Globalization and Food Safety

The Washington Post has an interesting story today about E. coli on lettuce. A batch of lettuce produced in California last month passed through numerous screenings and was sent to U.S. grocery stores. Some of it was also sent to Canada, and the government there found E. coli, which led to a major recall across both countries.

Here are some speculations:

  • Globalization increases the safety of American-produced goods because those goods must often pass muster in foreign markets where consumers and governments have different standards and safety procedures.
     
  • I don’t know whether American or Canadian food safety procedures are better, but a diversity of systems generates greater information, which allows producers and governments everywhere to improve quality.
     
  • Globalization doesn’t lead to a “race to the bottom” on environmental standards as critics often claim. Some countries, such as Japan, apparently have very high standards on food, and that tends to push up standards elsewhere. When Japanese importers demand strict standards from Chinese food producers, Americans consuming Chinese products also benefit.

Why the Mechanisms of Inequality Matter

Atlantic blogger Matthew Yglesias argues that it doesn’t matter why income inequality is increasing. According to Matt, as long as higher top tax rates and more downward redistribution won’t much hurt economic performance, then we ought to just go ahead and raise taxes and increase transfers, never mind the mechanisms of rising inequality.

Oftentimes, though, liberals act as if the thing that needs to be done is to prove somehow that inequality has exploded because people are in some sense “cheating” – so you get these long stories about corporate governance and corrupt compensation committees, etc. The problem here, though, is that even if this is true, it could still also be true that the cure – policy interventions into the operation of the market – would be worse than the disease. And, conversely, if you could prove that the rise in inequality was all above board – really was driven entirely by globalization and technological change – nothing about that causal analysis would debunk the idea that we ought to make our tax system more progressive.

The relevant debate isn’t about how we got here, it’s about what would happen if we tried to change things. Some people, of course, think changing things would be immoral. Indeed, there are some people I know who adhere to the bizarre view that one source of injustice in the contemporary United States is that our richest citizens aren’t rich enough. But beyond those people, you have a lot of people who take the view that raising taxes would have dire economic consequences, whereas lowering them would have large benefits. That’s the only debate that really matters in this regard. If the costs to the non-rich of higher taxes on the rich would be small (as I believe), then higher taxes on the rich to provide more benefits to the non-rich makes sense irrespective of why inequality has grown so much whereas if the costs would be high then it doesn’t make sense – again, completely apart from the causal issue.

I think Matt and I agree that the pattern of national incomes is largely morally irrelevant, but for quite different reasons.

From the classical liberal perspective, if today’s pattern is less equal than yesterday’s, but both patterns emerged from billions of individual transactions, each one of which took place on terms agreeable to the parties involved, then there is really nothing left over to evaluate morally. The relevant questions about the distribution of the gains from trade have already been settled in both cases.

Additionally, once we notice that many of these billions of transactions take place between parties of different nationalities – Americans trading with Canadians trading with Chinese, etc. – it becomes obvious that it is extra arbitrary to focus on national patterns of income, as if the nation were a giant factory with profits in need of equitable distribution. Many liberals, even extremely gifted professional liberal economists like Paul Krugman, seem congenitally incapable of thinking carefully about why nation-level equality matters, partly due to the blithe assumption of a fundamentally fallacious economic nationalism that afflicts both popular politics and academic economics.

That said, many welfare liberals are at some level quite sensitive to the fact that if the pattern of national incomes emerged from fair processes, then the argument for taking some people’s money and giving it to others is extremely weak. That is why many of Matt’s fellow travelers are keen to show that the pattern of incomes did not emerge from fair processes. The emphasis in some quarters on the importance of unions is a good example. If you think that strong unions are required to bargain laborers a fair share of their firms’ profits, and that the power of unions has eroded, then it will be natural to think that labor is now receiving an unfairly low wage, which will likely be reflected in nation-level inequality measures. In this case it should be obvious why this mechanism of rising inequality matters: because it matters for both morality and policy. If the problem is labor’s diminishing share of profits due to diminishing bargaining power, then the appropriate response will be measures designed to improve the bargaining position of unions. An increase in taxes and transfers will simply miss the structural cause for moral concern.

I take it (both from his blogging and from personal conversation) that Matt is some kind of utilitarian who really couldn’t care less about matters of fairness or justice – or equality. What Matt cares about is utility. The reason Matt thinks we ought to redistribute “irrespective of why inequality has grown so much,” is simply that he doesn’t care about inequality per se, and so he doesn’t care what caused it. He just suspects that if it were lower, national utility would be higher. If the marginal utility of money is greater for people with less money than for people with more, then we should take money from people with more and give it to people with less, period. Whether or not people acquired their money through fair processes, whether or not they are entitled to it, or have some “right” to it, is simply irrelevant to the question of whether someone ought to take it away from them and give it someone else.

But surely Matt understands that the inability of utilitarianism to acknowledge principled constraints on the way people may use one another is the main reason why most moral philosophers believe utilitarianism to be false. Perhaps Matt thinks these philosophers confused. But if so, then they share their confusion with most Americans, who also don’t believe utility maximization is a good justification for the appropriation of their property. As a matter of practical politics, philosophers don’t matter, but the public does. Which is why Yglesias-style utilitarian arguments for redistribution are non-starters in American politics, while arguments based in structural unfairness have the potential to be powerfully persuasive. If the system is rigged at a deep level against some people, then some redistribution may seem like a good way of balancing the scales. As matter of practical politics, his welfare liberal colleagues are right to keep sniffing around for “cheating” in the system.

