Puzzling Over Wealth

Puzzling Over Wealth

We like to show off. We like to have nice things to impress other people, and we like when people notice our things, compliment us on our fancy stuff, and respect us because of the wealth that we have. It is an instinct that likely evolved as humans lived in small tribes. If you had an ability to accumulate resources, you could be seen as a valuable ally, and you became a more attractive mate. Those who were good at creating allies and demonstrating their value through resource dominance passed their genes along.

 

The problem is that we don’t have an easy off switch for our resource signaling behavior. Finding a partner, having children, and living comfortably might not always be easy, but the way we compete for these things is different in the 21st century than it was eons ago when our early ancestors were living in small nomadic tribes. Today many people have sufficient wealth to live comfortably and are able to get married and have children or even adopt without the need for overt displays of wealth. Nevertheless, all around us is the pressure to have more. We are tempted to spend more on housing, buy new cars,  take more impressive vacations, and signal our wealth through our material possessions. Without a real reason, we still push ourselves in a signaling game to show off our wealth, and as we do, our possessions and wealth steal the meaning and enjoyment from our lives.

 

In Letters From a Stoic, Seneca wrote, “While he puzzles over increasing his wealth, he forgets how to use it. He collects his accounts, he wears out the pavement in the forum, he turns over his ledger—in short, he ceases to be master and becomes a steward.”

 

The pursuit of wealth for purposes of showing off and signaling leads us to have things we can’t enjoy. We become so fearful of losing our stuff that we lose connections with our communities and fellow citizens. We become willing to subject ourselves to longer work hours, worse working conditions, and lengthy commutes so that we can have nice things. We trade off the qualities of life that make it meaningful and enjoyable so that we can show off to others. In the process we become servants to our wealth, and rather than using the resources we acquire for a positive impact on the planet, we allow our wealth to have negative impacts on the planet and on our very own lives. We should puzzle over our wealth to ask ourselves what is needed for comfort, security, and to have a bigger positive impact on our communities and planet, rather than puzzle over our wealth in pursuit of more for ourselves.
Help Them Build a Better Life

Help Them Build a Better Life

It is an unavoidable reality that we are more motivated by what is in our immediate self-interest than we would like to admit. This idea is at the heart of Kevin Simler and Robin Hanson’s book The Elephant in the Brain and can be seen everywhere if you open your eyes to recognize it. I’m currently doing a dive into reading about homelessness, and I’m working through Elliot Liebow’s book Tell Them Who I am. Liebow writes about American society’s belief that people will become dependent on aid if it is offered unconditionally. In a passage from his book where he reflects on the barriers that homeless women face in obtaining services and aid, and how those barriers can often become abuse, Liebow writes:

 

“One important source of abuse lies much deeper, in a widespread theory about human behavior that gets expressed in various forms: as public policy, as a theoretical statement about rehabilitation, or simply as common sense. Whatever the form, it boils down to something like this: We mustn’t make things too easy for them (mental patients in state hospitals, welfare clients, homeless people, the dependent poor generally). That just encourages their dependency”

 

What is incredible with the sentiment in the paragraph above is how well it seems to justify what is in the immediate self-interest of the people with the resources to help those in need. It excuses inaction, it justifies the withholding of aid, and it places people with material resources on a moral high ground over those who need help. Helping others, the idea posits, actually hurts them. If I give up some of my hard earned money to help another person, I don’t just lose money, that person loses motivation and loses part of their humanity as they become dependent on the state. They ultimately drag us all down if I give them unconditional financial aid. What is in my best interest (not sharing my money) just also happens to be the economic, moral, and personal best thing to do for another person in less fortunate circumstances.

 

This idea assumes that people have only one singular motivation for ever working, making money to have nice things. It ignores ideas of feeling respected and valued by others. It ignores the human desire to be engaged in meaningful pursuits. And it denies our needs as humans for love, recognition, and basic necessities before we can pull ourselves up by our boot straps.

