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07/31/2005

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Neeru

I had a question about the idea that lower hour work weeks, coupled with health benefits not tied to work, cause higher unemployment. It seems to me that that if Krugman's hypothesis is true, and people want more leisure, the above policies would decrease unemployment.

For example, in a big law firm, first year associates often work 80 hour weeks. If Krugman is correct, than many of these associates would take a cut in pay to work less hours. However, because hiring additional employees costs the firm a lot of money (in part because of medical benefits), it is more economical for the firm to have one associate working 80 hours a week than two associates working 40 hours a week. However, if health benefits were provided by the government, employers might be able to afford hiring more employees who could work less hours. This, in turn, would allow for more people to be employed, thereby decreasing unemployment.

Perhaps the law firm is not the best example, but I still am unclear about how the above policies negatively affect unemployment.

cheers,

Neeru

Corey

"It seems like Jane was calling you a racist to me."

Jane was maliciously mischaracterizing what I had said. This was two weeks ago. Please drop it, or go post to that discussion.

This is not my blog, I post comments and critiques of Posner's texts because I feel like the open comment format invites me to do so. The amount of time some people spend calling me names suprises me.

Now prseshad responded to the content of my posts, claiming that it is as stereotypical to say that "one _can't_ attach common characteristics to 1 billion muslims" as it would be stereotypical to say that "extremism is common among the world's 1 billion muslims." There are certainly pan-national movements, but I continue to believe that it would be dangerous and unproductive to assume the views of any of them when evaluating the motivations of an individual muslim (like a london subway bomber.)

StevieJ

Extrapolating a linkage between work vs. leisure, labor force inflexibility, and Muslim radicalism is an interesting exercise, but it seems far too myopic to me. Increasing leisure time in Europe is not a recent phenomenon, but a steady trend for 30 or more years, whereas the opposite is true in the US. Likewise, during that period Europe generally has experienced steadily increasing median real hourly wages whereas the US has remained stagnant. While living standards have improved both in Europe and the US, in Europe it has been facilitated by an improving economic lot for the masses. In the US higher living standards have largely derived from the masses selling their leisure. Even if the European model has created an environment that is more conducive to the rise of Muslim extremism, it does not follow that the American model is superior from the standpoint of the commonweal

Corey

"it is more economical for the firm to have one associate working 80 hours a week than two associates working 40 hours a week."

And it would be even more economical for the firm to have 4 employees working 30 hour weeks, because then the firm would not legally have to provide benefits for any of them.

WalMart can get away with this, a law firm can not. It is interesting that lawyers will submit to working 80 hour weeks (a serious detriment to health or any outside life) but will not trade health or lifestyle benefits for the free time necessary to enjoy health and lifestyle.

It seems to me that both senarios are a departure from the ideal work life. There is a cultural norm at work there, not just the negative freedom from french-style restrictions. I thin it relates to the Horatio Alger myth, or the fact that (as a Harper's article recently pointed out) 75% of Americans incorrectly believe that the phrase "God helps those who help themselves" comes from the Bible.

josh

"it is more economical for the firm to have one associate working 80 hours a week than two associates working 40 hours a week."

Even if there were no laws governing this sort of thing, firms would need to pay people a whole lot more for that 75th hour than for the 23rd just to get them to show up, not to mention probable declining marginal returns on productivity. For a lot of people, no amount of money would be worth this and they'd go find another job. Unless their was collusion between all employers I can't believe you'd see anything like a 60 hour or more work week.

Not Corey

COREY: This was two weeks ago. Please drop it, or go post to that discussion.

If it is completely irrelevant, then why did you bring it up by slandering Jane? You said that she cast herself as a victim, but she did not. She simply called you a racist because you made comments that she found to be racist. She never said that she was a victim, and there is nothing in her post to indicate that she is black. Let's assume she was white. If a white person calls you a racist for making statements that reflect hatred of blacks, please explain how that white person is casting herself as a victim. You cannot. Jane was not. She was calling you a racist based on your statements. It was not name-calling; indeed, from the rigor of her post and the weaknessof your reply, I took it to be an assertion of fact (and I am not black, either).

If you don't want to be called a racist, Corey, maybe you should not make racist statements.

