Will Population Fall for Many Countries–and the World?

During my adult life, the main arguments about global population typically revolved around the topic of whether growth in population would overwhelm natural resources and lead to mass starvation and environmental collapse, or whether growth in population would be accompanied by technological progress in a way that would lead to a generally rising standard of living. Although the dire predictions of overpopulation from the 1960s and 1970s have not materialized on schedule, those concerned about overpopulation could always argue that even if the doomsday predictions were premature or delayed, they were nonetheless on their way. 

However, both sides of this controversy started from an assumption that population levels would continue to rise. In the 21st century, this assumption may be proven false. 

US birthrates have been in decline for some years. William Frey recently reported some historical figures on US population growth from the Census Bureau. Here\’s population growth by decade. Notice that the rate of population growth in the 2010s is the lowest of any decade in US history.

Here\’s US population growth annually since 1900. It looks as if 2020 will be the lowest population growth in that time. 

The US pattern is reasonably representative of the world as a whole: that is, population growths is faster in some countries and slower in others. In Japan, Russia, and Spain, for example, total population has already peaked in the last few years and how has started to decline. For an look at projected global population growth, a group of 24 demographers published a \”Fertility, mortality, migration, and population scenarios for 195 countries and territories from 2017 to 2100: a forecasting analysis for the Global Burden of Disease Study (The Lancet, October 17, 2020, pp. 1285-1306).  Here\’s a flavor of their results (for readability, I\’ve deleted footnotes and parenthetical references to statistical confidence intervals):

Our reference scenario, based on robust statistical models of fertility, mortality, and migration, suggested that global population will peak in 2064 at 9·73 billion and then decline to 8·79 billion (6·in 2100 … 

Responding to sustained low fertility is likely to become an overriding policy concern in many nations given the economic, social, environmental, and geopolitical consequences of low birth rates. A decline in total world population in the latter half of the century is potentially good news for the global environment. Fewer people on the planet in every year between now and 2100 than the number forecasted by the UNPD would mean less carbon emission, less stress on global food systems, and less likelihood of transgressing planetary boundaries. …

Although good for the environment, population decline and associated shifts in age structure in many nations might have other profound and often negative consequences. In 23 countries, including Japan, Thailand, Spain, and Ukraine, populations are expected to decline by 50% or more. Another 34 countries will probably decline by 25–50%, including China, with a forecasted 48·0% decline.

For the United States, their baseline scenario suggests that population will rise from 324 million in 2017 to a peak of 363 million by 2064, before declining to 335 million in 2100. 

When confronted with predictions that are decades in the future, it\’s of course important to note that they rely on underlying estimates about fertility and longevity, which in turn rely on estimates about factors like education levels and use of contraception. Perhaps there will be a new global baby boom that will surprise the demographers. But it\’s also important to note that much of the future population has already been born. For example, those who will be 40 or older by the year 2061 are already born right now. A sizeable share of those born in the last few years will live to see 2100. Thus, it\’s worth some thought as to where we seem to be headed. 

One obvious shift is that countries around the world will be much more focused on the elderly, because the elderly will be a much large share of the population. The demographers writing in the Lancet note: 

In 2100, if labour force participation by age and sex does not change, the ratio of the non-working adult population to the working population might reach 1·16 globally, up from 0·80 in 2017. This ratio implies that, at the global level, each person working would have to support, through taxation and intra-family income transfers, 1·16 non-working individuals aged 15 years or older (the working age population is defined by the International Labour Organization as those aged 15 years or older).41 Moreover, the number of countries with a dependency ratio higher than 1 is expected to increase from 59 in 2017 to 145 in 2100. Taxation rates required to sustain national health insurance and social security programmes might be so large as to further reduce economic growth and investment. Insecurity from the risk that these programmes could fail might generate considerable political stress in societies with this demographic contraction …

When thinking of these challenges, one\’s mind immediately turns to financing of government programs that support the elderly, like Social Security and Medicare in the United States, but that\’s only the beginning. For example, the US and other countries are going to face an enormous challenge in financing and providing long-term care options for the elderly. There are also likely to be hard-to-predict effects on the rate of economic growth: 

Having fewer individuals between the ages of 15 and 64 years might, however, have larger effects on GDP growth than what we have captured here. For example, having fewer individuals in these age groups might reduce innovation in economies, and fewer workers in general might reduce domestic markets for consumer goods, because many retirees are less likely to purchase consumer durables than middle aged and young adults. Developments such as advancements in robotics could substantially change the trajectory of GDP per working-age adult, reducing the effect of the age structure on GDP growth. However, these effects are very difficult to model at this stage. Furthermore, the impact of robotics might have complex effects on countries for which the trajectory for economic growth might be through low-cost labour supply.

These population shifts will alter perspectives on the magnitude of of countries around the world, too. For example, China is the now the most populous country in the world with a population of 1,412 million in 2017. However, China took dramatic steps to reduce fertility back in the early 1970s, later culminating in the \”one-child\” policy. Thus, the forecast is for China\’s population to peak in 2024 at 1,431 billion, and then fall by nearly half to 731 million in 2100. 

The decline in fertility for India started later. India\’s population is 1,380 million in 2017, but it will overtake China in the next few years, before peaking in these projections at 1,605 million in 2048–and then falling back to 1,093 million by 2100. 

Meanwhile, the fertility decline has barely started in Nigeria. Thus, Nigeria\’s current population of 206 million is forecast to rise continually through the rest of this century, and by 2100 the 790 million Nigerians would outnumber the population of China. 

I do not know if the problems of flat and falling population will ultimately be bigger or smaller than the problems of continually rising population, but the problems will be different ones, and it\’s none too early to start thinking about them. 

The Curse of Knowledge: Bad Writing, Bad Teaching, and Bad Communication

The \”curse of knowledge\” refers to a bias documented in various psychology and behavioral economics studies. Once you know something, it can be hard to  remember what it was like before you knew it, or to put yourself in the shoes of someone who doesn\’t know it. It\’s a barrier to communication.

Iwo Hwerka provides a short readable overview of some of the evidence behind \”the curse of knowledge at the \”Towards Data Science\” blog (November 26, 2019). For example, one study asked a group of experience salespeople how long it would take an novice to learn to do certain tasks with a cellphone: their estimate were about twice as long as it actually took. 
One aspect of the curse of knowledge is what psychologists sometimes call \”hindsight bias.\” Say that you make a prediction, and later events show that your prediction was incorrect. Do you remember making the incorrect prediction? Or do you find some reason to believe that your prediction was actually correct all along? One of the early studies of this phenomenon was \”\”1 Knew It Would Happen\”: Remembered Probabilities of Once-Future Things\” by Baruch Fischhoff and Ruth Beyth (Organizational Behavior and Human Performance, 1975 13, 1-16).
For example, one of their sets of questions revolved around President Nixon\’s trip to China in 1972. Before Nixon went, they distributed a questionnaire to students asking them to estimate the probabilities of specific events: for example,  \”(1) The USA will establish a permanent diplomatic mission in
Peking, but not grant diplomatic recognition;(2)  President Nixon will meet Mao at least once; (3) President Nixon will announce that his trip was successful.\” Several weeks after the trip was done, they then gave the same students the same questions. They asked the students whether these events had actually happened, and asked them to remember what they had predicted. As it turns out, when students believed that an event had happened, they were more likely to believe that they had previously predicted it. 

Fischhoff and Ruth Beyth refer to this pattern as \”creeping determinism,\” by which they mean that once something has happened, we can\’t readily imagine it not happening. Scholars of events like wars (say, the US Civil War or World War II) or election outcomes often tend to emphasize that the outcome was not preordained. It could have gone the other way. There was an element of chance involved in the outcome. But once the event has happened, for many of us the nuance quickly falls away, and it becomes easy to explain–with the operation of full 20:20 hindsight–why the  outcome that happened was really almost certain to happen all along.  

