President (To Win Colorado)
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(D) Kamala Harris
(R) Donald Trump
80%
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CO-01 (Denver)
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(D) Diana DeGette*
(R) V. Archuleta
98%
2%
CO-02 (Boulder-ish)
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(D) Joe Neguse*
(R) Marshall Dawson
95%
5%
CO-03 (West & Southern CO)
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(D) Adam Frisch
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CO-04 (Northeast-ish Colorado)
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90%
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CO-05 (Colorado Springs)
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CO-06 (Aurora)
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(D) Jason Crow*
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(R) Sergei Matveyuk
90%
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CO-08 (Northern Colo.)
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(D) Yadira Caraveo
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30%
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DEMOCRATS
REPUBLICANS
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State House Majority
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DEMOCRATS
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95%
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March 05, 2010 05:04 PM UTC
20 Comments
n/t
should be an integral part of any intentional system. In other words, you’re right.
There are some caveats: Quantifying the inherently unquantifiable aspects of public programs and services generally leads to certain biases and distortions, and, in administrative law, is often with countered with a “precautionary approach,” which maintain that risk aversion should sometime trumps cost-benefit analyses (particularly used in the context of regulating toxic substances). But I think that these considerations can and should be incorporated into a cautious and comprehensive risk-benefit approach.
I do think some quantifications are inherently political decisions. For example, how much should we spend to have one less murder occur each year.
ps – thank you for the “In other words, you’re right”
As someone who was (and is) a passionate advocate of microeconomic, epidemiological/evolutionary, and network modeling of social institutional systems, I have always agreed with you wholeheartedly that everything is “quantifiable,” in that a numerical representation of value can be usefully assigned to it (as long as the limits of its usefulness are understood). Using the word slightly differently, some things are “unquantifiable,” in that the numerical values assigned to them necessarily reflect qualititive and irreducible judgments (as you say, are inherently political decisions). I think we pretty much agree on this.
(referring to my previous post) generally gets reduced inclusion in cost-benefit models, thus leading to the “biases and distortions” mentioned in my first post. While this is not inevitable, it is more or less an empirical fact of administrative law, where cost-benefit analyses are often used in rule-makings, and where those rule-makings which do so almost always downplay or disregard those factors which are least easy to quantify.
Two principal competing approaches to administrative rule-making are sometimes called “cost-benefit analysis” and “the precautionary approach.” The latter approach is based on the argument that where public health and safety are at stake, the risks posed by various unknowns should lead to highly inflated valuation of potential dangers. As we both agree (and the word “valuation” implies), the precautionary approach is a form of cost-benefit analysis, assigning higher values to unknown or indefinite risks. But in the parlance of administrative law, at least, it is generally distinguished from it.
There is a difference between
1) How much should we spend to ensure that I am not, or someone I love is not, murdered during the next X years?
and
2) How much should we spend to reasonably ensure that one less person that I do not know is not murdered during the next X years?
If you intend to construct a society in which a change in the average is sufficient to direct policy, I don’t want to live in your society.
And you better hope that your kids’ generation hasn’t learned anything in college. If they did, your generation is going to be in a world of hurt in about 20 years. 😉
In other words you are living in “his” society.
When the EPA, for instance, makes a rule regarding the safety standard for the disposal of some substance, or OSHA makes a rule regarding employee handling of some toxic substance, they sometimes assign a dollar amount per life saved, to determine the level of safety required. In any case, to make rules which tolerate no loss of life associated with economic activities under any circumstances would result in a very dramatic economic contraction, and probably end up costing more lives than it saved as a result of the subsequent spread of poverty.
Once again, it’s that crazy non-linear world resisting linear solutions.
In the context of murder, what would direct policies other than a change in averages? There’s no reason to believe that we’re capable of getting from where we are to a zero murder rate by any policy initiative we are capable of, or, if so, then at a cost we are willing to pay (and not just monetary cost). Of course it’s a reduction in averages that directs our policies! We seek policies that lower the murder rate.
Did I misunderstand you?
