The Insider/Outsider Approach to Ideas

This is really just a pedestrian observation, one that ties together a few things I've written before.

The basic idea is this.  Facing a scarcity of resources, we have to make compromises.  One of those compromises is that intellectual approaches are more rigid and more "top-down" than they would ideally be, which in turn creates an "insider/outsider" dynamic reminiscent of Straussian "esoteric" writing.

I'll give an example that will hopefully illustrate my point.  Sometime just before the middle of the 20th century, economists developed the concept of national income and started to measure it rigorously.  I don't want to imply that people like Simon Kuznets, who played a central role, did a bad job.  Quite the contrary:  they did such a good job that I believe their concepts have been handed down with little modification to the present day, and their work ushered in the modern era of careful measurement of economic activity.

Of course the concept of national income involved a lot of careful tradeoffs, and one can (in theory) criticize those tradeoffs, or at least take them into account when using the concepts.  But here's the crucial point:  economics students are generally taught national income concepts as a kind of received wisdom, the same way students learn about electrons and species of animals:  GDP = C + I  + G + NX.

The instruction might include a few qualifications about how GDP isn't really the only thing we care about, with a few examples of how it can be misleading, but then the instruction continues as if GDP were a completely coherent and uncontested concept.  (By the way, I chose electrons and species because those, too, are conceptualizations that would, in a world with no scarcity, attract more scrutiny and a more nuanced approach.)

Now I want to emphasize, I think this is for the most part appropriate.  If anything I think undergraduate education often goes too far in the other direction.  Students are often asked, in introductory classes, to criticize the giants of the field.  (This is a complaint Tarun has leveled at undergraduate philosophy education.  Students are expected to come up with something original to say before they are equipped to understand the concepts, much less respond intelligently to them.)  It's a waste of time and inculcates an inappropriate arrogance, a lack of respect for deep reading.  Students actually think they've come up with a refutation of Kant or whatever...  and why wouldn't they?  Their instructor has given them every indication that this is an appropriate way to think about it.

Similarly it would probably be a waste of time to walk economics students through the intellectual history of national income statistics.  Most undergraduate economics students won't do any further work in the field.  And there is a sort of intellectual "division of labor" in which very smart people like Kuznets develop ideas that can then be used in an "off-the-rack" way within the field.  This is the essence of scarcity management:  Kuznets does the work once, and then the knowledge can be replicated millions of times without further effort.  It's mass production in the intellectual space.  The same approach is used in math, certainly, and probably in every area of study.

But there is a danger that a gap will develop between people who think they understand a concept and people who have a true appreciation of the history of the idea.  People who only understand ideas as received wisdom (which is most people) struggle to accommodate criticisms of the framework without really having the tools to do so.  When they identify weaknesses, they think they're treading new ground, or they think they've been sold a bill of goods.  Or, possibly, they remain ignorant of any weakness in their framework and they apply it robotically.

Just as an example, it was recently brought to my attention that the cutoff for "statistical significance" is arbitrary:

Why is the common level of statistical significance 5%? Because Fisher had this personal preference in 1926. pic.twitter.com/SVX4DLAmSM
— Michael Clemens (@m_clem) December 9, 2014

On some level, I knew this, but I wouldn't have been able to articulate it with any precision (I still can't, really, but now I know enough to invoke the concept and dig deeper if I need to).  In the statistics courses I've taken, statistical significance is exactly the kind of received wisdom that gives students enough to do most of what they need to do, but leaves them vulnerable to overconfidence and unable to critique their own field.

I don't have much more to say - I think these tradeoffs are pretty much unavoidable, and we can only hope that academics do a good job of picking the framework and providing at least some context so that students can, if they choose, learn more about the intellectual history of the concepts they are using.  "When the legend becomes fact, print the legend."  And similarly, "When the conceptualization becomes fact, print the conceptualization."  But it still feels elitist and a little gross to proceed this way.

Taxi Regulation and "Dirty" Politics

A quick comment on politics and taxi regulation.  Catherine Rampell has a thoughtful column in the Washington Post about the politics of taxi regulation, pointing out that deregulation has not been successful in the past:

Alas, as legal scholars such as Paul Stephen Dempsey and others later documented, this Wild West approach proved disastrous. Taxi entry surged. But, unexpectedly, prices rose in every single deregulated market. This likely happened for several reasons: Government regulations, it turns out, had been capping prices below market value (especially in underserved neighborhoods); fares were relatively opaque and unpredictable; and consumers were reluctant to price-shop or interrogate drivers about their insurance and safety records. They just hopped into the first available cab.