The label of this bias seems to have originated in a 1989 Journal of Political Economy article, \”The Curse of Knowledge in Economic Settings: An Experimental Analysis,\” by Colin Camerer, George Loewenstein, and Martin Weber. They write that the term was suggested to them by Robin Hogarth. Their article is focused on a point that will immediately have occurred to economists: in most models, a party with more knowledge can in some way benefit from that knowledge over the party with less knowledge. But the curse of knowledge seems to suggest that the party with more knowledge won\’t be able to imagine not having that knowledge, and thus will not benefit from it (or at least will not benefit as much as expected). 
They set up a series of classroom experiments in which one group of students were given financial information about companies from 1970-1979, and then asked to make a prediction about those companies for 1980. Another group of students were given the same information from 1970-79, and then also were told the actual outcome for the companies in 1980. The set-up of the experiment then rewarded the second group of students (the ones who knew the outcome in 1980) for being able to estimate the predictions of the first group of students (the one who did not know the outcome in 1980). Could the students ignore the outcome they knew had happened, and instead just replicate the thinking of the other students, if there was a cash reward on the line? The answer is \”partly:\” \”[W]e find that market forces reduce the curse by approximately 50 percent but do not eliminate it.\”
Indeed, a different study found that those selling cars tend to overestimate how much consumers know about cars, and thus they underestimate how much ignorant customers would have been willing to pay for cars. 
The \”curse of knowledge\” leads to a variety of bad communications outcomes. The psychologist Stephen Pinker wrote: 

I once attended a lecture on biology addressed to a large general audience at a conference on technology, entertainment and design. The lecture was also being filmed for distribution over the Internet to millions of other laypeople. The speaker was an eminent biologist who had been invited to explain his recent breakthrough in the structure of DNA. He launched into a jargon-packed technical presentation that was geared to his fellow molecular biologists, and it was immediately apparent to everyone in the room that none of them understood a word and he was wasting their time. Apparent to everyone, that is, except the eminent biologist. When the host interrupted and asked him to explain the work more clearly, he seemed genuinely surprised and not a little annoyed. This is the kind of stupidity I am talking about. Call it the Curse of Knowledge: a difficulty in imagining what it is like for someone else not to know something that you know. 

Haven\’t we all been an audience of that kind, at one time or another? Maybe it was an academic lecture. Maybe it was your car mechanic telling you what was wrong with the engine, or your neighbor explaining their gardening tips, or a distant relative explaining their job to you. Pinker also writes: 

The curse of knowledge is the single best explanation of why good people write bad prose. It simply doesn\’t occur to the writer that her readers don\’t know what she knows–that they haven\’t mastered the argot of her guild, can\’t divine the missing steps that seem too obvious to mention, have no way to visualize a scene that to her is as clear as day. And so the writer doesn\’t bother to explain the jargon, or spell out the logic, or supply the necessary detail.

My guess is that the curse of knowledge goes well beyond these settings, and causes problems in all kind of communications between specialists in one area and others. In many companies, the communications between engineers and marketing departments is fraught with misunderstandings. When doctors and patients interact, can doctors really remember what it was like not to know about symptoms and health conditions? 

How does one fight the cognitive bubble that is the curse of knowledge? One of my own methods is to get comfortable with saying: \”I was wrong about that\” or \”I really didn\’t expect that.\” Admitting that you had inaccurate expectations is not a confession of weakness or gullibility: no one has a crystal ball for the future. After all, even if you are 90% confident that something will happen, you should expect to be wrong 10% of the time; indeed, Damon Runyon\’s law (as exposited by some characters in his 1935 story \”A Nice Price\”) holds that nothing between human beings deserves odds of more than three to one. 
Perhaps the deeper challenge is to be aware of how others perceive a given topic, including the likelihood that they may just not know (or care) much about it, so if you want to communicate with them, you need to reach out and meet them where they are, not where you are. 
I can\’t complain about the curse of knowledge: after all, as the editor of an academic journal, revising papers by authors afflicted to greater or lesser extents by the curse of knowledge is how I make my living. In some ways, this blog is an effort to avoid the curse of knowledge, too. 
Still, saying that one\’s professional goal is to avoid \”the curse of knowledge\” doesn\’t exactly sound complimentary. In a way, the \”curse of knowledge\” is misnamed, because it\’s not the knowledge that the problem; instead, one might more properly call it the \”curse of socially oblivious knowledge.\” There. Now I feel much better. 

The Planning Fallacy or How I Ever Get Anything Done

The \”planning fallacy\” refers to a psychological theory that people systematically underestimate how long it will take them to complete a given task. My work life is one long example of the planning fallacy. I set deadlines for myself, scramble to meet them, miss the earlier deadlines, rinse, lather, and repeat until the work somehow gets done. 
The context of planning provides many examples in which the distribution of outcomes in past experience is ignored. Scientists and writers, for example, are notoriously prone to underestimate the time required to complete a project, even when they have considerable experience of past failures to live up to planned schedules. A similar bias has been documented in engineers\’ estimates of the completion time for repairs of power stations (Kidd, 1970). Although this \’planning fallacy\’ is sometimes attributable to motivational factors such as wishful thinking, it frequently occurs even when underestimation of duration or cost is actually penalized. 

Roger Buehler, a researcher in this area, put it this way in a short explainer piece in 2019 (Character and Context blog of the Society for Personality and Social Psychology, \”The Planning Fallacy: An Inside View,\” May 30, 2019). 

The planning fallacy refers to an optimistic prediction bias in which people underestimate the time it will take them to complete a task, despite knowing that similar tasks have typically taken them much longer in the past. An intriguing aspect of the planning fallacy is that people simultaneously hold optimistic expectations concerning a specific future task along with more realistic beliefs concerning how long it has taken them to get things done in the past. When it comes to plans and predictions, people can know the past well and yet be doomed to repeat it. …
 For example, university students typically acknowledge that they have typically finished past assignments very close to their deadlines, yet they insist that they will finish the next project well ahead of the new deadline. Then, predictably, they go on to finish the next project (as usual) right at the deadline.

The planning fallacy is remarkably robust. It appears for small tasks like daily household chores (such as cleaning), as well as for large scale infrastructure projects such as building subways. It generalizes across individual differences in personality and culture, and it applies both to group and individual projects. For example, conscientious people often get things done well before procrastinators, but both groups typically underestimate how long it will take them to get things done.

Why does the planning fallacy happen? Kahneman and Tversky explained in 1977:  

The planning fallacy is a consequence of the tendency to neglect distributional data, and to adopt what may be termed an \’internal approach\’ to prediction, where one focuses on the constituents of the specific problem rather than on the distribution of outcomes in similar cases. The internal approach to the evaluation of plans is likely to produce underestimation. A building can only be completed on time, for example, if there are no delays in the delivery of  materials, no strikes, no unusual weather conditions, etc. Although each of these disturbances is unlikely, the probability that at least one of them will occur may be substantial. This combinatorial consideration, however, is not adequately represented in people\’s intuitions (Bar-Hillel, 1973). Attempts to combat this error by adding a slippage factor are rarely adequate, since the adjusted value tends to remain too close to the initial value that acts as an anchor (Tversky and Kahneman, 1974). The adoption of an \’external approach\’, which treats the specific problem as one of many, could help overcome this bias. In this approach, one does not attempt to define the specific manner in which a plan might fail. Rather, one relates the problem at hand to the distribution of completion time for similar projects. We suggest that more reasonable estimates are likely to be obtained by asking the external question \”how long do such projects usually last?\”, and not merely the internal question \”what are the specific factors and difficulties that operate in the particular problem?\”

At some level, this explanation strikes me as exactly correct. I am overly optimistic when thinking about how long it will take me to do a task because I assume that everything will go smoothly and that I won\’t be interrupted or distracted by other immediately pressing tasks. When I edit a paper, I think about the actual editing going smoothly, not about what happens when I hit a snag that takes a day or two to resolve or what happens when the rest of my life sneaks up on me and demands attention. 

I find myself asking: If wasn\’t subject to the planning fallacy, would I get things done on time? For me, daily motivation seems to be some combination of optimism and self-imposed stress. Both of these are embodied in the planning fallacy: that is, the planning fallacy gives me an optimistic view of how much progress I should be making, but then also stresses me when that progress doesn\’t happen.  If I instead started each day with: \”Things are going OK, more-or-less on schedule and it\’s 50:50, at best, whether I will get that paper edited by tomorrow,\” I\’m not confident that I would be happier or more productive.  
The end result of this dynamic is that I\’ve been the Managing Editor of an economics journal for 34 years, putting out quarterly issues more-or-less on time, but also feeling perpetually behind schedule. This seems a potentially unhealthy combination.
So I try to strike a balance. At some level, I know I\’m fooling myself most mornings. In some strictly rational part of my brain, I know the day\’s work isn\’t likely to go as well as I hoped, and I also know that I\’m not as behind as I feel. For me, the tradeoff is that when a task is completed like editing a paper, or when an issue of the journal is published, I get a jolt of surprise and happiness. In that same strict strictly rational corner of my brain, it\’s really not a surprise. After all, I\’ve been editing papers and putting out issues for a long time. But rather than seeing my life as a straightforward process of linear movement, plodding step-by-step to an expected outcome. I apparently prefer to see it as a mini-drama: I could do it! But I\’m not doing it as quickly as hoped! I\’m behind! But it\’s getting done! It\’s a race against the schedule! I\’ve done it! Then I start all over again. 
For 2021, I hope that you too can use the emotional energies unleashed by the planning fallacy to your advantage, both as an encouragement and a goad for daily effort, and to give you a sense of accomplishment at the result.

