The Implications of a Full English Brexit

Britain's decision to leave the Eurozone has already sent waves through the markets. It taught traders too young to remember the 2004 US presidential election that the first few election night polls are not always accurate. (In 2004, markets relying on faulty exit polls gave Kerry a 70% chance to win at one point.) But traders predicting another vote incorrectly is not the story. The story is about an upcoming massive institutional change that no one is quite sure how to interpret.

In order to leave, the UK has to actually petition to leave the Eurozone. This won't happen until a new prime minister replaces David Cameron in three months time. Intraparty battles will occur over this time period as politicians position themselves in the aftermath of a referendum. If there is an attempt to ignore the referendum and keep the UK in the EU it will occur during this time period. Supporters of Remain recognize that after the European Council is notified by the UK under article 50 there is no way to reverse the process short of jumping through all of the hoops required of countries wishing to join the European Union. 

One way supporters of Remain might go about ignoring the referendum if they get into power is by indefinitely delaying any notification under article 50. This would extend the period of uncertainty indefinitely and would not be helpful to the UK or world economy.

After the UK issues their petition, the rest of the EU will have to come to an agreement with the UK about the terms of their exit within two years.

If during this turmoil the UK voters and EU members decide that they don't want the UK to leave the EU quite yet, there is a way to kick the can down the road for more than two years. They can indefinitely extend exit talks as long as the UK and European Council unanimously agree to extend withdrawal negotiations. However, any pro-Leave UK party or anti-UK EU member from that point onwards could cause even worse disruption as any dissenter would have the power to force an immediate exit. The UK would have either too little or too much leverage for this scenario to be stable. So any news about definite plans to initiate article 50 makes an exit more likely and might cause another mini-panic.

If the UK and EU keep it simple and retain relatively open trade and freedom of movement both sides will benefit. This seems to be Merkel's preferred approach.

"The negotiations must take place in a businesslike, good climate," she said. "Britain will remain a close partner, with which we are linked economically."

She has no separatist movement within Germany to worry about scaring away from EU exit. However, other members of the EU realize that there is a risk that the UK will not be the only one to leave, so signaling that leaving does not come without consequences will be a very tempting idea. And some will be tempted to punish the UK for choosing to leave them, as is the case of the Mayor of Calais. Fortunately for all of those in favor of prosperity, that particular mayor does not hold much sway in international negotiations.

The more EU officials sound like Merkel, the better the economic outcome. If they start sounding like the Mayor of Calais, the short and medium term economic damage will likely be significant.

But there will be economic impacts either way. There will be a hit to business confidence. Jamie Dimon, CEO of JPMorgan, seems to expect that they will have to change the location of some roles to comply with European laws. Other companies expecting to move may be reluctant to increase headcount and investment in the near term and when this happens on a large scale a recession is almost inevitable. 

Then there will be capital flight as the volatility of the British pound and uncertainty of the political situation scares away certain classes of slow moving investors. Foreign direct investment inflows for the United Kingdom have fluctuated between one and two percent of GDP in recent years. It is likely to be much lower over the next couple years. The large fall in the GBP after the results of the referendum occurred was in anticipation of these flows and economic weakness in the UK.

Weak economic growth is widely expected to be countered by central banks to the best of their ability. The Bank of England's base rate is already close to zero at 0.5%.  And sometimes the best thing a central bank can do to stimulate the economy is weaken a country's currency to boost exports. In this case, the GBP has already weakened considerably and further weakness may be interpreted as a further loss of confidence.

Part of the problem is that central banks influence demand more than supply. To the extent that Brexit is a hit to confidence, demand matters and central bank actions are important. But if there are permanent business relocations from regulatory change or economic damage from trade barriers going up, Brexit becomes a supply shock. This means that there is not much that the Bank of England can do even if it was in a position to do something. If a central bank tries to fight a supply shock, stagflation is a likely outcome. In light of this, it is heartening that Mark Carney's statement on Brexit focused on the stability of the financial system and not on what the bank might do to support growth.