 

Johann Hari’s book Chasing the Scream is an excellent example of how wrong this mindset is and of the horrors that people can face when the rest of society thinks this way and won’t offer them sufficient help to reach a better place in life. Regarding drug addicts and addiction, Hari quotes the ideas of a Portugese official, “addiction is an expression of despair, and the best way to deal with despair is to offer a better life, where the addict doesn’t feel the need to anesthetize herself anymore. Giving rewards, rather than making threats, is the path out. Congratulate them. Give them options. Help them build a life.”

 

Helping someone build a life requires a financial investment in the other person, a time and attention investment, and also requires that we recognize that we have a responsibility to others, and that we might even be part of the problem by not engaging with those in need. It is in our selfish interest to blame others for the plight of society or the failures of other people. From that standpoint punishment and outcasting is justified, but as Hari, Liebow, and the Portugese official suggest, real relationships and getting beyond fears of dependency are necessary if we are truly to help people reach better places and get beyond the evils we want to see eliminated from the world. We can’t go out of our way to find all the ways in which things that are in our self-interest are good for the rest of the world. We have to acknowledge the damages that our self-interests can cause, and find ways to be responsible to the whole, and help other people build their lives in meaningful ways.
The Cost of the Status Quo in Policing

The Cost of the Status Quo in Policing

It is not always clear exactly what the cost is of the status quo. Policing is an area that is getting more attention now, and hopefully calls to defund the police are met with serious consideration as to how much money our police forces really need. The status quo in policing is that we spend a lot of money to lock up people we determine to be criminals, but not a lot of money on things that help rehabilitate criminals or prevent crime in the first place. We argue that tight state and federal budgets don’t leave us with enough money for anything other than incarceration, but when we consider just how costly policing really is, we can see that changing the status quo would open a lot of funding for other avenues.

 

Johann Hari addresses this reality in his book Chasing the Scream from 2015. At the time Hari wrote the following about a block in Brooklyn, NY, “In Brownsville, Brooklyn, the state spends one million dollars for every five people it arrests and convicts of midlevel drug offenses.” Our priority for our police has been to go after drug criminals and place steep penalties against them. The harsh costs, society thinks, should go to drug dealers and addicts, but the reality is that the costs fall on society itself. The current movement of defund the police is as much about how we prioritize our resources as it is about stripping the police from their ability to cause physical harm to those they encounter.

 

“In the United States,” Hari writes, “90 percent of the money spent on drug policy goes to policing and punishment, with 10 percent going to treatment and prevention.”

 

We complain about limited resources and being unable to introduce policy to truly make the lives of our fellow citizens better. But we spend huge amounts of money ($5 million dollars on five people) in the costs of arrests, trials, and incarceration. We are willing to pay huge amounts of money to round up the problem and remove it from our sights, but we are not willing to pay money to work with people and help address the problems that spiraled into the even worse problems that we arrest people for having. There are other ways to address crime, drug use, and the dereliction of the lives of the people we incarcerate. Shifting away from an arrest first and police first mindset can open up new resources to better address these problems and challenges.
Misdiagnosis

Misdiagnosis

Healthcare spending has been increasing, but it is easy to see that we have a finite set of healthcare resources available to everyone. We only have so many hospitals, there are only so many doctors available, and our healthcare plans are all tied together so if one person uses a high amount of healthcare, everyone paying into the health plan will see their costs rise. This is one of the reasons why it is so important to make sure we are getting the best care possible with our healthcare dollars, why it is so important that we ensure that everyone gets the right treatment at the right time.

 

As Dave Chase writes in The Opioid Crisis Wake-Up Call, “A senior executive at a Fortune 10 company wisely told me that misdiagnosis is the biggest healthcare error; everything that follows both harms the patient and costs you.” 

 

If we don’t get the diagnosis piece right for patients, then they get the wrong care. They take medications that don’t help them, undergo procedures that don’t address the correct issue, and eventually return for more evaluation and diagnostic testing. The patient can be harmed by drug side-effects, by surgeries that were never needed, and by exposure to radiation from diagnostic imaging.

 

Getting the diagnosis wrong also wastes a huge amount of our finite healthcare resources. Each new appointment to try to get the diagnosis right, to do more testing and screening, or to try a new procedure leads to increased costs for the individual and everyone else. Doctor’s offices have to fit in more appointments, patients have to fill more prescriptions to try new medications, and operating rooms are booked for the wrong procedures. Individuals and patients are delayed and have to pay more for their services.

