Month: June 2018

Policies in 500 Words or Less

This is the next post in the “Policies We Should Be Talking About” series. For more information see the introduction (and other policies) here, but briefly, this series is about explaining policies that might be unpopular, unknown, or simply undeveloped that could still have large positive impacts. Some face specific political obstacles, and some may be too radical to gain enough momentum in the near term, but all deserve to have their signal boosted.

Approval Voting

The United States and many other nations use the worst voting system in the world: First Past the Post or FPTP. This forces voters to think strategically, voting for candidates they think will win rather than candidates they actually like. Combined with the “package deal” problem we’ve discussed before, voters have at best tangential input into the political system.  FPTP leads to a variety of bad outcomes, including static two party systems, wasted votes, ease of gerrymandering, minority rule, spoiler effects (where a third party causes the preferred major party to lose despite popularity, i.e. Nader voters preferred Gore, but didn’t vote for him and Bush won), and more.

The most common alternative discussed in the United States is Ranked Choice / Instant Runoff Voting, which is being used in Maine today. This allows voters to rank all candidates they like, supporting multiple candidates. If no candidate wins an initial majority, votes are redistributed from the least popular candidates based on voter rankings. The first candidate to accumulate a majority wins. However, this system still trends towards strategic voting and two parties, since voters’ second choices are only counted if their first choice is eliminated. If a smaller party is redistributed first, voters second and third choices may be ignored, with the winner being a candidate that fewer voters had as a second choice. There are other more mathematical objections, such as the lack of a Condorcet winner. It is nonetheless objectively better than FPTP.

An even better procedure is called Approval Voting. It is incredibly simple: voters vote for as many candidates as they like, and the candidate with the most votes wins. Voters can support the candidates they really like as well as the ones they think will win. In all likelihood, this will trend towards two parties, but the difference is that third parties can spring up and build support over time without voters fearing the spoiler effects. This incentivizes new parties with fresh ideas. Main parties may co-opt those ideas as they get popular, but that’s good news for voters anyways, as good ideas can bubble up outside of the two party system and nonetheless achieve mainstream success.

The main difficulty is that almost all politicians will not support a new electoral system if they know they have already won using the old system. To get around this, the Center for Election Science recommends ballot initiatives to bring this idea directly to popular vote rather than fighting politicians who want to stay in power. They are doing just that, starting small in Fargo, ND with a ballot measure this year. If successful, it can be pointed to as a real life implementation of a good idea and can be built upon in other polities.

Additional information:

Bail Reform

When someone is accused of a crime, they are charged and given a set of restrictions to ensure they show up for trial. In the United States, this usually includes a money bond that is deposited and then returned at trial. If the defendant does not show up, the property is forfeit. However, other common law nations, including Canada and the United Kingdom, usually do not require actual money, just restrictions on movement or activities (i.e. drinking).

In the US, this has given rise to bail bondsman, who will post your bail for a flat nonrefundable percentage of your bond, often 10-15%. If you fail to appear in court, they have authorization in most states to bring you to the court’s jurisdiction to recover their bond, which is known as bounty hunting, essentially legalized kidnapping. Even if bondsman were banned (and several states have done so) this system remains terrible. If you cannot afford the bail bond, you have a strong incentive to plead guilty. Sitting in jail until trial is not an option for someone in poverty who needs to be working and earning enough for their family. Combined with other criminal justice issues like overcriminalization and policing for profit, nonviolent poor offenders are trapped by a system where they never get a chance for a fair trial due to a lack of cash. Justice should be based on guilt or innocence, not wealth.

There are better ways; the Bronx Freedom Fund realized there was an excellent opportunity to help alleviate this problem. They bail out accused persons and help them make their court date, recovering a large percentage of their posted bonds. Poor defendants are thus able to contest their charges with a fair trial, and many charges are dismissed instead of forcing the accused to plead guilty or sit in jail unproductively. They’ve been so successful they are launching a nationwide project to establish charitable bail funds around the country. John Oliver has also talked about federal courts, where pretrial services assess if the accused is a flight risk. Many are not, and so are released without bail payment at all. Those who the services determine should be assessed a bond are never given one that cannot be paid by the defendant, and in fact in federal cases and the District of Colombia, there are virtually no people awaiting trial because they cannot afford bail, compared to the 450,000 state defendants.

What political challenges are there? The bondsman business has a strong interest in opposing any bail reform, and each state has to update their rules. There are good ideas though: Rand Paul and Kamala Harris introduced a bill that will provide federal grants to states who reform their bail system, although it will likely die in committee. It nonetheless lays the blueprint for how we might tackle this problem from a nationwide perspective in the future.