I not only agree 100% with Steve on this, but I think he laid it out clearly and specifically.
– dave
If there are misunderstandings (and I’m certain there are!) it is almost entirely due to my posting on a Saturday evening after a very enjoyable dinner out!
My concerns with the society that David proposes (and, indeed, the one in which we all currently live – h/t SH) is that costs are largely considered in terms of $. And these costs are often immediate and relatively easily determined.
In great contrast, benefits are frequently found in terms that can only perversely be expressed in dollars, are often difficult to do so, require subjective assessments to do so, and are frequently realized at some indeterminant time in the future.
Agreeing on what the “actual results” should be will be difficult. But very likely should be attempted since it would be worthwhile to do so.
However, the “actual results” we are able to measure may not resemble what we decide should be. And just because something is measurable does not mean it is desirable or even indexed to what we “want.”
So, in short, my early comment could be summarized as:
David, is this yet another “simple” “solution” to a suite of complex problems. If it makes you feel good, great. Your “solution” might be appropriate for problem #4 (since inputs and outputs are both easily measured in $). For the other problems, you’ve only offered “simple.”
Certainly there will be further misunderstandings. I am under a work deadline and can’t afford much more time on this. Sorry. I will return as I can.
While I believe in the utility of cost-benefit analyses as a part of a general policy-making approach, what tends to happen in political reality is that those factors that are hardest to quantify end up downplayed or ignored. While in theory, this isn’t necessary (and certainly isn’t desirable), in practice, it appears to be virtually inevitable. If an administrative agency is doing a rule-making, for instance, the more it invents numbers, the more likely that it’s rule-making will be held by the courts to be “arbitrary and capricious,” a principal basis for overturning agency-issued regulations. So, the less central to the rule the hard-to-quantify factor which it is quantifying happens to be, the more likely that it simply will end up disregarded or underemphasized.
One of the things you touched upon, discounting of future costs or benefits, is a point of contention when quantifying the value of human life, in a slightly different way from the one you identified. The numbers become ludicrous when normal economic discounting rates are used, and make no sense intuitively. Future lives, and future generations, end up discounted to the point of irrelevance.
As I said above, I love mathematical modeling of social systems for theoretical purposes, and think they are of potential enormous value for policy purposes as well. Unfortunately, politics intervenes in policy-making with, shall we say, mathematical certainty, and needs to be taken into consideration as one of the parameters influencing the outcome.
Money is a great invention because instead of having to find equivalent items to weigh against each other, you can reduce each to dollars and then dump all that in to the equation.
For example, our wars in the mid-east are a cost of an oil based economy. But if you want to put 4,000 soldier deaths against building 10 nuclear power plants. Then reduced medicare funding against subsidizing electric cars. Then…
It can be incredibly complicated properly pricing in all externalities. But taking that approach is a lot simpler than just trying to find equivalent activities to balance.
Yes it’s difficult and yes in many cases it is a political decision. But can you think of a better way to balance it all out?
Once long ago, in some class whose subject or purpose I no longer remember, the professor mentioned that the medium affects the art, that art is not so much some ideal form applied to some plastic substance (as we normally conceive of it), but rather the interaction of vision and medium, each modifying the other as they go.
I basically agree with you about the fundamental value of money (and once wrote a paper on the very topic, talking about the potential for utilizing political currency instruments, such as emissions compliance vouchers, only applied even more broadly).
But you’re relying on a false distinction when you identify some abstract possibility that is frustrated by the inherent dynamics of the application of that abstraction to the medium through which it must be realized. You have to consider both the ideal and the reality simultaneously; how does your idea interact with the means of its implementation, in the hands of people operating within a particular social institutional framework? And what refinements can be made in which aspects of that mess of interactions to alter the outcomes? And, finally, how realizable are the refinements you have thus identified?
It’s not that your ideas here are without merit; I’ve stated many ways in which I think they’re useful. But what you’ve proposed here is an oversimplified shadow of what actually is taking place in, for instance, administrative agencies as they seek ways to implement social policies. You’ve subtracted from, rather than added to, the pool of knowledge already embedded in the processes you’re seeking to refine.
