Al-Jazeera Article on Time Banking

Some of the best bits:

"One critique of time banking is that it degrades acts of generosity to an IOU. But traditional charity, Blech points out, rarely leads to sustained relationships."
"Cahn believes that we can use time banking to improve civic engagement and decrease government spending: An elderly person who has someone to lend an arm on an icy walk or check the fine print on prescriptions is less likely to need hospital care. Cahn’s projects have received political support from both liberals seeking new tactics for providing social welfare and small-government conservatives (the IRS has ruled that time credits cannot be taxed)." 

"According to Cahn, time banking allows for a more efficient use of our skills: Most people are paid for just one particular kind of labor, even if they’ve also spent decades practicing a hobby.""Most large time banks have at least one paid employee –— the VNSNY time bank has seven — but the cost of operating a time bank, Cahn says, can be as low as $1.50 for each hour of service provided. Critics have said that the necessity for paid staffers belies an obvious flaw in time banking — it requires money to sustain itself. But Cahn says his idea was never to create a wholly different economy, but to validate the kinds of people and labor that the monetary economy does not. They are, he says, a cost-efficient way of offering assistance to those who have lost unemployment benefits or have been pushed to the sidelines of the economy."

      Read the whole article. I am interested to see just how much potential these kind of schemes have. Taking the article at its word, it is an idea with a long history that computing has made much easier to administer, so that bodes well. Also, as my last post suggests, these types of schemes will probably benefit from the languishing monetary economy's slack capacity.

Naked Capitalism on Unemployment of 'Prime Age' Males

Naked Capitalism has a good post replying to a Wall Street Journal article. Unfortunately, the article is behind a paywall, but just reading the quotes and commentary on Naked Capitalism is interesting. He raises a very good point at towards the end of his post.

Lambert raised a question that the commentariat might be able to help answer: what happens to men in this fix? I told him that he shouldn’t be surprised, there’s money only to research things that show things are really swell, and not ferret out the many manifestations of distress and dislocation.The article makes clear that at least some of the men are on trajectories that can’t be sustained, borrowing and selling assets yet starting to fall behind on payments. Clearly (again as the article indicates) some wind up living with relatives. And even with budget cuts, we do have enough in the way of social safety nets to forestall the establishment of Obamavilles. But I wonder how many people are living in cars, or couch-surfing (meaning one step away from being homeless), or (as one reader found out over the summer) renting rooms in trailer camps.

        What is really puzzling is that so many of these men have given up looking for work entirely. I mean, I understand that finding work is costly and likely poorly rewarded in today's economy, but if their situation was so desperate would they not redouble their efforts anyway? Nor do I find the explanation that they are simply languishing on the welfare rolls to be particularly plausible either. Even at the best of times, the welfare system in America is not particularly generous, and it has been cutback pretty severely recently, so relying on it does not seem like a particularly attractive option for many. This is not to say that these men are not claiming any welfare, just that I do not think the welfare system would adequately explain why they are not looking for work. That they are being supported by family or spouses seems somewhat more plausible as an explanation, but why would their families and partners be so forthcoming with support for sons and husbands who are economically inactive? This question brings me to what my instinct says is the most likely explanation, that many of these men probably are working in the informal economy and will continue to do so for as long as the formal economy languishes.
       I will prefer to use the term 'informal economy' when discussing this trend since I dislike the authoritarian moralizing implicit in terms like the 'shadow,' 'black,'  'underground,' or 'illegal' economy. I would take the informal economy to mean any and all economically productive activities in which monetized transactions are not reported to the state. This can include activities where money changes hands but is not reported (i.e. cash in hand work) or transactions where no money changes hands (volunteer work, reciprocal mutual aid networks, household production).
     For one, there is evidence that the informal sector has expanded since the recession, and since such an expansion would probably be impossible without an increase in participation, it seems a likely candidate for where many of these men have taken their labor. Secondly, political and regulatory uncertainty has been rampant recently, from the debt-ceiling standoff, to the implementation of Dodd-Frank, to the Obamacare debacle. All of this is probably making businesses in the formal sector slow down investment and hiring. The informal sector, which is effectively unregulated, is basically immune to this effect and may even benefit from it. Finally, the Naked Capitalism post suggested that one reason that men may be hesitant to take jobs in the formal sector is that such jobs may not be worth it because of the costs of moving, commuting, or surrendering government benefits. While informal sector work is, perhaps, just as likely to require commuting or moving, it would not require relinquishing benefits. Add to this that there is no taxation of value created in the informal sector, and the appeal of dropping out of the formal labor market starts to make sense.