 

It is important that we focus on making sure we get the correct diagnosis at the beginning. I’m not a physician, and I haven’t spent years connected to the healthcare system to tell you exactly where the breakdown is in finding the right diagnosis, but the costs of patient health and healthcare resources make it clear that we should invest in diagnostic capabilities. We don’t need to spot every little thing in the patient’s body, but we do need good enough diagnostics and enough knowledge and understanding to get the right diagnosis the first time, for the good of our bank accounts, and more importantly for the good of our collective health.

To Wear a Sweater or Not?

There is a story that I hear from time to time in different contexts. Depending on the context, it is framed as either positive or negative, with different ideas about what our future holds and how we should behave. The story manages to hit political and social identities, aspirations and fears for the future, and concerns over self-sufficiency and parochialism. The story is about a president who encouraged us to wear sweaters during the winter.

 

I’ll start off with the negative view, one perspective of which Tyler Cowen expresses in his book The Complacent Class. He writes, “Jimmy Carter put on a sweater and urged Americans to turn down the thermostat, representing a new era of lowered aspirations. In other words, the American response to economic adversity was to seek to restore comfort more than dynamism, and Americans pushed their culture in this direction all the more in the 1980s.”

 

Cowen’s critique is that as a response to inflation and oil insecurity from foreign oil dependence, Carter suggested we accept limitations and lower expectations. Our president at the time did not encouraging Americans to find new ways to make the world the way they want it. I think this critique is fair. Instead of imagining that the world could be better, that we could be comfortably warm and energy independent through new technology, the story suggest we should just deal with some level of discomfort.

 

I’ve heard others reflect on this story in a similar way. They criticize Carter for a defeatist attitude and for thinking small. People don’t like the parochial feeling of having an elitist person tell them to be tougher and to put on another layer rather than be comfortable but use more resources. Its easy to understand why someone might have the mindset that they deserve to run the heat, even if it is wasteful, because they worked hard to be comfortable and they can afford it.

 

I also think there is value to having our top political leaders signal that we can be more and that we can use science, technology, innovations, and a sense of purpose to make the world a better place. Perhaps encouraging us to keep the thermostats where they were, but also encouraging us to, as the line from the movie The Martian says, “science the shit out of this” would have landed us in a better place than where we are now.

 

But on the other hand, perhaps Carter was right. I have heard people praise Carter for being honest and realistic with the American public. I have heard people criticize Reagan, Carter’s successor, as being an out of touch elitist wearing a suit 24/7. I think people today desire a president like Carter who would signal that they were more in touch with America by turning down the temperature in the White House, making a personal sacrifice themselves before asking others to do the same.

 

Carter’s statement that we need to conserve resources and think critically suggest that we should not just use resources in a wanton fashion. This is a sentiment that climate activists today are trying to mainstream, and perhaps if we had listened more carefully to Carter, we could have shifted our technology to be more green, less resource demanding, and less polluting. After all, who are we to decide that the world should perfectly suit us for every moment of our existence? Isn’t a little discomfort OK, and isn’t it a good thing for us to recognize that the world doesn’t revolve around us? Is it better if we turn the thermostat down, put on a sweater, and pull out a board game to play with friends and family rather than crank up the heat and stare at our screens?

 

My takeaway from this story almost has nothing to do with the story itself. Whether we decide Carter was right probably has more to do with who we want to be, who we want the world to see us as, and what is in our self-interest than it does with whether we truly believe his attitude reflected and encouraged complacency. My takeaway is that events happen in this world, and we attach stories and meanings to the events that can be understood in different ways depending on our background and context. The narrative we create and attach to an event matters, and it shapes what we see, what we believe, and in some ways how we feel about the things that happen in the world. Think deeply about your goals, what you want to achieve, and how a narrative can help you reach those goals, and you will find the ways to tie that narrative into an event. At the same time, watch for how others do the same thing, and when you have discussions with others and want to change their mind, be cognizant of the narratives at play before you go about throwing statistics and facts at someone. Maybe a new narrative will be more effective than a bunch of economics and math.