For Europe, the uncertainty is not going to be helpful, though the impact will be lighter than in the UK. A larger worry is what might happen as other EU members push for the right to hold their own referendums on leaving the EU. Gary Kasparov makes the interesting argument that Brexit will not only help Putin face a divided Europe, but the absence of the UK will lead to far worse policy being made in Brussels. Long term, this could be worse for Europe than the UK.

In the US, many people see the election of Donald Trump as analogous to a Brexit. Both are decision that were been deemed to be very unlikely well before voting day in part because elites regard Trump or Brexit as very destructive. The referendum resulting in a Brexit doesn't mean Trump's victory is any more likely than it was before the vote, but it does suggest that some forecasters might not be able to accurately forecast populist movements like Trump's.

Gold rose significantly on the day of the Brexit. The general theory is that uncertainty causes people to flee to gold. Gold is also helped by the general hit to economic growth expectations. Central banks who shift towards easing to counter the hit to global confidence should also benefit the irrationally valuable metal while also keeping government benchmark interest rates lower longer than previously expected.

The full implications of Brexit really are too many to cover in a short space. This is even more the case when some of the things people pretend are implications of Brexit are really just one of the many political impacts of long term trends like the stagnation of real income growth for many people in developed countries. A fuller picture would also look at Scotland and other parts of the UK who might favor leaving to try to stay in the EU. What it would take for London to remain a global financial center and whether any European city is likely to emerge as the obvious alternative is another interesting question. 

And there is still more to write about other countries. China's enigma of an economy will take a hit when Europe economic weakness reduces their Chinese imports. The Japanese yen is now just above 100 after the panic over Brexit and this yen strength puts extra pressure on Kuroda and Shinzo Abe.

But the biggest thing to track will be whether the world starts turning protectionist. Nasty exit negotiations would be a bad sign. Many people are tempted to constantly make bad analogies between our economic circumstances and the Great Depression. But the Brexit negotiations have the potential to create the closest thing to a modern Smoot-Hawley Tariff bill. And that's why it has the potential to be very scary.


Disturbing Future Tech

The expected future is economic growth. Humanity invents and improves many things and people will live better lives. But even in upside scenarios not everything will be getting better. There is a subset of future use cases for technology out there that are both practically inevitable and at the very least disquieting to imagine. 

Also, it will be fun to write about them before they become too mainstream.

First, we have the inevitable results of improving drone technology combined with parental paranoia. The combination leads to children tracking drones. The ability to watch children 24/7 without actually having to follow them wherever they go will be a luxury at first only claimed by the upper middle class. They are too poor for full time nannies but rich enough to afford the latest gadget. A drone that follows their kids can let parents watch them from afar, notify the parents when the kids interact with strangers or even give automatic verbal warnings to children who are playing too close to traffic.

Now, given that we already have children on leashes this might not seem like such a big step. Infact, a drone following a child from a safe distance is probably preferable to a leash in every single way. But beyond desensitizing a generation to the surveillance state, these drones are only going to make helicopter parents more paranoid. This is because everything happening will be videotaped, and this will include the inevitable tragedies. In 15 years, if an alligator gets a toddler it won't just be national news, there will be video of the attack itself. The unecessary culture of paranoia that surrounds child rearing in our society is only going to get worse. And drone cameras stalking kids will have a part in that.

Next, we have personal bots. Right now, bots are being automated to do all sorts of customer relationship management. It is only a matter of time until bots are available that are designed to mimic your writing patterns and interact with your friends for when you don't have time. Maybe it will only be to keep social media profiles active - wishing people happy birthday or commenting on life events to help those who find themselves with less time for social media. But its use will eventually spread.