Lessons from World War II Statisticians: Survivorship Bias and Sequential Analysis

During World War II, a Statistical Research Group was formed to assist the war effort. W. Allen Wallis, who was Director of Research, tells the story in in \”The Statistical Research Group, 1942-1945\” (Journal of the American Statistical Association, 75:370, June 1980, pp. 320-330, available vis JSTOR): \”The Statistical Research Group (SRG) was based at Columbia University during the Second World War and supported by the Applied Mathematics Panel (AMP) of the National Defense Research Committee (NDRC), which was part of the Office of Scientific Research and Development (OSRD).\” Wallis was Director of Research. Some prominent members of the group included Milton Friedman, Harold Hotelling, Leonard Savage, and Abraham Wald. Indeed, Wallis writes: \”SRG was composed of what surely must be the most extraordinary group of statisticians ever organized, taking into account both number and quality.\”
The backstory goes like this. On behalf of himself and some other other Stanford statistics professors, Wallis wrote to the US government government in 1942, offering to help in some way with the war effort. He got a letter back from W. Edwards Deming, the engineer who later became a guru of industrial quality control, but who at this time was working in the US  Census Bureau. Deming wrote back \”with four single- spaced pages on the letterhead of the Chief of Ordnance, War Department,\” and suggested that the statisticians prepare a short course for engineers and firms in how statistical methods could be used for quality control. As Wallis dryly noted in 1980: \”The program that resulted from Deming\’s suggestion eventually made a major contribution to the war effort. Its aftermath, in fact, continues to make major contributions not only to the American economy but also to the Japanese economy.\”
By mid-1942, Wallis soon ended up moving to Columbia to run the Statistical Research Group. One bit of back-story is that, in those pre-computer days, \”the computing … was done by about 30 young women, mostly mathematics graduates of Hunter or Vassar. Some of the basic statistical tables published in Techniques of Statistical Analysis (SRG 1948) were computed as backlog projects when there was slack in the computing load.\”
The SRG carried out literally hundreds of analyses: how the ammunition in aircraft machine guns should be mixed; quality examination methods for rocket fuel; \”the best settings on proximity fuzes for air bursts of artillery shells against ground troops\”; \”to evaluate the comparative effectiveness of four 20 millimeter guns on the one hand and eight 50 caliber guns on the other as the armament of a fighter aircraft\”; calculating \”pursuit curves\” for targeting missiles and torpedoes. \”Statistical studies were also made of stereoscopic range finders, food storage data, high temperature alloys, the diffusion of mustard gas, and clothing tests.\”
Several of the insights from the SRG have had a lasting effect in terms of statistical analysis. Here, I\’ll focus on two of them: survivorship bias and sequential sampling. 
\”Survivorship bias\” refers to a problem that emerges when you look at the results of data, not realizing that some data points have dropped out over time. For example, suppose you look at the average rate of return from stock market mutual funds. If you just look at the universe of current funds, you will be leaving out funds that did badly and were closed or merged for lack of interest. Or suppose you argue in favor of borrowing money to attend a four-year college by citing evidence about higher salaries earned by college graduates, but you leave out the experience of those who borrowed money and did not end up graduating.  In health care, the issue of survivorship bias can come up quite literally in studies of trauma care: before drawing conclusions, such studies must of course beware of the fact that the data of those who suffered and injury but did not end up in the trauma care unit, or those who died of the injury before arriving at the trauma care unit, will not be included in the study. 
In a follow-up comment on the main article, appearing in the same issue, Wallis describes the origins of the idea of survivorship bias: 

In the course of reviewing the history of SRG, I was reminded of some ingenious work by Wald that has never seen the light of day. Arrangements have now been made for its publication, although the form and place are yet undecided. Wald wrote a series of memoranda on estimating the vulnerability of various parts of an airplane from data showing the number of hits on the respective parts of planes returning from combat. The vulnerability of a part (engine, aileron, pilot, stabilizer, elevator, etc.) is defined as the probability that a hit on that part will result in destruction of the plane (fire, explosion, loss of power, loss of control, etc.). The military was inclined to provide protection for those parts that on returning planes showed the most hits. Wald assumed, on good evidence, that hits in combat were uniformly distributed over the planes. It follows that hits on the more vulnerable parts were less likely to be found on returning planes than hits on the less vulnerable parts, since planes receiving hits on the more vulnerable parts were less likely to return to provide data. From these premises, he devised methods for estimating the vulnerability of various parts.

In other words, just looking at damage on the planes that returns would not be useful, but when adjusting for the fact that the returning planes are the ones that survived, it can offer real insights. Wald\’s 1943 manuscript \”A Method of Estimating Plane Vulnerability Based on Damage of Survivors,\” was published in 1980 by the Defense Technical Information Center

But clearly the most prominent statistical insight from the SRG was the idea of sequential analysis, which Wallis calls \”one of the most powerful and seminal statistical ideas of the past third of a century.\” In his 1980 article, he reproduces a long letter that he wrote in 1950 on the subject. Doing quality control testing on potential new kinds of ordnance required firing thousands of rounds. Apparently, a general observed to Wallis that if someone \”wise and experienced\” was on hand, that person could tell within a few thousand or even a few hundred rounds if the new ordnance was either much worse or much better than hoped. The general asked if there was some mechanical rule that could be devised for when the testing could be ended earlier than the full sample. Wallis noodled around with this idea, and expressed it this way in his 1950 letter: 

The fact that a test designed for its optimum properties with a sample of predetermined size could be still better if that sample size were made variable naturally suggested that it might pay to design a test in order to capitalize on this sequential feature; that is, it might pay to use a test which would not be as efficient as the classical tests if a sample of exactly N were to be taken, but which would more than offset this disadvantage by providing a good chance of terminating early when used sequentially. 

Wallis remembers a series of conversations with Milton Friedman on the subject, after Friedman joined the SRG in 1943. They made some progress in thinking about tradeoffs between sample size and statistical power and what is learned along the way. But they also ended up feeling that the discovery was potentially important to the war effort and that they weren\’t well-equipped to solve it expeditiously. Wallis remembers a momentous walk:  

We finally decided to bring in someone more expert in mathematical statistics than we. This decision was made after rather careful consideration. I recall talking it over with Milton walking down Morningside Drive from the office to our apartment. He said that it was not unlikely, in his opinion, that the idea would prove a bigger one than either of us would hit on again in a lifetime. We also discussed our prospects for being able to work it out ourselves. Milton was pretty confident of our (his?) ability to squeeze the juice out of the idea, but I had doubts and felt that it might go beyond our (my!) depth mathematically. We also discussed the fact that if we gave the idea away, we could never expect much credit, and would have to take our chances on receiving any at all. We definitely decided that even if the credit situation turned out in a way that disappointed us, there would be nothing to do about it, 

They ended up getting permission to talk with Abraham Wald on the subject, which wasn\’t easy, because Wald\’s time was \”too valuable to be wasted.\” 

At this first meeting Wald was not enthusiastic and was completely noncommital. … The next day Wald phoned that he had thought some about our idea and was prepared to admit that there was sense in it. That is, he admitted that our idea was logical and worth investigating. He added, however, that he thought nothing would come of it; his hunch was that tests of a sequential nature might exist but would be found less powerful than existing tests. On the second day, however, he phoned that he had found that such tests do exist and are more powerful, and furthermore he could tell us how to make them.

It took a few more years for the underlying theory to be worked out, and Wald\’s book on Sequential Analysis is published in 1947. But the roots of the idea go back to an army general noting that someone with expert and informed judgment could sometimes make a faster decision than the existing quality control algorithms.
The SRG is an example of how ideas and statistical methods invented out of immediate practical necessity–like new methods of quality control–had longer-run powerful results. As this year draws to a close, I find myself wondering if some of the ideas and methods that have been used to create vaccines and to push back against COVID-19 will find broader applicability in the years ahead, perhaps in areas reaching well beyond health care.

Thomas Sowell on Editors and Writing

Thomas Sowell offers some autobiography and vivid examples in his 2001 essay, \”Some Thoughts about Writing.\” He offers both a case for the importance of editing, and also some vivid frustrations about overly officious editors. He writes near the start: \”People who want to be complimentary sometimes tell me that I have a `gift\’ for writing. But it is hard for me to regard as a gift something that I worked at for more than a decade—unsuccessfully—before finally breaking into print. Nor was this a case of unrecognized talent. It was a case of quickly recognized incompetence.\”

Here\’s Sowell on his own experience with editing academic writers (footnote omitted): 

To say that my relationship with editors has not always been a happy one would be to completely understate the situation. To me, the fact that I have never killed an editor is proof that the death penalty deters. However, since nowadays we are all supposed to confess to shameful episodes in our past, I must admit that I was once an editor. Only once. And I didn’t inhale.

It was the most painful kind of editing—editing academic writers. Too many academics write as if plain English is beneath their dignity and some seem to regard logic as an unconstitutional infringement of their freedom of speech. Others love to document the obvious and arbitrarily assume what is crucial. A typical work of this genre might read something like this:

As surely as the world is round (Columbus, 1492), and as surely as what goes up must come down (Newton, 1687), when Ronald Reagan was elected President (Cronkite, 1980) and then re-elected (Rather, 1984), it signaled a change in the political climate (Brinkley, 1980–88). Since then, we have seen exploitation (Marx, 1867) and sexism (Steinem, 1981) on the rise.

