Everyone knows the social sciences are fuzzy. Economists, political scientists and anthropologists bring their moralistic baggage into the ivory tower as soon as they decide what to study and what not to. There’s no avoiding social science’s value-ladenness.
But on the value-ladenness continuum, there’s a point at which you undermine your credibility as a scholar. That is, if you use your status as a scholarly “expert” to launch a political crusade, you are engaging in a form of academic malpractice. Michael I. Norton of Harvard and Dan Ariely of Duke are guilty of such malpractice. Let me explain.
In a recent “study,” Norton and Ariely seem to be engaging in a kind of democracy-by-proxy. They claim Americans really want more “wealth redistribution” and they have the evidence to prove it. Here’s their own description of the findings from the Los Angeles Times.
We recently asked a representative sample of more than 5,000 Americans (young and old, men and women, rich and poor, liberal and conservative) to answer two questions. They first were asked to estimate the current level of wealth inequality in the United States, and then they were asked about what they saw as an ideal level of wealth inequality.
In our survey, Americans drastically underestimated the current gap between the very rich and the poor. The typical respondent believed that the top 20% of Americans owned 60% of the wealth, and the bottom 40% owned 10%. They knew, in other words, that wealth in the United States was not distributed equally, but were unaware of just how unequal that distribution was.
When we asked respondents to tell us what their ideal distribution of wealth was, things got even more interesting: Americans wanted the top 20% to own just over 30% of the wealth, and the bottom 40% to own about 25%. They still wanted the rich to be richer than the poor, but they wanted the disparity to be much less extreme.
Okay. So Norton and Ariely succeeded in proving that Americans don’t know who has how much money. We the People are not only largely ignorant of quintiles, but how many assets are controlled by each quintile.
[O]ur results suggest that policies that increase inequality — those that favor the wealthy, say, or that place a greater burden on the poor — are unlikely to reflect the desires of Americans from across the political and economic spectrum. Rather, they seem to favor policies that involve taking from the rich and giving to the poor. [Emphasis mine.]
You see, Norton and Ariely can’t claim those surveyed favor coercive redistribution. They merely infer it. Absent any context or micro-reality, the most ardent libertarian surveyed might wish that poor people had more resources and yet not support forced redistribution. I know I do. But even if they did learn most people favor redistribution at some point, we cannot conclude such desires justify redistribution -- much less prove that redistribution is a good thing. And this is where the malpractice really begins.
Norton and Ariely have concluded something very strange. They happily admit that Americans are ignorant of the real distribution of assets. Now, this information can pretty easily be gained online. Indeed, Academic socialists with bees in their bonnets are eager to trot out who has what at every turn, as if concern for the poor somehow translates into worries about the holdings of the rich. (On this point, more later.) So these self-same ignorant Americans - when aggregated - suddenly become endowed with a magical wisdom -- a “wisdom of crowds” if you will? And apparently, this wisdom confers justification for all manner of redistributionist policies. Don’t believe me? It’s right there in the Los Angeles Times.
First of all, why should we think that Americans factually ignorant in one area would have some sort of special wisdom on the timeless and intractible questions of justice? Norton and Ariely conclude that asking Joe Sixpack, Jill Accountant, and Barb Waitress their thoughts about a mathematical abstraction like income distribution limns some great insight into what justice demands. Even the venerable soft egalitarian John Rawls -- were he alive today -- would have bristled at this kind of scholarship. For it is a clumsy intrusion into a discipline (philosophy) that demands more than what amounts to the naturalistic fallacy dressed up in the trappings of Zogby and Rasmussen.
Speaking of Rawls, Norton and Ariely start out their actual paper claiming their study is Rawlsian:
We take a different approach to determining the “ideal” level of wealth inequality: Following the philosopher John Rawls (1971), we ask Americans to construct distributions of wealth they deem just.
One may have have good reasons to disagree with the late Rawls, but his theory is elegant and sophisticated. Norton and Ariely have no business hitching their wagon to the Theory of Justice. Rawls’s theory was a product of a prioristic reasoning and “reflective equilibrium.”
In other words, Rawls’s theory requires one to think about what sort of society he or she would want to be born into if he or she didn’t know what his own circumstances would be. Rawls believed people would want a high degree of individual freedom, but that they would want the least well off to be cared for -- lest they be born in that stratum. More importantly, Rawls’s theory -- even if it was wrong -- was about rigorous philosophical deliberation from one person to the next, not about opinion polls or focus groups in which people simply get to come up with a distribution and have academics standing by to call it Utopia. Thus, when it comes to Rawls, Norton and Ariely are apparently shrouded in a veil of ignorance.