On Redistribution

In the United States people hate the idea of redistribution. I was remarking the other day while reading a political science journal article that American culture operates with a background sense that using public policy to improve ones economic fortunes is illegitimate. The only legitimate way, in American culture, to improve ones economic standing is through hard work in the traditional labor market.

 

This is one contributing factor to why redistribution is viewed so negatively in our country. To be seen as deserving, one has to be seen as hardworking, and hardworking and economically successful are tied in the way we think about people in our country. We use a heuristic to tell ourselves that rich people are hard working and that poor people are lazy because it is easier than considering the alternative, and it also confirms to how we want the world to work, at least if we are relatively well off or see ourselves as becoming more financially successful in the future. We want to believe that our good economic standing and future earnings potential reflect our own industriousness and not just a set of favorable circumstances beyond our control.

 

In their book The New Localism, Bruce Katz and Jeremy Nowak look at our behavior around redistribution and consider how it fits with the framework for local action that they develop. Redistribution is an area where they find an interesting split between the role of federal and local governments.

 

“Major redistributive policies, such as the earned income tax credit, are best pursued at the federal level. Federal redistribution is more effective than more local efforts because the federal government has a larger pool of income from which to draw and there is less capacity to opt out. Federal redistribution is largely people based. State redistribution is generally linked to providing support for public goods in jurisdictions with taxing capacity disadvantages.”

 

I find it really interesting to think that the federal government’s redistribution programs are more people-based than local programs, but I think I understand why that might be. At the local level, we become upset when we see a person in our community who is accepting some form of assistance from the government while simultaneously driving a new car or leaving a nail salon. In some way, when we see an actual person who is benefiting from a redistributive program and using their resources in a way we find inappropriate given what we judge their priorities to be, we feel cheated. We feel that the economic assistance provided to them should have been spent on other local pressing problems rather than on supporting someone who using the financial aid unwisely. This makes local adoption of redistributive programs for individuals more challenging. At a national level, the quote from Katz and Nowak seems to suggest, we likely won’t recall as many of these hyper-local context examples, or just won’t be as aware of the aid, and won’t be as keen to notice the effects of a redistributive policy.

 

Another local level wrinkle that influences the policy appraoches from Katz and Nowak’s quote is that we don’t want to live in a city or region that is known for its slums. Those of us who are affluent enough will likely make efforts to avoid local trailer home regions and find ways around the lower socioeconomic parts of town. We won’t want to acknowledge these regions because they make our entire community look worse, especially from the outside or when commented on by national media. These pressures may make us more willing to have government take action to “clean-up” these economically depressed regions. We see a personal benefit to ourselves in having our city invest more in economically weak regions. We don’t see the same personal benefit from redistributive programs that help other individuals.

Five Factors To Consider Regarding Our Donation Behavior

In The Elephant in the Brain, Kevin simler and Robin Hanson ask just how much of our behavior is influenced by our self-interest. As an explanation for why we do what we do, simply saying that we did something because we gained some material good, gained more social status, or received some type of pleasurable outcome is generally accepted, but ignored. It is clear that we have self-interest in doing things that we benefit from, but in many ways, we like to ignore self-interest and we prefer to explain our behaviors with more complex rationalizations for why we do what we do. This motivated reasoning, however, creates models that account for many factors without acknowledging the main factor that we would all rather ignore, the elephant in the room (brain), our self-interest.

 

Simler and Hanson investigate charitable donations in the framework of self-interest and consider the warm glow feeling that we get when we make charitable donations, help the person on the street, and generally do good things for others. They look beyond simply “we do things because it makes us feel good” and ask questions to get to a deeper level understanding of human behavior:

 

“The much more interesting and important question is why it feels good when we donate to charity. Digging beneath the shallow psychological motive (pursuing happiness), what deeper incentives are we responding to?

 

To figure this out, we’re going to examine five factors that influence our charitable behavior:
  1. Visibility. We give more when we’re being watched.
  2. Peer pressure. Our giving responds strongly to social influences.
  3. Proximity. We prefer to help people locally rather than globally.
  4. Relatability. We give more when the people we help are identifiable (via faces and/or stories) and give less in response to numbers and facts.
  5. Mating Motive. We’re more generous when primed with a mating motive.
This list is far from comprehensive, but taken together, these factors help explain why we donate so inefficiently, and also why we feel that warm glow when we donate.”