Sunday 26th of January Links

Political Blindspot: Cop "Stops and Frisks" African American Teen, Literally Destroying His Genitals

Bloomberg: Davos Finds Inequality Its Business as Backlash Seen

Megan McArdle: The Mother of All Collective Action Problems (they mean climate change)

NPR: Computers Are the Future, but Does Everyone Need to Code?

Overcoming Bias on Evaluation Criteria

Robin Hansyn has a really good post on the influence of coalition politics on our criteria for evaluating claims made by allies and rivals.

"      Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking...
        Do you presume that your worlds aremostly dominated by politics, where different coalitions vie tosupport allies and knock rivals? Or do you see the groups you hangwith as holding themselves to higher standards? If higher standards,are they standards that outsiders can easily check on? Or do you inpractice mostly have to trust a small group of insiders to judge ifstandards are met? And if you have to trust insiders, how sure canyou be their choices aren’t mostly driven by coalition politics?     "

    Read the whole post. I am not to familiar with the basis for Robin's claim that prediction markets are a good way of cleansing discourse of political influence, but I would always approach such a claim from a position of scepticism, as I think Robin would suggest we do. Even if they were, they would sooner or later fall prey to political manipulation for that very reason  But that is not what I really want to write about now.
   The more important takeaway from this post is that interpretation and evaluation are inherently political acts. In political discourse, I am often struck by how often each faction claims to be advocating policies that are based on "objective assessment" of "facts," "logic," and "arguments," as supposed to rivals whose proposals are based on emotion, prejudice, interest, authority, or whatever. However, all "objective criteria" really means is that evaluations can be easily checked against the criteria by more or less neutral outsiders and NOT that the criteria do not favor some over others.
   Of course, this means that there is more than one way of assessing and interpreting something "objectively" and not necessarily any reason to suppose a priori that some criteria are necessarily 'better' than any others, especially in a way that did not vary with context. In other words criteria can be simultaneously 'objective' and 'relative.' This is not really to suggest, however, that we should start doubting whatever criteria we use to asses phenomena, especially if those criteria have served us well in the past. After all, we have to assess things somehow, and we cannot really believe anything without thinking that those beliefs are reasonable and that those who do not believe the same thing are somehow wrong. However, we have to keep two things in mind. First that those with whom we disagree, however ardently, probably have criteria they use to establish their beliefs that make as much sense to them as our criteria do to us. Secondly, that our choice of criteria probably has as much to do with serving our interests and maintaining our power as any commitment to "truth."
    Objectivity is a useful and worthwhile thing; it is good for others to be able to double check our assessments, but some criteria being 'objective' does not mean that it is equally applicable and useful by all people in all situations, or  that it is somehow above the fray of the power games played between individuals and factions.

Do you presume that your worlds are mostly dominated by politics, where different coalitions vie to support allies and knock rivals? Or do you see the groups you hang with as holding themselves to higher standards? If higher standards, are they standards that outsiders can easily check on? Or do you in practice mostly have to trust a small group of insiders to judge if standards are met? And if you have to trust insiders, how sure can you be their choices aren’t mostly driven by coalition politics? - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking. - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

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Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking. - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking. - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Who Wants Standards?

By Robin Hanson · January 26, 2014 12:45 pm · 13 Comments · « Prev ·

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking.

- See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Who Wants Standards?