To put it another way, you’re reinventing the wheel, only with far more bulges and angles than the one you are trying to improve upon. Nothing you’ve said in this diary or these posts is a revelation; it’s a roughly wittled version of something that the lathe of human genius and experimentation has been working on for some time. It makes much more sense to draw on that corpus of knowledge than to compete with it from a less well-developed starting point.
One more aside: You’re reduction of our wars in the Middle East to the single prominent variable of oil, and then reducing that to a trade-off between the lives lost in those wars and the costs of building nuclear power plants, is an example of too much reductionism. I could write a book (and books have been written) describing all of the additional and tangental variables involved that you have just removed from the equation. And that reality is no small part of the difficulty of the challenge you are alluding to.
Where the real estate tycoon tells his accountant (going from memory):
Sometimes things are complicated. But many times they are straightforward & simple – if you look for that. And many more times you can work with a decent approximation that is simple (that’s why we use Newtonian Mechanics where we can – even though it’s not what is truly occurring).
If someone asked how to turn on the water it would not surprise me if you answered with 10 paragraphs. All that’s needed is the phrase “turn the handle counter-clockwise.”
ps – Of course it’s not a trade-off between just lives lost & nuclear power plants – I merely used that as a simplistic example sufficient for the argument. Again, why 10 paragraphs when 1 sentence works.
And I will leave it at this giving you the opportunity to have the last word.
Just repeating that “sometimes things are simple” (which I’ve never disputed), and that my explanations at length could always be reduced to one sentence without any loss of information, does not either address the specific flaws in your approach that I’ve explained to you, or make your oversimplistic assertions any more correct or relevant. You seem to believe that your caricatures of social analysis are rich with meaning and relevance, and that the libraries full of actual empirical and theoretical research by people with actual training building on others doing the same are irrelevant when you can step in and say, “see how simple it all is?”
You like to try to dismiss me with falsehoods and insults for some reason. In your ps, you refer to one point, and ask why I spend 10 paragraphs on it when one sentence would work. Actually, I spent two sentences on that particular point. And you rarely, and barely, ever address any of the substance of what I say, prefering to repeat endlessly the same comment on form.
The fact is that real institutional analyses require more than one sentence. You’re insistence to the contrary, both to continue to believe that you have some unique and wonderful knowledge about something you clearly have virtually no understanding of, and that anyone who does (and thus challenges your pleasant delusions) doesn’t, is no more going to change reality than your oversimplistic policy prescriptions.
Addressing social problems is, indeed, far more complex than opening a fawcet, or flicking a switch. That’s what you just don’t get.
David, think about how our economy got to its current recessed position. Don’t forget to include the contributions from Enron, Madoff, Merril-Lynch, AIG, Lehman Bros., General Motors, and the list goes on.
In other words, the private sphere can be quite adept at “delivering less for more.” Fortunately, the public sphere is there to bail them, and us, out. Is this a cost or a benefit?
Framing your list of problems as a flaw in the public sphere that is corrected in the private sphere suggests ideological thinking on your part.
Perhaps it would be more useful to identify the similarities in those entities that “deliver less for more” versus those that “deliver more for less” and not tritely, and inaccurately, claim that it is solely, or even largely, a difference between private and public spheres?
I’ve worked, and excelled, in both spheres. It is pretty amazing how much of the excellence “produced” by the “private” sphere depends upon inputs provided by the public sphere.
The relative roles of the public and private spheres are so confused in popular discourse, in so many ways. They are either mistaken for being alternative ways of accomplishing the same thing, which is only true to a limited extent on the margins. Or one is mistaken for being parasitic on the other, when they are in reality symbiotic.
The private sphere, as we know it, can’t exist or function without the public sphere. The latter defines and enforces property rights, reduces transaction costs, and internalizes externalities. Without those functions, the private sphere would be nothing but brutal gang warfare, or paralyzed with inefficiencies, or the robust by-production of mutual destruction, respectively.
