Monday, June 27, 2016

Glasgow - a case study of the consequences of coercive, centralized planning

From The Glasgow effect: 'We die young here - but you just get on with it' by Karin Goodwin.

Glasgow was an industrial powerhouse of the British Empire, noted for its engineering prowess, shipbuilding and other manufacturing. Glaswegian mechanics and engineers spread across the empire, building roads, building ships, stringing telegraph, etc.

As so often is the case, the cycle of prosperity led to the killing of the goose that laid the golden egg of productivity. The increasing prosperity of the city matched the era when communism still seemed not just feasible but morally compelling. So much so that the epithet Red Clydeside was settled on the shipbuilding district and Glasgow became a by-word for obstreperous, recalcitrant and militant labor unions.

All cities in the developed world have struggled with post-World War II competition and trade. Given the labor circumstances of Glasgow, it was one of the earlier victims. But it wasn't the only one. All cities whose prosperity was solely or dominantly founded on manufacturing and transportation suffered reconfiguration and realignment to the modern services and knowledge economies. In the US, Akron, Cincinnati, Philadelphia, Los Angeles, New York City, Newark, Boston, Trenton, Paterson, Gary, Detroit, Chicago, Milwaukee, St. Louis, Birmingham, etc. have all struggled in the transition from predominantly manufacturing to services and knowledge. Newark, Patterson, Detroit have all pretty much failed to make the transition but the others, sometimes rockily, have.

The transition road Glasgow has had to travel is not unfamiliar. What made it far worse were the cultural and political constructs.

The Guardian begins the article painting a scene.
Robert Preston takes the grainy photo – just a few square centimetres and yellowing with age – from his wallet and with a careful thumb and forefinger holds it up to the light.

In the picture he is just seven and his three brothers are aged three to 11, the youngest grave-faced and chubby cheeked. His 14-year-old sister, her dark hair perfectly coiffed, peeps over the tops their heads.

It’s the Glasgow Fair holiday circa 1947 and they are in Dunoon, a coastal town that sits on the Firth of Clyde and a popular “doon the watter” destination for Glaswegians escaping the urban sprawl.

“I’m the only one left now.” The 76-year-old Preston’s tone, who was born in Govan, icon of Glasgow’s shipbuilding heritage on the River Clyde, is matter of fact. Two brothers died of cancer, one of heart complications, and his sister dropped dead in the street after a brain aneurysm.

“I don’t think that’s unusual,” says Preston. “We die young here. But you just take the hand that life deals you and get on with it.”

What he calls fate, some researchers have labelled the “Glasgow effect” – excess mortality that cannot be accounted for by poverty and deprivation alone, and it impacts on everyone in the city.

Glaswegians have a 30% higher risk of dying before they are 65 (considered a premature death) than people in comparable de-industrialised cities such as Liverpool and Manchester. They die from the big killers: cancer, heart disease and strokes, as well as the “despair diseases” of drugs, alcohol and suicide.

And though they have a higher chance of dying prematurely if they are poor, deaths across all ages and social classes are 15% greater. Economic advancement alone will not save your life here.
Urban governance and planning and transitioning from manufacturing to services and knowledge economies are very much human processes no matter how much we treat them as abstract matters of the mind.

The catalyst for the article is new research.
The mystery of Glasgow’s “sick man of Europe” status started to rear its head more than half a century ago. But now, for the first time, researchers from the Glasgow Centre for Population Health (GCPH) claim to have found hard evidence of a number of key factors that explain it.

In a new report, History, politics and vulnerability: explaining excess mortality, they claim a combination of the historic effects of overcrowding, poor city planning decisions throughout the 1960s, 70s and 80s and a democratic deficit – or lack of ability to control decisions that affect their lives – are among reasons why Glaswegians are vulnerable to premature death.
There's a lot of good material in the article.