Some conversations might end up feeling like fake voicemail hoaxes, or at the very least there will be some people who use bots to an extent where we won't we won't know for sure if we've gotten through to the real person. But perhaps worse than either of those will be the friends who use their bots to spam their network far too frequently. Today we get spam email from there people, but tomorrow we'll get personalized spam that if treated as spam will desensitize us to text conversation that we would consider to be very real today. (Hat tip to @garvinandrew)

Finally, we have virtual reality and augmented reality. Just like Brazil has been the country of the future, virtual reality has been the entertainment technology of the future. Unlike Brazil, many people are starting to think that virtual reality's time is near.  If not with this generation, then we are only a few generations away. This brings us a step closer to Nozick's thought experiment of the Experience Machine. Infact, good virtual reality would be more addictive than Nozick's machine since it would not have to be preprogrammed. People already choose to shut themselves off from the physical world, and as the "Shut out reality" option gets more advanced more and more people will choose this option.

Augmented reality holds a lot of promise. The ability to overlay information will make many jobs much easier. Skilled workers will save time and make fewer mistakes while inexperienced workers who know how to interface with augmented reality will be able to replicate the work of the highly skilled. 

Once the technology to discreetly utilize augmented reality in social settings is available then improving facial recognition technology means forgetting names or the context by which you know someone will be a thing of the past. But that's not the only thing that you will know about other strangers in the room. Not only might it be possible to know someone's employment history, but those interested in filtering people based on which political candidates they've donated to or whether they have made comments that are deemed not acceptable can avoid undesirables  without having to talk to them. 

Our society is getting more and more partisan. There aren't many Trump supporters trying to make friends with Clinton supporters in today's world, and Clinton supporters are more likely to boycott the Trump fan's business than try to befriend a stranger who is a known fan. If this pattern doesn't change before ubiquitous augmented reality combines with facial recognition software then our social lives will get far more tribal.

In the midst of all of these bleak predictions, I can only be sure of one thing: There is something worse that I left out.

The Ethics of Self Driving Cars Aren't That Confusing

One of the things that it has become popular for the commentariat to wring their hands over is the ethics of self driving cars. What if there is a trolley problem* where the car can save the lives of many by sacrificing or risking the life of its driver?

The solution isn't simple, in the sense that our modern system of rules and regulations and common practices for an automobile based society aren't simple. But given that this infrastructure will remain in place, the ethical questions of self driving cars are not hard.

Cars should be programmed to follow the rules of the road, and change their behavior in light of people violating the rules only to the extent as it is currently expected.

These rules were made for a reason. If a car was known to react selflessly they will be taken advantage of. Google found this out first hand when they had to adjust their cars to make them more aggressive. This was in part to avoid scenarios in which cars were cutting off Google's cars consistently in heavy traffic. If people knew that they could take advantage of a car, some proportion of the population will react to those incentives.

So if a person jumps out in front of a car on the bridge and the car has an option of trying to brake while hitting the person or driving off the bridge, the person who jumped out in front of the car is going to suffer.

The ethics of traffic laws make for interest conversation. But adding self driving cars to the mix doesn't change the basic behaviors. 

The legality of self driving cars, such as who gets sued if there is an accident where the self driven car is at fault, is still an unsolved problem and is more productive topic of discussion and debate.


While on the topic:

*The Trolley Problem is confusing. My main issue with it is that it doesn't analogize very well onto relevant real world situations where estimated costs and benefits are uncertain and may be incorrect**. The situation is also muddied when various actors have different levels of culpability. What if the crowd of people are willingly on an track with a big sign that says "Trains coming" and the single person is standing on a track with a "Track closed" sign? It should change things.

**This is also one of the biggest problems with "The ends justify the means" thinking. People are bad at probability and more often than not are wrong about the beneficial ends, while the horrible means they utilized to attain those ends still happened.

The Video Blog Ghetto

One of the more disturbing trends on the internet is the ghettoization of extreme cultures. People don't have to interact with each other if they don't want to. Liberals can read the Huffington Post, conservatives check Drudge Report. More extreme people all have their websites, each equipped with specific ideological blinders.

Sometimes there is some cross pollination, but people are usually only exposed to members of other groups through quotes provided by their preferred sources. This happens when there is a debate around a current partisan issue, or more often when an author is trying to make a point that people on the other side sure are stupid/racist/sexist/etc.

Either way, the statements from the other side are at least quoted and links to their original location are generally provided. A reader can browse through the respective articles and come away with a conclusion as to how the evidence seems to stack up. People are still biased and will likely stick with their own ideological champions, but at least it is feasible to get a fuller picture of the debate in a relatively short amount of time.

