The following is a modified excerpt from my presentation at Sunstone this summer. We live, not only in a capitalist, but a consumerist, society. Our society is all about spending, acquiring, cluttering, and replacing, not about maintaining, restoring, renewing, and protecting. It is cheaper to buy new than to repair old. We live in a disposable country, where everything is trash, if not now, then soon. How did we get here? One of the best explanations I’ve found is in the work of the social theorist Max Weber (1). He examined the correlation between the Protestant religious belief and its accompanying work ethic and the accumulation of capital and the subsequent rise of capitalism. One aspect [of the concept of calling that arose during the Reformation] was unequivocally new: the fulfillment of duty in vocational callings became viewed as the highest expression that moral activity could assume. Precisely this new notion of the moral worth of devoting oneself to a calling was the unavoidable result of the idea of attaching religious significance to daily work (39-40). The motivation to accumulate wealth was the desire to have confirmation that one was saved. Unlike Catholics, Protestants had no priest to confess to and receive absolution of sins, so the status of soul was in doubt, which was a very uncomfortable position to be in spiritually (60,66). “Restless work in a vocational calling was recommended as the best possible means to acquire the…
Category: Social Sciences and Economics
Desert and a Just Society
The 2010 poverty level in the U.S., we learned on Tuesday, is the highest it has been since 1993. In 2010, about one in six Americans lived below the poverty line.[fn1] In June, 14.6% of Americans received food stamps.[fn2] To some extent, the high poverty rate is probably related to the high unemployment rate, which was 9.1% in August. I throw out all of these numbers to suggest that, as a society, we have a problem. That problem needs to be fixed. And we, as Mormons, undoubtedly have something that we can bring to the discussion of how to fix it. As I think about how we can fix poverty, though, I’m hugely influenced by Ron Haskins and Isabel Sawhill’s book Creating an Opportunity Society.[fn3] Haskins and Sawhill point out that Americans care about desert.[fn4] That is, as Americans, we want those who have the ability to work for a living. And I’m interested in this idea of desert. Because I’m not convinced that we have a religious dispensation to withhold assistance from those don’t somehow “deserve” our help.[fn5] Still, as a practical matter, irrespective of whether we have religious dispensation or not, we care about desert. And no social program that is blind to to recipients’ refusal to work is going to go anywhere. As a pragmatist, then, I have to confront desert. But, as we consider how to provide aid to those to whom we have the political…
Mormonism and Social Justice
Recently, we’ve seen some distrust of religions that advocate social justice, from sources as diverse as the political punditry and lay Mormons.[fn1] The criticism is unfounded, of course, and strikes me as ahistorical and anti-Catholic. The term “social justice” comes from 1840, when the Jesuit scholar Luigi Taparelli as he worked through the philosophy of Thomas Aquinas. As you look at Jesuit schools’ mission statements, you begin to understand how central social justice is to the Jesuit identity. I teach at a Jesuit law school. Part of our mission is to “prepare graduates who will be ethical advocates for justice and the rule of law.” This social justice emphasis is inspired by the belief that each human being “deserves dignity and respect.” And Pope Benedict XVI takes this dessert further: he says that charity is inseparable from justice.[fn2] So why spend this time, on a Mormon blog, talking about Catholic conceptions of social justice? Because not only does the Mormon tradition has the same biblical and traditional Christian justifications to pursue a just society,[fn3] but Restoration scripture and modern prophets provide additional impetus.[fn4] That is, as Mormons, we have a duty to pursue a just society. Recognizing this duty doesn’t, of course, define the contours of a just society, or prescribe the route we use to arrive at this just society. We still need to ask what and how. Neither is a simple question, and I don’t have an overarching vision for what…
What If President Monson Endorsed Mitt Romney?