What is striking is what is missing. The Guardian is famously a newspaper of the socialist left. They have some great reporting but it is often blinded by their ideological orientation. This is one of those occasions. There is no mention that virtually all of Scotland has been Labour Party since World War II and the cities were governed by the hard left. Politicians who were quite proud to identify themselves with Communism, Maoism, Socialism, etc. Scotland in general and Glasgow in particular has been a case study of the national effects of leftist policies. Much like contemporary Venezuela. Aside from the leftism of its politics, perhaps the greater issue for Scotland and Glasgow has been the virtual absence of real political competition.

The Guardian has a pro forma swipe at Thatcher but largely the article is simply a chronicle of political governance failure. Indeed, story after story is told of failures in urban planning without ever a comment on the fact that all that planning was done by the supposed best-and-the-brightest with the sincerest intentions of doing good. It all failed. No freedom, no competition, no choices.

Glasgow today is the natural consequence of a series of deliberate policy decisions arising from a political culture and civic institutions mired in pathologically altruistic and coercive central planning.

The Guardian wants to make this an issue of simply choosing the wrong policies. The root causes of Glasgow's condition today is only indirectly a result of bad policies. The systemic root causes are an absence of competition, freedom, and respect for individuals as individual agents of their own decisions.

Sunday, June 26, 2016

I see the problem emerging but not yet the solution

This is interesting when taken in combination with a number of other research reports I have seen recently.

From A Family-Friendly Policy That’s Friendliest to Male Professors by Justin Wolfers.
The underrepresentation of women among the senior ranks of scholars has led dozens of universities to adopt family-friendly employment policies. But a recent study of economists in the United States finds that some of these gender-neutral policies have had an unintended consequence: They have advanced the careers of male economists, often at women’s expense.

Similar patterns probably hold in other disciplines, too.

The central problem is that employment policies that are gender-neutral on paper may not be gender-neutral in effect. After all, most women receive parental benefits only after bearing the burden of pregnancy, childbirth, nursing, and often, a larger share of parenting responsibilities. Yet fathers usually receive the same benefits without bearing anything close to the same burden. Given this asymmetry, it’s little wonder some recently instituted benefits have given men an advantage.


To combat these disparities, many universities have adopted tenure-extension policies that give new parents greater flexibility. Typically, this means extending the seven-year period of tenure evaluation, usually by an extra year for each child. In practice, these policies are usually gender-neutral, giving dads an extra year to establish their reputations, just like moms. Universities typically adopted such policies in the 1990s and early 2000s, while about one-fifth chose not to do so.
Sound a little cryptic? What they are saying, but trying not to say, is that when male and female academics are both given the same generous parent leave benefits, male academics use that leave to accelerate their academic output above and beyond what they would normally have been able to do with a normal work load while female academics spend the leave taking care of the child.

So what were the results of the family friendly gender neutral parental leave policies that were enacted?
The policies led to a 19 percentage-point rise in the probability that a male economist would earn tenure at his first job. In contrast, women’s chances of gaining tenure fell by 22 percentage points. Before the arrival of tenure extension, a little less than 30 percent of both women and men at these institutions gained tenure at their first jobs. The decline for women is therefore very large. It suggests that the new policies made it extraordinarily rare for female economists to clear the tenure hurdle.
If it is as reported, that is a massive effect size. Before the family friendly policy, 30% of women and 30% of men gained tenure at their first job. After the family friendly policies, the reporting is that 8% of women and 49% of men gained tenure at their first job. I am pretty certain that was not the intended outcome.

