“The short answer is, we can’t”

Yesterday, Jeffrey Liebman, a poverty-policy expert at the Kennedy School, gave a lunch and talk on “Jewish Ethics and the Social Safety Net.” He reviewed his research and the current hot questions in political science’s study of poverty, and talked about his own work in the Clinton and Obama administrations. Afterwards, a rabbi contextualized Liebman’s social scientific approach with a discussion of the Talmud’s ethical lessons on how to care for the poor. The rabbi also recounted the efforts of the Hebrew Immigrant Aid Society, active during late 19th and 20th century waves, whose case-workers helped Jewish immigrants through all the stages of learning English, finding housing, vetting job applications, etc. Liebman said that state social workers had once played a similar role for the U.S. population more broadly, but inadequate funding has now left a typical worker with some “300-plus” cases.

Beyond the broad review of research, Liebman mad a few very interesting points I want to recount and press on. He said that the best political leaders were usually those with very little political experience, because high-level political office inevitably entails long periods of social distance from ordinary people and their ordinary lives. Arkansas was “such a small community” that Governor Clinton was still compelled to interact with “people in trailer parks,” and this explained some of his charisma and policy intuition. Liebman recalled that he (Liebman) had fervently opposed and protested President Clinton’s 1996 welfare reform—he tore his Clinton bumper sticker from his car and left a protest-vote in the same year’s election. When welfare reform turned out to be a wild success, Liebman attributed Clinton’s superior intuition on the policy to his greater lifelong proximity to poor people. Liebman also felt that then-senator Obama’s only-two-years’-experience in the Senate should properly have been a selling point during his presidential campaign, because it meant he was more cognizant of the challenges ordinary people faced. (Obviously, a scholar for whom the salient issues are the global economy or foreign policy, rather than domestic poverty, would have a decidedly different attitude on the proper kinds of experience for a commander-in-chief.) Next, the main polemical point he argued was that economists today focus too much on the second-order, distortionary economic effects that social-insurance policies might have, and too little on the first-order benefits (i.e., the plain good of poor people having more income). Finally, he made a brief reference to “Social Impact Bonds”—a quintessentially Cameronian idea I am excited about, because it could allow more innovation and experimentation in social policy that could help us better discover what works, and which I hope to write about soon.

Domestic social policy isn’t my expertise, so, after his remarks, I asked a broader methodological question along these lines:

The research we talked about today focuses on measuring the direct impacts of specific anti-poverty interventions. But, if we wanted to evaluate social policy as a whole, we would need to think about broader cultural effects—i.e., how the policies might influence social mores and behaviors in good or bad ways over the long term. Clinton’s welfare reform was based on the idea that abuses of the welfare system had left many children in families where nobody had worked in three generations—and these kids grew up unfamiliar with the most basic norms of the working world, like showing up on time. Even more broadly, some very-libertarian types will argue that the welfare state as a whole displaces our feelings of direct, individual obligation to each other—i.e., groups like the Hebrew Immigrant Aid Society are less likely to come into being if everyone feels that aiding immigrants is the responsibility of the government. Some more left-leaning types argue that social-insurance policies have much, much broader economic benefits than first appear—i.e., if we all felt fully insured, we would be more willing to take entrepreneurial risks, or quit jobs for which we were poorly matched, in ways that would, in the long run, have enormous economic benefits.

So if it’s true that our social policies have these much broader, third-order or fourth-order cultural impacts, via their effects on social mores, then how can we measure that?

Liebman replied, “The short answer is, we can’t.” He agreed that the impacts on social mores were hugely important; the stunning success of Clinton’s reform, which had shocked him, he said, could only be explained by such a change in mores, “of people seeing their neighbors go to work, and starting to think that they could get work, too.” But usually, such aggregate effects were simply unmeasurable.

And Liebman is surely right. There’s simply no social scientific way to measure the answers to my questions. So what can we do? Well, one option is just to despair. Otherwise, since we can’t directly measure the effects, we can theorize, reasoning from premises instead of measuring outcomes. We could make a model of what human beings are like and how they make choices, and then input the social policy of interest into this model, and logically reason our way to its likely effects. This is the best we can do, but it isn’t scientific, and will still leave us with contentious disagreement. Different people will come to different conclusions according to their different premises—i.e., what theories of human nature and behavior they have. It is my sense that I am more pessimistic about social-welfare policies in general/more optimistic about market-oriented reforms (depending on how you prefer to put it) than Liebman, and that this is probably because my view on human nature is, relative to his, more (1) cynical and (2) focused on social learning and adaptation.

Cynicism about human nature leads one to suspect that welfare procurements will inevitably be taken advantage of not just by welfare recipients, but also by the white-collar professionals who run the agencies (or those who litigate them), whose own incentives are to expand their own bureaucracies. (Such taking-advantage, of course, does not by itself argue against welfare; it’s just one cost in a much bigger cost-benefit analysis.) A belief in human adaptability (to think that we humans, who now spend our days in spreadsheets, were once hunter-gatherers, with virtually the same genes!) leads one to think that people could exhibit remarkable ingenuity and tenacity in finding and making work if they were given the right incentives (i.e., less direct welfare transfers and more earned income tax credits). It also suggests that people will find clever ways to rationalize staying on the dole if given that option, so that the “tough love” of kicking people off the dole can often truly be a good thing for them. And a focus on social learning should make one very worried about the prospects of children growing up in neighborhoods in which many adults do not work, and the feedback loops and third-order cultural effects that could, as a result, cause problems even many generations down the line.