But a new trend has been emerging. We don't see many new blogs, but there are now a lot of video bloggers on all parts of the spectrum. Though more often than not the political vloggers are on one of the more extreme sides or they would not have started a political video blog. In some sense, arguments in video format should be more persuasive. Videos can more fully utilize sarcasm, humor, body language and can utilize graphics in ways a blogger writing an article cannot. But while they may be very convincing to a subset of people, they are also isolating themselves from the general debate.

Part of this is because watching a video is a bigger commitment than reading an article. A two minute read becomes an eight minute video. Skimming a video is much less effective than skimming a post. Hoping someone takes the time to watch a video is a bigger ask.

Vloggers are also isolated from mainstream debate because citing and responding to inaccurate parts of the video is more difficult. You can't just copy and paste the questionable arguments into a paragraph in order to expose where the vlogger is mistaken. You either have to type out the relevant transcript, describe the vlogger's arguments in your own words (increasing the chance of misstatements), link to the point in time of the most egregious part of the video, or have the people observing the discussion watch the whole video themselves and potentially waste the time of their readers.

Given the most ideological video bloggers have relatively niche audiences, this is a lot of work to have a dispute. And it's already work when a person who disagrees with you has a very different ideological perspective. And since vloggers are generally not yet high status people, there is even less reason to engage. (We will see more critiques of documentaries or of people who appear on television). Most people would reasonably choose not to start or follow up on an argument with someone who communicates primarily through video (or for that matter, a podcast without a transcript). The most likely person to respond would be another vlogger (or podcaster).

This creates a dynamic where vloggers start dialogue with people who are on the other side, but never receive feedback from anyone outside their ecosystem. They end up shouting into the wind. 

But it's not just the wind, they have some followers. And these followers see how their relatively articulate vlogger is rarely countered by people with opposing ideas. These viewers and the vlogger themselves are at high risk of thinking they don't get responses because the videos make incontrovertible arguments, and not because it's too much trouble to call bullshit on long winded videos.

And that's why we can expect video bloggers to be relatively extreme, they are engaging people in a medium where debate is far more inconvenient. This format is far more popular among younger internet users, so it is somewhat scary to think about how political discourse will evolve under these dynamics.

Note: Maybe a simpler hypothesis is that most video blogs are the new long winded disorganized blog or forum posts. Generally, no one with the relevant knowledge would take the time to counter them. Yes, I appreciate the irony. This is post getting a bit long winded. 

Ted Cruz's Game of Chicken

It looks more and more like Trump is going to run away with enough delegates to become the GOP candidate. There aren't many polls where Trump doesn't have a plurality of GOP voters in upcoming states.

And yet, Trump rarely has the support of a majority of GOP primary voters. If this were a one on one competition Trump's position would be considerably weaker. Fortunately for Trump, GOP candidates have a coordination problem. 

Kasich and Rubio are staying in the race because they hope that between them and Cruz they get enough votes to force a brokered convention in which they might emerge victorious. Recently Cruz came out against the idea of a brokered convention.

"Any time you hear someone talking about a brokered convention, it is the Washington establishment in a fevered frenzy, they are really frustrated because all their chosen candidates, their golden children, the voters keep rejecting," Cruz said Friday at the Conservative Political Action Conference (CPAC).
 
"So they seize on this plan of a brokered convention, and the D.C. power brokers will drop someone in who is exactly to the liking of the Washington establishment. If that would happen, we would have a manifest revolt on our hands all across this country."

This is a message to the establishment and to Rubio and Kasich. He will not play their game. If they want to stop Trump the only way is through him. If they stay in the race, they will all lose. He's shown his intransigence in the Senate. He's hoping that they know that he will not back down.

He's followed up his words with actions. The path to a brokered convention where Cruz might still come out on top is easier if Rubio beats Trump in the winner take all state of Florida. But Cruz has recently started campaigning in Florida, potentially splitting the Trump vote and reducing Rubio's chances of winning.