I’m pretty sure it was David Hume who said you cannot derive a value from a fact -- or an “ought” from an “is”. And yet Norton and Ariely dance that two-step. From the fact that a statistically significant number of people have a loosely similar mathematically abstracted idealization of how wealth should be distributed they are lead to the value that wealth ought to be distributed by state coercion. This is the kind of thing students quickly learn to dispatch with in Philosophy 101. (I also wonder whether the respondents had the option to say “I don’t think there is such an “ideal distribution,” but I digress.)
Norton and Ariely never consider the notion that people might want to see a different wealth distribution carried out through means other than forced redistribution, for example, by ridding government of all the rent-seeking schemes that protect the assets of corporate CEOs and shift the costs onto consumers. Nor do they consider that if people had greater information about the circumstances of specific times and places -- like taking x dollars from businessman B means B can afford to hire y fewer people. Ask people for idealized abstractions and you’ll get idealized abstractions. After all, people are “predictably irrational.”
Likewise, even if we went back and asked all these folks if -- given their ideal distribution -- they would support policies of forced redistribution and they all said “yes,” it wouldn’t make it Truth. Heaven forbid, we learn this in Logic class, too. Ever heard of Fallacy Ad Populum? The gist is this: just because a bunch of people believe or claim it, doesn’t make it so. Norton and Ariely’s entire thesis seems to be that because a bunch of people believe it, it ought to be policy. If that were the case, we’d have to agree that popular support for Jewish pogroms justified policies put in place during 1930s Germany. Or we might agree that Islam is the only true religion. There are, after all, more Muslims than members of any other faith.
Let’s just assume that the assumptions and conclusions of Norton and Ariely’s research are sound -- and that we can overlook all the problems above. We could then apply the same methodology to people’s “ideals” about sexiness and dating.
Suppose the conclusions of their research were not about asset distribution, but about the distribution of dates (or sex). (By analogy, let’s also pretend that the distribution of assets in the U.S. is not already distorted by taxcode- and regulatory rent-seeking, but is rather a natural result of the free market at work.) Pretty people would have a lot more dates than ugly people. Now, I doubt folks surveyed -- unless very ugly -- would say we ought forcibly to redistribute dates to ugly people. But if we look at the analogy, there would be no relevant difference in the structure of these cases.
The structure is that people use their natural endowments to gain advantages in individual acts of consensual exchange in both dating and trading. Such results in natural inequality in the distribution of sex and money, respectively. The distribution is such that ugly people normally get dates with other ugly people if they get dates at all. Sexy people get dates with sexier people--and more of them. I think we can agree that it would be wrong somehow to suggest “redistribution” based on any mathematical abstractions like the “distribution of dates among the sexy and the ugly.” So why is this different for other outcomes of exchange?
One might try to respond by saying “Ah, but we’re talking about the basic needs of the poor.” First, we’re really not talking about the basic needs of the poor. We’re talking about the distributional distance between rich and poor, whatever the wealth of the poor. Second, even if were talking about the needs of the poor - which we are not -- sex qualifies as a basic need according to Abraham Maslow. So if we can agree there is something wrong with redistributing the dates of the pretty among the ugly, then there is probably something wrong with wealth distribution too -- that is, under certain conceptions of justice (which Norton and Ariely clearly don’t share).
Reference to Maslow’s Hierarchy should also remind us of some things about wealth. The first one, economist Don Boudreaux puts succinctly in his own critique of Norton and Ariely:
That Americans "drastically" underestimate the wealth of "the very rich" compared to the wealth of "the poor" reveals that the difference in the number of dollars owned by "the very rich" compared to the number of dollars owned by "the poor" translates into a much smaller - that is, far more equal - difference in living standards. In other words, differences in monetary wealth are not the same as differences in living standards.
Bill Gates's monetary wealth, for example, is approximately 70,000 times greater than my own, but I'm certain that he doesn't daily ingest 70,000 times more calories than I eat in a day. I'm also certain that the food he eats isn't 70,000 times tastier than the food I eat; that his many homes are not 70,000 times larger than my one home; that his children are not educated 70,000 times better than is my child; that he cannot travel to Europe or to Asia 70,000 times faster or more safely than I can; that he doesn't have 70,000 times more annual leisure than I have; and that he will not live 70,000 times longer than I will live.
