Category: Business and Society

Blog author: jballor
Wednesday, July 11, 2007
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Here’s a new NBER working paper, “Why are Immigrants’ Incarceration Rates so Low? Evidence on Selective Immigration, Deterrence, and Deportation,” by Kristin F. Butcher and Anne Morrison Piehl.

Here’s the abstract:

The perception that immigration adversely affects crime rates led to legislation in the 1990s that particularly increased punishment of criminal aliens. In fact, immigrants have much lower institutionalization (incarceration) rates than the native born – on the order of one-fifth the rate of natives. More recently arrived immigrants have the lowest relative incarceration rates, and this difference increased from 1980 to 2000. We examine whether the improvement in immigrants’ relative incarceration rates over the last three decades is linked to increased deportation, immigrant self-selection, or deterrence. Our evidence suggests that deportation does not drive the results. Rather, the process of migration selects individuals who either have lower criminal propensities or are more responsive to deterrent effects than the average native. Immigrants who were already in the country reduced their relative institutionalization probability over the decades; and the newly arrived immigrants in the 1980s and 1990s seem to be particularly unlikely to be involved in criminal activity, consistent with increasingly positive selection along this dimension.

Blog author: jballor
Monday, July 9, 2007
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In yesterday’s WaPo, George F. Will assesses FDR’s domestic legacy, “Declaration of Dependence.”

It’s not a pretty tale: “The war, not the New Deal, defeated the Depression. Franklin Roosevelt’s success was in altering the practice of American politics.

This transformation was actually assisted by the misguided policies — including government-created uncertainties that paralyzed investors — that prolonged the Depression. This seemed to validate the notion that the crisis was permanent, so government must be forever hyperactive.”

In a previous issue of Religion & Liberty, Prof. Steven Gillen writes that FDR helped to

redefine freedom and liberalism in America. In speeches throughout the 1930s the president declared, ‘I am not for a return of that definition of liberty under which for many years a free people were being gradually regimented into the service of a privileged few’ and called for a ‘second bill of rights’ that included governmentally-guaranteed rights to remunerative jobs, decent homes, and adequate health care. Not surprisingly, FDR’s neo-liberal justification of his ‘New Deal’ expansion of the economic role of the federal government enormously appealed to the heavily poor Catholic base of his Democratic Party during the Great Depression and still dominates much of the ‘liberal’ thinking with respect to liberty, rights, and the role of government in America today.

Acton research fellow Kevin Schmiesing also discusses the history and legacy of the New Deal in his book, Within the Market Strife: American Catholic Economic Thought from Rerum Novarum to Vatican II.

A review of Schmiesing’s book by Thomas E. Woods notes of Schmiesing’s reappraisal of Catholics and the New Deal, “Schmiesing has made an important contribution because he reminds us that a great many considerations, including the dangers posed by political centralization and broad construction of the Constitution, may inform the Catholic conscience on economic matters.”

Blog author: jballor
Wednesday, July 4, 2007
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Henry I. Miller, a doctor and fellow at the Hoover Institution, author of The Frankenfood Myth, weighs in on the milks wars over the artificial hormone rBST.

In “Don’t Cry Over rBST Milk,” Miller writes, “Bad-faith efforts by biotechnology opponents to portray rBST as untested or harmful, and to discourage its use, keep society from taking full advantage of a safe and useful product.”

Whether or not scientific studies show that the use of rBST is as safe as not using it, I think it is bad faith to say that milk consumers should not be able to buy rBST-free milk if they so choose.

So, Miller writes, “Some milk suppliers and food stores have increased the price of milk labeled ‘rBST-free,’ even though it is indistinguishable from supplemented milk, and offer only this more expensive option, pre-empting consumers’ ability to choose on the basis of price.” Try reading that paragraph while drinking a glass of cool milk and not do a spit take, or laugh so hard that some of it comes out your nose.

The fact is, consumers can freely choose to patronize any one of the millions of markets that don’t carry rBST-free milk (much less carry it exclusively). If rBST is so safe and so effective, why not let it compete in the marketplace against non-rBST milk? Let milk companies proudly use the label, “A Proud Product of rBST-Supplemented Cows,” and see how they do.

I’m not in favor of banning rBST. But neither am I in favor of banning non-rBST labeling. And it’s the latter impulse that is driving so much of the lobbying in the milk wars.

The National Center for Policy Analysis (NCPA) has published a paper titled, “Taxing the Poor: A Report on Tobacco, Alcohol, Gambling, and Other Taxes and Fees That Disproportionately Burden Lower-Income Families” (PDF).