It will be interesting to see if the establishment and their candidates back down before Trump's victory is ultimately assured. So far it looks like they will refuse to budge and both sides will lose this game of chicken.

Ted Cruz's only hope is that the signal of a few unexpected victories will be enough to convince others of his strength, determination and ability to win. The establishment is not going to blink in a game of chicken if they think giving in to another extremist doesn't even have a chance of working. But when you involve the egos of people who think they should be the president, it's likely that everyone will lose in a game of chicken.

Today's Negative Nominal Interest Rates Won't Work

A lot of central banks have moved towards negative interest rates. Some people think it is essential that central banks ease below the zero boundary. This includes central bankers at the ECB, in Denmark, Sweden, Switzerland and Japan who have all implemented negative rates.

Some critics believe that negative rates will have all sorts of unintended consequences. Even proponents of negative rates sometimes lobby for a move towards a cashless society where negative rates can be implemented with potentially fewer unintended consequences.

Regardless of whether side is correct, negative nominal rates are a sign that central bankers will fail to accomplish their goals. 

In the case of critics of negative nominal rates being correct, the reasons are relatively straightforward. Something will go wrong. Maybe attempts to avoid negative rates by changing deposits to cash mean negative rates merely incentivize unproductive behavior. Perhaps negative interest income of banks drive deleveraging, or the uncertainty of negative nominal rates negatively impact the markets. There are many possible unintended consequences that could cause negative nominal interest rates to be counterproductive.

What is interesting is that even if negative nominal rates are necessary and proper, things will still turn out badly in our current environment. Central banks are naturally cautious, and negative interest rates a new territory that they will not dive into. When central banks think an interest rate cut is necessary in positive nominal rate regimes, they usually move in increments in 25 or 50 basis points. However, many central banks are being very reticent about moving interest rates negative around or past the zero-bound - the Bank of Japan is a good example. They only moved the rate to negative 0.1%, and only apply it to specific accounts held by financial institutions held at the BOJ. To the extent that negative rates are necessary and proper, central bankers are too scared to move the rates sufficiently negative.

So either they are messing things up by implementing negative rates, or their negative rates won't be sufficient to accomplish their goals. This helps explain why the Japanese yen has actually strengthened since the implementation of negative rates by the Bank of Japan. Either they aren't doing enough, or what they are doing is counterproductive. Even if it is difficult to parse what negative nominal rates will do, it is safe to say that central banks resorting to the implementation negative nominal rates are unlikely to accomplish their goals.

The GOP Establishment's Primary Problem

It's been a long time since I've posted. And I've been following the primaries much more closely than is probably healthy. Following primaries is unhealthy for a few reasons. First, it's paying attention to things that are hard to benefit from or change. Second, believing that the future of our country is changing on a day to day basis with the polls ascribes a bit too much explanatory power to politics when the default is for the major parties to trade nominal control without usually making drastic changes. Finally, no one thinks reality TV is good for you, and this season politics and reality TV are inter-lapping more than ever before. Also, closely following the GOP primary is counter productive when demographics suggest that any moderate Democrat should be able to win in the general election in today's status quo. That said, I have some thoughts that I am going to in-advisably share with the internet.

The GOP primary is a coordinated action problem for the Republican establishment. They really don't want Trump to win. They don't like Cruz. Unfortunately for them, voters do not like them. Between Trump, Cruz and Carson, the anti-establishment Republican candidates are polling at over 50%. To have any hope of beating either, they need to unite behind one candidate. Scott Walker saw this early on, along with his relatively low poll numbers. But what is driving the establishment candidates still in the race?

The establishment money and votes are currently spread between Jeb and Rubio and with a little bit of money and more votes going towards the more moderate Kasich. Given how they are currently polling nationally, the first order solution is to throw support behind Rubio. There are currently a three issues preventing that.

First, Rubio's robotic performance in the pre-New Hampshire debate made him look stupid. He's already relatively inexperienced, so any signals that he'll help Democrats accentuate this weakness in the general election is extra worrisome.