In his talk at the close of the April 2008 General Conference, President Monson talked about the blessing we had received, both as members of the Church and, specifically, over the course of the conference. He ended his talk with counsel: parents are to love and cherish their children, youth are to keep the commandments, those who can attend the temple should, and we should all be aware of each other’s needs. But what if, in closing his remarks,[fn1] President Monson had said, “My dear brothers and sisters, I feel strongly that Mitt Romney is the best person to lead our country. I encourage each of you to campaign on his behalf and to donate to his campaign. We have also established the Perpetual Mitt Fund, with an initial investment from tithing dollars for $1 million in order. This fund will go toward his election and, if any money is left over, it will be transferred to Harry Reid’s next campaign. If you would like to support the PMF, you can use the donation slips. In the ‘Other’ category, please write ‘PMF.’”[fn2] There was, unsurprisingly, an immediate backlash. Dozens of people sent letters to the I.R.S., demanding that it revoke the LDS church’s tax exemption. In its review, the I.R.S. determines that the Church’s actions were in flagrant violation of the anti-campaigning rules. Sick of tax-exempts pushing the envelope, the I.R.S. decides to make an example of the Church and…
The Parable of the Talented Endowment Tax
Governments impose taxes in order to raise revenue that, in turn, funds government function and services.[fn1] In designing a tax system, tax theorists generally try to create provisions that will raise revenue without significantly altering taxpayers’ economic choices. That is, ideally, taxpayers will act in approximately the same way as they would have in a world without tax.[fn2] But we can’t hit the ideal. The income tax alters people’s actions, because it alters the price calculus. One way is in our work-leisure decisions. Assume with me that I earn $10 an hour. That said, I enjoy not working, too–my leisure is worth $8/hour to me. In the absence of an income tax, if I have a choice between work and leisure, I’ll choose work. Even with a 10% tax, I’ll choose work, because I’ll bring home $9 after taxes, while my leisure is still worth only $8/hour. However, if the income tax is at a 25% rate, I’ll only bring home $7.50 after taxes. Suddenly, an hour of leisure is worth more to me than an hour of work; the income tax has caused my to substitute less-valuable leisure for more-valuable work.[fn3] One way you could eliminate this problem, according to some economists and tax theorists, would be to replace our income tax with an endowment tax.[fn4] An endowment tax is, in broad strokes, a tax on potential income, rather than on actual income. An example (though not a rigorous…
Faith frames the pie, and other reasons to be grateful
Today I, with millions of other home cooks around the country, will be getting frisky in the kitchen with all manner of saturated fats and simple carbohydrates as I beget a table full of gorgeous harvest pies. I make pie once a year, the day before Thanksgiving; the rest of the year I prefer my saturated fats and simple carbohydrates in other forms. But at about 4:00 on Thanksgiving Day, surrounded by a riot of dirty dishes and family, there’s nothing in this world or out of it that tastes better. Social scientists would call my Thanksgiving palate a “framing effect”. The framing effect is an important concept in economics and psychology, describing the way in which the presentation of an object or idea in different contexts will change people’s decision-making. By swapping out one emotional frame for another—Thanksgiving Day for Easter, say—we change our perception of the object or opportunity at hand, even though it remains objectively constant. Pie is pie, after all. Thus an egg presented to tasters as “free-range” and “organic” will taste better than the same egg served, say, as part of a blind taste test. Technically speaking, the framing effect is a cognitive bias. Framing distorts our perception of reality, and it can be manipulated to produce irrational decisions. Despite this potential for abuse, though, I want to speak up in defense of the humble framing effect, especially at this Thanksgiving season. While it’s occasionally…
Zion and the Limits of Intellectual Agrarianism
There is a strand of progressive Mormon thinking that associates Zion with an exaltation of agrarian virtues. I am thinking here of folks like Hugh Nibley or Arthur Henry King or my friend Russell Arben Fox who argue that small scale, local economies, ideally based in large part on agriculture provide the best possible model for building Zion. At least one way of understanding this line of thinking is to see it as a kind of Mormonization of agrarian thinkers like Wendell Berry. It is striking in this regard that Leonard Arrington, whose works on nineteenth-century Mormon communitarianism provide the historical ur-texts for much of this thinking, was trained at North Carolina in a progressive economics department then much under the influence of an earlier generation of Southern agrarian thinkers. I am skeptical.
The Tebows and Other Good Omens
I never expected to see the day that Kate Michelman, past president of NARAL, would write, “all sorts of well-educated and progressive people are comfortable calling themselves pro-life.” Michelman’s opinion piece in the Washington Post is fascinating not only for her openly acknowledging the eroding support for her movement (she says recent polls shows 51% of Americans identify with the label “pro-life” and only 44% with “pro-choice”; the pro-life number would be a historical high), but by how hamstrung she feels defending abortion. She attributes the shift in public opinion primarily to technological progress: “[s]cience played a big role, making the fetus more visible. Today, the first picture in most baby books is the 12-week 3D ultrasound, and Grandma and Grandpa have that photo posted on the fridge.” Read that again. Michelman acknowledges that support for the pro-choice movement benefited from people’s ignorance of human development and the reality of the preborn person. This admission could scarcely be more heartening to those of us working for fetal rights. I’ve observed the phenomenon she mentions first-hand, and it is real. On two separate occasions at our former fetal imaging studio, Baby Insight, men who appeared to be in their 60s, who I assumed to be grandfathers of the new baby, came out of the studio where they’d spent 30 minutes watching their new grandbaby on a 70″ projection screen, and say to no one in particular, “Well, it really is a…
Charity Free Riding
As we all know, the gospel is overrun with economic doctrine. On that note, I noticed a quote about free riding from President Monson (which I just saw at Mormon Times): “I am confident it is the intention of each member of the church to serve and to help those in need,” he said. “At baptism we covenanted to ‘bear one another’s burdens, that they may be light.’ How many times has your heart been touched as you have witnessed the need of another? How often have you intended to be the one to help? And yet how often has day-to-day living interfered and you’ve left it for others to help, feeling that ‘Oh, surely someone will take care of that need.’” Under reasonable assumptions it is not hard to show that if people only give out of an altruistic desire to see others better off, and they have no personal gain (emotional or otherwise) from being the giver, than most people will free ride and leave the giving to the very rich (who have nothing better to do with their money). Since this doesn’t happen as much as that theory suggests, a likely cause is that givers are those who perceive some individual gain from giving — either because it makes them feel good or, as King Benjamin pointed out, it was essential to their salvation. Thus “pure altruists”, as defined by those who have no personal gain from…
Explaining the Puzzle of Cross-State Differences in Bankruptcy Rates
Bankruptcy rates vary alot across states. With a fairly simple statistical model, Lars Lefgren and I explain about 70% of these differences in a paper just published in the Journal of Law and Economics. For cross sectional work using survey data, where you are looking across states at a point in time, explaining 70% is pretty darn impressive.
