Asymmetrical Information

The minimum wage isn't a government transfer any more than corporation laws which allow organizations to exist outside the scope of individual owners, making them much bigger and giving them more bargaining power which allows them to pay lower wages than they would if wage earners had equal bargaining power.

Sounds a lot like Milton Friedman's "negative income tax" idea. Just another example of his genius.

Errr . . . corporations typically pay much higher wages than privately owned businesses (particularly small ones), in part no doubt because the money isn't coming directly out of the pockets of the managers.

You really really need to make your blog UTF-8.

As far as MT is concerned, it is UTF 8. the problem only happens when I'm copying from another blog, presumably one that uses the old character set.

I've said this before about your social security reform. The first step is to change the name to "a pension".

No changes to payouts, or eligibility, or lock-boxes or anything, just change the name.

Anyone arguing against the name change is going to look pretty silly. Who will march in the streets about a name change? (OK. China/Taiwan and Greece/Macedonia will threaten war about name changes, but I mean sane people.)

But once it is called a pension, once you drop this silly pretense of "insurance", other reforms will become possible.

MT might think you're UTF-8, but Apache doesn't:

Trying 64.235.242.247...
Connected to janegalt.net.
Escape character is '^]'.
HEAD / HTTP/1.1
Host: janegalt.net

HTTP/1.1 200 OK
Date: Mon, 20 Mar 2006 21:56:37 GMT
Server: Apache
X-Powered-By: PHP/4.3.11
Content-Type: text/html

That last line should be

Content-Type: text/html; charset=utf-8

Why is it that every apostrophe is replaced with an a (with a hat over it), a Euro sign, and a "trademark" TM?

Of all the blogs I read (the number of which is something between "way too many and "someone needs to get a life"), yours is almost the only one where this "UTF-8" problem happens regularly. As you say, it occurs when you import quotes but all of the other blogs I read regularly import quotes from elsewhere and they don't have the formatting problem yours does.

what way is your idea of the public good compatible with a democratic vision?

Simply put, marketing works, and pretending that people are not influenced by marketing isn't idealistic, it's stupid.

Let's take something a little more split down the middle. If I'm for continued American participation in Iraq, then I'm going to damn well want to downplay the casualties by discouraging media attention on them, etc. Am I evilly trying to hide the fact that soldiers are dying? No, I'm simply acknowledging that people *will* be influenced by crying mothers, soldiers screaming in pain as they die, etc.

If I'm against American participation, then I'm not going to want the media to focus on Iraqis thanking Americans for their intervention and begging them to remain to prevent Iraq from becoming a war that kills thousands upon thousands of women and children. Am I evil? No, I'm well aware of people's tendencies to sympathize with those in desperate need.

If I have an opinion, then I've already weighed the two sides and chosen one. But it's stupid to think that everyone will automatically be influenced in the same way by the same materials. If I believe that something is right, then I'm going to try and persuade people to that opinion by marketing it to them in terms that they wil accept.

Being aware that people are swayed by marketing doesn't make one terrible. It simply means on recognizes the need to market *anything*. And it is also silliness to think that anyone who opposes your idea isn't going to be marketing the other direction.

When the government goes to war, it can use words to downplay the risks and costs of the war, and to emphasize the positive effects of the war, or the risks of not going to war. The government might or might not have a valid argument. They migh or might not even be lying. But either way, it's still a war, and it's difficult to obscure that fact.

What Jane is talking about isn't just marketing. She's talking about structuring the program, regulation, etc. itself in such a way that it obscures the real effects.

You mean structuring a war to prevent a dictator from gaining Weapons of Mass Destruction when what you are really trying to do is restructure the Middle East to make it less amenable to terrorists?

Look, the war is not a perfect analogy, but implementation *is* a marketing choice. Admittedly in some cases there is a cost to the implementation, but that's marketing costs. And they're real. If you're not willing to market your plans, don't bother making them. It's not the people's responsibility to think you're right. It's your responsibility to persuade them you're right by appealing to them as you can.