But no attempt to parody academic writing can match an actual sample from a scholarly journal:

Transnationalization further fragmented the industrial sector. If the dominant position of immigrant enterprises is held to have reduced the political impact of an expanding industrial entrepreneurate, the arrival of multinational corporations possibly neutralized the consolidation of sectoral homogeneity anticipated in the demise of the artisanate.

You can’t make that up.

If academic writings were difficult because of the deep thoughts involved, that might be understandable, even if frustrating. Seldom is that the case, however. Jaw-breaking words often cover up very sloppy thinking. It is not uncommon in academic writings to read about people “living below subsistence.” The academic writers I edited seemed to have great difficulty accepting my novel and controversial literary doctrine that the whole purpose of writing is so that people can read the stuff later on and know what you are trying to say. These professors seemed to feel that, once they put their priceless contributions to mankind on paper, a sacred obligation fell upon the reader to do his damndest to try to figure out what they could possibly mean.  

I\’ve worked 34 years as an academic editor, so I enjoyed reading that passage. But I would also say that while the problems of academic writing are well-described here, my own experience is that authors are quite willing, and even grateful, to work with my editing in producing an improved draft. 

Sowell also conveys the horror of the kind of copy-editing that makes everything taste the same, or worse. He writes: 

But these are just two kinds of absurdities from the rich spectrum of the absurdities of copy-editors. Where Shakespeare wrote, “To be or not to be, that is the question,” a copy-editor would substitute: “The issue is one of existence versus non-existence.” Where Lincoln said, “Fourscore and seven years ago,” a copy-editor would change that to: “It has been 87 years since . . .” Where the Bible said, “In the beginning, God created the heavens and the earth,” a copy-editor would run a blue pencil through the first three words as redundant.

Pedestrian uniformity and shriveled brevity are the holy grail of copy-editors, the bureaucrats of the publishing industry. Like other bureaucrats, copy-editors tend to have a dedication to rules and a tin ear for anything beyond the rules. Seldom is there even the pretense that their editorial tinkerings are going to make the writing easier for the reader to follow, more graceful, more enjoyable, or more memorable.

Self-justifying rules and job-justifying busy work are the only visible goals of copy-editors.

My own approach here is that in the process of hands-on editing, I try to make all the small-scale copy-editing changes that are needed. Then the author has a chance to revise, and while authors may differ with other suggestions I offer, they hardly ever care about the copy-editing details like spelling out \”United States\” as a noun but using \”US\” as an adjective, whether to use a serial comma when listing more than two authors, and the like. But as a result, when authors see galley proofs, they have already seen and digested the copy-editing changes, so there aren\’t any last-minute surprises. 
Sowell\’s methods may not work for everyone. For example, he describes his usual approach of working on several books at once, and putting aside the ones where he doesn\’t feel inspired for years, before perhaps returning to them. 

Joseph Schumpeter: "Capitalism Stands Its Trial before Judges Who Have the Sentence of Death in their Pockets"

In my experience, relatively few of those who pretend to adjudicate between capitalism and socialism are interested weighing the evidence: instead, most of these discussions quickly turn into denunciations of the flaws of capitalism, apparently with the assumption that any un-capitalism would inevitably be an improvement. Joseph Schumpeter, in his classic 1943 book Capitalism, Socialism, and Democracy coined a memorable phrase to describe this prejudgement, when he wrote: 

\”[C]apitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear …\”

It\’s part of a passage that includes another of my favorite acerbic Schumpeter comments: \”\”[P]ractically every nonsense that has ever been said about capitalism has been championed by some professed economist.\”

Here\’s the broader context for these comments, from pp. 143-145.

1. The capitalist process, so we have seen, eventually decreases the importance of the function by which the capitalist class lives. We have also seen that it tends to wear away protective strata, to break down its own defenses, to disperse the garrisons of its entrenchments. And we have finally seen that capitalism creates a critical frame of mind which, after having destroyed the moral authority of so many other institutions, in the end turns against its own; the bourgeois finds to his amazement that the rationalist attitude does not stop at the credentials of kings and popes but goes on to attack private property and the whole scheme of bourgeois values.

The bourgeois fortress thus becomes politically defenseless. Defenseless fortresses invite aggression especially if there is rich booty in them. Aggressors will work themselves up into a state of rationalizing hostility —aggressors always do. No doubt it is possible, for a time, to buy them off. But this last resource fails as soon as they discover that they can have all. …

2. But, so it might well be asked—in fact, so it is being asked in naïve bewilderment by many an industrialist who honestly feels he is doing his duty by all classes of society—why should the capitalist order need any protection by extra-capitalist powers or extra-rational loyalties? Can it not come out of the trial with flying colors? Does not our own previous argument sufficiently show that it has plenty of utilitarian credentials to present? Cannot a perfectly good case be made out for it? And those industrialists will assuredly not fail to point out that a sensible workman, in weighing the pro’s and con’s of his contract with, say, one of the big steel or automobile concerns, might well come to the conclusion that, everything considered, he is not doing so badly and that the advantages of this bargain are not all on one side. Yes—certainly, only all that is quite irrelevant.

For, first, it is an error to believe that political attack arises primarily from grievance and that it can be turned by justification. Political criticism cannot be met effectively by rational argument. … Just as the call for utilitarian credentials has never been addressed to kings, lords and popes in a judicial frame of mind that would accept the possibility of a satisfactory answer, so capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever the defense they may hear …

Second, the success of the indictment becomes quite understandable as soon as we realize what acceptance of the case for capitalism would imply. That case, were it even much stronger than it actually is, could never be made simple. People at large would have to be possessed of an insight and a power of analysis which are altogether beyond them. Why, practically every nonsense that has ever been said about capitalism has been championed by some professed economist. But even if this is disregarded, rational recognition of the economic performance of capitalism and of the hopes it holds out for the future would require an almost impossible moral feat by the have-not. That performance stands out only if we take a long-run view; any pro-capitalist argument must rest on long-run considerations. In the short run, it is profits and inefficiencies that dominate the picture. … In order to identify himself with the capitalist system, the unemployed of today would have completely to forget his personal fate and the politician of today his personal ambition. …. Secular improvement that is taken for granted and coupled with individual insecurity that is acutely resented is of course the best recipe for breeding social unrest.

A Dose of Skepticism about Randomized Control Trials

When I was being socialized into economics, it was common to for professors to say something like\” Economics cannot carry out experiments like the natural sciences, and thus we must turn to other standards of evidence.\” But the last couple of decades have shown that economists can indeed carry out experiments in the form of randomized control trials: that is, an experiment in which one group of participants selected at random gets a \”treatment\” of some kind and the other \”control\” group does not. 

Indeed, the 2019 Nobel prize economics was awarded “for their experimental approach to alleviating global poverty” to Abhijit Banerjee, Esther Duflo, and Michael Kremer. Going back a little farther, Vernon L. Smith received a share of the 2002 Nobel Prize \”for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms.\” 

But as with all seismic shifts in what one group of economists do, some other economists push back. A collection of essays by prominent economists edited by Florent Bédécarrats, Isabelle Guérin, and François Roubaud, Randomized Control Trials in the Field of Development: A Critical Perspective, has just been published by Oxford University Press. Broadly speaking, the concerns are that the evidence from such trials can often be less compelling than their advocates claim, and that such trials may in some cases be more productive as a format for producing publishable economic research than for gaining a deeper understanding of the challenges of economic development. Here, I\’ll give a quick sample of some main points made in the first few essays, while recommending the book itself for additional discussion.  

The first essay, by Angus Deaton, is entitled \”Randomization in the Tropics Revisited: A Theme and Eleven Variations.\” A sizeable portion of Deaton\’s argument focuses on treating randomized control trials as just another form of empirical study, with no presumption that it should be better or worse.  For example, Deaton writes (I draw here on the version of the essay published as NBER Working Paper No. 27600, issued in July 2020, footnotes omitted):

The RCT is a useful tool, but I think that it is a mistake to put method ahead of substance. I have written papers using RCTs. Like other methods of investigation, they are often useful, and, like other methods, they have dangers and drawbacks. Methodological prejudice can only tie our hands. Context is always important, and we must adapt our methods to the problem at hand. It is not true that an RCT, when feasible, will always do better than an observational study. This should not be controversial, but my reading of the rhetoric in the literature suggests that the following statements might still make some uncomfortable, particularly the second: (a) RCTs are affected by the same problems of inference and estimation that economists have faced using other methods, as well as by some that are peculiarly their own, and (b) no RCT can ever legitimately claim to have established causality. My theme is that RCTs have no special status, they have no exemption from the problems of inference that econometricians have always wrestled with, and there is nothing that they, and only they, can accomplish. Just as none of the strengths of RCTs are possessed by RCTs alone, none of their weaknesses are theirs alone, and I shall take pains to emphasize those facts. There is no gold standard. There are good studies and bad studies, and that is all.

