Tag Archives: Romney

The Other Kind of Entitlement

“There are 47 percent who are with him [Obama], who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. These are people who pay no income tax.”

-Mitt Romney

Short Facebook posts cannot capture how much this statement bothers me. This will get a bit metaphysical, but I promise it will all come back to politics in the end – whether you like it or not.

I lived two years in Ecuador, where I worked as a Mormon missionary, never once returning to the United States during that time. As missionaries in the city of Guayaquil, we enjoyed reasonable living conditions, but we mostly worked in slum neighborhoods where rural migrants set up house when they arrived looking for work. They were called “invasions” because they were squatter shantytowns. Residents did not own the land they built their houses on. Almost without exception (we lived in the exceptions), these were cane shacks.

When I returned to the US and saw my parent’s very average American suburban house, I was amazed that I lived in so much luxury for 20 years without realizing it. It was well beyond what would be considered upper middle class in Ecuador. It was downright wealthy, although not quite super-rich. A week later, I resumed my engineering studies at Cornell University. As I made the transition to Ivy League life after the slums of the Third World, I was surprised and a bit smug to see my classmates so stressed about their studies. “Don’t sweat it,” I thought, “even if you coast your way to some C grades, you are set for life. Just let me tell you where I was two weeks ago…”

Twenty years later, the memories of Ecuador are dimmer, but there is an abiding sense that life has been good to me. With a PhD from Caltech, I have enviable educational credentials. I’m an engineering professor at an “elite” university. Even if it’s not quite as cushy as everyone thinks, it’s a pretty darn good job. It’s intellectually stimulating, personally satisfying and provides an income that is well above the median, even for the United States, one of the wealthiest countries in the world. My wife, Amy, and I have no financial worries. I appreciate that we have the means to pay others to perform household repairs that we cannot or prefer not to. We eat out at nice restaurants, have travelled extensively, and splurging on a nice bottle of wine is not something to worry about.

To quote David Byrne, “how did I get here”? Did I work for this? Yes, reasonably hard at times, but I am not certain that it has been much more or less than what a lot of people put into their jobs. My mother-in-law has spent most of the past decade putting many hours into holding down two jobs without being rewarded the same way. A lot of people in Ecuador worked much harder, in more physically demanding jobs, for a lot less money. Probably, some of them are as smart or smarter, although there is really no way to know for sure. My science and math aptitude is high, but it’s not off the charts. Since we knocked on a lot of doors as missionaries, I must have met many, many people capable of similar scientific achievements. But they are not university professors at elite institutions.

It turns out that being born into a stable, loving, middle class family in 20th century America is a good deal. I would not have gotten where I am without work, but the opportunities were there for the taking. A natural talent for science didn’t hurt either, especially in modern America. With my physical hardiness, if I had been born into a society of subsistence farmers or a tribe of hunter gatherers, I would be lucky to achieve an average prosperity, even by their modest standards. Seen in a global, historical perspective, I was born with a winning lottery ticket in hand. All I had to do was go and cash it in.

Your lot in life is a combination of the circumstances of birth, natural talent, and effort – not to mention luck along the way. I’m sure that effort is virtuous and deserving of reward. Natural talent is debatable. Many people think so, but I cannot see how being born with the smart advantage is any different than being born rich, born in a technologically advanced society, or so on. I do know that I have taught students, who have studied harder than I did, but graduated with a C average. They are no dummies – they got into Carnegie Mellon’s engineering program – but they won’t go to graduate school and won’t become research scientists. Calculus just didn’t click for them the way it did for me. Some will make more money than I regardless, either by luck or because they learned some valuable life lessons during the rough transition from high school valedictorian to below-average CMU engineer.

In summary, I have a classic case of liberal guilt. But, it’s guilt and not angst. I won’t question too much a system that has been good to me, and anyway the universe is too mysterious to understand why these things happen.

I’m not saying that anyone who holds down a job should get paid the same. About ten years ago, Amy suffered an aneurysm. Modern science, in the form of an excellent neurosurgeon named Dr. Bob Caton, saved her life. During the long hours spent at the hospital, I wondered who could cut open a person’s skull and put a titanium clamp on a blood vessel nestled in sensitive brain tissue? Who would put themselves through that kind of stress just once? What kind of person would make a life and a career out of it? It’s probably a mixture of hubris, icy coolness, confidence in excellent training and willingness to put doubts aside when another’s life is on the line. Whatever it is, I decided they deserve to be compensated very well for their troubles.

