Finland to Introduce a Basic Income

Finland

Finland has plans to scrap its welfare state in favour of a universal basic income of 800 Euros.

While it may sound counterintuitive, the basic income is intended to encourage more people back to work in Finland, where unemployment is at record levels. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.

Detractors caution that a basic income would remove people’s incentive to work and lead to higher unemployment.

The article doesn’t say who those detractors are, but they are wrong. When economists claim that welfare removes people’s incentive to work, it’s not because receiving cheques from the government automatically makes one lazy. It’s because they take those benefits away when you earn more.

Take Finland before this reform. As the article states, “At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.” That means that they faced an implicit marginal tax rate of over 100%! With a basic income, the implicit marginal tax rate for everyone below the lowest tax bracket is zero. If your tax rate dropped from >100% to 0%, would that motivate you to work more? It sure would for me.

This is a good policy move. It will reduce marginal tax rates on the very poor while simultaneously reducing bureaucracy. Good job, Finland!

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New Study Finds Strong Evidence of Male-Female Brain Differences

Use Your Brain

Perhaps you’ve heard about a precocious study making the rounds about the differences between male and female brains. Perhaps you’ve noticed it reported under headlines like, “Stereotypically ‘male and female brains’ aren’t real, say scientists” or “Brains aren’t actually ‘male’ or ‘female,’ new study suggests” or “Scans prove there’s no such thing as a ‘male’ or ‘female’ brain” or “Male brain vs. female brain? Research says they’re unisex” or “There Is No Difference Between Male and Female Brains, Study Finds” or “There’s no such thing as a ‘male brain’ or ‘female brain,’ and scientists have the scans to prove it” or “Men are from Mars….and so are women! Scans reveal there is NO overall difference between the brains of the sexes” or “A welcome blow to the myth of distinct male and female brains.”

I could go on, but I won’t. Given all these headlines, it might surprise you that the study all these journalists are reporting on actually finds strong evidence of differences between male and female brains. The study is “Sex beyond the genitalia: The human brain mosaic” by Daphna Joel et al. (and that’s a big et al!). It’s sadly behind a paywall, but here’s its abstract in full:

Whereas a categorical difference in the genitals has always been acknowledged, the question of how far these categories extend into human biology is still not resolved. Documented sex/gender differences in the brain are often taken as support of a sexually dimorphic view of human brains (“female brain” or “male brain”). However, such a distinction would be possible only if sex/gender differences in brain features were highly dimorphic (i.e., little overlap between the forms of these features in males and females) and internally consistent (i.e., a brain has only “male” or only “female” features). Here, analysis of MRIs of more than 1,400 human brains from four datasets reveals extensive overlap between the distributions of females and males for all gray matter, white matter, and connections assessed. Moreover, analyses of internal consistency reveal that brains with features that are consistently at one end of the “maleness-femaleness” continuum are rare. Rather, most brains are comprised of unique “mosaics” of features, some more common in females compared with males, some more common in males compared with females, and some common in both females and males. Our findings are robust across sample, age, type of MRI, and method of analysis. These findings are corroborated by a similar analysis of personality traits, attitudes, interests, and behaviors of more than 5,500 individuals, which reveals that internal consistency is extremely rare. Our study demonstrates that, although there are sex/gender differences in the brain, human brains do not belong to one of two distinct categories: male brain/female brain.

To paraphrase that last sentence, while male and female brains are different, they’re not different in the strong sense of having some exclusive traits. All those headlines saying that “Scans reveal there is NO overall difference between the brains of the sexes” are just wrong. The scans revealed that there were differences, but that these differences weren’t shared by 100% of one gender and 0% of the other. In ordinary life, 80-20 or 60-40 is considered a difference.

Let’s be honest about why this study is of so much interest to all these journalists and the people who read them: We want to know about mental differences between men and women that manifest in different behaviour in everyday life. We also want to know if these differences are the result of nature or nurture. So when the study says that the “findings are corroborated by a similar analysis of personality traits, attitudes, interests, and behaviors of more than 5,500 individuals, which reveals that internal consistency is extremely rare,” what they mean is that they tested the thing we’re really interested in. And by golly, they found that some women enjoy football and some men enjoy romantic comedies. They didn’t find that men and women were equally likely to enjoy football or rom coms, a claim even science journalists were wise enough not to make.

The claim I take issue with is summarized in this sentence:

Documented sex/gender differences in the brain are often taken as support of a sexually dimorphic view of human brains (“female brain” or “male brain”). However, such a distinction would be possible only if sex/gender differences in brain features were highly dimorphic (i.e., little overlap between the forms of these features in males and females) and internally consistent (i.e., a brain has only “male” or only “female” features).