 

I have been writing a lot recently about charitable giving. Part of the reason why is because I see great potential in the resources at the disposal of the average American. We have a lot of wealth relative to the rest of the world, a lot of time relative to previous generations, and a lot of information available to us. However, rather than using our wealth, our time, and the information available to us to maximize our lives, make the world a better place, and solve pressing problems, most people waste their resources. I have continually been thinking about what I consider The Stupid Economy where we feel pressured to buy things we don’t really want to keep up with and impress people we don’t really care much about, and use our resources in pointless and meaningless ways.

 

Our world today has incredibly bright people working at meaningless jobs. We use a lot of our human potential, our creative energy and brain power, and our money to get people to drink sugary water. We invest massive amounts of attention in celebrity news and we celebrate technological inventions like iPhones without applying our hunger for technological improvement to other problems that could potentially save more lives or do more to protect the planet from human caused problems – like trash in our oceans.

 

I want to encourage society to move in a direction that is more considerate and careful with our resource use. I want to be part of something that builds toward a society that has a smart economy, where instead of complaining about the diminishing purchasing power of our society while simultaneously buying $100 jeans we celebrate the resources we have and put them toward real use to create sustainable development. If we are going to set out to do good in the world, we have to understand what Simler and Hanson describe in the quote above. We have to understand how our rationality is derailed, and we need to understand why it is important to be truly effective when we try to do good with what we have.

Cory Booker on Cynicism

Being Cynical is easy. Being Cynical is also dangerous and damaging. Toward the end of his book United Senator Cory Booker reflects on the cynical state of politics and society today, and what it means for individuals and for the nation to be as cynical as we are today. Booker writes, “cynicism about America’s current state of affairs is ultimately a form of surrender; a toxic state of mind that perpetuates the notion that we don’t have the power to make a difference, that things will never change.” When we don’t take action to be involved in our city, when our knowledge of politics (or anything else) is only cursory, and when we fall into a habit of not looking beyond our own perspective, we begin to think everyone is like us, and we accept the easy cynical story. Booker, in United, challenges inaction, challenges cynicism, and challenges the idea that only bad people are involved in how government and society operates.

 

I study Public Administration at the University of Nevada, Reno and it has forced me to focus on the realities of government, which is that there are a limited number of resources available for society, and somehow we must decide who gets what, when, and how. Any time you think about the way the world operates and begin to consider the world, the word ‘should’ undoubtedly pops up, indicating that you are making a judgement statement about your beliefs of the world. I don’t use belief in the religious sense of the word, your opinion and worldview could be shaped and reformed by objective empirical data to a large degree, but ‘should’ indicates political preference, ideology, and what you think would work best for an individual or collection of individuals in a situation. The important thing about the word “should” is that there is almost never 100% clear evidence that the suggestion following it is the only answer. When dealing with limited resources we must make political decisions, meaning that we must write down our “should” and our perspectives influence how we decide what is the most important.

 

Cynicism fails to recognize what is happening when the word “should” is introduced into discussion. It assumes there is an easy answer, and assumes that resources are not constrained and that we do not have to make difficult decisions that undoubtably give some people more resources or access to resources than others. When we allow ourselves to be cynical we are looking at a shell of any given situation and seeing what we want to see. We look for the negative and criticize what is in front of us. Being cynical is not about finding the errors and problems in a given situation and looking for a solution. Instead it is about propping ourselves up and placing ourselves on the right side of a moral divide, in much the same way that we use outrage to feel better about ourselves.

 

Booker is critical of cynicism, arguing that it takes our power away from us when we need to take more action on our own. Rather than recognize that we can band together to improve the world, cynicism looks at the status quo and assumes that we cannot make a difference. It is the result of what Tyler Cowen calls the “Complacent Class” that does not want to put in the effort and focus needed to make a change in the world. Cynicism allows “should” statements to exist in isolation within the brain, never challenged by new facts, and never actually introduced to the world. When we allow ourselves to be cynical we accept complacency when the world needs action and initiative. Cynicism is self-perpetuating, and fighting it off is a struggle, but if we want to grow individually, and if we want to see the world improve, we must understand that our world view will always be incomplete, that other people will have different motivations and will make mistakes, and that it is only by our actions that we can change the world for the better, even if our actions will be infinitesimally small in the course of history.