As a more prosaic example, most people are surprised to learn that private school teachers make less money than public school teachers. Private schools seem elite, and most people assume teachers there get a premium. We learned this when we got married, Amy moved to Pasadena, and took a position at a private school there. It makes perfect sense when you think about it. Compared to the comfortable working environment of a private school, how much more would you have to be paid to put up with the discipline problems, gang violence and all the rest that you get in the LA Unified schools? Can you put a price on it? It turns out you can, and this seems fair to me. Our quality of life was much better with Amy at a private school. She had a short commute, a great work environment, and we lived comfortably.

Entitlement means getting your fair share, getting what you deserve. How much does the market know about fairness? Neurosurgeons make good money, and public school teachers make more than private school, so it gets things part right. But the broader you look, the more it lets you down. In the grand scheme of things, accidents of the birth lottery count for more than hard work.

You don’t have to look across countries or centuries to see the role of luck and circumstances in market outcomes. Over the past 30 years, income inequality has increased in developed nations. There is probably endless economic debate about why, but there are some leading explanations. Information technology has helped educated and highly paid workers become more productive, boosting their incomes yet more. Skilled workers in manufacturing jobs, on the other hand, have suffered as their jobs move overseas, automation makes them redundant, and they get pushed into lower wage service jobs. See, for example,

http://www.economist.com/blogs/dailychart/2011/12/incomes

and related discussion.

Moreover, personal income in the United States has been pretty stagnant for 40 years (http://en.wikipedia.org/wiki/Personal_income_in_the_United_States), so it’s not true that everyone is becoming better off, just at different rates. There is no rising tide lifting all the boats. Working people at the lower end of the socioeconomic spectrum are seeing their standard of living eroded through no fault of their own. Adjusted for inflation, their incomes have gone down. Household incomes have increased only because so many households now have two incomes instead of one.

The point is that, 40 years ago, a skilled worker and a highly educated worker had much closer incomes, and this was considered a “fair” market outcome. Nowadays, the same two individuals would end up much further apart on the socioeconomic spectrum than their 1970s counterparts. Even if each individual’s merits (natural talent, level of education, work ethic) didn’t change, their rewards did … and this is still supposed to be a “fair” market outcome.

Evidently, what passes as a “fair” market outcome is not justice in the absolute sense of the word. That would imply an unchanging standard and a reward for virtue and merit that I fail to see in the workings of the market. The invisible hand of the market is surprisingly fickle.

Sometimes, religion has espoused the idea that your good fortune is not entirely your own doing. To quote the Book of Mormon as a not completely random sample text:

“And now, if God, who has created you, on whom you are dependent for your lives and for all that ye have and are, doth grant unto you whatsoever ye ask that is right, in faith, believing that ye shall receive, O then, how ye ought to impart of the substance that ye have one to another.”

I won’t argue that the last bit is a Mormon call for a modern welfare state. Let’s leave it for what it was probably meant to be, a call for private and voluntary charity. The important thing is the first part that says you cannot take full credit for the stuff you own. A sense of wonder and gratitude, in moderation, is a healthy thing.

Conservative talk about the value of the free market and the evils of the public sector revolve around the idea that market outcomes are fair and effective, and that public interventions distort them. Free markets have been attributed with almost God-like wisdom as the Arbiter of what is fair, who is deserving and so on. But imponderables like the whims of the birth lottery and prosaic factors like globalization and technological change play roles that are every bit as important as hard work. The idea that people should be rewarded for being born with natural talent is not self-evident.

Technological and economic progress is not bad. Without a doubt, the free market has proven itself to be the most effective system for delivering them. Ultimately, the market delivers progress in the form of a bigger pie. But the free market appears to be incapable of dividing the pie in a way that seems morally just in any meaningful way. It cannot even ensure that the slice going to the majority of working individuals gets bigger over time when it delivers on its promise of progress.

Unfortunately, finding a “fair” way to divide the pie is a task left to us. It will always lead to contentious debates as it is doing now. For better or worse, the only mechanism we have for resolving them is the political process, and the results of that debate will be implemented via the action (or inaction) of the government. To push the metaphor too far, we need to be careful that the slicing of the pie doesn’t interfere too badly with the growing of the pie. We will muddle through.

What will not work is to try and shirk responsibility for making a moral judgment about income distribution and redistribution (because every government action or inaction implies redistribution) by appealing to the Market as the Higher Authority of all that is Good and Fair. An unquestioned belief that you fully deserve your privileged position in society is just another kind of entitlement.

Advertisements