The whole article is written from an advocacy perspective. The author, Wolfers, is clearly positioning that parental leave should not be gender neutral but should be held only for mothers. His evidence that the gender neutral policy is not addressing the underlying problem is compelling. One of the advocates interviewed points out, correctly, that:
The problem, said Ms. Davis-Blake, is that “giving birth is not a gender-neutral event,” recalling that during her pregnancy, “I threw up every day.” She argued, “Policies that are neutral in the eyes of a lawyer are not neutral in fact.”
I see this as further evidence to the argument I have been making for some time, that gender policies are often ineffective, have unintended negative consequences, and position women as second class protected citizens without actually delivering the intended benefits. I believe the reason that this is so is because the issue is not about gender but a complex interplay between six realities:
1. Expertise, accomplishment and elevated productivity are, broadly, the result of the amount of purposeful time invested in an effort along with the duration. The more hours you put into the endeavor over the longer the period of time, the more productive you become and the more expert, leading to rewards and recognition. This is true for males and females as illustrated by similar success rates for males and females of comparable background who are both childless.

2. The beneficial outcomes generated by intense purposeful effort are logarithmic in nature and Pareto distributed. In other words, if it takes 10,000 hours of sustained purposeful effort to achieve expertise, the first 8,000 or 9,000 hours won't result in much differentiation in outcome. It is only at the far margins of performance where the results become evident; that is the logarithmic aspect. The Pareto distribution arises from the logarithmic nature of the effort. 80% of the beneficial outcomes (be it income, stock return, rewards, citations, recognition, etc.) will be garnered by 20% of those involved in the field. Regardless of gender. Consequently, everything depends on the capacity to invest an exceptional number of hours over a prolonged period of time to garner the rewards that come with distinctive capability.

This reality gives the lie to the common advice to pursue your passion. If beneficial outcomes in terms of income and recognition are the goal, the actual advice should be pursue your passion to the extent that it is something where you have differential capability and which is in demand by others. If nobody wants it, you won't be rewarded. If you do not have native capability that will yield something at the 8-9,000 mark, it doesn't matter how passionate you are.

3. Childbirth and childcare are inherently disruptive to intense work over long spans of time. The more time off and the longer the disruption, the greater the impact on career outcomes. Hours invested in child welfare and in career welfare are a zero sum game. What one receives the other loses. For individuals, the choices are minimal childcare, outsourced childcare, familial childcare (member of the family looking after the child) or some division of labor with a spouse. Other than minimization, all other strategies involve some diminution of career outcomes. This aspect is essentially a trade-off decision between child welfare and career welfare which are zero sum between them.

4. Familial structure and circumstances is obviously a major determining factor in outcome determination. Childbearing within the context of a family unit is statistically far more beneficial to overall outcomes than is single parent childbearing. Similarly, variance over time (separations, divorces, etc.) is also detrimental to desired outcomes.

5. In addition to the child-career trade-off, and familial structure, there is also a complex familial structure trade-off. Within a family choices are available, often influenced by particular career prospects at the time of childbearing. Do both parents continue working full time with family member or other third party taking up the child caring role? One work full time and the other exit the workforce? Both moderate workforce investment so that both can equally invest in childcare? One work full time and the other work part-time? The list of alternative career and child caring balancing within the family unit are extensive. Some have reasonably well known outcomes and others are less documented. Much depends on estimations of career uncertainties and prospects - estimates which are not necessarily accurate.

6. There is an inherent class inequality in these trade-off decisions. The cost of good childcare is relatively fixed within narrow boundaries regardless of individual circumstances. Given that it is a fixed cost, the overall burden on those with little income and low social capital are excessive, dramatically limiting their capacity to achieve desirable outcomes.
Given these relatively well established facts, I believed it is a chimera to chase after gender discriminatory policies. Women should not receive extra assistance because they have a baby. It is the parent who takes on the primary burden of childcare who should be considered for support, not the gender. I.e. support for the role, not the gender.

But even that is problematic from a philosophical and ethical perspective. A policy that might be neutral at an individual level is likely not neutral when you consider it between family structures. I have observed elsewhere that much of the policy debate is cast as a competition between genders when it is in fact a competition between family structures.

Take, for example, a gender neutral policy such as high quality childcare for everyone. This is a thought experiment, not a practical suggestion. If everyone has access to high quality childcare, the returns are highly differential based on family structure. Single and childless people pay higher taxes but receive no direct benefit. For those with low human, financial, and social capital, it presumably benefits those who might not otherwise be able to work but it does not substantially change their income level.