However, Deaton also argues that randomized control trials have a particular disadvantage, which is that they are using people as experimental subjects. 
Yet some of the development RCTs seem to pose challenges to the most basic rules. How is informed consent handled when people do not even know they are part of an experiment? Is it OK to run experiments that might change the results of an election? Beneficence is one of the basic requirements of experimentation on human subjects. But beneficence for whom? Foreign experimenters or even local government officials are often poor judges of what people want. Thinking you know what is good for other people is not an appropriate basis for beneficence.  …
My main concern is broader. Even in the US, nearly all RCTs on the welfare system are RCTs done by better-heeled, better-educated and paler people on lower income, less-educated and darker people. My reading of the literature is that a large majority of American experiments were not done in the interests of the poor people who were their subjects, but in the interests of rich people (or at least taxpayers or their representatives) who had accepted, sometimes reluctantly, an obligation to prevent the worst of poverty, and wanted to minimize the cost of doing so. That is bad enough, but at least the domestic poor get to vote, and are part of the society in which taxpayers live and welfare operates, so that there is a feedback from them to their benefactors. Not so in economic development, where those being aided have no influence over the donors. Some of the RCTs done by western economists on extremely poor people in India, and that were vetted by American institutional review boards, appear unethical, and likely could not have been done on American subjects. It is particularly worrying if the research addresses questions in economics that appear to have no potential benefit for the subjects. Using poor people to build a professional CV should not be accepted. Institutional review boards in the US have special protection for prisoners, whose  autonomy is compromised; there appears to be no similar protection for some of the poorest people in the world. There is an uncomfortable parallel here with the debates about pharmaceutical countries testing drugs in Africa. …
 Working to benefit the citizens of other countries is fraught with difficulties. In countries ruled by regimes that do not care about the welfare of their citizens—extractive regimes that see their citizens as source of plunder—the regime, if it has complete control, will necessarily be the beneficiary of aid from abroad. … The RCT is in itself a neutral statistical tool but as Dean Spears notes60, “RCTs provide a ready and high-status language” that allows “mutual legitimization among funders, researchers, and governments.” When the RCT methodology is used as a tool for “finding out what works,” in a way that does not include freedom in its definition of what works, then it risks supporting oppression. 
The next essay, by Martin Ravallion, asks \”Should the Randomistas (Continue to) Rule?\” He supports and offers his own angle on many of the questions about randomized control trials and statistical inference raised by Deaton, and adds concerns about how an overemphasis on RCTs may bias the research agenda. Here, I quote from the version of the paper released as NBER Working Paper 27554:

We are seeing a welcome shift toward a culture of experimentation in fighting poverty, and addressing other development challenges. RCTs have a place on the menu of tools for this purpose. However, they do not deserve the special status that advocates have given them, and which has so influenced researchers, development agencies, donors and the development community as a whole. …  Despite frequent claims to the contrary, an RCT does not equate counterfactual outcomes between treated and control units. The absence of systematic bias does not imply that the experimental error in a one-off RCT is less than the error in some alternative non-random method. We cannot know that. Among the feasible methods in any application (with a given budget for evaluation), the RCT option need not come closer to the truth. Indeed, if the sample size for an observational study is sufficiently greater than for an RCT in the same setting, then the trials by observational study can be more often close to the truth even if they are biased. …  Moreover, when we look at RCTs in practice, we see them confronting problems of mis-measurement, selective compliance and contamination. Then it becomes clear that the tool cannot address the questions we ask about poverty, and policies for fighting it, without making the same type of assumptions found in observational studies—assumptions that the randomistas promised to avoid. … 

The questionable claims made about the superiority of RCTs as the “gold standard” have had a distorting influence on the use of impact evaluations to inform development policymaking. The bias stems from the fact that randomization is only feasible for a non-random subset of policies. When a program is community- or economy-wide or there are pervasive spillover effects from those treated to those not, an RCT will be of little help, and may well be deceptive. The tool is only well suited to a rather narrow range of development policies, and even then it will not address many of the questions that policymakers ask. Advocating RCTs as the best, or even only, scientific method for impact evaluation risks distorting our knowledge base for fighting poverty …
Lant Pritchett follows with the third essay, \”Randomizing Development: Method or Madness.\” (I draw here from the version of the paper at his website dated June 30, 2019). Pritchett emphasizes that \”development\” is a big picture concept. He writes: 

National development is a four-fold transformation of an intrinsically social grouping (country or region or society) to higher levels of capabilities in four dimensions: an economic transformation from lower productivity to higher productivity; a political transformation to governments more responsive to the broad wishes of the population, an administrative transformation to organizations (including those of the state) with higher levels of functional capability for implementation, and a social transformation to more equal treatment of the citizens of the country (usually with a sense of common identity and, to some extent, shared purpose). National development is about countries like Haiti or India or Bolivia or Indonesia achieving the high levels of economic, political, administrative, and social functional capabilities that Denmark or Japan or Australia possess

Pritchett argues that when you compare those big-picture goals to the very limited focus of the actual randomized control trials of the sort that often end up being published in economics journals, the comparison is somewhere between ridiculous and painful. He writes (footnotes omitted):
Bill Gates has recently been promoting chicken ownership to address poverty in Africa. In an open letter, Professor Blattman of University of Chicago pointed out that cash transfers may be more cost effective than chickens said: “It would be straightforward to run a study with a few thousand people in six countries, and eight or 12 variations, to understand which combination works best, where, and with whom. To me that answer is the best investment we could make to fight world poverty. The scholars at Innovations for Poverty Action who ran the livestock trial in Science agree with me. In fact, we’ve been trying, together, to get just such a comparative study started.” [emphasis added] 
I think it is important for the development community to stop and reflect on how we, as a development community, arrived at this two-fold madness. First the madness that Bill Gates, a genius, a humanitarian, an important public intellectual, could be even semiseriously talking about chickens. Second, the madness about method, that the response of Chris Blattman, also a genius, an academic at a top global university, and also an important public intellectual would respond not “Chickens? Really?” but rather that the “best investment” to “fight world poverty” is using the right method to study the competing program and design elements of chickens versus cash transfers. 
That this is madness is, I hope, is obvious. The top 20 most populous developing countries in the world are (in order): China, India, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh, Russia, Mexico, Philippines, Ethiopia, Vietnam, Egypt, Iran, Turkey, DR Congo, Thailand, South Africa, Tanzania and Colombia. Together these countries have 4.6 billion people. Imagine gathering a couple of dozen of the leaders from any one of these countries (where “leadership” could be political, social, economic, intellectual, popular, mass movement, civil society, or any combination) and saying: “We, the experts in the development community, think ‘fighting world poverty’ is the center of the development agenda and we think that the ‘best investment’ we can make to promote development/fight poverty in your country [fill in the blank: Indonesia, Brazil, Nigeria, DRC, Tanzania, South Africa, Egypt, India] is a set of studies using the right method to resolve the questions of whether anti-poverty programs should promote chicken ownership or distribute cash and, within that, how best to design such chicken or cash transfer programs?” 

I imagine two responses from country leaders. One, how could you have come to such trivial and trivializing ideas about our country’s goals, aspirations, and challenge? How can we as [Indonesians/Indians/Nigerians/Egyptians/Tanzanians] not take as outright contempt the suggestion that either “chickens” or “studies about chickens” are the top priorities for our country? Two, we can easily list for you many pressing, urgent, if not crisis, development issues affecting the current and future well-being of the citizens of our country. These questions are important whether or not your preferred method for producing research papers can address them.

There is much more in these essays worth considering, and much more in the volume as a whole. Although I am here emphasizing the criticisms of this approach, I should also note that these issues are well-known and broadly debated, and the supporters of a randomized control trial approach have answers of their own. For example, for a discussion of how experiments can move from small-scale to larger-scale and eventually to public policy, one starting point is a three-paper symposium in the Fall 2017 issue of the Journal of Economic Perspectives

_______________
Here\’s the full Table of Contents for Randomized Control Trials in the Field of Development: A Critical Perspective, edited by Florent Bédécarrats, Isabelle Guérin, and François Roubaud: 

General Introduction, Florent Bédécarrats, Isabelle Guérin, and François Roubaud
0. Randomization in the Tropics Revisited: A Theme and Eleven Variations, Sir Angus Deaton
1. Should the Randomistas (Continue to) Rule?, Martin Ravallion
2. Randomizing Development: Method or Madness?, Lant Pritchett
3. The Disruptive Power of RCTs, Jonathan Morduch
4. RCTs in Development Economics, Their Critics, and Their Evolution, Timothy Ogden
5. Reducing the Knowledge Gap in Global Health Delivery: Contributions and Limitations of Randomized Controlled trials, Andres Garchitorena, Megan Murray, Bethany Hedt-Gauthier, Paul Farmer, and Matthew Bonds
6. Trials and Tribulations: The Rise and Fall of the RCT in the WASH Sector, Dean Spears, Radu Ban, and Oliver Cumming
7. Microfinance RCTs in Development: Miracle or Mirage?, Florent Bédécarrats, Isabelle Guérin, and François Roubaud
8. The Rhetorical Superiority of Poor Economics, Agnès Labrousse
9. Are the \’Randomistas\’ Evaluators?, Robert Picciotto
10. Ethics of RCTs: Should Economists Care about Equipoise?, Michel Abramowicz and Ariane Szafarz
11. Using Priors in Experimental Design: How Much Are We Leaving on the Table?, Eva Vivalt
12. Epilogue: Randomization and Social Policy Evaluation Revisited, James J. Heckman
Interviews