I'll point out that I don't notice the Libertarians bending over backwards to announce that policies that give "greater freedom" will absolutely mean that there will be many losers who will suffer greatly from the consequences of that "freedom". Why? Because to do so is bad marketing. So what does a Libertarian do? They use stealth to introduce greater freedoms. Pretend that *everyone* will win, and push onward. If they're not willing to do that, they're not interested in seeing their policies enacted.

Of course, the line between marketing and fraud is a pretty wide grey one. Is it fraud to connect beer and pretty girls in the viewers mind? They're generally not remotely connected in real life. So, as always, it becomes a judgement call as to when the line has been crossed. The only thing to do is to try to avoid crossing the line oneself and point it out noisily when others do.

My point isn't about rhetoric or persuasion so much. It's a pretty basic point about democratic transparency. Governments use coercion to make things happen. Government coercion can be legitimate, but it has to meet certain conditions. One of the traditional conditions is that a majority of the citizens who are going to be coerced, or a majority of their representatives, have to agree to it. However, if policies are structured so that we can't see whether or how we are being coerced, then we can't freely endorse them in the democratic process. So those policies fail the test of legitimacy.

Part of the issue here is a big principle-agent/incentive compatibility problem between representatives and the citizens they represent. Politicians want to get re-elected. If they can subsidize interest group A at group B's expense without group B really noticing due to the hidden transfer, then that will sound like a real winner to a politician. Which is just to say that the incentives politicians face encourage them to violate the very conditions of transparency and public justification that make their coercive powers legitimate. That sounds like a problem to me.

Politicians would have a constant incentive to try to violate and work around an explicit transfer requirement. Which is exactly why we need one. It would give anyone in the group from which resources are being appropriated standing to file suit in order to repeal the law licensing the hidden transfer under the Constitution. The whole class wouldn't need to notice the hidden transfer, and then fight it off politically. Only one person would have to notice and win in court. If the politicians can succeed in passing a law that makes the transfer explicit, then that's OK--it satisfies the minimal conditions of legitimate government power.

Patrick: Don't call SocSec a "pension," call it a "welfare program."

People earn "pensions" by working for one employer for a period of time.

People get "entitlements" or "welfare programs" by voting for politicians who promise to award them--people effectvely give them to themselves.

Jane, the point of democracy is to find out what the people want. However, clearly the people often have false consciousness. Therefore it is the task of the political elite to determine what the people really want, and force them to have it, regardless of the fact that between their racism, sexism, TV watching, and general ignorance they don't know what's good for them. However, we can verify easily enough what they really want. After they are correctly educated by properly credentialed and educated teachers, the people will unlearn their crude ideas and they'll then all vote for Democratic policies. And in fact, most of the people who are properly educated in the state schools do vote Democratic. So you see a sort of higher level of democracy here.

In short, we need to pull the wool over the eyes of the stupid and ignorant for the indefinite future while we educate them into the people they ought to be, but currently aren't. They'll thank us for it in the end.

madding democracy is not the only thing we're about.

democratic *republicanism* is what we're about.

left to themselves, people would vote that F=mv. they probably would also not vote for free trade.

if you agree that subjecting many things to a plebiscite will end up with bad results for the many, then...

This seems to be at the heart a question of welfare economics and social choice. This means that FIRST we must choose what our goal (equilibrium condition) should look like (a purely normative question.) Then, and only then can we look at how transfers can/should be made, and what externalities will be produced by making the transfers themselves. Certainly, if we are anywhere near a "pareto optimal" point, and want to move to a different point, then some will be made worse off, is it "right" or wrong that they know how (technically) they are being made worse off if everyone before the transfer occured agreed upon the final goal?

Well, I suppose the mortgage tax exclusion would be hard to sell on that basis, or the cigarette tax, but the alcohol tax could be explained as cost transfer to pay for emergency room service for automobile accidents.

Bristlecone
Oh, I'd love to have my social security taxes back. It's been thirty five years of the wildest stock, bond, and real estate boom of all time. If it was welfare for the poor instead of the middle class, I'd be so much better off.
Only the bottom five percent, the mentally or physically disabled people would get "social security" as welfare. The other 95% would do just fine.
It was the "Greatest Generation" that got more out than they paid in. We babyboomers haven't got anything back, let alone what we paid, and let's not even get into the interest, dividends, or rent that we have forgone.