It won't make any difference for the 30% of mothers who stay home as a choice (i.e. they have chosen child welfare over career welfare). And it won't make much difference to those in the workforce in any sort of non-exceptional career path. The only people for whom such a policy would be materially beneficial are those where one or both of the income earners is in pursuit of the 10,000 hour excellence and cannot afford to see an interruption or decline in the career hour investments.

In other words, looking at career/child trade-off decisions and intra-family structure trade-off decisions, the only people who materially benefit from this seemingly benign and beneficial policy are the 5-10% upper income already highly advantaged people who have chosen good careers and good family structures.

That everyone else should subsidize the already most privileged is obviously not ethically right.

So what is the answer? I don't know. My head hurts. I'll keep chipping away at this. But what the evidence is telling me is that the problem is badly defined in the first place, most of our popular policy remedies are counterproductive or detrimental and we are not ready to talk about real remedies to real problems because most of the current solutions, while detrimental to others, tend to be highly beneficial to the most privileged.

Misandry bias

The article is Artificial Intelligence Has a ‘Sea of Dudes’ Problem by Jack Clark.

It is, to me, an example of the prejudicial bias that the chattering class has against seeing their own prejudicial biases. It is an empirical fact that while it has become ever easier for women to enter STEM (recent studies indicate a bias of 2 to 1 for the female candidate when presented with two equally qualified candidates), there are fewer and fewer women choosing to go into STEM and into the computer sciences in particular and into artificial intelligence in the very particular.

If women, as citizens with agency, are choosing this course, is there a problem? Not on the face of it. There is much research on the value of diversity which produces a scattershot of results which pretty much come down to what you would expect. In general there is little inherent value in diversity (racial, gender, etc.) except in very particular circumstances. Diversity as a goal in and of itself has no real return. Diversity of experience and accomplishment is valuable in particular contexts.

The article posits that there is a problem arising from the fact that the field is numerically dominated by men. I read the article expecting that there would be some examples of why AI is negatively affected by the gender imbalance.

There is not one such example. The premise of the article is that there is a problem with male gender dominance but they are unable to muster a single example of a problem in AI created by such an imbalance.

All the article boils down to is that the reporter does not like that so many men choose to go into AI and so few women do.

There is no problem that needs fixing because, based on evidence advanced in the article, there is no problem in the first place.

Different people make different choices and the author doesn't like those choices.

Not much there, there.

UPDATE: Nursing, Education, Librarians, Sociology, Psychology are all fields overwhelmingly dominated by women. Other than education, there is, as far as I am aware, not much research indicating that the gender skew has any negative consequence. To capture the blindness to their own prejudice, recast the original headline to get a flavor of just how prejudiced and inappropriate the headline is: "Sociology Has a ‘Sea of Dames’ Problem", "Nursing Has a ‘Sea of Dames’ Problem", "Teaching Has a ‘Sea of Dames’ Problem", etc.

There are never any paradoxes. The appearance of what seems to be a paradox is simply the illumination of one’s ignorance.

From the comments section of Intimate partner violence against women and the Nordic paradox by Tyler Cowen. Discussing a new paper which finds:
The Nordic countries are the most gender equal nations in the world, but at the same time, they also have a disproportionately high rate of intimate partner violence against women. This is perplexing because logically violence against women would be expected to drop as women gained equal status in a society. A new study explores this contradictory situation, which has been labeled the ‘Nordic paradox.’
What is the rate in Scandinavia?
Denmark clocks in at about 32%, Finland at 30%, and Sweden at 28%
But what does that compare to. I couldn't access the study and it is remarkable how hard to it is to find objective empirical data comparing countries. The closest I could get was a WHO study which reported non-Latin North America (i.e. Canada and USA), the rate was the lowest in the world at 23%. I'll take the US as 23% compared the Scandinavian rate of 28-32%.