Charles Dickens on Management and Labor

There\’s a sort of parlor game that the economically-minded sometimes play around the Christmas holiday, related to A Christmas Carol, by Charles Dickens. Was Dickens writing his story as an attack on economics, capitalism, and selfishness? After all, his depiction of Ebenezer Scrooge, along with his use of phrases like \”decrease the surplus population\” and the sarcastic use of \”a good man of business\” would suggest as much, and a classic example of such an interpretation is here. Or was Dickens just telling a good story with distinct characters? After all, Scrooge is portrayed as an outlier in the business community. The warm portrayal of Mr. Fezziwig certainly opens the possibility that one can be a successful man of business as well as a good employer and a decent human being. And if Scrooge hadn\’t saved money, would he have been able to save Tiny Tim?

It\’s all a good \”talker,\” as they say about the topics that get kicked around on radio shows every day. As part of my own holiday break, I republish this essay each year near or on Christmas day.
I went looking for some other perspectives on how Charles Dickens perceived capitalism that were not embedded in a fictional setting. In particular, I checked the weekly journal Household Words, which Dickens edited from 1850 to 1859. Articles in Household Words do not have authors provided. However, Anne Lohrli went through the business and financial records of the publication, which identified the authors and showed who had been paid for each article. The internal records of the journal show that Dickens was the author of this piece from the issue of February 11, 1854, called \”On Strike.\” (Lohrli\’s book is called Household Words: A Weekly Journal 1850-59, conducted by Charles Dickens, University of Toronto Press, 1973. Household Words is freely available on-line at at site hosted by the University of Buckingham, with support from the Leverhulme Trust and other donors.)

The article does not seem especially well-known today, but it is the source of a couple of the most common quotations from Charles Dickens about \”political economy,\” as the study of economics was usually called at the time. Early in the piece, Dickens wrote: \”Political Economy was a great and useful science in its own way and its own place; but … I did not transplant my definition of it from the Common Prayer Book, and make it a great king above all gods.\” Later in the article, Dickens wrote: \”[P]olitical economy is a mere skeleton unless it has a little human covering and filling out, a little human bloom upon it, and a little human warmth in it.\”

But more broadly, the article is of interest because Dickens, telling the story in the first person, takes the position that in thinking about a strike taking place in the town of Preston, one need not take the side either of management or labor. Instead, Dickens writes, one may \”be a friend to both,\” and feel that the strike is \”to be deplored on all accounts.\” Of course, the problem with a middle-of-the-road position is that you can end up being hit by ideological traffic going in both directions. But the ability of Dickens to sympathize with people in a wide range of positions is surely part what gives his novels and his world-view such lasting power. The article goes into a fair amount of detail, and can be read on-line, so I will content myself here with a substantial excerpt.

Here\’s a portion of the 1854 essay by Dickens:

\”ON STRIKE\”

Travelling down to Preston a week from this date, I chanced to sit opposite to a very acute, very determined, very emphatic personage, with a stout railway rug so drawn over his chest that he looked as if he were sitting up in bed with his great coat, hat, and gloves on, severely contemplating your humble servant from behind a large blue and grey checked counterpane. In calling him emphatic, I do
not mean that he was warm; he was coldly and bitingly emphatic as a frosty wind is.

\”You are going through to Preston, sir?\” says he, as soon as we were clear of the
CharPrimrose Hill tunnel.

The receipt of this question was like the receipt of a jerk of the nose; he was so short and sharp.

\”Yes.\”

\”This Preston strike is a nice piece of business!\” said the gentleman. \”A pretty piece of business!\”

\”It is very much to be deplored,\” said I, \”on all accounts.\”

\”They want to be ground. That\’s what they want to bring \’em to their senses,\” said the gentleman; whom I had already began to call in my own mind Mr. Snapper, and whom I may as well call by that name here as by any other. *

I deferentially enquired, who wanted to be ground?

\”The hands,\” said Mr. Snapper. \” The hands on strike, and the hands who help \’em.\”

I remarked that if that was all they wanted, they must be a very unreasonable people, for surely they had had a little grinding, one way and another, already. Mr. Snapper eyed me with sternness, and after opening and shutting his leathern-gloved hands several times outside his counterpane, asked me
abruptly, \” Was I a delegate?\”

I set Mr. Snapper right on that point, and told him I was no delegate.

\”I am glad to hear it,\” said Mr. Snapper. \”But a friend to the Strike, I believe?\”

\”Not at all,\” said I.

\”A friend to the Lock-out?\” pursued Mr. Snapper.

\”Not in the least,\” said I,

Mr. Snapper\’s rising opinion of me fell again, and he gave me to understand that a man must either be a friend to the Masters or a friend to the Hands.

\”He may be a friend to both,\” said I.

Mr. Snapper didn\’t see that; there was no medium in the Political Economy of the subject. I retorted on Mr. Snapper, that Political Economy was a great and useful science in its own way and its own place; but that I did not transplant my definition of it from the Common Prayer Book, and make it a great king above all gods. Mr. Snapper tucked himself up as if to keep me off, folded his arms on the top of his counterpane, leaned back and looked out of the window.

\”Pray what would you have, sir,\” enquire Mr. Snapper, suddenly withdrawing his eyes from the prospect to me, \”in the relations between Capital and Labour, but Political Economy?\”

I always avoid the stereotyped terms in these discussions as much as I can, for I have observed, in my little way, that they often supply the place of sense and moderation. I therefore took my gentleman up with the words employers and employed, in preference to Capital and Labour.

\”I believe,\” said I, \”that into the relations between employers and employed, as into all the relations of this life, there must enter something of feeling and sentiment; something of mutual explanation, forbearance, and consideration; something which is not to be found in Mr. M\’CulIoch\’s dictionary, and is not exactly stateable in figures; otherwise those relations are wrong and rotten at the core and will never bear sound fruit.\”

Mr. Snapper laughed at me. As I thought I had just as good reason to laugh at Mr. Snapper, I did so, and we were both contented. …

Mr. Snapper had no doubt, after this, that I thought the hands had a right to combine?

\”Surely,\” said I. \” A perfect right to combine in any lawful manner. The fact of their being able to combine and accustomed to combine may, I can easily conceive, be a protection to them. The blame even of this business is not all on one side. I think the associated Lock-out was a grave error. And
when you Preston masters—\”

\”I am not a Preston master,\” interrupted Mr. Snapper.

\”When the respectable combined body of Preston masters,\” said I, \” in the beginning of this unhappy difference, laid down the principle that no man should be employed henceforth who belonged to any combination—such as their own—they attempted to carry with a high hand a partial and unfair impossibility, and were obliged to abandon it. This was an unwise proceeding, and the first defeat.\”

Mr. Snapper had known, all along, that I was no friend to the masters.

\”Pardon me,\” said I; \” I am unfeignedly a friend to the masters, and have many friends among them.\”

\”Yet you think these hands in the right?\” quoth Mr. Snapper.

\”By no means,\” said I; \” I fear they are at present engaged in an unreasonable struggle, wherein they began ill and cannot end well.\”

Mr. Snapper, evidently regarding me as neither fish, flesh, nor fowl, begged to know after a pause if he might enquire whether I was going to Preston on business?

Indeed I was going there, in my unbusinesslike manner, I confessed, to look at the strike.