Secondly, there is a perception that Rubio is a disloyal former Jeb Bush lieutenant. George W. Bush's book on his father, 41, made loyalty a central theme. Jonathan Haidt's research tells that loyalty is even more important to conservatives, so a sizable group of Bush loyalists will resist rewarding disloyalty. 

The third issue is immigration. On this issue Rubio is not only out of step with a significant amount of conservatives, but he has demonstrated his ability to at least partially change his position when he comes into power. So the GOP establishment has someone who is disloyal and changes positions. 

Even with all of those problems, Rubio has plenty of money and is polling moderately nationally. With full establishment support he'd have a plurality of voters against Cruz and Trump. Absent a new self inflicted wound, he has no incentive to bow out at this point.

The other establishment hope has been Jeb! Jeb's problems are simpler than Rubio's. Jeb just isn't a good enough candidate to make up for the fact that he is a Bush. Not enough people support him. In a recent poll, 24% of Republicans claim that they would not support him in the general election even if he became the Republican nominee. The only candidate who has more Republicans refusing to support them in the general election is Trump, at 30%. The massive amount of money that he and his super PACs have raised will keep him in the race. My prediction is that he will stay in the race as long as it looks like he has a chance and/or if he believes that staying in the race will harm Rubio.

That leaves Kasich. He's more moderate, which works against him in primary season. He doesn't have the name recognition that McCain had, and without funds he is well behind on setting up his political organization outside of the time he spent in New Hampshire. When his second place finish in New Hampshire coincided with Rubio's debate implosion he seemed like the perfect compromise candidate. But he might not be able to stay in the race long enough to garner the establishment support, he entered the year with a lot less cash on hand than either Bush or Rubio. If he does stick around the establishment might default towards him, if it isn't too late by that point. Being more experienced and less ideologically conservative than Rubio, Kasich has little incentive to step aside for Rubio.

South Carolina and Super Tuesday might encourage establishment GOP members to get their collective houses in order, but the longer this disorder goes on the better it is for both Cruz and Trump. The way things are going, we may even see a brokered convention. That would be fun, at least for those of us who like a certain type of reality TV.

Good policy held hostage

There are a lot of silly laws out there. People on all sides of the aisle would agree on that. And many would agree that some form of the solution is relatively obvious. But even when a most reasonable people on all sides would agree that a policy is bad the work to change it is just beginning. 

That's because fixing broken policy still creates winners and losers. And sometimes those winners are more on one side of the spectrum than others. Unfortunately, giving away a free win to the other side in the name of good policy is bad politics. 

This is a broken part of our system that is under discussed today. The current debate around oil exports in congress is a prime example of how hard it is to fix. Policy implemented in the 1973 oil crisis banned exports in most circumstances. So this is a forty year old nationalistic policy implemented in the midst of a crisis around a good whose supply and demand dynamics have flipped on its head in recent years. It obviously should change, and the White House's primary argument against it is that they would like to keep control of their ability to allow or disallow oil exports.

So unfortunately, if this policy is going to pass it needs to be included as part of a broad deal on spending and taxation. And tax credits to solar and wind companies need to be extended (corporate welfare in action), so each side gets a win. Refineries who have benefited from captive domestic oil producers and earned out sized profits for years may or may not be handed a tax credit as a consolation prize for losing their captive oil suppliers.

It is true that there is some real opposition to changing the inane law preventing oil exports from people who seem to think that our carbon energy based society needs to be made as inefficient as possible if they are going to reduce emissions in the long run. Politicians that count on support from these confused constituents could use a small victory to show them. But holding back a fix on bad policy to implement something for their special interests should be mocked the same way as Republicans who threaten a debt crisis to get their way on minor spending matters.

And outside of the debt ceiling hostage shenanigans, many within the GOP have acknowledged that they will fix the carried interest tax loophole only as part of an overall bargain around reforming the tax code. They are holding back an obvious policy change favored by almost everyone not currently utilizing the loophole as a bargaining chip.