Preservation of Our Environment

Taking care of our shared spaces and maintaining our environment is not something we do a great job of. Fields, rivers, lakes, and outdoor areas are everyone’s shared responsibility, and because of that, they are no one’s individual responsibility. We will maintain our own lawns or pay people to do our home landscaping, but when it comes to our public outdoor spaces, we often fail to maintain and preserve the land we share. These spaces are expensive to maintain, the threats of invasive species are hard to understand, and it is not clear who should be the person that spends the time and energy taking care of our public places. In political science this dilemma is known as the Tragedy of the Commons, and Cory Booker addresses it in his book United.

 

Booker writes, “We are all dependent on nature, so we all have a stake in the preservation of our environment.” Taking care of our planet is important because it is the only one we have, and it is what sustains our individual lives, our societies, and the only life we know of in the universe. At the same time, taking care of the planet is unclear with ecosystems connected and dependent on each other in complex ways, with connections we are not always able to understand. Scientific research is expanding, but still not at a point where perfect models of natural processes such as rainfall, erosion, or phosphorous cycling are possible. But we depend on what we know about nature, and must continue to push forward and be cautious with how we use nature so that we can maintain what we have for not just our generation’s use, but for the use of future generations.

 

The truth is that we must use nature. We need to extract minerals, metals, and plant based materials from the earth. The physical structures that protect us and allow us to thrive come from what we pull out of the earth. Our medicines are dependent on plants and compounds that plants create, and our smartphones rely on rare elements mined form across the planet. Our dependence and demand for what the earth has to provide is very real and feels much larger than any one individual, making our personal responsibility feel tiny in comparison. Nevertheless, it is important that we use what the earth has to provide in a rational and reasonable manner, recycling what we can, eliminating waste when possible, and constantly striving to take things from the planet in the least disruptive manner. This responsibility is difficult and expensive, which is why the commons are ignored leading to the tragedy they face. We must understand that pollution, imbalanced extraction, and continued consumption do have costs that are greater than their immediate benefits, even if we only see the benefits now and can’t understand the costs of the future.

Communities of Fear

Our nation today faces challenges of concentrated poverty and dangerous neighborhoods that lead to stress, fear, and trauma for the families and children living within them. Senator Cory Booker looks at what life is like for people in these neighborhoods and how it impacts our nation’s well being in his book United. Booker served as mayor of Newark, New Jersey and shares a story about a concerned mother whose child was dealing with trauma and symptoms similar to post traumatic stress disorder after experiencing a gun fight in an impoverished neighborhood in Newark. Focusing on the dangers that these neighborhoods produce and the mental trauma facing those living in such neighborhoods, Booker writes,

“When fear becomes the norm, it stalks your life relentlessly, lurking and casting shadows over your daily routine. Fear changes you. Fear changes us. My parents worried about me, but they never had to deal with an ever present fear that violence could erupt at any moment and consume their child in an instant, affecting him or her in ways that no hug or loving assurance could heal.”

The fear that Booker describes is a result of concentrated poverty and unsafe neighborhoods. Our society has decided that the best way to organize people’s living spaces is to segregate individuals and families based on income. Honest concerns for property values and natural desires to be surrounded by similar people and nice things has pushed societies to split regions and housing based on income, creating wealthy neighborhoods and neighborhoods of intense poverty. The fear that Booker describes in the quote above is the result of living in a situation where poor people are pushed together and in some ways ignored. Regarding the trauma present in these neighborhoods Booker writes, “This is not normal, but somehow we behave as if it is. We accept it. If anything we think it is ‘their’ problem.”

I don’t have a perfect solution to end housing problems and neighborhood violence, but I think that Booker demonstrates that concentrated poverty and the problems it creates are unfairly faced by those with the fewest resources to overcome such challenges. Society often turns a blind eye to the ghettos we have designed to house our poor, and fail to see the choices society has made in establishing neighborhoods in the way we have. The fear and trauma that so many face makes it nearly impossible to overcome the obstacles present in such communities.