Interesting. I lived in Sweden for five years in the early 1970s. Sweden is a very egalitarian society. I was very familiar with the irony that Scandinavia has very family friendly policies that read like a dream to many third wave feminists in the USA but which result, unintentionally, in women having a much lower presence in competitive fields of endeavor compared to their sisters in the USA.

This is the first time that I have heard of high rates of intimate partner violence in Scandinavia. It runs counter to much that I assume I know about Sweden and the other countries of the region. Alcohol is a perennial issue and I can see that as being perhaps a significant contributor to elevated domestic violence rates but my first instinct is that there must be some definitional or data collection issue instead. The researchers feel like they have controlled for that.

I am perplexed. Experience and assumptions are not matching data. I have to accept some conditionality to my assumptions pending further more robust data.

There is a very wide ranging discussion in the comments section including this from commenter Jason K.
There are never any paradoxes. The appearance of what seems to be a paradox is simply the illumination of one’s ignorance.

The people have spoken, the bastards.*

Post-Brexit there is, of course, much posturing, pedanticism, condemnation, hectoring, allegations of xenophobia, racism, etc.

Of course this was a momentous and consequential decision on the part of the British. The striking thing to me regarding the commentary is the absolute certitude of people on both sides of the debate, particularly on the losing side, the Remainders. Sure, there's sour grapes. They lost. And sure, this result, in the long sequence of political upsets and surprises (American elections in 2010, 2012, rise of the Tea Party, Donald Trump, rise of the far right in much of Europe, etc.), seems to be an endorsement of the theory that the masses are rising against the elites.

But the absolute certainty. In headlines and tweets, in hallway conversations and press conference declarations, there is the predicate assumption that anybody has clear knowledge of what this means and why it occurred. We can guess, we peer into the glass darkly. But with certainty? No one knows what is going on and what will happen and what the likely consequences will be. Could this be devastating to the position of Britain in world affairs and to their economy? Certainly. Could this be the jolt needed to revitalize the economic, political, and cultural vitality of Britain? Certainly. No one knows. We all have reasons for believing it might tilt one way or another, but no one knows. But no one seems to be speaking as if they have any self-awareness of the weakness of the epistemological foundations for their shouted convictions.

I think a rejection of the political class and their crony capitalists (as well as academia and entertainment) by the electorate is one part of the equation. But there is something deeper going on perhaps. Not just a temporal issue that will pass. For fifty years we have had increasingly centralized decision-making, in Washington and in Brussels. But that's a structural issue. I suspect the issue of greater importance is diminution of the assurance that all decisions have been made in a fashion that elicits the consent of the governed.

For Americans, that is central. It's right there in the second paragraph of the Declaration of Independence.
That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.
The right of the people to alter or abolish the status quo seems to me to be a pretty accurate and explicit description of what the British did (voting 52:48 to leave) and certainly the English did (70:30 if you remove the votes of Scotland and Ireland). The conversation in Europe has for the better part of three decades had some elementary concern about a "democracy deficit" when it came to the EU. But no one in the ruling elite ever did anything about it. The cosmopolitan elite in Brussels continued issuing increasingly infantile regulations in a one size fits all fashion with little solicitation or even regard for the opinion of those consenting to be governed. The democracy deficit seems to have finally manifested and the panic among the elite is that the opinions of the electorate in Britain were, based on continental surveys, less extreme than among other European nations. The loss of Britain is a misfortune for the EU but the loss of France, Netherlands and Italy would be careless, to paraphrase Oscar Wilde. If all the countries who fund the EU want to leave, then the EU rump simply becomes an unsustainable deficit generator.

Regardless of which form of government is best at generating the consent of the governed, the post-Brexit commentary is focused largely on the idiocy of the voters, leaving the grotesque smell of condescension. The privileged elite, beneficiaries of crony capitalism, rent seeking, and regulatory capture, are fed up with the public and their idiotic opinions. If only they had an electorate worthy of them.