A very similar dynamic is occurring within immigration policy, this time with Democrats holding back some obvious fixes unless the GOP agrees to a comprehensive deal. People on both sides know many of the things that need to be done with high skilled immigration. They don't quite understand that high skilled immigrants should never be placed in the position of indentured servants, but they generally recognize that educating students at world class colleges and then making it difficult to stay and live in the United States is bad policy. 

However, there is no chance of this being fixed unless the more difficult problem of low skilled immigrants is addressed. Each year this policy isn't fixed, too many promising college graduates decide to head back home where they can get jobs or start companies without worrying about legal issues. Even if the preferred solution to the thorny political problem would be good policy, holding acknowledged good policy hostage as a bargaining chip is an action that needs to be understood as a destructive tactic.

Our government is dysfunctional enough. Whenever there is general consensus on what would constitute good policy the politicians holding policy fixes hostage should not be given a free pass.

Protecting Students with Double Negative Rights

One framework that I've found to be useful when thinking about policy is that of positive and negative rights. When thinking about who benefits, it's helpful to determine whether a policy protects an individual from others or if it gives individuals a claim on other members of society. I've used this framework in the past to discuss corruption in developing countries. To avoid both plagiarism and re-paraphrasing common knowledge, I'll quote myself:

"Negative rights are things that are prohibited from being done to a person, and includes areas such as freedom from violent crime, private property (freedom from theft), freedom of speech and freedom from slavery. Positive rights are things that society must provide for a person. These include areas such as the right to police protection, housing, a job, food and health care. Many positive and negative rights conflict either indirectly or directly with each other. While a police force might help enforce the negative right or protection from violent crime, it also weakens the right to private property by requiring that citizens have some of their money taxed in order to pay for that protection."

When thinking about how these categorizations of rights might apply within our modern cultures of victimhood, it becomes a little more complicated. Take the new proposal by the University of California Regents which hopes to label being "free from expressions of intolerance" as a "right," recently highlighted by Eugene Volokh. The proposed policy principles state in part that.

"Everyone in the University community has the right to study, teach, conduct research, and work free from acts and expressions of intolerance...

...Addendum

The following non-exhaustive list contains examples of behaviors that do not reflect the University’s values of inclusion and tolerance, as described in the Regents of the University of California’s Statement of Principles Against Intolerance.

* Vandalism and graffiti reflecting culturally recognized symbols of hate or prejudice. These include depictions of swastikas, nooses, and other symbols intended to intimidate, threaten, mock and/or harass individuals or groups.

* Questioning a student’s fitness for a leadership role or whether the student should be a member of the campus community on the basis of race, religion, ethnicity, national origin, citizenship, sex, or sexual orientation.

* Depicting or articulating a view of ethnic or racial groups as less ambitious, less hardworking or talented, or more threatening than other groups.

* Depicting or articulating a view of people with disabilities (both visible and invisible) as incapable."

Volokh goes on to highlight some of the more inane situations that could result.

"For instance, articulating a view that people with various intellectual disabilities are incapable of various intellectual tasks, or people with various physical disabilities are incapable of various physical tasks, would be condemned by the authority of the University."

It is interesting to fit these policies into the framework of positive and negative rights. Students, staff and administrators will not have to hear anything that might disturb their delicate psyche* and on that basis it looks like the Regents are trying to define a new negative right. But protecting people from offense is a false negative right. If a large subset of people become offended when women refused to cover up their left hand, the policy of protecting the offended by mandating gloves would not be the enforcement of a real negative right. The obligation of the women the cover their safehand for fear of offending crazy people would be best understood as a nonsensical positive right.

The required self censorship by many who would in the normal course of events cause offense is a duty imposed on them. The new policy of the Regents is the creation of a double negative right, or a nonsensical positive right. 

My grammar school teacher always made sure to point out when I was using a double negative because that meant I was being incoherent and if the Regent's principles are adopted the forthcoming policies are likely to be similarly incoherent**. The implementation of a speech and conduct code that discourages students from even thinking of discussing protected groups in a negative manner will not change hearts and minds. Students won't lose their prejudiced views, it will just prevent their views from facing scrutiny in the light of day.