Corey

For those of you reading this exchange. I regret that the discussion has been drawn off topic in this manner. You may not agree with anything I have said here since I started posting comments last winter, you may form your own opinions of my integrity or lack thereof. I would prefer that you did so based on my actual words, but I cannot control that.

Corey

"Unless their was collusion between all employers I can't believe you'd see anything like a 60 hour or more work week."

And yet 80 hour weeks are common at law firms as well as engineering companies (though less so in the latter since the internet bubble burst).

Camden

Corey,

You wrote re: high working hours: "It seems to me that both senarios are a departure from the ideal work life. There is a cultural norm at work there, not just the negative freedom from french-style restrictions. I thin it relates to the Horatio Alger myth, or the fact that (as a Harper's article recently pointed out) 75% of Americans incorrectly believe that the phrase 'God helps those who help themselves' comes from the Bible.î

I also feel that there is cultural norm at work -- but that's only part of the explanation, and maybe not a large part. For instance, most Americans do not work 80 hour weeks. I would surmise that most Americans who work those kind of hours fall into two groups: (1) members of the elite professional class (lawyers, investment bankers, etc.) and (2) low-wage workers who need to work those hours in order to support their families. The reason that less continental Europeans work 80 hour weeks may be because both of those groups are relatively smaller in Europe.

Obviously, redistributive social polices in many European countries reduce the number of workers in those countries who have to work 80 hour weeks just to raise their children. However, I think that a wide range of social polices in European countries also reduce the incentive and opportunity for young people to enter elite, high-paying jobs.

High income taxes are an obvious example. Even more fundamentally though, educational and labor policies in many European countries suppress students' motivation to strive for excellence (assuming that it's excellent to work 80 hours a week). It's tough to work 80 weeks when it's against the law to work more that 35 hours a week. Anecdotally, I know that the many of the best graduate opportunities in the Dutch educational system are distributed with basically no regard to student merit -- some are even granted by lottery. Instead of the Ivy League, German students have guaranteed access to almost uniformly bad universities (which they are paid to attend). I have met many European students who express frustration with these systems.

Ok, obviously I'm simplifying things a little, but you probably get my drift. I think that incentives do matter (and sorry for the rushed post -- Iím at work).

Wes

It is interesting that most of the young men in the US military are also there for economic reasons: lack of better job opportunities.Whether being forced by economic factors to fight for Bush or for Bin Laden counts as a "social pathology" depends on whose side one is on.Both Bush and Bin Laden invoke a lot of vague high minded principles to justify blowing things up and killing people. They both claim to be doing God's will and fighting evil and making the world a better place for the common man by fighting oppression, defending human rights and promoting morality.The one disagreement that they seem to have is whether the USA or the Middle East should have more influence in the world and specifically how much influence the USA should have in the Middle East. They both accuse each other forcing corrupt moral values on the common people.Despite the alarmist claims of their followers, the reality is that no matter how many things get blown up and how many people get killed by either side, people in the USA will still be predominantly Christian and people in the Middle East will still be predominantly Muslim.Personally, I don't put much stock in the high minded rhetoric of either Bush or Bin Laden and I don't think that the level of influence that the USA has in the Middle East really matters all that much, certainly not enough to justify blowing things up and killing people.As far as I'm concerned, young men being forced by lack of job opportunities to fight for either side counts as "social pathology" but, after all, my answer to "Whose side are you on?" is "Neither."

Palooka

Nothing like a good dose of moral relativity, Wes. So Bush=bin Laden and Islamofascist terrorists are no different than our own boys who are "forced" to serve their country because of economic deprivation? Some things just speak for themselves. I'll leave it at that.

Wes

Nothing like a good dose of moral relativity, Wes.Not to get too off-topic but it would be "moral relativism" if I said that Bush and Bin Laden's morality was relative to their respective cultures. While I acknowledge that others may disagree with me, it is my opinion that they are both morally wrong in an absolute sense regardless of culture.

Palooka

My apologies. The tone of your post was certainly relativistic, and your only denounciation was pathetically weak, "Personally, I don't put much stock in the high minded rhetoric of either Bush or Bin Laden and I don't think that the level of influence that the USA has in the Middle East really matters all that much, certainly not enough to justify blowing things up and killing people."