I’d argue that it is much better for a child (after age 8 or so) to grow up in Hypothetical Neighborhood #1, where all the parents work and none are home to supervise children until 8pm, rather than in Hypothetical Neighborhood #2, where all the kids get plenty of supervision from parents who are layabouts (for lack of a better word). Because we are social animals, and kids in particular are learning machines, kids from HN#1 will inevitably pick up the norms of the professional world and what it requires for success, like future-orientation, delayed gratification, respectful and non-aggressive behavior, etc. They will see entrance into the professional world as an inviolable expectation, and act more or less accordingly, even with 5 unsupervised hours after school.

With all due appreciation to my parents and their saintly devotion to all four of their children (even to the point of, no doubt, carefully reading this blog post), it’s unlikely that their attendance at my soccer games or procurements of tutors were needed for my relative success in life (‘success’ here defined by modest standards of anti-poverty policy—i.e. making it into white collar life with no criminal record). More important than their special gestures was simply who they were. Their lavish attention no doubt contributed to my happiness and security and admission to very-very-top-tier colleges. But even without their special, active efforts, I probably still would have gotten into top-30 colleges, simply as a result of absorbing the mores and ambitions and habits of thought of an educated, upper-middle class household in an educated, upper-middle class neighborhood and school district, including learning to delay gratification and think about college from a very early age. Kids learn much more from their parents’, siblings’, and peers’ examples than from the first’s instructions and other efforts.

(This is, incidentally, why I get half-miffed when people say that the upper-middle class’s preponderance at elite universities is attributable to the privilege of “expensive test prep tutors.” The problem is, this places the locus of privilege way too late, and thus wildly understates the privilege that children of the affluent and educated have. In fact, we are privileged practically from conception, absorbing superior nutrition and less brain-stunting stress hormones and more vocabulary and better grammar from our mothers even in utero, and absorbing the behaviors, speech-patterns, mores, and ambitions necessary for ‘success’ from the moment we are born. And these have feedback loops and second-order effects, too—we go into kindergarten better prepared, and are identified as ‘gifted’ by our teachers, and accordingly encouraged and rewarded, which teaches us to like learning and school, which makes us study more to become even more ‘gifted’ and receive accordingly more encouragement and rewards, etc., ad nauseum/ad-making-partner-at-the-firm. And just the opposite feedback loops, driven by vicious cycles of discouragement, alienation from learning, more writing-off by teachers, etc., works on the less privileged. If we want to talk about upper-middle class privilege and the reproduction of inequality, we need to, at the very least, talk about what a child learns from her parents in the first three years of her life—and even what she gets in utero. “Expensive test prep tutors” are utterly trivial by comparison.)

This all is why I’m sort of skeptical of Liebman’s approach. He focuses on studying the immediate effects of very particular interventions, because he thinks “the short answer is, we can’t” measure the broader cultural impacts, but it seems to be me that culture and mores are so deep and powerful that changes in them—whether for ill or good—will completely overwhelm the impact of these smaller policy interventions.

There’s no one obvious policy takeaway from all this. Progressives could take this as proof that we need radically more redistribution and social insurance, so all mothers can afford good nutrition and low stress during pregnancy, to disrupt the reproduction of inequality. Conservatives could take this as proof that the long-term social effects of allowing some parents to avoid the working world and subsequent feedback loops must, over the long run, outweigh the benefits of any welfare. In my view, in extremely broad generalization, it seems the only non-cruel way to structure welfare, in a way that accounts for my view of human nature, would entail (1) a small guaranteed minimum income (i.e., literally just a $10,000 handout to everyone in the U.S. every year; because this would be taken out of taxes, the average taxpayer would break even on this policy, but it is important that it be given to everyone, lest it become a disincentive to pursuing employment), (2) very large earned-income tax credits, both to increase the poor’s incentive to work, and to make it easier for employers to hire the low-skilled, (3) very large child-tax credits, to relieve poor mothers of some of their stress, and (4) a reduction of the welfare bureaucracy and other constraints on the liquidity of labor markets almost everywhere else. Oh yeah, and, also, America really, really needs to fix health care, for the sake of both the poor who don’t have it and the middle-class, which has seen all of its productivity gains over the past decades disappear into paying for it. (This all is, obviously, not going to happen.)

***

One self-critical note: I am vulnerable to the critique that I have no right to write about poverty policy, especially because I am taking a position which some may characterize as insufficiently sympathetic to the poor. The fact that I have never experienced poverty, or even really known a poor person, is an anti-credential for me on this and other policy issues. But the vast majority of bloggers and policy thinkers who take positions opposite mine, which are (unfairly, in my view) held as more sympathetic to the poor, are similar to me in those respects. We are all biased by our own backgrounds. Partly for reasons highlighted above, every society’s ‘intellectuals’ are disproportionately children of privilege, which biases every society’s intellectual life in predictable ways. But, being citizens of a democracy, we are all nonetheless, regardless of our backgrounds, obligated to come to some conclusion on matters of social policy. The thing to do, then, is to reason as best we can, in good faith, and draw our conclusions—but hold those conclusions tentatively, modestly, and preliminarily. And so I do. My critics must take issue with my reasoning, rather than with my self.

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2 thoughts on ““The short answer is, we can’t”

  1. If we want to talk about upper-middle class privilege and the reproduction of inequality, we need to, at the very least, talk about what a child learns from her parents in the first three years of her life—and even what she gets in utero. “Expensive test prep tutors” are utterly trivial by comparison

    This. Yes. More thoughts later.

  2. Pingback: Bolingbroke and Burke on Leadership, Meritocracy, and Inequality | This is your brain on economics

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