Now, as I like to point out, the problem with structural injustice is structural injustice, not the nation-level inequality it may help produce as a side-effect. Which is why I think national Gini coefficients are a distraction, and why programs that lower the national Gini coefficient simply by moving money around make it all-too-easy to ignore the real, hard problems. I suppose a virtue of Matt’s argument for redistribution is that it doesn’t even pretend to be fixing a problem.

Hong Kong’s Flat Tax Rate Dropping to 15 Percent

Unlike American politicians, Hong Kong lawmakers understand that lower tax rates are a key to staying ahead in a competitive global economy. The Chinese Territory’s chief executive has just announced that the flat tax will drop by one percentage point, from 16 percent to 15 percent. As BBC news reports, the corporate rate also will drop, with further reductions likely:

Hong Kong has said it will cut taxes, in a move to promote further growth and lure foreign investment. Leader Donald Tsang said taxes would be cut by 1 percentage point, to 16.5% for firms and 15% for individuals, in the first policy speech of his new term. …In announcing the tax cuts, Mr Tsang said: “We will consider further profits tax relief if our economy remains robust and our public finances stay sound.”

Absence of Income Tax is Key to State Competitiveness

The Tax Foundation has released its annual State Business Tax Climate Index and there are two things that jump off the page. First, the top five states (and seven of the top 10) have no state income tax. The flip side is that the worst-performing states all have income taxes, generally with steeply “progressive” rates. Rhode Island is in last place, though it will be interesting to see whether a quasi-flat tax adopted this year will improve the state’s future rankings. Tax-news.com reports:

The Tax Foundation’s 2008 State Business Tax Climate Index has found that Wyoming has the most business friendly tax regime in the United States, while the business powerhouses of California and New York continue to fare particularly badly in terms of state tax competitiveness. …According to the index, the top ten states with the best business tax climate in 2008 are: Wyoming, South Dakota, Nevada, Alaska, Florida, Montana, New Hampshire, Texas, Delaware and Oregon. Propping up the table was Rhode Island in 50th place. California, New York and New Jersey occupy 47th, 48th and 49th place on the index respectively. The remaining states in the bottom ten include (descending): Maine, Minnesota, Nebraska, Vermont, Iowa and Ohio. “There’s no question that states are competing with one another for companies, jobs, and people,” announced study co-author Curtis Dubay. “Taxes matter to businesses, and the states with better business tax climates will reap the rewards.”

Lomborg on Gore

At the Guardian’s “Comment is free” site, skeptical environmentalist Bjorn Lomborg has some tart words for the Nobel committee:

This year’s Nobel Peace Prize justly rewards the thousands of scientists of the United Nations Climate Change Panel (the IPCC). These scientists are engaged in excellent, painstaking work that establishes exactly what the world should expect from climate change.

The other award winner, former US vice president Al Gore, has spent much more time telling us what to fear. While the IPCC’s estimates and conclusions are grounded in careful study, Gore doesn’t seem to be similarly restrained.

Gore told the world in his Academy Award-winning movie (recently labelled “one-sided” and containing “scientific errors” by a British judge) to expect 20-foot sea-level rises over this century. But his Nobel co-winners, the IPCC, conclude that sea levels will rise between only a half-foot and two feet over this century, with their best expectation being about one foot - similar to what the world experienced over the past 150 years. …

The IPCC engages in meticulous research where facts rule over everything else. Gore has a very different approach.

New at Cato Unbound: Philip Jenkins versus Mark Lilla

In his spirited reply to Mark Lilla’s lead essay the eminent Penn State religion scholar Philip Jenkins contests both Lilla’s reading of history and the lessons he draws from it. In contrast to Lilla’s claim of American innocence of political theologies, Jenkins points to the centrality of religiously-motivated politics in “the moral crusades of the late nineteenth century, … the Social Gospel, the era of Progressivism and Prohibition” and the civil rights movement. Jenkins’ alternative theory of the rise of liberal toleration emphasizes “changes in the material life of Western societies” brought about by increasing commercialization, which “has nothing to do with the intricacies of Christian theology, and was only marginally connected with Enlightenment political theory.” Muslim theology and culture aren’t at the bottom of Muslim intolerance and religious militancy, Jenkins says, but the failure of these societies to create “economic development, … free institutions and free media.”

Don’t miss Wednesday’s essay from Damon Linker, author of The Theocons: Secular America Under Siege, and be sure to tune in Monday when blogging eminence Andrew Sullivan joins the fray.

Yet Another Reason Not to Be Too Enamored of SCHIP

The U.S. health care sector is fundamentally broken.  Yet most reform proposals, including Congress’ plan to expand the State Children’s Health Insurance Program, would just throw more money at the dysfunction without doing anything to fix it.  (Mind you, that suits the health care and insurance industries just fine.) 

Another example of what such reforms won’t fix emerged in this week’s New England Journal of Medicine.  Researchers examined the medical records of 1,500 children and found that the kids received (what the evidence suggests is) high-quality care only 47 percent of the time. 

Similar studies have found that adults receive recommended care only 55 percent of the time.  One of those studies even found that having insurance doesn’t much improve the quality of care that adults receive:

Although having insurance increases the ease of access to the health care system, it is not sufficient to ensure appropriate use of services or content of care. Indeed, within systems where access to care is more equitable … substantial gaps between observed and optimal quality remain.  In the United Kingdom, with universal coverage, a study using our methods found that the overall proportion of recommended health care that was received was similar to what we have reported.

This week’s study on the quality of pediatric care did not compare the quality of care received by insured children to that received by uninsured children.  Nonetheless, the researchers closed with an illuminating comment on the current debate over SCHIP:

Expansion of access to care through insurance coverage, which is the focus of national health care policy related to children, will not, by itself, eliminate the deficits in the quality of care.

Yeah … but … oh, what the hell.  Who’s up for throwing more money at the problem?