Not that this lets you off the hook. Whatever one thought of the prudence of the war, only the most morally bankrupt effete liberal would be agnostic on the current struggle. Bringing democray to Iraq is, apparently, equivalent to murdering thousands of innocent civilians because "the holy land" must not be tainted by "infidels." Yes, they're so on the same scale, their motives equally base. Even Corey wouldn't say something so repugnant and utterly stupid.

Stuart

Posner argues that restrictive labour policies are creating a barrier to entry into the labour force for new immigrants, thereby leading to less assimilation, more alienation and better breeding conditions for extremism. Posner therefore suggests that because restrictive labour policies (and also more generous welfore) lead to lower working hours for Europeans compared with Americans, that there is a trade-off between long vacations on one hand and more extremism on the other.

Yet isn't the main reason that Europeans work a lot fewer hours than Americans that they get on average many more weeks of annual leave by law than in America? I wouldn't really put a policy for high levels of annual leave under the heading of inflexible labour policies as it doesn't really create a barrier to entry into the labour force or restrict mobility like for instance a highly unionised work force.

Why is it that so many Americans can't see how ridiculous it is that the richest country in the world in material terms (apart from maybe luxembourg) is comparitively poor in leisure hours.

BB

Palooka: "Bringing democray to Iraq. . .[?]"


Wait, wait. I must have missed something. I thought we were 'fighting the terrorists over there so we wouldn't have to fight them here.' No, wait, don't tell me, I remember--we removed Saddam because he had a WMD 'program.' No, that's not right. As I recall, Saddam actually had WMDs, and we knew where they were, and they could be deployed against London in thirty minutes and against, say, Cleveland by the end of a day's news cycle.


(Oh yes. Quite unfair. I mean, everybody who's anybody thought they had WMDs, even the French and the Germans who were urging us to continue inspections. But you know, when I think about that poor sap who drove his sub into an mountain in the middle of the Pacific and lost his job, I sometimes think we're harder on some folks for their mistakes than for others.)


But let's switch from the messiness of foreign policy to the precise science of economics. A quiz: What is the correct tax policy when a) we are in surplus, b) we are running a deficit, c) the economy is booming, d) the
economy is going bust, e) we are at war, f) we are at peace. Answer: cut taxes.


Call me a cynic, but when the answer stays the same, and the rationale changes, the rationale is not the reason.

And so to Judge Posner: I agree that this post is brilliant. Saying that those who support a social safety net actually hurt those they intend to help is run of the mill Orwellian, but linking a concern for economic justice to support for terror is brilliant, the kind of brilliance that only comes from already knowing the answer, and then reverse engineering to discover the rationale.


"Advocates of the European model point to the pockets of poverty in the United States, but may not realize that poverty cannot be abolished without recourse to measures that produce the social pathologies that we observe in Europe. Social mobility implies the opportunity to fail. If society protects jobs, the employment opportunities of ambitious newcomers are reduced and they may end up at the embittered margin of society. Thus, it is not poverty that breeds extremism; it is social policies intended in part to eradicate poverty that do so, by obstructing exit from minority subcultures."


('pockets of poverty'--hardly worth mentioning, really. A few poor families in Appalachia, perhaps? Hey, anybody heard about all those meth labs popping up in Iowa? What's with that?)


Well, you see, there's good fear, and there's bad fear. The good fear is productive. Fear keeps you going to work every day, working unpaid overtime, nights and weekends, and not taking all of your sick time or vacation time because you're afraid you'll lose your job.


Bad fear is the fear that you'll go out the door and not come back at the end of the day because some terrorist blew you up. (Of course, back in the day, pre-union, pre-OSHA, there was a lot of bad fear connected with the job, but we're not talking about that type of safety netting, today. Let's get rid of the minimum wage and unemployment insurance first. . ..)


See. Fear of death: bad. Fear of poverty: good.


Could it be that this view is colored by the fact that we all share equally in the fear of terror, but the fear of poverty is shared unequally--and not at all by some?

If freedom from want and freedom from fear are not fundamental American values, then we did not win WWII--the other side won. Fear is fear, and creating unnecessary fear--whatever the basis--is terror. Want is want, and keeping people in want in a land of plenty is unAmerican and unChristian. Only those who fear terror but not poverty, can think otherwise.

Corey

"Bringing democray to Iraq is, apparently, equivalent to murdering thousands of innocent civilians... ...Even Corey wouldn't say something so repugnant and utterly stupid."