The public sphere can’t exist without the private sphere, the latter being one layer closer to the actual production of wealth upon which the entire social system, and particularly the maintenance of the public sphere, depends. Having said that, it is, of course, as ridiculous to say that “governments don’t produce any wealth” as it is to say that capitalists, or corporations, or anything other than laborers, don’t produce wealth. In reality, we have layers of organizational structures which contribute to the production of wealth, which laborers directly effect. Without the organizational layers, the laborers would not have the framework in place through which to produce the wealth, and without the laborers the organizational layers would not have any mechanisms for its physical realization.
Government, like corporate management, investors, or shop foremen, is an indispensible organizational layer.
What David is referring to is “goal displacement” in its various forms, which is the ways in which actors in some of these organizational layers spend time and energy in ways which do not contribute as efficiently to the actual goals for which they are employed as might otherwise be the case. Goal displacement, in fact, is found in both the private and public sectors, though the private sector (as David would be quick to point out) is more disciplined by market competition than the public sector, and so has more incentives for weeding out goal displacement among its personnel.
But what David isn’t recognizing is that some public sector goals are meant to be “inefficient,” as seen through a private sector lens. They provide a system of checks and balances and dampers on an otherwise blindly careening system. They provide the foot on the brake and the hand ready to downshift. That’s their purpose.
All of these considerations are just pieces of a very complex and convoluted puzzle. You are absolutely right, as I so often say, that it is a grave mistake to treat it as a bunch of linear problems amenable to simple solutions. Very, very little in human social systems ends up within that category, on careful examination.
The trick is not to argue which sector does “it” better, but rather to figure out how to integrate and refine the two sectors to do “it” best.
First deliver more for less – how much would it cost 10 years ago to get the functionality of an iPod (and forget it being portable)? Or look at how little a family pays for food today compared to even 20 years ago. (Yes there are issues with food today but the reduction in cost is major.)
Also most (all?) cases of the private sphere that you bring up are ones that are sucking at the public teat. Yes the banks took advantage of being TB2F and showed the same issue of delivering less for more. But that was due to treating them like a private business rather than a regulated utility.
As to Steve’s point that some of the public sector is meant to be inefficient, I disagree. I do think there are many places where the public sector does (or should) introduce regulation and oversight that does slow down the system. But I think the state should do that as efficiently as possible.
I do agree that the state generates wealth. Historically our public education from K-12 to the GI Bill, to financial aid has been the single biggest wealth generator in the history of our country.
Do you do that on purpose, or is it just a lack of attention to detail?
I said “some public sector goals are meant to be inefficient as seen through a private sector lens,” and you reply, no, the public sector, when appropriately putting on the brakes, should do so efficiently. Notice the word “goals,” and the phrase “as seen through a private sector lens” in my original statement. The goals of the private sector are generally to keep the public sector’s foot off the brakes, no matter where they are careening toward. That was my point. And if you take my analogy to its logical conclusion, you would notice that an appreciation of doing so efficiently is implicit in the metaphor: You want to have good reflexes and well-coordinated skills when applying brakes and/or downshifting.
No one disagrees that any enterprise benefits from doing whatever it is really, fundamentally meant to do as efficiently as it can do it. That pretty much is a simple tautology, and goes without saying. Or should.
(Some, such as George Will, would argue that government is meant to be inefficient in the passing of laws, but, if so, it’s real, fundamental purpose is to syphon off political rent-seeking and channel it into a harmless and impotent process, and then that is what it should do as efficiently as possible. I’m not agreeing with Will’s perspective, just including it in the discussion).
As for the challenge of refining the public sector to perform its tasks more efficiently, that is a non-trivial goal. As I pointed out, not all of its tasks can be replaced by the private sector. In fact, a very limited range of them can be. Sometimes, for some purposes, market-like innovations, or public-private partnerships, can be a good idea. It has to be analyzed on a case-by-case basis, determining if the goals of the agency are best served by some market-incentivizations. But some sloppy, one-size-fits-all sledgehammer notion that we should make the public sector “more like” the private sector misses the subtleties and complexities of the real challenges we face.