Additional information:

Organ Markets

Organ markets are extremely unlikely to be implemented soon. Nonetheless, organ market legalization would have by far the most concrete and immediate benefit to the world today, and black market organ markets already exist. Every year over 4000 people die awaiting a kidney in the US, and Medicare spends $89,000 per person on dialysis every year (that’s $34B/year for Medicare, $42B including private spending). The kidney supply is dwindling as cars get safer (many organs are donated by deceased car accident victims), but the vast majority of people do not need both kidneys while alive, and so could sell their kidney to another person with relatively low risk, given compensation. By far the most likely to sell their kidney would be people of lower income, and this is widely touted as a negative for this policy. It is not: blocking the poor from this avenue of income available to them, while simultaneously allowing people in need of kidney transplants to die, is morally wrong.

There is always concern when a transaction occurs between people of different wealth levels. Poor people may not be “forced” into the transaction, but if they have no good alternatives, it seems apparent there is a lack of choice. This is the difference between transactions that are “voluntary” and those that Michael Munger calls “euvoluntary“. Nonetheless, preventing the poor from participating in “voluntary” transactions that others would categorize as “exploitative” does not solve the poverty problem, and in fact makes it worse than letting them participate in the transaction.

Despite this argument, there is a simpler answer to legalizing organ markets: don’t legalize every possible transaction. Law can preclude people below a certain wealth level from selling their kidneys, enforce waiting periods for sellers, create delayed payments, or set prices via formula instead of the market. Yes, these restrictions will severely reduce the benefits that could accrue to the poor who want to sell their kidneys, but anything is better than the total ban we have now. Regulated organ markets could significantly increase the supply of kidneys available, while reducing demand on black markets.

On the demand side, regulation could leave in place the current waitlist structure and avoid rich people jumping the line entirely. This would require the compensation on the supply side to be fully government funded (would still likely save money given Medicare spending on dialysis). A market price on the demand side would have better systemwide benefits, as there would be incentives to improve the market, find efficiencies, etc. However, the potential gains are so large that even a heavily regulated market is worth creating, and relevant legislation already exists.

The political obstacles are clear. Organ markets could be exploitative, while transactions involving human body parts “diminish human dignity” according to the National Kidney Foundation (does death diminish human dignity?). Despite this opposition, there are significant gains to be had from an organ market that cannot be overlooked.

Additional information:

 

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Picture credit: Martin Falbisoner,  US Capitol at dusk as seen from the eastern side, licensed under CC BY-SA 3.0

Podcast Recommendations June 2018

A while ago I had an idea to try and catalog everything I could about the libertarian ideas on the internet, what organizations exist, which writers are interesting, whose podcasts discuss what, and compile it into a giant document. It was ambitious, but I figured over time I could add to it until it had tons of useful information.

When the 2016 election happened, a bunch of people and organizations I had considered pretty libertarian and conservative free marketers suddenly embraced a populist with no understanding of free trade or individual liberty. Not every conservative I had listed became someone I didn’t want to recommend, and I didn’t particularly want to politicize the list based on Trump, yet I couldn’t leave many recommendations out there. There was way too much to update, and so I abandoned the project. I’ve kept the blogs list in the sidebar, but I figured it was time to revisit some podcast recommendations.

Podcasts have become an excellent demonstration of the wonders of an unfettered free market. There are podcasts on virtually any topic you might be interested in, because they are just audio files, they can be distributed in a variety of methods and platforms in a decentralized way, and many are profitable on advertising alone. This decentralization also means that there aren’t specific places you might go to find out about new podcasts, and I have personally learned about most podcasts through other people. Consequently, I wanted to pass on some of the ones I listen to. If you have some good recommendations, leave a comment here or on reddit, or tweet @postlibertarian. I’m always looking for new podcasts.

EconTalk – A great podcast covering all sorts of economic issues, this is probably my favorite libertarian/economics podcast. Hosted by Russ Roberts, Hoover Institute Fellow, and free market leaning economist, Russ does an excellent job interviewing people he agrees and disagrees with, offering skepticism, even of his own biases, and investigating claims along the way.  It’s part of the Library of Economics and Liberty which also hosts EconLog, linked in the sidebar. It used to be about an hour, although nowadays he’s letting it go a bit longer.

Reason Podcast – This is podcast put out by Reason Magazine, which includes a Monday roundtable of all the senior editors at the magazine, including Katherine Mangu-Ward, Nick Gillespie, Matt Welch, and Peter Suderman, with occasional substitutions. I really enjoy it, and I recommend following them on Twitter as well. During the week, there are additional interviews, usually by Nick Gillespie, which I sometimes listen to. Also on the podcast is the audio for the monthly Soho Forum Debates, which are really interesting always debating topics of interest to libertarians.

