Darwinian Politics and risk-seeking behaviour

I love Paul Rubin's "Darwinian Politics". Rubin argues that existing political preferences around things like fairness, inequality, altruism, and group affiliation can really be traced back to the Environment of Evolutionary Adaptedness - the 50,000 years or so that modern-form humans spent in the Pleistocene. I often teach the book as part of my graduate-level public choice class.

Jason Collins reviews the book here and notes the one part of the book with which I disagreed:

Rubin’s least libertarian finding, apart from his implied support of restrictions on polygamy, relates to restrictions on drugs and other “anti-social” activities. Rubin argues that if consumption of these goods and activities is a form of competition between young males to signal status, restrictions on their use will be required to prevent above optimal use. While Rubin considers that the need to maintain a society’s prime age men at fighting strength is weaker than in our evolutionary past, a case can still be made for this form of control. It was interesting that Rubin chose to use a signaling argument at this point as he does not address the role of signaling in most of his analysis, such as in his discussion of “altruistic” gifts of game in ancestral societies or donations to charity.

I find this argument wholly unsatisfying. I agree with Rubin that the age-profile of risk preference looks like it's set in the EEA. But the policy implications of that are a lot less obvious than Rubin makes out. If we're hardwired to demonstrate ability to bear risk when we're in our mid to late teens, then banning one form of risk-taking is very likely to push risk-taking demonstrations over onto other margins. It's then manifestly unclear whether we improve or worsen outcomes when we ban youth access to consumption activities whose risks are relatively well understood and the use of which is at least relatively well socialised as it depends onto what other margins the kids switch. If everybody switches to bungee jumping, that's probably better; if everybody switches to car surfing, that's worse.

Where at least some youth alcohol demand is derived from an underlying preference for demonstrating fitness to bear risk, we have to worry about the other margins on which the underlying preference can be expressed if we want to push down on one part of the balloon.

I worry for similar reasons about Veblen-themed arguments about reducing status competition through income taxes. If we're hard-wired to be status-seeking animals, isn't it better that that status-seeking is channelled into productive outlets, like earning money by working hard to meet the needs of others, than less productive or downright harmful alternatives, like jousting, tournaments, or feats of military valour? As I'd wondered a few years ago after Robin Hanson provided some data on the relative positionality of different types of activities:

If humans are status-seekers, which seems highly likely given how sexual selection works, then high marginal tax rates just push status-seeking onto the other dimensions identified by Hanson. Which then gives us some testable hypotheses: do countries with heavy income redistribution see greater spending on education, more time investment in sport, more money and time spent on personal beauty and exercise (all normalized for income, of course)? I wouldn't know where to start looking for the data, but I'd be keen to see the results.

I'll have to dig around a bit to see whether that kind of cross-national data exists: potentially another topic for the future honours projects file.

Positional goods: remove all the vices

One argument for income redistribution is that income is largely a positional good; folks then spend more time on work and less time on leisure than would be optimal. Curtis Eaton presented a paper in our Department a couple of years back showing that the addition of a Veblen good (ie a positional good) crowds out civic engagement and other kinds of public good production. I was rather critical in the seminar, first because the addition of any private good to that kind of optimization problem has the effect of reducing time allotted to any other particular element of the utility function, but more importantly because if humans are status-seeking, closing off status-seeking on any one dimension (by heavy income taxation, for example) may force it over to less productive dimensions: at least the pursuit of income generates real wealth; the pursuit of other status markers may be relatively inefficient. But I didn't have data on the relative positionality of different activities.

Robin Hanson yesterday provided a listing of the relative positionality of different types of activities. Veblen goods are everywhere it seems. While 48% of survey respondents listed an income increase from $200K to $400K as being positional, lots of other things also rated as being at least as positional, including hours studying for a test (57%) and hours training for athletic competition (48%). Another survey found gains in your child's education to be as positional as gains in your income, with gains in either your own or your child's attractiveness being more positional than income.

Today, Hanson calls for those advocating heavy income taxation based on the negative externalities of status-seeking to be consistent:

Some policy implications of this data on positional effects seem easy for folks like Frank to swallow. While our evidence so far is tentative, it does seem to support subsidizing health, including air quality and device safety (though not necessarily medicine if it has little relation to health). It also supports subsidizing insurance more generally; bads being less positional than goods gives a new reason to avoid inequality from bad outcomes, such as crime. Our evidence also supports taxing work relative to leisure, though since we already have large taxes just like this, this evidence does not obviously support larger work taxes.

Many other policy implications, however, seem much harder for Frank to swallow. Since sport effort seems especially positional, should we tax sports, instead of subsidizing them as we often do now? Since education seems to be at least as positional as income, should we drastically reduce educational subsidies, or even tax it? And since government spending seems far more positional than income, shall we greatly reduce our unprecedented levels of such spending?

Perhaps Frank would suggest that other compensating side effects justify vast government spending as well as sport and education subsidies. But what about personal beauty, which our evidence suggests is one of our most positional goods? Yes, exercise also improves health, but it is very hard to see any large compensating side effects justifying makeup, hairdressing, and nice clothes. Will folks like Frank at least agree that severely taxing beauty aids is one of the clearest policy implication of our evidence on positional effects?

Also, we observe huge amount of variation in who sees what to be how positional. This suggests that perhaps policy can influence this distribution of envy. Shouldn't it be a top priority to find ways to influence folk's attitudes toward the gains of others, so that they don't feel as envious of such gains?

If student grades are positional and we tax them accordingly, what's the equilibrium of the game? Commenter Nazgulnarsil there sums up my general view, calling for the appointment of Robert Frank as Handicapper General.

If humans are status-seekers, which seems highly likely given how sexual selection works, then high marginal tax rates just push status-seeking onto the other dimensions identified by Hanson. Which then gives us some testable hypotheses: do countries with heavy income redistribution see greater spending on education, more time investment in sport, more money and time spent on personal beauty and exercise (all normalized for income, of course)? I wouldn't know where to start looking for the data, but I'd be keen to see the results.