By Robin Hanson · January 26, 2014 12:45 pm · 13 Comments · « Prev ·

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking.

- See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Who Wants Standards?

By Robin Hanson · January 26, 2014 12:45 pm · 13 Comments · « Prev ·

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking.

- See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Who Wants Standards?

By Robin Hanson · January 26, 2014 12:45 pm · 13 Comments · « Prev ·

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking.

- See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Who Wants Standards?

By Robin Hanson · January 26, 2014 12:45 pm · 13 Comments · « Prev ·

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking.

- See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking. - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking. - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Most of us live in worlds of conversation, like books or blogs or chats, where we tend to give many others the benefit of the doubt that they are mostly talking “in good faith.” We don’t just talk to show off or to support allies and knock rivals – we hold our selves to higher standards. But let me explain why that may often be wishful thinking. - See more at: http://www.overcomingbias.com/2014/01/who-wants-clean-standards.html#sthash.VEkEbCit.dpuf

Emergent Economics on Methodology

Dan Gay writes:

"Thinking about methodology – how methods are selected and applied – is important when practising development economics. Economists are far too reluctant to question their underlying methodology, preferring to think of the discipline as a standardised approach rather than a toolkit or a process of enquiry using ideas from other social sciences like social and political theory. The discipline probably doesn’t carry the same scientific status as the natural sciences, and it should be a lot more modest.

Reflexivity means in part a process of critical self-examination, involving reflection on outside influences as well as the specific peculiarities of a situation. Maybe development economics itself should become more case-study based, empirical and context-orientated instead of so often applying theories based on deductive modelling?"

I would be quite interested to see some examples of the successful use of ethnographic methods to address economic questions and concerns. There seems to be a lot of suggestion in the economics world today about the potential rewards to be reaped from broadening economic methodology, but it is hard  to come across examples of economists actually doing this.

Modeled Behavior on the Minimum Wage

Adam Ozimek writes:

"The claim that “for older workers, the two effects offset one another” is only true if you count the utility of keeping a job as offsetting the disutility of not being able to find one. I am surprised how quick people are to accept this is not only a neutral development but a positive one, arguing that less turnover in the labor market is a good thing. I am more concerned that more stable but harder to get jobs is not what you want during a time of problematically high long-term unemployment."

Adam makes a good point, but there is an important counterpoint. For those who do manage to find or keep their jobs after a minimum wage hike, the jobs will not only be more stable, they will be higher paying. These pecuniary benefits might accrue completely to those workers who hold onto their jobs, but they may not. Plenty may have friends or relatives who are long term unemployed to whom they may transfer resources. If we accept that minimum wage hikes represent a tradeoff of unemployment for some versus higher wages and job security for others, should we not also accept that it is, at least in principle, possible for some of the gains to be transferred to those who lose out. Depending on the elasticity of labor demand, it may even be possible for it to be a Pareto-improvement from the workers perspective. It would be interesting to see some data on this if any exists.

Anthropological Observations on the Usefulness of Anthropology

Ted Fisher writes

"Social scientists, and anthropologists in particular, bring what should be a privileged perspective to public policy debates. Taking as our starting point not idealized theory (say, of rational actors) nor (hopefully) partisan moralization, anthropologists look at, and take seriously, what folks actually say and do...

Hampton's follow-up studies show that use of the public spaces in his sample has gone up over the last decades; that there are many more women in those public spaces; and that there is more, not less, social interaction going on despite the ubiquity of cell phones and other technology. "

      Anyone with at least a little background probably knows that the relationship between economics and anthropology is generally sceptical at best. This is a shame since the two disciplines could probably learn a lot from each other.

      As Ted says ethnography is a useful tool for bridging the gap between abstract theories and concrete manifestations and economists would benefit from making use of it more. Ethnography, however, should start from a position of healthy scepticism towards how people explain themselves. It is useful to 'look at and take seriously what people say and do.' However, talk is cheap, and in the ultimate what people do should be taken more seriously.