No, but I might point out that the process of "bringing democracy to Iraq" has resulted in the deaths of over 10,000 innocent civilians.

Now maybe Saddam or the sanctions might have killed that many in the same time if we had not invaded. However, we have traded maybe for a certainty.

As economists, surely many of you would agree that the justification for a war should be considered relative to the cost of a war. You might even agree with me that an innocent Iraqi life is worth as much as an innocent American life. Or perhaps there I am getting controversial again.

I am not agnostic on the current struggle. I am skeptical that you can bring lasting democracy to a country by bombing and invading it. I am concerned about the consequences of proceeding that way, both in terms of dead Iraqis and dead Americans (at the hands of newly radicalized Iraqis.) I do not think we invaded Iraq to bring democracy any more than we invaded to find WMDs, as the pervious post indicates, rationales that shift are unlikely to be the real reason.

Bringing democracy is what we are doing now though, and I hope we win. I hope we have the character to step back and abide by what the People of Iraq democratically choose for themselves, even if we don't like the result.
Our history suggests otherwise (re: democratically elected leftist gov'ts in Latin America)

Ieyasu

Interesting argument. However, Judge Posner doesn't even try to explain why the UK, which has much more competitive economy than continental Europe, seems to have its fair share of marginalized Muslims.

Samuel

You do not mention the possibility that the United States' success in assimilating immigrants is due in large part to the fact that the children of immigrants immediately become citizens. This might also explain why the United States is the immigrant destination of choice. Yet this is a practice that you have suggested should be abolished in at least one of your judicial opinions. Do you not believe that citizenship by birth plays any role, or do you have some way of rationalizing these views?

N.E.Hatfield

Hey Corey! They've already dug up over 300K buried in the desert and they're still finding more daily. To quote Stalin, "a single death is a tragedy, thousands a mere statistic." (I believe Stalin was one of Saddam's hero's)

We're just beginning to find out how efficient and effective the Secret Police and Republican Guard really were. And these guys are the ones who now make up the resistance. We've got a long way to go to quiet the opposition to a liberated Iraq. But then maybe we ought to turn our back and walk away because it's too hard and requires sacrifice.

Corey

"But then maybe we ought to turn our back and walk away because it's too hard and requires sacrifice."

Or maybe we should obtain consent before we sacrifice other people en mass.

I only mentioned the 10,000 dead innocent civilians to keep people mindful of the sacrifices. The last administration admitted that the sanctions regime was responsible for 500,000 deaths, with our Secretary of State saying on national TV that such a toll was "worth it".

How hard are you willing to let it get? Maybe we are as good at dismissing statistics as Stalin was?

Willingness to kill statistically does as much to radicalize the friends and family of (or indeed anyone who empathizes with) those killed as does the economic or social marginalization Posner and Becker point to.

In addition to the lives lost, the effects on world opinion, as well as on our own sense of self, are all costs/sacrifices of your willingness to assume the role of enforcer.

History will validate you if you win, because that is the function of history, but I say that with the assumption of police power comes the responsibility to carefully consider the lives lost, both personally and statistically.

And why?...

Wars create violent resistance and dissent, even at home. Shared cultural ideologies (often reflected in the "reasons" for going to war) work to restrain that dissent. Here, the "reasons" have been questioned and undermined, and many members of society have empathic ties to the victims of the war which compete. Some of these same people are marginalized, further weakening the possibility of ideological restraint. Some small part of that group is criminally violent. So in this way, the subway bombings can be seen partly as a failure of the justification for war, and we can understand why even middle class integrated citizens might be led to perpetrate them.

Of course they shouldn't have done it, and are horrible criminals. But this entire discussion is an inquiry into why.

thibaud

Prof Becker's analysis is spot-on, though others (esp Marty Peretz, IIRC) have pointed out this long before: when it comes to religious immigrants, the US attracts strivers, Europe attracts resenters.

The rather brutal logic of a lack of a large safety net for immigrants, however, is only one aspect of this phenomenon. Also crucial is the difference between cultural laissez-faire, as practiced historically in the US, and the European corporatist (in the Mussolini sense) approach to organization and co-optation of religious minorities. One can even see this today in Sarkozy's "Muslim PArliament" idea in France, or Blair's similar gestures in Britain: bring the aggrieved minority under the control of the state through a corrupt bargain that empowers sham leaders while increasing state interference, and all will be well.