Tom West,

Yes, everyone does marketing but I think the same rule that applies to business applies to politics in that the worse your product, the more marketing you have to do.

If a product is clearly superior we say it "sells itself." No one has to do much to make people want the product. It is the products that don't work well that have such a huge percentage of their total cost devoted to marketing. When you see a product getting renamed or rebranded repeatedly you can be certain that the product is in trouble. The real-world functionality of the product does not sell it and customers essentially have to be tricked into buying it.

In democratic politics this raises an interesting question: How much do you actually trust or respect the will of the people if you think you have to trick them into voting for your ideas? Viewed from the other direction, if most people don't accept your ideas without a high level of deceit doesn't that suggest that the idea itself might be a bad one?

I think Jane is saying that when we, as individual political actors, find ourselves thinking, "we can't tell people what we honestly think the program does or how it actually works" then that in itself should warn us we have left the path of democracy.

Is it fraud to connect beer and pretty girls in the viewers mind? They're generally not remotely connected in real life.

If you drink enough beer, the girls look prettier.

Interestingly enough, Rand's observation was the subject of a formal study once, and it confirmed his observation.

It seems to me that very few of the political classes or the "intellectuals" really believe in democracy at all. Its just a vehicle to legitimize their rule. The idea that the filthy peasants can throw the "best and brightest" out of power is a terrifying thought to them. Consider if you will the attitude of many Europeans that it is stupid to expect that democracy can take hold in an Arab country because it goes against the grain of their culture, but at the same time many of those same people support almost unrestricted Arab immigration to their countries and are against any effort to force them to assimilate. If you grant their premise that Arabs are culturally indisposed to democracy, why do you want to import them in large numbers to a democratic country while insisting that they should be able to maintain every bit of their original culture? Is this stupidity on their part? Or is it a long term strategy?

And we are certainly not immune to this in the US. The "McCain-Feingold Reform Bill," aka "The Incumbent's Protection Act" is an ugly example of anti-democratic forces in action.

More and more we see the emergence of Potemkin democracies across the world, where the outward trappings of democracy are maintained but the power of the electorate to effect their will is essentially denied to them. These tend to take one of two forms. There are systems like Iran where the elected representatives do have power but there are restrictions as to who may run for office, and then there are things like the EU where anyone may run for office but the elected assembly has no real power at all. Take your pick. It seems to be the wave of the future.

The character set problem is this line in the HTML source for the page:

<meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" />

It happens that my job involves working with nuclear weapons. Surprisingly, most nuclear weapons data is secret, not top secret. Otherwise, yeah, this is stuff I don't ever want to see on the front page of the New York Times. (And I don't doubt they would publish it, if given the opportunity.)

Making transfers explicit is a fine principle, but I'm skeptical it could be successfully codified as a Constitutional amendment even by a Congress full of people of good will. And I don't believe we have a Congress full of people of good will.

if most people don't accept your ideas without a high level of deceit doesn't that suggest that the idea itself might be a bad one?

Only if you believe that popularity = correctness.

If we go back 50 years, I'd be perfectly willing to say that the majority was wrong with respect to racist beliefs, and I'd be willing to use "deceitful" measures to rectify this situation (to whatever small degree would be practical).

Does this mean that I consider myself anti-democratic? No. I do not expect public opinion to be identical to mine. I'll fight to change it, but just because I believe that the public is wrong about a particular subject doesn't meant that I want society to face the full brunt of the consequences of that belief.

Right after 9-11, there were a pretty large number of people who wanted to hit whatever they could as fast as they could. "Nuke Mecca" was not an uncommon sentiment. Are you suggesting that if a majority held this opinion that:

1. It would be wrong to use subterfuge to alter it?
2. It would be wrong to use subterfuge to avoid doing so?
3. Failing to agree with the sentiment means you do not respect democracy?

People are people. Pretending that the majority is always right is as stupid as pretending the majority is always wrong.

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