Indeed, maybe the reason Americans misjudge the actual wealth distribution is that most consider themselves wealthy in Boudreaux’s sense -- at least when it comes to the basics.
Along the same lines, I wrote:
So when it comes to the “Great Divergence” — a.k.a. “the gap” — the essential question becomes: What exactly is your point? If your goal is to alleviate poverty or perhaps to raise the baseline for what constitutes a minimum level of income that most people, conservative, liberal or libertarian could tolerate — maybe that‘s something we can talk about. But that is not the same thing as worrying about how much money the rich have.
In other words, suppose you asked the same Americans “If you could guarantee that every poor person in America had their basic needs met, would you agree to abandon your ‘ideal’ wealth distribution?” Their answers might surprise us. That’s because most people -- very likely including Norton and Ariely -- conflate wealth distribution and concern for the poor.
I realize academics like Dan Ariely and Cass Sunstein are currently enjoying a kind of rock star status for their work on irrationality, paternalism and central nudging. But I’m going to go out on a limb and argue that these showbiz behavioral economists are under a spell that, if lifted, would invalidate much of their work. This spell was cast long ago by men in two discredited traditions. These traditions coupled in the underworld to produce a most insidious scion -- Skeynesianism. Skeynesianism takes the black box behaviorism of B.F. Skinner and couples it with the aggregates and abstractions of Keynes. Here's how I have described it elsewhere:
Skinner thought you could tweak people into ideal behaviors. The mind, brain and the genes could simply be cut away in his methodology. To perfect people would be to stimulate them in the appropriate ways. But that required lobotomizing them. The baby Skinner threw out with the bathwater -- cognitive neuroscience -- has come a long way since Skinner orphaned it. And, though Skinner has been pretty thoroughly discredited by contemporary science since Beyond Freedom and Dignity, strands of his thinking have re-emerged in the work of some behavioral economists.
Keynes has enjoyed a revival too. Where Skinner discarded the mind, brain and genes at the local level, Keynesian turned individuals and their behavior into aggregates and abstractions at the macro level. Sophisticated mathematical models were enough, it seemed, to limn the important aspects of a deterministic economy. Generally, it doesn’t matter if that economy is made up of thinking, feeling, acting individuals. Circumstances of time and place -- individual actions and local knowledge - are not important from the perspective of policymakers.
The result is an unholy hybrid methodology certain “experts” have embraced to justify all manner of intrusions into our lives by government elites.
I’ll do my best to drive a stake into the Skeynesian creature elsewhere. Here’s a sliver:
[N]udgers are usually establishing choice architectures for aggregates, not individuals. That is, they're setting policy. So it's not exactly like offering to pay your 15-year-old son not to tattoo his girlfriend's name on his behind. The woulda-shoulda-coulda considerations will always differ from one person to the next, at different times and in different contexts. Government policy almost never does a good job of addressing particular circumstances. Nor does government policy tease out the degree to which a particular person possesses cognitive ability or information—dimensions that are facets of subjective valuation. Worse still, nudgers are seldom any smarter, more attentive or better-informed than the rest of us. They can be. But more often than not, even old-fashioned good advice requires local knowledge that bureaucrats simply aren't privy to—even if values were objective. Before making our lives better, the choice architectures they dream up in their marbled rotundas end up in perverse dead ends. Weren't Americans marnudged towards home ownership via the tax code and loose qualifying standards for mortgages? How's that working out for us?
In the context of Norton and Ariely’s “study” of opinions on asset distribution, they are doubly Skeynesian. Not only do they rely on the aggregate abstractions of regular folk thinking about aggregated abstract things, they’re using such to justify aggregate abstract social policy. This level of Skeynesian circularity is enough to make your head spin.
That’s why I contend that these celebrity behavioral economists need to chill out. They may be good here and there for convincing people to save money or not to use their credit card so much, but Dave Ramsey is probably better. I know, they’re best sellers. New York Times readers love authors who justify their eliitism. But until behavioral economics rids itself of all its Skeynesian claptrap, we would do well to conclude it’s gotten too big for its britches.
Note: I haven't had a good rant in a while. Thanks for reading. I spend much of my time blogging over at Ideas Matter.