\”To look at the strike!\” echoed Mr. Snapper fixing his hat on firmly with both hands. \”To look at it! Might I ask you now, with what object you are going to look at it?\”

\”Certainly,\” said I. \” I read, even in liberal pages, the hardest Political Economy—of an extraordinary description too sometimes, and certainly not to be found in the books—as the only touchstone of this strike. I see, this very day in a to-morrow\’s liberal paper, some astonishing novelties in the politico-economical way, showing how profits and wages have no connexion whatever; coupled with such references to these hands as might be made by a very irascible General to rebels and brigands in arms. Now, if it be the case that some of the highest virtues of the working people still shine through them brighter than ever in their conduct of this mistake of theirs, perhaps the fact may reasonably suggest to me—and to others besides me—that there is some little things wanting in the relations between them and their employers, which neither political economy nor Drum-head proclamation writing will altogether supply, and which we cannot too soon or too temperately unite in trying to
find out.\”

Mr. Snapper, after again opening and shutting his gloved hands several times, drew the counterpane higher over his chest, and went to bed in disgust. He got up at Rugby, took himself and counterpane into another carriage, and left me to pursue my journey alone. …

In any aspect in which it can be viewed, this strike and lock-out is a deplorable calamity. In its waste of time, in its waste of a great people\’s energy, in its waste of wages, in its waste of wealth that seeks to be employed, in its encroachment on the means of many thousands who are labouring from day to day, in the gulf of separation it hourly deepens between those whose interests must be understood to be identical or must be destroyed, it is a great national affliction. But, at this pass, anger is of no use, starving out is of no use—for what will that do, five years hence, but overshadow all the mills in England with the growth of a bitter remembrance? —political economy is a mere skeleton unless it has a little human covering and filling out, a little human bloom upon it, and a little human warmth in it. Gentlemen are found, in great manufacturing towns, ready enough to extol imbecile mediation with dangerous madmen abroad; can none of them be brought to think of authorised mediation and explanation at home? I do not suppose that such a knotted difficulty as this, is to be at all untangled by a morning-party in the Adelphi; but I would entreat both sides now so miserably opposed, to consider whether there are no men in England above suspicion, to whom they might refer the matters in dispute, with a perfect confidence above all things in the desire of those men to act justly, and in their sincere attachment to their countrymen of every rank and to their country.

Masters right, or men right; masters wrong, or men wrong; both right, or both wrong; there is certain ruin to both in the continuance or frequent revival of this breach. And from the ever-widening circle of their decay, what drop in the social ocean shall be free!

Charles Dickens on Seeing the Poor

 Charles Dickens wrote what has become one of the iconic stories of Christmas day and Christmas spirit in A Christmas Carol. But of course, the experiences of Ebenezer Scrooge are a story, not a piece of reporting. Here\’s a piece by Dickens written for the weekly journal Household Words that he edited from 1850 to 1859. It\’s from the issue of January 26, 1856, with his first-person reporting on \”A Nightly Scene in London.\” Poverty in high-income countries is no longer as ghastly as in Victorian England, but for those who take the time to see it in our own time and place, surely it is ghastly enough. Thus, I repeat this post each year on Christmas day.

Economists might also wince just a bit at how Dickens describes the reaction of some economists to poverty, those who Dickens calls \”the unreasonable disciples of a reasonable school.\” Dickens writes: \”I know that the unreasonable disciples of a reasonable school, demented disciples who push arithmetic and political economy beyond all bounds of sense (not to speak of such a weakness as humanity), and hold them to be all-sufficient for every case, can easily prove that such things ought to be, and that no man has any business to mind them. Without disparaging those indispensable sciences in their sanity, I utterly renounce and abominate them in their insanity …\”  Here\’s a fuller passage from Dickens:

A NIGHTLY SCENE IN LONDON

On the fifth of last November, I, the Conductor of this journal, accompanied by a friend well-known to the public, accidentally strayed into Whitechapel. It was a miserable evening; very dark, very muddy, and raining hard.

There are many woful sights in that part of London, and it has been well-known to me in most of its aspects for many years. We had forgotten the mud and rain in slowly walking along and looking about us, when we found ourselves, at eight o\’clock, before the Workhouse.

Crouched against the wall of the Workhouse, in the dark street, on the muddy pavement-stones, with the rain raining upon them, were five bundles of rags. They were motionless, and had no resemblance to the human form. Five great beehives, covered with rags— five dead bodies taken out of graves, tied neck and heels, and covered with rags— would have looked like those five bundles upon which the rain rained down in the public street.

\”What is this! \” said my companion. \”What is this!\”

\”Some miserable people shut out of the Casual Ward, I think,\” said I.

We had stopped before the five ragged mounds, and were quite rooted to the spot by their horrible appearance. Five awful Sphinxes by the wayside, crying to every passer-by, \” Stop and guess! What is to be the end of a state of society that leaves us here!\”

As we stood looking at them, a decent working-man, having the appearance of a stone-mason, touched me on the shoulder.

\”This is an awful sight, sir,\” said he, \”in a Christian country!\”

\”GOD knows it is, my friend,\” said I.

\”I have often seen it much worse than this, as I have been going home from my work. I have counted fifteen, twenty, five-and-twenty, many a time. It\’s a shocking thing to see.\”

\”A shocking thing, indeed,\” said I and my companion together. The man lingered near
us a little while, wished us good-night, and went on.

We should have felt it brutal in us who had a better chance of being heard than the working-man, to leave the thing as it was, so we knocked at the Workhouse Gate. I undertook to be spokesman. The moment the gate was opened by an old pauper, I went in, followed close by my companion. I lost no
time in passing the old porter, for I saw in his watery eye a disposition to shut us out.

\”Be so good as to give that card to the master of the Workhouse, and say I shall be glad to speak to him for a moment.\”

We were in a kind of covered gateway, and the old porter went across it with the card. Before he had got to a door on our left, a man in a cloak and hat bounced out of it very sharply, as if he were in the nightly habit of being bullied and of returning the compliment.

\”Now, gentlemen,\” said he in a loud voice, \”what do you want here?\”

\”First,\” said I, \” will you do me the favor to look at that card in your hand. Perhaps you may know my name.\”

\”Yes,\” says he, looking at it. \” I know this name.\”

\”Good. I only want to ask you a plain question in a civil manner, and there is not the least occasion for either of us to be angry. It would be very foolish in me to blame you, and I don\’t blame you. I may
find fault with the system you administer, but pray understand that I know you are here to do a duty pointed out to you, and that I have no doubt you do it. Now, I hope you won\’t object to tell me what I want to know.\”

\”No,\” said he, quite mollified, and very reasonable, \” not at all. What is it?\”

\”Do you know that there are five wretched creatures outside?\”

\”I haven\’t seen them, but I dare say there are.\”

\”Do you doubt that there are?\”

\”No, not at all. There might be many more.\”

\’\’Are they men? Or women?\”

\”Women, I suppose. Very likely one or two of them were there last night, and the night before last.\”

\”There all night, do you mean?\”

\”Very likely.\”

My companion and I looked at one another, and the master of the Workhouse added quickly, \”Why, Lord bless my soul, what am I to do? What can I do ? The place is full. The place is always full—every night. I must give the preference to women with children, mustn\’t I? You wouldn\’t have me not do that?\”

\”Surely not,\” said I. \”It is a very humane principle, and quite right; and I am glad to hear of it. Don\’t forget that I don\’t blame you.\”

\”Well!\” said he. And subdued himself again. …

\”Just so. I wanted to know no more. You have answered my question civilly and readily, and I am much obliged to you. I have nothing to say against you, but quite the contrary. Good night!\”

\”Good night, gentlemen!\” And out we came again.

We went to the ragged bundle nearest to the Workhouse-door, and I touched it. No movement replying, I gently shook it. The rags began to be slowly stirred within, and by little and little a head was unshrouded. The head of a young woman of three or four and twenty, as I should judge; gaunt with want, and foul with dirt; but not naturally ugly.

\”Tell us,\” said I, stooping down. \”Why are you lying here?\”

\”Because I can\’t get into the Workhouse.\”

She spoke in a faint dull way, and had no curiosity or interest left. She looked dreamily at the black sky and the falling rain, but never looked at me or my companion.

\”Were you here last night?\”

\”Yes, All last night. And the night afore too.\”

\”Do you know any of these others?\”

\”I know her next but one. She was here last night, and she told me she come out of Essex. I don\’t know no more of her.\”

\”You were here all last night, but you have not been here all day?\”

\”No. Not all day.\”

\”Where have you been all day?\”

\”About the streets.\”

\’\’What have you had to eat?\”

\”Nothing.\”

\”Come!\” said I. \”Think a little. You are tired and have been asleep, and don\’t quite consider what you are saying to us. You have had something to eat to-day. Come! Think of it!\”

\”No I haven\’t. Nothing but such bits as I could pick up about the market. Why, look at me!\”

She bared her neck, and I covered it up again.

\”If you had a shilling to get some supper and a lodging, should you know where to get it?\”

\”Yes. I could do that.\”

\”For GOD\’S sake get it then!\”

I put the money into her hand, and she feebly rose up and went away. She never thanked me, never looked at me— melted away into the miserable night, in the strangest manner I ever saw. I have seen many strange things, but not one that has left a deeper impression on my memory than the dull impassive way in which that worn-out heap of misery took that piece of money, and was lost.

One by one I spoke to all the five. In every one, interest and curiosity were as extinct as in the first. They were all dull and languid. No one made any sort of profession or complaint; no one cared to look at me; no one thanked me. When I came to the third, I suppose she saw that my companion
and I glanced, with a new horror upon us, at the two last, who had dropped against each other in their sleep, and were lying like broken images. She said, she believed they were young sisters. These were the only words that were originated among the five.