If the approved answer to "What is your physically disabled classmate capable of?" has to always be "Everything!" then the ignorant students will never learn when the true answer is "Actually, a lot more than you thought possible." because there is less likely to be any discussion in the first place. It's better to let the prejudiced or misguided air their beliefs openly where they can be confronted with reasoned debate and facts.

Universities should make sure students are safe. Preventing vandalism, unwanted graffiti and actual threats to students are causes that everyone can stand behind. But academic institutions should encouraging discourse, and enshrining principles that will make people scared to state what they think is true for fear of punishment does the opposite. If I told you ten years ago that an institution's leaders decided that a large subset of contentious topics are not open for debate and anyone bringing up forbidden ideas will likely be condemned, you would have assumed I was talking about a religious institution or an authoritarian government. Today, more of you would have filled in the details correctly. And that might be the saddest part about this story.


*The neuroticism of Americans has been consistently increasing from the 50's through at least the 90's, so they may be right about the vulnerability of today's college students and staff. But it's likely that the implementation of policies such as the above exacerbate the situation.

**Often the application of negative and positive rights framework can also be incoherent, because outside of the simple cases it depends on how the rights are framed. If this post seems to go off the rails a bit, it's because I really wanted to use the phrase "double negative right" to describe anti-free speech rules and nonsensical positive rights in general. Unfortunately, I can't easily tell if the phrase "double negative right" has been used in a similar context due to the popularity of the phrase "that's a double negative, right?".

Honor vs Dignity vs Victimhood Cultures

Jonathan Haidt posted a really interesting article that puts the recent increased focus on microaggressions into a larger context. He posted the paper Microaggressions and Moral Culture by Bradley Campell and Jason Manning. The basic thesis is that the increased policing of microaggressions could herald another major cultural transition akin to the transition that occurred in Western societies in the 18th and 19th centuries. 

The cultures displaced in the 18th and 19th century West were cultures of honor. Honor was something that had to be earned and protected. The classic example of defending honor would be the duels that were fought to defend honor. These duels were fought even if the slight that caused the duel was unintentional. Members of honor cultures would be less likely to appeal to the law for help and are more likely to settle disputes themselves.

This culture of honor was displaced by a culture of dignity, where it is assumed that all humans have dignity that does not have to be earned or personally defended. People socialized into cultures of dignity rely more on centralized authority to settle major disputes, and will be more likely to shrug off minor slights that would need to be addressed in honor cultures. Campell and Manning point out that "Sticks and stones may break my bones but words will never hurt me" is a concept that is foreign to honor cultures.

In settings where censuring those who engage in microaggressions is becoming common, this culture of dignity is being supplanted by a culture that Campell and Manning label a culture of victimhood. In their words:

"A culture of victimhood is one characterized by concern with status and sensitivity to slight combined with a heavy reliance on third parties. People are intolerant of insults, even if unintentional, and react by bringing them to the attention of authorities or to the public at large. Domination is the main form of deviance, and victimization a way of attracting sympathy, so rather than emphasize either their strength or inner worth, the aggrieved emphasize their oppression and social marginalization."

The last transition from a culture of honor to a culture of dignity occurred during a step function upwards in economic growth. Cause and effect are messy, but the culture of dignity reinforced things that are beneficial to economic growth. The rule of law and the ability to trust strangers enough to work with them are both more difficult to implement in cultures of honor. 

This current potential transition from a culture of dignity to one celebrating victimhood is occurring during a time period of potentially slowing long run economic growth. Again, cause and effect are messy but there are obvious ways that a more enshrined culture of victimhood could retard economic growth. To take one example, the process of documenting and aggregating small offenses to punish people will eventually incentivize people to interact with out-group strangers to a far smaller degree than they have in the past. The act of sending a stranger a message will become a very risky. Transaction costs are increased when every little action is potentially going to be monitored and might lead to severe punishment.

It's important to note that this is not an inevitable transition. Even in our current society, there are many pockets where cultures of honor dominate. The culture of victimhood that is prevalent on college campuses today is not yet the dominant culture.