But the question remains - how do we ensure that whatever legislative actions are taken, that they are done with the consent of the governed. The crony capitalist governing elites have been ignoring the electorate for a long time but electorates everywhere seem to be taking action to ensure that their consent is obtained. No matter how much the governing elites (and media and academia) dislike it.

This video Human Dignity and the Freedom to Choose by James R. Otteson seems especially pertinent here. The right of everyone to agency and the willingness and courage to extend respect for that agency even when we disagree with a decision they might make, which we might even think is harmful to them. That respect on the part of the chattering classes is not much in evidence at the moment.

* Dick Tuck concession speech following his loss in the 1966 California State Senate election.

For example, both sides might agree that rocket launchers are a step too far.

Scott Adams, creator of the Dilbert comic strip, has always been an idiosyncratic, creative thinker. He has upped his output this election cycle. He is not always right but he is virtually always interesting. One of his gifts is looking at a tired issue from just a slightly different angle and coming up with a startling new perspective. Here is an example based on the gun control issue.

From Why Gun Control Can’t Be Solved in the USA by Scott Adams.
On average, Democrats (that’s my team*) use guns for shooting the innocent. We call that crime.

On average, Republicans use guns for sporting purposes and self-defense.

If you don’t believe me, you can check the statistics on the Internet that don’t exist. At least I couldn’t find any that looked credible.

But we do know that race and poverty are correlated. And we know that poverty and crime are correlated. And we know that race and political affiliation are correlated. Therefore, my team (Clinton) is more likely to use guns to shoot innocent people, whereas the other team (Trump) is more likely to use guns for sporting and defense.

That’s a gross generalization. Obviously. Your town might be totally different.

So it seems to me that gun control can’t be solved because Democrats are using guns to kill each other – and want it to stop – whereas Republicans are using guns to defend against Democrats. Psychologically, those are different risk profiles. And you can’t reconcile those interests, except on the margins. For example, both sides might agree that rocket launchers are a step too far. But Democrats are unlikely to talk Republicans out of gun ownership because it comes off as “Put down your gun so I can shoot you.”

Let’s all take a deep breath and shake off the mental discomfort I just induced in half of my readers. You can quibble with my unsupported assumptions about gun use, but keep in mind that my point is about psychology and about big group averages. If Republicans think they need guns to protect against Democrats, that’s their reality. And if Democrats believe guns make the world more dangerous for themselves, that is their reality. And they can both be right. Your risk profile is different from mine.

So let’s stop acting as if there is something like “common sense” gun control to be had if we all act reasonably. That’s not an option in this case because we all have different risk profiles when it comes to guns. My gun probably makes me safer, but perhaps yours makes you less safe. You can’t reconcile those interests.

Our situation in the United States is that people with different risk profiles are voting for their self-interests as they see it. There is no compromise to be had in this situation unless you brainwash one side or the other to see their self-interest differently. And I don’t see anyone with persuasion skills trying to do that on either side.

Fear always beats reason. So as long as Democrats are mostly using guns to shoot innocent people (intentionally or accidentally) and Republicans are mostly using guns for sport or self-defense, no compromise can be had.

If we had a real government – the kind that works – we would acknowledge that gun violence is not one big problem with one big solution. It is millions of people with different risk profiles voting their self-interest as they see it.

So stop acting like one side is stupid. Both sides of the gun issue are scared, and both have legitimate reasons to be that way. Neither side is “right.”

Saturday, June 25, 2016

Markets distill the biases, opinions, & convictions of elites

An interesting observation.

Mysteries of data display


Great health achievement.

But as always I am fascinated by how we communicate things, particularly in numbers.

One of the standing rules of thumb is to watch the axis. Things get hidden by monkeying around by truncating ranges and other such tricks. Also pay attention to legends.

This is a great example. I would have sped right by without those two heuristics. And I don't think there is anything maliciously misleading going on. But the way the data is presented ends up being misleading even though it is a remarkable and positive story.

