.

Posted by: Yu-Ain Gonnano at August 27, 2009 05:20 PM

And this is my problem with ObamaCare. They certainly don't *intend* to ration healthcare. After all if they did that, "the people would revolt!"

Well yes, today they would. But would they revolt at denying an alcoholic a *second* liver transplant? The thing is once you agree in principal that the gov't *can* determine the level of care you may receive "it's no longer a question of what you are madam, we're just haggling over the price". And then 20 years from now it's not the second transplant, but the first. And it's not just the alcoholic, but the smoker too. 10 years after that, it's the obesity epidemic and so we tax sugar and fat exhorbanantly. And 50 years from now, there still aren't "Death Panels" ala The Obsolete Man but simply a faceless bureaucrat in a cubicle somewhere making policy which effectively says "He look, we told you drinking/smoking/sugar/fat/political-boogeyman-of-the-day was bad for your health, why should *you* get treatment when these other people did everything right? Go to the back of the line, we'll get to you when we get a chance".

A little question for our Democrat brethren. George W and republicans in general, were supposed to have been a tyrants, fascists, warmongers, bigger threats to our county than Al-Qaida, only looking out for their friends at Haliburton, Hitler wannabes and more stupid than a deranged chimp not to be trusted to manage their own pretzel much less the country. If they are so damned evil are they the people you want in charge of *your* healthcare decisions? Because, sooner or later, like it or not, the Republican will be elected majorities in congress and the White House again.

Posted by: Yu-Ain Gonnano at August 27, 2009 06:12 PM

Thing that freaks me out is how much control the gov't already has over health control... listening to the radio on the way back to my apartment, I heard that 1) Sacred Heart is now the only level-2 Trama center east of the mountains in Washington, and 2) they were being denied permission to add 175 beds to deal with increased demand.

Their spokesman hopes to get permission to cannibalize a dozen or so level-2 trauma usable beds from the existing facilities in less than a year, and maybe get permission to build 25 inside of five years.

...

Eeek?
(numbers may be a bit off, I didn't write anything down because I was driving)

Posted by: Foxfier at August 27, 2009 07:47 PM

One additional item that caused the breakup of black families: the welfare rule that counted everyone living in the house towards the economic maximum permitting welfare payments. So, even if unmarried but wanting to live together, this rule put the fathers out of the house so the mother could collect welfare.

Posted by: Rex at August 27, 2009 09:32 PM

Several years ago, I used to read LaShawn Barber regularly. She discussed, at length, how the welfare state had destroyed the black family. Even back in the days of segregation, you had stable, successful black families. The welfare state told the black man that his family didn't need him anymore. So, he left. The welfare state didn't just hurt black families, though that is certainly the most noticeable, nationally. Go to places where "white trash" is more predominate, and you'll see the same thing: the man is told "We don't need you", so he doesn't stay. Likely not much different in poor Hispanic communities, either: I did my student teaching in a poor minority school. There were kids from stable homes with both parents, with working parents. But, there were also the kids from broken homes, or dad in prison, or whatever. The kids that needed help the most, who I hated thinking "I wonder if they'll make it to their 18th birthday", but I couldn't help thinking that, knowing the kind of home life they had to go home to. How different would be the lives of those children if they all had a mom and a dad, who had real jobs, who would make the effort to improve the environment their families lived in...?

Posted by: Miss Ladybug at August 27, 2009 11:07 PM

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