Contrast this with the historic US approach to Quakers, mormons, hasidim, sikhs, etc in which religious groups were encouraged to develop economically and maintain strong local institutions, even if those institutions were separatist, in the belief that religious minorities were per se good and necessary contributors to American pluralist democracy. And as history has shown, good contributors to US capitalism. Our most energetic, entrepreneurial and productive groups have tended to be immigrant groups bound by common religious beliefs, not only because of

a) the self-selection process alluded to above (strivers go the US, slackers and resenters stay home in Europe, or go to Europe)

but also because of

b) the great advantages available to entrepreneurs in the US -- ease of capital formation, strong market opportunities, fewer monopolistic or "national champion" state-backed behemoths.

Put these together and you get Wm Penn, Ben Franklin, superb Mormon businessmen from Utah to Sonora, countless jewish entrepreneurs, sikh and gajarati hindi and confucian millionaires, even irish catholic millionaires (Tom Sowell IIRC determined this group to be the wealthies ethnic group in the US a few decades back).

In sum, it's not enough to offer opportunity and restrict access to the slacker/welfare teat; it's also crucial for the state to get out of the way in cultural and political terms. If you attract hardworking strivers who want what all Americans want -- to build strong families and strong businesses and generally be left alone to pursue happiness -- then you don't need to worry about what they tell their girls to wear. Out in places like Utah we also have our poligamists, but they're part of a law-abiding, respectful and, not least, hardworking and economically successful religious minority community.

A pity the Euros can't seem to learn how crucial it is to attract strivers and then have the state LEAVE THEM ALONE. I don't see any improvement in Europe's muslim problem without such an understanding.

rmg

See our post regarding Posner's failed approach and his dumb and error laden articled in this past weekends NY Times.

Posner: Wrong on the Blogosphere - As Biased and Dumb as Ever

Site: Truth and Lies: Blog for a Better America

http://reliantmedia.blogspot.com/2005/08/posner-wrong-on-blogosphere-as-biased.html

Corey

I looked at your article expecting to find why you thought Posner's article was biased or wrong. Instead, I learned that you dislike Posner, and that you like to use the word "dumb". (9 times in 2 pages) Both of these things were obvious before I clicked the link.

Criticism that responds to a text is better than criticism that merely labels and rejects a text. Its the difference between discourse and punditry.

You did a little better on "Why L&E is defunct".

Jeroen

As a "European", I would just like to make one (on-topic) point that seems to be under-emphasized in the original post.

Strongly redistributive welfare systems work best, politically, if the transfers are relatively anonymous and run in all directions. On a personal level, even most social democrats don't like it when they work very hard and see that part of the money they earn goes to a neighbour who sits in front of the TV the whole day. The problem with an "underclass" that is mostly composed of identifiable minority immigrants, is that certain wealth-transfers becomes very visible. This creates resentment with a good proportion of the "natives". Some politicians will be tempted to capitalize on this and engage in xenophobic discourse, which in turn creates resentment with members of the minority. A strongly redistributive welfare state thus reinforces certain primal instincts, rather than reducing them. Immigrants are probably easier integrated where they are not perceived firstly as a drag on public resources.

As to why there is a "stable" minority immigrant underclass (many of which are from Muslim countries indeed) in Europe, there is little doubt in my mind that labour market regulations have something to do with it. They just cut the first few sports off the ladder of upward mobility.

On an aside, Krugman?s theory (as related by Posner; I did not read it myself) seems to illustrate just how wrong-headed cost-benefit analysis can get if conducted on this kind of grand macro-level and assuming the computational capacity of a benevolent central planner. The whole of Europe is forcibly trading leisure for money...and better off for it because leisure has a positive network externality component? Come on! I am sure Krugman just loves it to be at the same theme park or the same beach that everybody visits at the same time. This is just plain ex-post rationalization for the outcome of blatant interest group politics.

I guess I did not stick to my one point after all, sorry.

Jeroen from Brussels

N.E.Hatfield

Corey, Sometimes there are no "whys and where fors". Evil just is and as such must be confronted, lest it overwhelm the world. BTW, in a combat zone there are no "innocents". Welcome to the brave new world of modern war; terrible as it may be.

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