The first thing that caught my attention was that the two, nearly identical lines are not labelled. Going to the source data, the solid line is for men and the dotted line is for women. A glancing look makes you think that the cancer rates for women and men have plunged in tandem. And, in a fashion, they have.

But having sorted out the line labelling, you then notice that there are two Y axes with different ranges. The one on the left ranges from 1 to 9 odd and the one on the right ranges from 2 to 17. It takes a second to grasp what is going on.

The Y axis on the left is for women and on the right is for men. Let's follow this through. in 1950, women suffered roughly 9 stomach cancers per 100,000 women whereas men suffered stomach cancers at nearly twice that rate at 17 for 100,000 men.

By using different ranges, the chart hides an important fact. Yes, stomach cancers have decline at the same rate but they started from dramatically different points. Men suffer stomach cancer at nearly twice the rate as women.

And what about today? Looking at the chart, you'd think that men and women have converged to the same cancer rate. But they haven't. Men still suffer stomach cancer at nearly twice the rate as women, but both suffer at a far lower level than in the past. Women 1.45 per 100,000 and Men at 2.68 per 100,000. The ration of male suffers to female suffers has barely budged in 50 years.

This is virtually entirely a good news story, the decline in stomach cancer rates. But there is also a communications story in here.

Why use different Y axes ranges? By doing so you hide that men suffer stomach cancer at twice the rate of women and that hasn't changed in fifty years? By charting the data as they have elected to do, they hide a pretty interesting question. Why do men suffer stomach cancer at twice the rate? Is it simply a gender difference? Do men have sufficiently different diets (eat more red meat, drink more beer?) that that might cause the differential. Is the fact that women live longer than men in some way responsible for the differential? Are there other common organ cancers where there is such a strong variance between the sexes and do others penalize women over men, and if so, which and why?

The only reason I can think of to display the data in the fashion it has been displayed is if one were advocating for the distribution of research money. In other words, men would favor larger investments in stomach cancer research than women simply because of the differential.

But the originating site, HumanProgress, doesn't, at a cursory view, appear to me to be an advocacy group.

So a mystery and a good example of the importance of clear thinking about information display. Properly displayed, the data prompts some interesting and unresolved questions. Displayed as it is, the data suggests that the problem is all but solved.

Friday, June 24, 2016

Productivity has increased dramatically and in a short time frame

More than 700 years of income inequality in the UK measured via income share of the top 5% and Gini, 1980-2010 by Max Roser.

Click to enlarge

Excellent charting of what is a difficult to measure concept.

What is missing is the productivity dimension. Yes, income inequality is blessedly dramatically lower today than it was a hundred years ago. But that just measures the relative difference at the whole society level.

A hundred years ago, if you were in the bottom quintile, maybe the bottom two quintiles, you were border line starvation and even the middle income quintile was financially perilous. When everyone was working at such lower income, absolute income was a greater issue than relative income. It is only since we have become so prosperous so quickly that we have focused (mistakenly) on income inequality rather than what has always been the real root issue, productivity.

I think what these charts bring to the fore is that a hundred years ago poverty and income inequality were tantamount to starvation whereas today, definitional poverty and income inequality are really measures of relative discomfort.

And it is the rapidity of the spread of prosperity which is perhaps most remarkable of all. From top of mind, the bottom income quintile in the US in 2016 have a capital and durable goods consumption profile equivalent of that of the middle income quintile in 1970. There are a lot of people who are alive today with happy childhood memories of being middle income quintile in 1970.

Looking internationally, Mexico today has an average per capita GDP about where the US was in 1950 (from memory). Again, most of us today know someone who can remember the 1950s.

The only point here is that the income in individual and national productivity has increased dramatically and in a short time frame. It is disorienting and easy to lose perspective. Yes there are still poor countries and poor people within countries but what those terms actually mean in real life circumstances are far different from what they meant fifty and a hundred years ago.