The Fifth Column – An excellent libertarian news and analysis podcast with Matt Welch, Editor of Reason magazine, Kmele Foster, an entrepreneur and libertarian talking head, and Michael Moynahan, a libertarian-leaning columnist.  It’s more news focused than EconTalk, and more crude, but I find it is entertaining and provocative.

Security Now – If you are interested in cryptography and information security, this is the weekly podcast that covers security news. It’s on the TWiT (This Week in Tech) Network, hosted by Steve Gibson and Leo Laporte. You can get a lot of the information by just reading through the show notes or the transcripts which are there on the website linked, and I’d recommend that as the podcast is pretty long. I just find there’s so much security news I don’t ever want to miss this podcast.

Rationally Speaking – Hosted by Julia Galef, this interview podcast covers a broad range of topics, but often centers around epistemology, science, and knowledge. Galef is a good interviewer and is able to engage with an eclectic and wide-ranging series of guests. I’m not sure how best to place this podcast besides in the “rationalist/LessWrong community”, but it’s absolutely not necessary to have any other interaction with that community to enjoy the podcast.

The 80000 Hours Podcast – 80000 Hours is an Effective Altruist organization focusing on how people can spend their career best benefiting humanity. The podcast, hosted by Rob Wiblin, explores various effective altruist interest areas, such as artificial intelligence, pandemic risk, animal welfare, or international development. It is worth listening to even if you aren’t interested in a career change, as they tend to go pretty in depth with each guest on exactly how an organization or person can have a large impact on the world.

The Economist Editor’s Picks – Sometimes I’m looking for a more international view of world affairs and The Economist is a lot better than many mainstream news sources. Of course, they publish way too much to read every week, so the editor’s picks podcast selects four top articles to check out. They’re usually pretty short so they’re easy to consume.

This post may end up becoming its own page, as I’ll certainly be able to update a page just for podcast recommendations.

Policies We Should Be Talking About – in 500 Words or Less

What policies should be undertaken to improve society? I would hope that would also be the fundamental question of politics, but it often seems to take a backseat to “how do we obtain and hold political power?”

Nonetheless, I like to push back against that worldview, and I hope this blog has somewhat succeeded at doing so. Efficient Advocacy is a way to answer the question of what policies should be undertaken to improve society, while Artificial General Intelligence and Existential Risk analyzes why we might be concerned about extremely high impact, although unlikely, events. There’s also a good discussion of the various aspects to consider when choosing where to expend resources and effort: is the policy widely known or discussed, is it popular, do candidates take a position on this issue, should political processes themselves be reformed before the policy can be implemented?

This post is going to be the first in a recurring group of posts discussing various good policies. For the most part, these posts will discuss policies that are outside of the main political discourse, but ought to be discussed more. I’ll try and note why they may or may not be politically tolerable, but I’ll also try and keep each policy discussion very brief, to 500 words or fewer, with three policies in each post. I’m not ruling out that policies will repeat, but that will depend on the frequency of posts and how good the policies are. Many of these policies may be new or incomplete, but all discussions start somewhere.

Nominal GDP Futures Targeting

The Federal Reserve is the most important institution for macroeconomic stabilization policy. It is not particularly political, it can react quicker than Congress, and it controls the money supply for the most widely used currency in the world. The 1977 Federal Reserve Reform Act gave the Fed the goals of price stability and maximum employment in what is known as the “dual mandate”.  However, these particular goals are often at odds, which means the “correct” policy the Fed should be taking isn’t obvious.

The 90s saw the rise of the Taylor Rule, although Milton Friedman had argued for a rules-based policy regime long before this. The Taylor Rule isn’t an exact rule, but it is an attempt to codify monetary policy to stabilize prices, increasing the real interest rate in response to inflation, and thus targeting a specific inflation level.  Nominal GDP targeting, on the other hand, doesn’t target specific interest rates, but levels of spending in the economy. Scott Sumner, and others at the Mercatus Center have argued that the Taylor Rule is inferior to Nominal GDP targeting because the Taylor Rule relies on retrieving more information, specifically both inflation and the “gap” between real and potential economic output. It’s argued that Nominal GDP is much simpler to get data on in real time, allowing the Fed to apply monetary policy with better understanding of the economy’s current state.

Additionally, NGDP targeting can be enhanced with futures markets, allowing the Fed to have direct feedback from the market on the expected levels of NGDP growth. This helps to solve the Hayekian knowledge problem, by pulling as much data as possible into a single market price. NGDP is also beneficial in that it doesn’t target specific interest rates, just spending levels, so in a low-interest rate environment, like the 2008 recession, the Fed would have had a rule to help guide the level of quantitative easing, instead of just shooting in the dark and hoping it would work.