This really seems like a straw man, or at the very least a weak man. Who precisely is making this distinction? The “significance” blurb gives us a hint:

Sex/gender differences in the brain are of high social interest because their presence is typically assumed to prove that humans belong to two distinct categories not only in terms of their genitalia, and thus justify differential treatment of males and females.

Again, the passive voice prevents us from finding out who these mysterious people are that are making this false assumption. However, because this is of “social interest” rather than scientific interest tells us that it’s regular people, rather than neuroscientists, who the authors think are using neurological evidence to justify differential treatment of men and women.

When people talk about “male brains” and “female brains,” are they really assuming a stark distinction? I don’t think so. If I say “men are taller than women,” I don’t mean that literally every man is literally taller than every woman. I mean that if we looked at the distribution of heights for men and for women, we would see that the male distribution has a higher mean and median than the female distribution.

What this study proves is that the male and female neurological differences that they measured were more like height than like some other sexually distinct characteristics such as “having a penis” or “having a uterus.” Drawn from different distributions, but not categorically different with near-100% accuracy.

I think both the researchers and the journalists are responsible for the misleading nature of the reporting on this study. The researchers did a good piece of science that incrementally added to our knowledge about gender and the brain. They didn’t overturn the apple cart by radically departing from some well-established theory, they merely added to what we already knew.However, to promote their paper and get worldwide media attention and invitations to TED talks for life, they set up a straw man theory that they could easily knock down; setting it up in such a way as to play to journalists’ obvious biases. The journalists, and their editors, jumped at the opportunity to confirm their biases while sparking controversy and driving clicks. They wrote their titles and opening paragraphs in such a way as to make it seem that the idea of male-female brain differences had been debunked, while hiding a few sentences about the study’s actual findings further down the page.

This pattern is all too familiar, as documented in the Slate Star Codex article on “Reporter Degrees of Freedom.” The message we should all be taking is that science journalists, and especially the editors who write their headlines, cannot be trusted. This is especially the case when their stories have political implications  that flatter their biases.

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The Tyee Asks About Climate Change

Wind Power

I attended a Students for Liberty conference organized by my good friend Liz Jaluague and happened to speak to a reporter from The Tyee. We talked about many things, but she made climate change her focus when writing her article. Here’s my part:

Like Proenca, Garrett Petersen is conflicted about climate change. The PhD candidate in economics at SFU acknowledges climate change is a failure of the market or a “market externality” imposed on future generations.

“Obviously we can’t write a contract with them because they are not born,” he said, referring to instances where the polluter signs a contract with those impacted by pollution, like cap-and-trade systems where industries are allowed a certain amount of emissions.

“For climate change I would argue there is no perfect solution. It would be great if we could all come together in a perfectly utopian and altruistic way and decide how much carbon to emit,” he said.

But he believes neither governments nor private companies are better suited to making that decision: markets can’t bargain with future generations, and politicians only care about the time they’re in office — not how their actions will impact the next generation.

I think that’s a pretty accurate summary of my (economic) views on climate change. Note that I take no side in the scientific debate on whether and how much the climate will warm; that’s way beyond my pay grade as an economics PhD student. I assume climate change is real and that the effect is large enough to be important because that assumption is implicit in the question I was asked.

Given that assumption, climate change is among the more difficult problems for libertarians. If we were to compare a libertarian society with a perfect government policy, of course the perfect government would be able to internalize the externality imposed by pollution.

But we don’t have the perfect government. We have a government that would ban a particular type of lightbulb, not because that is the most efficient way to reduce carbon emissions (it isn’t) but because it’s a visible way to seem to be taking action.

The same incentives are what led governments to restrict the construction of nuclear power plants over over-blown public fears of nuclear meltdowns. Nuclear power produces zero carbon emissions, but it is politically unpopular. Wind and solar are uneconomical but politically popular.

Germany phased out its nuclear plants to switch to solar and wind. But solar and wind power need to be supplemented by something more reliable when it is neither sunny nor windy. The solution: coal. Germany is burning coal like it’s going out of style. If there were no German government to intervene in the energy sector, they wouldn’t have shuttered their nuclear plants and they wouldn’t be burning so much coal. Consequently, they wouldn’t be releasing nearly as much carbon into the atmosphere.

Think about that next time someone tells you we need government intervention to prevent climate change. Maybe governments really will do something to prevent climate change, or maybe they’ll be like the German government and make things worse.

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