Morality Polling
Suppose you take a “wisdom of the crowds” approach to morality (not that you should). Well then what could be more informative than a poll telling you what actions are morally wrong and what aren’t? Enter Gallup’s recent poll… Tip: Adultery is still wrong. Polygamy also out.
Commuter trains in Utah
I just returned from a short presentation by Mike Ransom on the Utah commuter Frontrunner rail line. It is a lesson in how to not spend money.
The Economics of Service and Welfare
A friend of mine suggested a few months ago that ward Elder’s Quorums should stop helping members move. Why, he asks, should we be competing with businesses in our area?
Optimal Tithing
Suppose that we had a base 8 system instead of base 10, perhaps because, in this hypothetical world, we had 8 fingers rather than 10. Would we pay 1/8 our increase, or do you think it would still be one tenth? Or, to reverse causality, what are the chances we have ten fingers so that we’d develop a base 10 system that would make it easier to count out our tithing?
Dow 6,000
One of the things people find odd about Mormons is our claim to be led by a prophet.
A Short Lesson on Multipliers
This is just a post about Keynesian mulitpliers with no particular religious content. You have been warned and forewarned.
Expected Value of A Fetus
A thoughtful reader asked me if there were any economic tools that could be brought to bear in valuing a fetus. Of course there are! And in fewer than a 1000 words, no less!
The Political Uses of Debt and Mormon History
Yesterday’s discussion got me thinking about debt, in particular the political uses of debt. Here, I think that the experience of the American Revolution and the failure of the Confederacy may have something to tell us about Mormon history.
A Nobel calling
I’m very happy to see this year’s Nobel Prize in economics going to Paul Krugman, whose columns in the New York Times helped me see the importance of the discipline of economics as nothing else ever had. I think Mormon scholarship could use more scholars like Paul Krugman (quite apart from the Nobel and the weekly NYT column)
Returning to Zion
Given all that might be said of Mormonism, it should not come as a surprise that a lot of interesting topics sit pretty much neglected. One of these, I would argue, is the Mormon contribution to building settlements in the United States.
Global Warming, Redefining Marriage, and Risk Aversion
I think we can all agree that, from a risk analysis perspective, global warming and gay marriage share a lot of characteristics.
McCain and the Revelatory Economist
Bloomberg reports the following from McCain about economists who criticized his (lunatic) summer gas plan:
Moral Hazard in the Scriptures
For those hoping to find more economics in their scripture study…
Shortage and storage
With the recent spike in food prices, a three year old post demands new life. Here it is: Clearly, were there to be a famine, a one year food supply in the basement would look really good. What may be slightly less obvious is that the presence of food storage, even if nobody ever uses any of it for an emergency, can stop a famine from ever actually happening.
Coase on Abortion
Estimates suggest that, on average, Americans behave as if they value a year of their life at, more or less, $100,000. This would put an average American life at a “revealed preferred” value of somewhere around $7 million.
Economics and the Vicious Dating Scene
Diminishing Returns: Once things start going downhill, bail. Increasing Returns: It can only get better.
Markets and Consumer Activism
With fair regularity, one hears someone talking of efforts to buy less of some commercial product, either out of a desire for global conservation or because he doesn’t like how it is produced or whatever. Invariably, he comments that his own effect on the market is small, but he wishes to “send a message” or help along some broader movement. Within a plausible model of markets. there are easily understood conditions under which this small effect is actually zero, and remains zero even if he is joined by many like-minded individuals. At which point one wonders if the “message” being sent is “I don’t understand how markets work”.
Fixing the Minimum Wage
It seems pretty clear that we are heading for a hike in the minimum wage. For the many of us who care about poverty reduction, which would be basically all of us, this could be a big deal. The problems with the minimum wage are that it:
The Opportunity Cost of Publishing
In this excellent post, Rosalynde talks about the gender differences in subject material among Deseret Book writers. This renews the discussion brought up by Taryn Nelson-Seawright on the same difference existing in other Mormon outlets. Explanations abound for this phenomena, ranging from differing preferences to piggy discrimination, but most of them are sort of boring. Here’s one that is at least slightly more interesting:
Why Europeans look lazy
It is a well established fact that Europeans perform vastly less formal market work than Americans. A less known fact is that this is a recent development— in the late 50s, Europeans worked about 10% more hours, but this has been in steady decline for 40 years, until now they work about 30% fewer hours than Americans.