So what is the political status of this policy? Well it’s pretty technical and so I doubt any voters have or could be persuaded to have much of a view on this. That also means it doesn’t have much political opposition, although conservatives interested in monetary policy don’t love it. The actual legislation that would need to happen would probably revolve around the legalization of NGDP Futures markets, which would essentially be speculative gambling on government data collections. Luckily, from the Fed’s perspective, policy change requires no legal hurdles; the Taylor Rule is a self-imposed policy goal that could be exchanged for NGDP targeting as soon as Fed officials are convinced of its benefits.

To convince them, here is some further reading:

Social Security Identity Theft Reform

Social Security wasn’t meant to be a national ID program, but because it is the only national program everyone is guaranteed to be enrolled in, it has become the de facto national ID number. SSNs can’t be revoked easily like credit cards, they weren’t assigned randomly until 2011, and they are used for authentication despite being universally stored, subjecting them to serious security issues. Identity theft is thus a major problem.

The solution is to make SSNs a public/private key pair. For a 5 minute intro on Public Key Cryptography, check out my post on encrypted communication apps. The basics of SSNs wouldn’t need to change. This cryptography system would utilize a particular type of Public Key Cryptography called Elliptic Curve Cryptography; the only reason this detail is important is that in ECC, any number can be a private key (as opposed to only prime numbers) and keys can be relatively short and human memorizable. I would recommend new SSNs with at least 12 digits to make them harder to guess. SSNs don’t have a checksum digit, so I’d recommend adding that as well.

The technical details of how people would use this number to authenticate themselves would be with the application of the Elliptic Curve Digital Signature Algorithm. For an average person, all that needs to be known is that this algorithm is standardized, like sending a message to an e-mail address; any computer can send a message without it mattering what the message says, since “sending an email to an address” is something all computers know how to do. When a person has to prove who they are to a company or the government, instead of the organization checking their SSN against a database, the person will type in their private SSN, the computer will compute a digital signature, and that will be sent to the organization. The organization would compare the signature to the public key of the person to validate they are who they say they are.

How will they know the public keys? Unlike private keys, public keys can be published freely, so the Social Security Administration can maintain a public database of public keys without issue. Digital signatures can only be computed with private keys, which should be kept secret. The benefits arise because organizations can hold signatures in their databases instead of private keys. Stealing a signature in a data breach would do nothing; today losing SSNs is equivalent to losing your private keys. Problems that could arise involve lack of knowledge on the part of organizations, which could mistakenly store private keys instead of signatures. However, this is already the problem today, so things can only get better.

Potential political pitfalls involve people believing this would be a national ID number, even though SSNs already are, and that it’s difficult to update systems for better security.

Increase the Housing Stock in US Cities

This idea was taken from the Niskanen Center’s Wil Wilkinson, in his response for the single best policy to reduce inequality in the United States. Wealth inequality doesn’t concern me too much, but this policy would solve inequality by improving the options of those least well off, allowing them to move to high productivity cities where high paying jobs are. Wilkinson’s piece is already pretty short, so I’ll be quoting it a bit here.

Wages have barely budged in decades, yet housing costs have soared in the bigger cities in which most Americans live, because restrictive municipal zoning and land-use policy have prevented housing supply from keeping up with demand. When rent takes an ever-larger chunk of workers’ paychecks, savings and wealth accumulation rates go down.

Additionally, the restrictions on housing have caused massive losses in productivity. Chang-Tai Hsieh and Enrico Moretti suggest in this paper that the inability of labor to relocate to high productivity cities has significant effects on GDP growth rates, leading to pretty massive losses in potential productivity. Andrii Parkhomenko suggests that federal policy that incentivizes localities to deregulate housing supply would have a pretty sizeable impact on growth rates. Going back to Wilkinson, he details what this policy might be:
If I were king for a day, I would dangle a huge pot of federal infrastructure money in front of states, and then condition those delicious, fat federal grants on big cities in those states hitting growth targets for housing supply. If big cities fail to add new housing stock fast enough, they and the states they are in will lose many, many, many billions in federal funds for new and upgraded infrastructure.
So why isn’t this happening now? Wilkinson continues:
The political power of NIMBY-ism (“not in my back yard”) has made it nearly impossible to tackle rising housing costs, and the wealth inequality it produces, at the municipal level. But a federal lever can offset the self-seeking forces of NIMBY-ism by giving city and state governments a strong incentive to cut the red tape that keeps housing supply lagging so far behind demand.
I’m skeptical that it will be straightforward to get a federal bill like this passed, although it will probably be easier than in local municipalities. The potential benefits here are far too great to be ignored, but it’s disappointing housing policy isn’t a major issue for most voters today.

 

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