Over time, traffic and pollution became bigger issues, incomes fell as individual drivers secured fewer rides, and service declined. By the early 1990s, nearly every city had re-regulated.

I think these conclusions will come as a surprise to people who think that Uber is by definition good because it increases competition and is innovative and blah blah blah.  I am not particularly surprised by the findings, particularly when it comes to price increases.  Uber's pricing is highly opaque and in general seems to be about double what you would pay for a taxi in New York.  It's a mystery to me why this is regarded as "consumer friendly," unless you are restricting your analysis to particularly well-heeled consumers.

But leave all that aside.  The point I want to make has to do with the politics of deregulation.  Rampell notes that "Nevada recently banned Uber — after the company reportedly failed to obey laws relating to licensing, vehicle inspections and insurance — in a move widely interpreted as being orchestrated by Big Taxi."

I think a lot of people are repulsed by the idea that public policy might be driven by interest groups such as taxi drivers or medallion owners.  The mere fact that taxi regulation benefits incumbents might seem like reason to oppose it (though of course almost every existing regulation, as opposed to new regulation, benefits incumbents, pretty much by definition).  But here is the key point:  there is a kind of physics of politics that essentially requires that interest groups will drive these sorts of discussions.

Occasionally politicians take the initiative and make good policy for the sake of good policy.  (I think William Gladstone was an exemplar of this brand of politics, though he wasn't above trying to buy off key constituencies).  But politicians aren't generally going to stand up to behemoths like Uber unless they have some concrete reason for doing so.  And even the best policy is not going to last long unless it enjoys broad popularity or has a strong constituency behind it.  Something like taxi regulation is far too nuanced and arcane for the general public to form strong opinions about, and so you are left looking for other sources of political support.

And here I think we have a way of thinking about what it means to be a good politician.  A good politician doesn't sacrifice his or her career in futile defense of, for instance, sensible taxi regulation.  But a good politician tries to find ways to mobilize a constituency in favor of good policy.  In other words, it doesn't have to be the case that if Uber spends 51x on lobbying, and the taxi industry spends 49x, that Uber will get what it wants.  51/49 is close enough for a politician to make the right decision.  But very few politicians can carry the banner of good policy if the ratio goes to something like 95/5.  If you believe that taxi regulation serves some public purpose, then you have to go out and find its natural allies and assemble them into a constituency that can sustain good policy.  (By the way, this doesn't have to be about money.  Quite often it's simply a matter of what opinions are voiced.  This is why it's so irritating that many people, particularly in the media, cast taxi regulation as a fight between innovative, high-tech Uber and the evil taxi cartel.)

And this goes into policy design at all stages.  If you want sustainable redistribution, you better find a way to build a lasting constituency that will support it (this is the logic behind the universality of Social Security and Medicare - see this old Sarang post).  If you want environmental regulation, you better make sure it is in someone's interest to keep the regulations strong.  In a lot of cases this is not a particularly difficult exercise, but it is an important aspect of the art of politics, and there is nothing whatsoever dirty about it.  Or at least, it is no dirtier than politics must be.

More Light

Why is winter colder than summer?

Obviously the days in winter are shorter, thanks to the tilt of the earth.  But this is only part of it.  During the winter the sun is lower in the sky.  Partly, that weakens the sunlight because it has to pass through more atmosphere to get to the surface.  (Although query whether that would really make things colder, on average.  If the sunlight's energy is getting absorbed in the atmosphere, it's still making it warmer somewhere.)

 But part of it is simply that the sunlight is coming in at a low angle, so that each unit of sunlight is spread out over a larger area of land, reducing the energy falling onto each square meter of the earth's surface.

Now all of this might seem very obvious.  I point it out because, atmospheric absorption aside, the angle of the sunlight doesn't affect how much you get when you are walking around outside.  If anything, you probably get more sunlight when it is coming in horizontally than you do when it is coming down from nearly straight up, at least if you are standing upright.  I think the sunlight is meaningfully weaker because of atmospheric absorption (which is why, I assume, it is less likely to burn your skin), but two of the big factors that make it cold in winter (short days and less sunlight per square meter) are non-factors in terms of your own exposure to sunlight.