And now let me close this terrible account with a redeeming and beautiful trait of the poorest of the poor. When we came out of the Workhouse, we had gone across the road to a public house, finding ourselves without silver, to get change for a sovereign. I held the money in my hand while I was speaking to the five apparitions. Our being so engaged, attracted the attention of many people of the very poor sort usual to that place; as we leaned over the mounds of rags, they eagerly leaned over us to see and hear; what I had in my hand, and what I said, and what I did, must have been plain to nearly all the concourse. When the last of the five had got up and faded away, the spectators opened to let us pass; and not one of them, by word, or look, or gesture, begged of us.

Many of the observant faces were quick enough to know that it would have been a relief to us to have got rid of the rest of the money with any hope of doing good with it. But, there was a feeling among them all, that their necessities were not to be placed by the side of such a spectacle; and they opened a way for us in profound silence, and let us go.

My companion wrote to me, next day, that the five ragged bundles had been upon his bed all night. I debated how to add our testimony to that of many other persons who from time to time are impelled to write to the newspapers, by having come upon some shameful and shocking sight of this description. I resolved to write in these pages an exact account of what we had seen, but to wait until after Christmas, in order that there might be no heat or haste. I know that the unreasonable disciples of a reasonable school, demented disciples who push arithmetic and political economy beyond all bounds of sense (not to speak of such a weakness as humanity), and hold them to be all-sufficient for every case, can easily prove that such things ought to be, and that no man has any business to mind them. Without disparaging those indispensable sciences in their sanity, I utterly renounce and abominate them in their insanity; and I address people with a respect for the spirit of the New Testament, who do mind such things, and who think them infamous in our streets.

Gifts and Consumer Durables: A Meditation with Adam Smith

The end-of-year holidays are a time for giving gifts, which raises an ongoing question. Do you prefer experiences, like a restaurant meal, a kayak tour, a night at a bed-and-breakfast? Or physical objects with a limited life expectancy, like a sweater or a cooking pot, that will be consumed over a longer time? Or do you sometimes desire an object that will last for decades, even to the next generation? My family uses a dining room table that belonged to my grandmother: my wife has over the years picked up some vintage flapper dresses from the 1920s and 1930s in which she looks especially fabulous, and which have been on occasion loaned out for high school proms to fortunate members of the next generation; and we have a hallway in our house of family pictures, including some inherited from earlier generations. 
In thinking about tradeoffs of any kind, it will surprise no one who knows me that I find myself turning to Adam Smith\’s 1776 magnum opus, The Wealth of Nations. In Book II, Chapter III, Smith writes \”Of the Accumulation of Capital, or of Productive and Unproductive Labour.\” As you might expect, Smith argues that spending on durable commodities, rather than things that are consumed immediately, is better for the economy. I quote here from the text at the Library of Economics and Liberty website:  

The revenue of an individual may be spent either in things which are consumed immediately, and in which one day’s expence can neither alleviate nor support that of another, or it may be spent in things more durable, which can therefore be accumulated, and in which every day’s expence may, as he chooses, either alleviate or support and heighten the effect of that of the following day. A man of fortune, for example, may either spend his revenue in a profuse and sumptuous table, and in maintaining a great number of menial servants, and a multitude of dogs and horses; or contenting himself with a frugal table and few attendants, he may lay out the greater part of it in adorning his house or his country villa, in useful or ornamental buildings, in useful or ornamental furniture, in collecting books, statues, pictures; or in things more frivolous, jewels, baubles, ingenious trinkets of different kinds; or, what is most trifling of all, in amassing a great wardrobe of fine clothes, like the favourite and minister of a great prince who died a few years ago.

Were two men of equal fortune to spend their revenue, the one chiefly in the one way, the other in the other, the magnificence of the person whose expence had been chiefly in durable commodities, would be continually increasing, every day’s expence contributing something to support and heighten the effect of that of the following day: that of the other, on the contrary, would be no greater at the end of the period than at the beginning. The former, too, would, at the end of the period, be the richer man of the two. He would have a stock of goods of some kind or other, which, though it might not be worth all that it cost, would always be worth something. No trace or vestige of the expence of the latter would remain, and the effects of ten or twenty years profusion would be as completely annihilated as if they had never existed.

As the one mode of expence is more favourable than the other to the opulence of an individual, so is it likewise to that of a nation. The houses, the furniture, the clothing of the rich, in a little time, become useful to the inferior and middling ranks of people. They are able to purchase them when their superiors grow weary of them, and the general accommodation of the whole people is thus gradually improved, when this mode of expence becomes universal among men of fortune. In countries which have long been rich, you will frequently find the inferior ranks of people in possession both of houses and furniture perfectly good and entire, but of which neither the one could have been built, nor the other have been made for their use. What was formerly a seat of the family of Seymour is now an inn upon the Bath road. The marriage-bed of James the First of Great Britain, which his queen brought with her from Denmark as a present fit for a sovereign to make to a sovereign, was, a few years ago, the ornament of an ale-house at Dunfermline.

In some ancient cities, which either have been long stationary, or have gone somewhat to decay, you will sometimes scarce find a single house which could have been built for its present inhabitants. If you go into those houses too, you will frequently find many excellent, though antiquated pieces of furniture, which are still very fit for use, and which could as little have been made for them. Noble palaces, magnificent villas, great collections of books, statues, pictures and other curiosities, are frequently both an ornament and an honour, not only to the neighbourhood, but to the whole country to which they belong. Versailles is an ornament and an honour to France, Stowe and Wilton to England. Italy still continues to command some sort of veneration by the number of monuments of this kind which it possesses, though the wealth which produced them has decayed, and though the genius which planned them seems to be extinguished, perhaps from not having the same employment.

The expence too, which is laid out in durable commodities, is favourable, not only to accumulation, but to frugality. If a person should at any time exceed in it, he can easily reform without exposing himself to the censure of the public. To reduce very much the number of his servants, to reform his table from great profusion to great frugality, to lay down his equipage after he has once set it up, are changes which cannot escape the observation of his neighbours, and which are supposed to imply some acknowledgment of preceding bad conduct. Few, therefore, of those who have once been so unfortunate as to launch out too far into this sort of expence, have afterwards the courage to reform, till ruin and bankruptcy oblige them. But if a person has, at any time, been at too great an expence in building, in furniture, in books or pictures, no imprudence can be inferred from his changing his conduct. These are things in which further expence is frequently rendered unnecessary by former expence; and when a person stops short, he appears to do so, not because he has exceeded his fortune, but because he has satisfied his fancy.

The expence, besides, that is laid out in durable commodities gives maintenance, commonly, to a greater number of people than that which is employed in the most profuse hospitality. Of two or three hundredweight of provisions, which may sometimes be served up at a great festival, one half, perhaps, is thrown to the dunghill, and there is always a great deal wasted and abused. But if the expence of this entertainment had been employed in setting to work masons, carpenters, upholsterers, mechanics, &c., a quantity of provisions, of equal value, would have been distributed among a still greater number of people who would have bought them in pennyworths and pound weights, and not have lost or thrown away a single ounce of them. In the one way, besides, this expence maintains productive, in the other unproductive hands. In the one way, therefore, it increases, in the other, it does not increase, the exchangeable value of the annual produce of the land and labour of the country.

I would not, however, by all this be understood to mean that the one species of expence always betokens a more liberal or generous spirit than the other. When a man of fortune spends his revenue chiefly in hospitality, he shares the greater part of it with his friends and companions; but when he employs it in purchasing such durable commodities, he often spends the whole upon his own person, and gives nothing to anybody without an equivalent. The latter species of expence, therefore, especially when directed towards frivolous objects, the little ornaments of dress and furniture, jewels, trinkets, gewgaws, frequently indicates, not only a trifling, but a base and selfish disposition. All that I mean is, that the one sort of expence, as it always occasions some accumulation of valuable commodities, as it is more favourable to private frugality, and, consequently, to the increase of the public capital, and as it maintains productive, rather than unproductive hands, conduces more than the other to the growth of public opulence.

Of course, there\’s no need to be inflexible here: the holidays (and life in general) are broad enough to encompass many types of consumption, from immediate pleasures to the long-lasting. But even when it comes to holiday consumption, the tradeoffs over time interest me. The young adults in my family, aided and abetted by their mother, sometimes spend an afternoon looking through the clothes, furniture, and household goods available in second-hand stores.  Like most people, we live in a \”used\” house, in the sense that we bought it from someone else several decades after it was built.
A few years back, we gave my parents a starter set of high-end pots and pans. They had been using the same set of pots and pans for decades: they were worn and dented and some of the lids were missing. The price was similar to taking the entire family out to dinner at a high-end restaurant for one night. But they have now used the pots and pans multiple times each week for years. I find myself wondering about what other decisions might be less flashy in the present, but would offer future smiles for their continued place in my day-to-day life.
 I fully intend during the holidays to enjoy the short-term pleasures of decorations, our annual homemade fudge and cookies, a family get-together for binge-watching something yet-to-be-determined, and so on. But after a stay-at-home year, I find that my thoughts of gifts often turn to making commitments about future plans or trips: that is, short-term consumption, but deferred into a less constrained future.