The paper highlights state lotteries as particularly regressive taxes: “The dollar amount spent on the lottery by the lowest-income individuals (earning less than $10,000 annually) is twice as much as the highest earners (earning more than $100,000 annually).” I wrote a piece reacting to a poll with a similar finding awhile back.

The NCPA study also points out that “lotteries have worse odds than other forms of gambling; in fact, states retain some 33 cents of each dollar of lottery revenue — whereas privately owned casinos keep just 4.4 percent of the take.” And of course that casino take depends on the type of game played. Keno has the worst odds, with roughly 1/4 of the take going to the house, while games like roulette, slots, or blackjack have less than 5% house takes.

The paper also studies other popular sin taxes, like tobacco and alcohol, and one of the newest potential additions to the sin tax category: gasoline.

Here’s more from David Schmidtz’s Elements of Justice, in which he is engaging Rawls’ thought experiment on original position that presumes a closed society as the basis for his social thought. In a closed society we only enter by birth and leave by dying. Schmidtz observes that

as a matter of historical record the least advantaged have always been better off in open societies, societies where people are free to move in search of better opportunities. if we are theorizing about what kind of society is best for the least advantaged – if that is the desired conclusion – then is anything more fundamental than the freedom of movement? Indeed, why not deem freedom of movement the core of the first principle: Everyone has a right to live in a maximally open society, a society where they have no obligation to stay if they would rather be elsewhere? (222)

My guess is that Rawls is concerned with describing a grand (perhaps utopian) global vision for human society, which ultimately is closed and in which migration wouldn’t be of consequence. But Schmidtz is right to point out that practically that vision is not within our grasp, and is of little use when comparing the various actual different human societies.

I’m reading David Schmidtz’s Elements of Justice, which is very ably reviewed (although not by me) in the forthcoming issue of the Journal of Markets & Morality (10.1). I just read a striking passage, which discusses the merits of a principle of property rights that respects first possession rather than equal shares.

An overlooked virtue of first possession: It lets us live together without having to view newcomers as a threat. If we were to regard newcomers as having a claim to an equal share of our holdings, the arrival of newcomers would be inherently threatening. Imagine a town with one hundred people. Each has a one hundred foot wide lot. If someone new shows up, we redraw property lines. Each lot shrinks by one foot, to make room for the new person’s equal share (and so on as more people arrive). Question: How friendly will that town be? Even now, in our world, people who see the world in zero-sum terms tend to despise immigrants. They see immigrants as taking jobs rather than as making products, as bidding up rents rather than as stimulating new construction, and so on. The point is not that xenophobia has moral weight, but that xenophobia is real, a variable we want to minimize if we can. Rules of first possession help. What would not help is telling people that newly arriving immigrants have a right to an equal share (155).

It seems that the latter is exactly what many political liberals in America are doing by guaranteeing various kinds of entitlements to immigrants, whether legal or illegal. In that sense, a statist ideology that emphasizes government provision of various social entitlements seems to promote and foment rather than minimize xenophobia. And so ironically, the liberals who champion a freer and more lenient immigration policy are effectively undermining their own efforts.

This also shows just how dominant a statist (or zero-sum) mentality is in today’s United States when political conservatives are the ones who are most vociferiusly depicting immigrants as economic and social drains rather than positive producers.

The reality is that immigration generally tends to be a net economic benefit. While there are some localized pockets of negative economic effects, the national economic trend is positive. This has been articulated in one of Acton’s policy publications, “The Stranger who Sojourns with You: Toward a Moral Immigration Policy,” and was recently underscored by a White House report.

These realities bear serious reflection. Last Wednesday was World Refugee Day. We should be asking whether our society’s decisions about the government provision of social welfare entitlements has concurrently made our nation more attractive as a destination as well as more unfriendly to newcomers.

Could an elimination or reduction of entitlements make our country even more attractive while at the same time removing some of the economic incentives for xenophobia? Perhaps so.

I thought this was an interesting bit at the intersection of morality and economics. An insurance brokerage firm, K&B Underwriters, is sponsoring a physicians’ survey designed to determine whether doctors who work within a “culture of life” framework (e.g., eschewing abortion) are less prone to malpractice suits than those who don’t. The company’s hypothesis is that pro-life physicians are indeed “safer” in this way, with the implication that pro-life medical practices could be one criterion taken into account when calculating malpractice insurance. It’s a controversial claim, to be sure, but an intriguing approach—and the results so far seem to be supporting the hypothesis.

You can read more about the initiative—and complete the survey, if applicable—here.

HT: Deal Hudson’s “The Window” column.